What is a Continuing Power of Attorney for Property? A Continuing Power of Attorney for Property is a legal document in which you can appoint a person or persons to act on your behalf (called an “Attorney”) with respect to your property and financial affairs. The document will allow them to make decisions for you if you become incapable of managing your financial affairs. *The term “Attorney” refers to the person or persons you have chosen to act on your behalf. He or she does not have to be a lawyer. WHO YOU CAN APPOINT AS YOUR ATTORNEY FOR PROPERTY You can choose anyone you want as your Attorney as long as he or she is eighteen (18) years of age or older. You can also choose multiple people to act. If you appoint more than one person, you can state that the Attorneys are to act “jointly” or “jointly and severally”. If the Attorneys are appointed “jointly”, this means that they will be required to act together at all times. If the Attorneys are appointed “jointly and severally”, this means that either of the Attorneys named can act independently. If you name the Attorneys “jointly”, the advantage is that there is always a second person “double checking”. A disadvantage of naming the Attorneys “jointly” is the lack of flexibility – say, for example, if one Attorney is temporarily unavailable because of vacation, the available Attorney will not be able to make any decisions without the second person. APPOINTING A TRUST COMPANY AS YOUR ATTORNEY FOR PROPERTY Some people prefer to appoint trust companies (many of the big banks offer trust services) because they are professional and impartial. WHAT HAPPENS IF THE PERSON YOU CHOSE IS DECEASED, IS INCAPABLE, OR DOES NOT WANT TO ACT AS YOUR ATTORNEY FOR PROPERTY? If two or more Attorneys act jointly under the Continuing Power of Attorney and one of them dies, becomes incapable of managing property, or resigns, the remaining Attorney or Attorneys are authorized to act, unless the power of Attorney provides otherwise. If only one primary Attorney was named, you can name a substitute Attorney, and the substitute can act. DATE OF EFFECTIVENESS OF THE POWER OF ATTORNEY FOR PROPERTY We generally recommend that the Power of Attorney give your Attorney legal authority as soon as the document is signed. However, you can specify otherwise in the document. For example, some people only want the document to be effective upon a specific date or specific event (such as the Attorney obtaining a letter from your family physician which states that you are mentally incapable and cannot manage your property). An advantage of giving your Attorney legal authority as soon as the document is signed is that your Attorney will not need to go through formal processes to prove to third parties, such as banks, that the Power of Attorney has come into effect. IS MY ATTORNEY ENTITLED TO COMPENSATION? Your Attorney is entitled to take payment at a rate set out by the law, unless you say otherwise in the Power of Attorney for Property. If you want to prohibit your Attorney from taking any payment or you want to set a specific amount yourself, you can do this by including specific instructions in the Power of Attorney for Property. FIVE FACTORS TO CONSIDER WHEN CHOOSING WHO YOU SHOULD APPOINT AS YOUR ATTORNEY FOR PROPERTY Choosing an Attorney for Property is an important decision as that person will have full access to your money and other property. Trustworthiness Is the person honest? Do you know the person well enough or long enough to trust them? Will this person act in your best interest? Does the person have personal issues such as financial or health concerns that may interfere with the management of your property? Reliability Can you rely on this person? Experience Does the person understand financial matters? Availability Does the person have the time to handle your financial matters? Is the person readily available and easy to contact? Does the person live nearby? Willingness Is the person willing to take on the responsibility? Does the person understand the duties and responsibilities involved in being your Attorney? For further information or to schedule a consultation regarding powers of attorney in Ontario please contact Vanessa Romanino of Devry Smith Frank LLP at 416-446-3348. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Wills and EstatesAugust 22, 2019July 10, 2023
Could a Gift Card Compensate for a Minor Human Rights Tribunal complaint? A recent British Columbia Human Rights Tribunal decision has struck down a human rights complaint by a supermarket customer on the grounds that she was already compensated by the store for her complaint. But what compensation was considered enough? In Duke v Sobeys, 2018 BCHRT 283, the complainant went grocery shopping at a Sobey’s in British Columbia. While shopping, the complainant stated she was approached by an employee who told her inappropriate sex jokes. The employee admitted to his behaviour. Ms. Duke then requested a $250 gift card and an apology, both of which Sobeys provided. After the fact, Ms. Duke filed a complaint with the British Columbia Human Rights Tribunal. The Human Rights Tribunal concluded that the gift card and the apology were sufficient compensation in the circumstances. The Tribunal found that Sobey’s promptly responded to the complaint, immediately investigated it and addressed it appropriately. Because Sobey’s dealt with the complaint as efficiently as possible to ensure that if any discrimination existed, it would be resolved appropriately, the court felt no other remedial measures were necessary. The Tribunal also stated, “it does not further the purposes of the Code to encourage a complainant to increase what is sought, after they receive what they initially ask for”. Since the customer asked for compensation, and Sobey’s promptly provided it to her, no further remedies were required. The complaint was ultimately dismissed under section 27(1)(d)(ii) of the British Columbia Human Rights Code as it did not further the purposes of the Code. What does this decision tell us? As an employer, it is very important to respond quickly to complaints to avoid negative legal consequences. In this case, Sobey’s was quick to investigate the complaint and dealt with it in a reasonable manner that clearly ameliorated their customer’s concerns, at least at the time. This was sufficient to allow Sobey’s to avoid an unfavourable decision of the British Columbia Human Rights Tribunal. If you would like more information on human rights and employment law, contact Marty Rabinovitch at 416-446-5826 or at marty.rabinovitch@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment Law, Human Rights LawAugust 20, 2019September 30, 2020
How Canada’s Privacy Legislation Affects the Use of Third Party Information and Payment Processors Businesses often use third party entities to process customer information or transactions and to then relay portions of that information back to the business. Businesses using third parties in this manner should be aware of the provisions of Canada’s privacy legislation in this regard. Overview of Canada’s Privacy Legislation Canada’s two predominant privacy statutes are the Privacy Act, RSC 1985 c P-21 and the Personal Information Protection and Electronic Documents Act, SC 2000, c5 [“PIPEDA”]. The former applies to actions of the federal government, while PIPEDA applies to every entity that collects, uses or discloses personal information in the course of commercial activities. Alberta, British Columbia and Quebec have provincial privacy legislation which is, for the most part, substantially similar to PIPEDA. Compliance with PIPEDA Any entity collecting personal information for the purpose of a commercial activity must first obtain the consent of the individuals whose information is being collected. It is important to note that personal information includes the names and contact details of individuals, as well as their credit card and other financial information. PIPEDA provides that “the consent of an individual is only valid if it is reasonable to expect that an individual to whom the organization’s activities are directed would understand the nature, purpose and consequences of the collection, use or disclosure of the personal information to which they are consenting.” Therefore, whenever personal information is collected in a commercial context, the individuals whose consent is sought must be informed of the manner in which their personal information will be used and disclosed. The transfer of information to third parties for processing is considered to be a disclosure of information. It therefore follows that when seeking someone’s consent for collection of his or her personal information, the entity collecting the information should outline that the information will be shared with third parties for processing. Furthermore, if the third party is in another country, specific risks such as the possibility of foreign officials obtaining the information, should be disclosed to the individuals whose consent is being sought. In summary, a business seeking to use third party processors of customer information or payments should so advise any individuals whose personal information will be collected and should outline for those individuals the potential risks of the collection and disclosure of the personal information by and to, the third party. The third party processor should ensure that the necessary consent has been obtained and that its contract with the business provides for indemnification by the business should issues arise as a result of the collection and processing of the personal information. For questions regarding compliance with Canada’s privacy legislation in a commercial context, please contact Elisabeth Colson of Devry Smith Frank LLP at 416-446-5048 or elisabeth.colson@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Corporate LawAugust 15, 2019April 30, 2021
Thinking of Getting Married? Maybe You Should Consider A Marriage Contract There is more to marriage than just a party with a DJ and catered food. Getting married is a serious legal undertaking which involves significant financial consequences. I realize that discussing a marriage contract with your spouse can be extremely difficult and may spoil the mood. Marriage contracts are not for everyone – but they may be helpful for some (if they can muster up the courage to discuss the contract with their spouse). What happens to your property when you do not have a marriage contract? The Family Law Act (the “FLA”) is the legislation that applies to property upon marriage breakdown – it provides default regime for those of us who do not have contracts. The philosophy of the FLA, is that subject to certain exceptions*, any financial growth during the marriage is to be shared equally by both spouses. Accordingly upon marriage breakdown caused by separation or death, a calculation is done for each spouse to determine the growth in the value of that spouse’s assets during the marriage. The FLA then prescribes that a payment is to be made by one party to the other to provide for equal financial growth during the marriage. Please note a common misconception is that parties will end up with the same net worth on marriage breakdown – this is not necessarily true, especially if one spouse came into the marriage with significant assets! The exceptions mentioned above relate primarily to the matrimonial home, inheritances and gifts. Note that if you are living in the same home at the date of marriage as at the date of separation or death, the entire net value of the home is shared equally between the spouses, but if you move homes the entire net value of the home is NOT necessarily shared equally between the parties. The court may award a spouse an amount that is more or less than half the difference between net family properties if the court is of the opinion that equalizing net family properties would be unconscionable. Marriage Contract Parties wishing to opt out of the property provisions of the FLA can enter into a marriage contract to provide for different provisions than contemplated in the FLA. Among other things, a marriage contract may deal with: – property; – support obligations; and – directing the education and moral training of children. Note that if you decide to enter into a marriage contract the court may set aside a contract for various reasons including if: – If a party failed to disclose to the other significant assets or significant debts or other liabilities existing when the domestic contract was made; – If a party did not understand the nature and consequences of the domestic contract; and – Otherwise in accordance with the law of contract. Further the court may disregard any provision of a contract respecting provision for support if: – the provision results in unconscionable circumstances; – the provision relates to a dependent who qualifies for social assistance; or – there is a default in paying support under the contract. If you are interested in drafting a marriage contract please contact Ashley Doidge of Devry Smith Frank LLP at 416-224-1996 or Ashley.doidge@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Wills and EstatesAugust 13, 2019July 5, 2023
Avoiding Guardianship Litigation with Carefully Considered Powers of Attorney With Canada’s ageing population, there has been an increase in disputes within families about who should be making personal and financial decisions on behalf of incapable members of the family. Many of these disputes could be avoided with properly drafted Powers of Attorney. In Ontario, there are two common Powers of Attorney: 1) a Continuing Power of Attorney for Property, and 2) a Power of Attorney for Personal Care. While a Will directs what will happen to your assets after you pass away, Powers of Attorney stipulate who will make decisions about your assets while you are alive, and who will make decisions about your personal care when you are alive but unable to make the decision for yourself. The person(s) who is named is referred to in the documents as the “attorney”. Note, the attorney does not need to be a lawyer and often is a family member or friend. Without a Power of Attorney for Property, when you become incapable of managing your property, nobody except the Office of the Public Guardian and Trustee will be able to manage your finances unless a court application is commenced. Such court applications can be inconvenient and expensive. Needless to say, the person you would have chosen to do this job for you may not be the person the court appoints. Without a Power of Attorney for Personal Care, when you become incapable of making personal care decisions, the legislation takes effect which provides a list of potential substitute decision-makers in a hierarchy. Note that the list includes the incapable person’s “spouse” or “partner” before the incapable person’s child. Hypothetically, a situation could occur where an incapable person’s boyfriend or girlfriend could have the legal authority to make important personal care decisions instead of the incapable person’s adult children. Alternatively, another hypothetical situation that could occur if there is no Power of Attorney for Personal Care is that an estranged relative might have the right to make personal care decisions for the incapable person. Who and How Many Attorneys Should You Name? While it may seem like a straightforward decision to name one child over the others for simplicity, it may be viewed by your other children as a symbol of favouritism. For this reason, many people decide to name all their children. If you name more than one attorney, you can designate whether you want them to act “jointly” or “jointly and severally.” The main advantage of naming attorneys jointly (which requires unanimity) is that there are checks and balances, whereas if the attorneys are named jointly and severally, each of them can technically make decisions on your behalf without consulting the other. The main hurdles with jointly- appointed attorneys will be the unavailability of one attorney, the inconvenience of requiring all attorneys to make each decision together (which means all the attorneys may need to go to the bank to withdraw funds, for example), and the possibility of having a disagreement among an even number of attorneys, leaving them deadlocked. To proactively deal with these potential issues, we recommend that each client consider providing a “majority rules clause” in their Powers of Attorney, which outlines that a majority of attorneys can act. Alternatively, a client may want to name an additional attorney to act as a tie-breaker when there are disputes about managing the property. Note that if your attorney is a US resident, you may want to get legal advice about the following potential complications: Affected status of a Canadian Controlled Private Corporation (CCPC); Canadian brokerage institution insisting that the attorney liquidate the investment portfolio which may give rise to potentially accelerated capital gains; If your attorney has signing authority over a Canadian account, they may be required to report annually to the Department of the Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114 and a Report of Foreign Bank and Financial Accounts (FBAR). What to do if you have been named as an Attorney for Property? 1) Determine if you want to act as the attorney or if you want to renounce; 2) Meet with a lawyer to obtain advice as to whether your authority is triggered or whether you need to obtain medical evidence to support your authority to act; If you decide that you want to act: 1) Collect a full list of assets and liabilities of the incapable person; 2) Obtain legal advice about the duties of attorneys for the property; 3) Obtain a copy of the last Will and Testament and do not dispose of property that is subject to a specific testamentary gift unless it is necessary to comply with your duties; and 4) Keep detailed accurate records of your activity and be sure to keep all receipts for expenses. Note to Professionals: Use Caution When Presented with a Power of Attorney for Property If you are presented with a Power of Attorney for Property, be sure to: obtain an original or notarized copy; ascertain whether the attorneys are named jointly or jointly and severally; determine whether the Power of Attorney is effective in Ontario; be sure to read the document to see if the grantor provided specific restrictions on the authority of the named attorney; identify the attorney named by taking photo ID for your file; take reasonable precautions to discover and avoid fraud and determine the authenticity of the document (some case law suggest making inquiries as to whether the grantor is alive, if they had ever revoked the power of attorney, or if they were mentally competent when the power of at attorney was signed); And consider obtaining legal advice. If the grantor is deceased, the Power of Attorney document is no longer valid and the attorney loses their ability to manage the assets of the grantor and to give instructions to third parties using the document. SUMMARY OF TYPES OF POWERS OF ATTORNEY A Continuing Power of Attorney for Property is a legal document that gives someone else the legal authority to make decisions about your finances. Using the document, the attorney may be able to manage your property and make decisions including: Selling your home; Obtaining a mortgage; Withdrawing funds from your bank account; Instructing your investment advisor; Filing tax returns; Instructing counsel on your behalf if you become involved in litigation; Gifting your grandchildren wedding and birthday gifts; and Making donations to charity Power of Attorney for Personal Care is a legal document in which one person gives another person the authority to make personal care decisions on their behalf if they become mentally incapable. Using the document, the attorney may be able to make the following decisions: Whether you live in a Jewish nursing home such as Baycrest or a secular nursing home or at home with live-in support; What kind of medical treatment you receive; and What you eat. Many clients include boilerplate instructions about their wishes with respect to the end of life treatment. Some clients may wish to consult with their Spiritual Advisor to discuss drafting a religiously-oriented Power of Attorney. The Power of Attorney is called “continuing” because it can be used after the person who gave it is no longer mentally capable to make the financial decisions themselves. Note that this document can also be used by the attorney when you are capable, but unable to act–for example, if you are away in Florida for the winter and you need something to be signed at home in Toronto. You can also create a Non-Continuing Power of Attorney for Property which is a legal document that gives someone else the legal authority to make decisions about your finances, but, in this case, the document cannot be used if you become mentally incapable. If you would like more information on the powers of attorney, please contact Ashley Doidge at 416.446.3348 or ashley.doidge@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Wills and EstatesAugust 6, 2019September 30, 2020
What happens when a party to a real estate transaction fails to close? The Agreement of Purchase and Sale (APS) has been signed and any conditions waived or fulfilled. All that remains is for the closing itself to take place. What happens when a party to a firm APS fails to close the deal? This may happen, for example, if the buyers find out that they are unable to obtain financing for the property, as was common around the Greater Toronto Area (GTA) two years ago during the market correction. The answer will obviously depend on the particular circumstances, however case law provides us with some generalizations: 1) SELLER FAILS TO CLOSE If the buyer is ready to close, and for whatever reason the seller has a last minute change of mind and refuses to close, the buyer may be entitled to damages and/or specific performance forcing the seller to close. In Semelhago v Paramadevan [1996] 2 SCR 415, the Supreme Court of Canada held that whether or not a buyer is entitled to specific performance depends on how “unique” the property in question is. Courts will take into account both objective and subjective factors when determining whether the test for uniqueness is met (see, for example, Marvost v Stokes, 2011 ONSC 4827, aff’d 2012 ONCA 74). 2) BUYER FAILS TO CLOSE This was a common situation following the market correction in areas around the GTA that resulted from the introduction of Ontario’s Fair Housing Plan (Ontario Ministry of Finance, 20 April 2017). Unless the seller can sell the property for an amount greater or equal to what the buyer had agreed to pay, the seller will be entitled to damages, amounting to the difference between the agreed upon price for the property in the failed APS and the amount that the seller ultimately sold the property for. 3) REALTOR LIABILITY Occasionally we are asked whether a realtor can be held liable for a failed APS, particularly if, for example, a realtor did not advise an inexperienced buyer to make an offer conditional on financing. Case law on this topic is somewhat mixed. There is a line of cases in which buyers were successful in third party claims against realtors who failed to advise the buyers about the risks of not making their offers conditional on financing or another event taking place, such as a satisfactory home inspection (see, for example, Krawchuk v Scherbak, 2011 ONCA 352 and Pitter v Ha, 2005 CarswellOnt 10310 (Sup Ct J), aff’d 2007 CarswellOnt 4271 (Sup Ct J (Div Ct)). On the other hand, there are cases in which courts have determined that the parties to an APS were experienced in trading in real estate and should have been aware of the risks of making an unconditional offer to purchase a property, and therefore third party claims against the realtors did not succeed (see, for example, Shields v Broderick, 1984 CarswellOnt 1251 (H Ct J). 4) RETURN OF DEPOSIT One final item to consider regarding a failed APS is what happens with the buyer’s deposit. A deposit will only be refunded if the buyer and seller agree to execute a mutual release or if one of the parties obtains a court order. If you have further questions about failed real Agreements of Purchase and Sale and your legal rights, please contact Christopher Statham at Christopher.statham@devrylaw.ca or 416.446.5839 “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateAugust 2, 2019September 30, 2020
7 Estate Planning Tips For Spouses Estate planning is inarguably one of the most important things you can do for yourself and your family. Not only can estate planning legally protect your spouse and assets, it can also instruct others on exactly how you would like things handled after your death. MAKE A WILL If you die without a will, the provincial government decides how your assets will be distributed under intestacy rules. Many people incorrectly assume that if they die without a will their estate would pass to their spouse. This is not necessarily the case. In Ontario, for a spouse to inherit from your estate they must be married to you [common law spouses do not automatically inherit under intestacy rules!]. If you have children, your spouse will receive a “preferential share” up to $200,000 worth of your assets. The remainder of your estate will be divided as follows: If you have one child, your child and spouse will split the remainder. If you have more than one child, your spouse receives one third, and your children will split two thirds equally. Making a valid will prevent the intestacy laws above from taking effect as well as providing additional benefits. UPDATE YOUR WILL REGULARLY They say the only thing worse than dying without a will is dying with an outdated will. If any of the following have occurred since your last will we highly recommend you consider updating your will: birth of new child; birth of grandchildren; beneficiaries may be irresponsible with money and may require funds to be held in a trust; death of your named executor or inability of that executor to serve. CONSIDER MAKING A SECONDARY WILL TO LOWER PROBATE TAXES Probate taxes paid to the Government in Ontario are among the highest in Canada. Since the landmark case of Granovsky v. Ontario was decided in 1998, lawyers have been recommending that certain clients consider making a secondary will which deals with assets that do not need to be probated (such as shares in a corporation or an art collection). The end goal of the secondary will may result in substantial minimization of probate taxes. WHAT IS PROBATE? In Ontario, many executors are required to go through a legal process where the court confirms the validity of the will and the executors’ authority to act on behalf of the estate, this is known as probate. This process is usually required where the deceased owned real estate or bank accounts with substantial amounts of funds. When a will is probated, probate taxes (also known as Estate Administration Fees) are triggered for the assets dealt with in the Will. MAKE A POWER OF ATTORNEY FOR PERSONAL CARE A Power of Attorney for Personal Care is a legal document in which you designate the person or people who will make personal care and treatment decisions for you if you become incapable. This document can be used to ensure that your wishes about personal care decisions will be respected MAKE A CONTINUING POWER OF ATTORNEY FOR PROPERTY A Continuing Power of Attorney for Property is a legal document in which you can designate a person or people to act on your behalf with respect to your property and financial affairs. If you become unable to make decisions about your property and you have not made a Power of Attorney for Property, it is difficult for your family to access your assets and manage them for your benefit. Instead, someone must apply to the court for permission to be your representative or a guardian must be appointed by the Office of the Public Guardian and Trustee CONSIDER TRANSFERRING TITLE IN YOUR HOME INTO “JOINT TENANTS WITH RIGHT OF SURVIVORSHIP” Your home can be held by two or more people in two ways: either as joint tenants or tenants in common. Joint tenants implies an automatic right of survivorship. For example if A dies, A’s 50% interest automatically passes through right of survivorship to B. Tenants in common implies that each tenant owns a separate undivided interest in the property. For example if A dies, a 50% interest falls into A’s estate and will be dealt with according to A’s will or by the laws of intestacy, if A does not have a will. If your home is held as Joint Tenants with Right of Survivorship, the home may not be subject to your Will and may pass outside of your estate. Thus your estate may not have to pay probate tax on the value of your home. A transfer of title should only be considered after consulting with a knowledgeable lawyer and it is not appropriate in every situation. CONSIDER DESIGNATING A BENEFICIARY FOR SPECIFIC ASSETS A person can designate a beneficiary to receive the benefit of certain assets upon death (eg life insurance policies, RRSP, pension plans, TFSAs). When the person who designated a beneficiary dies, the benefits flowing from that asset will flow directly to the person named outside the deceased’s estate (and not pass through the estate). Therefore, since the asset does not flow through the estate it may not be subject to probate taxes and creditor’s claims. Another considerable advantage is that your beneficiaries will have nearly immediate access to funds following your passing. For further information about estate planning or to schedule a consultation please contact: Ashley Doidge at 416- 446-3348 or ashley.doidge@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Wills and EstatesJuly 30, 2019July 5, 2023
Arbitration Clauses in Employment Agreements: New Developments Two recent Ontario court decisions suggest that arbitration clauses requiring employees in employment agreements to submit certain employment actions to arbitration may be unenforceable. In a recent Ontario Court of Appeal decision, Heller v Uber Technologies, 2019 ONCA 1, Uber brought a preliminary motion to stay a class action advanced by one of its drivers. Uber sought to have the action proceed to arbitration in the Netherlands pursuant to its boilerplate arbitration clause, to which all drivers are required to agree before driving for Uber. Since this was a preliminary motion, the court assumed that Uber drivers would be considered “employees” under the Employment Standards Act, 2000 (“ESA”) and thereby could, for the purposes of this motion, be considered to benefit from the provisions under the ESA. The court noted that under s. 7(1) of the Arbitration Act, 1991 if a party to an arbitration agreement commences a proceeding for a matter which, according to the agreement, should be decided in arbitration, the court will stay the proceeding and submit the matter to arbitration. However, under s. 7(2), there are exceptions to the rule delineated under s. 7(1): for example, if the court deems the arbitration agreement to be invalid. The Court of Appeal found the arbitration agreement was invalid on two grounds: (a) it constituted an impermissible contracting out of the ESA and (b) it was unconscionable. Considering (a), the Court of Appeal noted that under the ESA, employees may launch a complaint to the Ministry of Labour or may launch a civil proceeding to launch a complaint against their employer. Since the arbitration clause forced employees to proceed immediately to arbitration, it took away their ability to make complaints to the Ministry of Labour or to launch a civil proceeding (arbitration was not considered a “civil proceeding” by the court). This constituted an unacceptable contracting out of the ESA and therefore the clause was ruled unenforceable on these grounds. Considering (b), the court also found that, even if the clause did not violate the ESA, the clause was still unenforceable because it was unconscionable. The court found it to be unconscionable primarily because it was a unilateral arbitration agreement which eliminated the drivers’ bargaining power and because drivers had agreed to the arbitration clause in the absence of legal advice. In a subsequent decision, Rhinehart v. Legend 3D Canada Inc., 2019 ONSC 3296, the court applied the reasoning from Heller, above. Mr. Rhinehart worked at a U.S. branch of a company, Legend 3D USA. Mr. Rhinehart signed several arbitration agreements with Legend 3D USA. Mr. Rhinehart then began to work for Legend 3D Canada. His employment was later terminated. When Mr. Rhinehart sought damages for wrongful dismissal, Legend Canada sought to stay the action and submit the matter to arbitration pursuant to the arbitration agreements between Mr. Rhinehart and Legend USA. However, the court found the arbitrations agreements were not enforceable because they were (a) not between Mr. Rhinehart and Legend CA; (b) the arbitration agreements between Mr. Rhinehart and Legend USA did not apply to issues arising from his Ontario employment; and (c) applying the same reasoning from Heller, the arbitration clauses constituted an impermissible contracting out of the ESA. These cases indicate that where arbitration clauses in employment agreements force employees to proceed to arbitration, rather than using the complaint process under the ESA or advancing a civil action, such clauses will be found unenforceable. Moreover, if the arbitration clause demonstrates a clear inequality of bargaining power, and leaves parties to the contract with no other reasonable choice but to agree in the absence of legal advice, such clauses will likely be invalid as they will be deemed unconscionable. If you would like more information on arbitration clauses or would like legal advice on this subject, please contact Marty Rabinovitch at 416.446.5826 or marty.rabinovitch@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment LawJuly 25, 2019September 30, 2020
Denied a Job Due to Lack of Canadian Work Eligibility? You May Have Been Discriminated Against If you have recently been denied a job due to a lack of proof of permanent eligibility to work in Canada, you may be entitled to compensation under Ontario human rights law. In a decision last year from the Ontario Human Rights Tribunal, Haseeb v Imperial Oil Limited 2018 HRTO 957, an employer (Imperial Oil) refused to hire the applicant to whom they offered a job (Mr. Haseeb) after the job applicant failed to provide requested documentation regarding his legal authorization to work permanently in Canada. Mr. Haseeb, an international student, was a recent graduate of McGill University’s engineering program, and only possessed a postgraduate work permit for up to three years. The applicant anticipated he would attain permanent residency status within three years. Imperial Oil required graduate engineers to have permanent residency or citizenship to be eligible to apply for a permanent full-time job at their company. To circumvent this requirement, Mr. Haseeb repeatedly answered positively when asked about his eligibility to work in Canada on a permanent basis. These responses were false, as he only had a temporary work permit. Although Mr. Haseeb was offered a job at Imperial Oil, the company later rescinded the offer about one month following the deadline for acceptance. The Tribunal found that Imperial Oil did not rescind the offer due to Mr. Haseeb’s dishonesty, but rather because Mr. Haseeb did not provide required permanent work eligibility documentation when it was requested. The Human Rights Tribunal concluded that the employer’s hiring policy was directly discriminatory on its face towards international students. This meant that Imperial Oil was not permitted to rely upon the defence that permanent work eligibility was a bona fide occupational requirement. Moreover, the Tribunal determined permanent work eligibility could not have been required (i.e., an occupational requirement) to do the job effectively, as Imperial Oil was found to have recruited individuals without permanent work eligibility where their skills were particularly sought-after. If you would like more information on discrimination in hiring practices, or would like legal advice on being denied a job for discriminatory reasons, please contact Marty Rabinovitch at 416.446.5826 or marty.rabinovitch@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment LawJuly 23, 2019September 30, 2020
Failing to Abide by Confidentiality Provisions in a Settlement Agreement Can Cost You Your Settlement Payment The recent decision of an arbitrator in the matter between Acadia University and Acadia University Faculty Association (Re Dr. Rick Mehta), 2019 CarswellOnt 8518 (Lab Arb) [“Acadia”] emphasizes the importance of abiding by a confidentiality provision in a settlement agreement. Background In the spring of 2018 Dr. Mehta was terminated by Acadia University for, among other things, allegedly harassing students and other faculty members. The Acadia University Faculty Association (“AUFA”) filed a grievance on behalf of Mehta and in April 2019 the matter came before a voluntary mediation session. At the mediation, a settlement agreement was reached and the Minutes of Settlement (the “Minutes”) were voluntarily executed by Acadia University, the AUFA and Mehta. Confidentiality Provision The Minutes contained a provision that all of the parties to the Minutes agreed “to keep the terms of [the] Minutes strictly confidential” and that if asked about particulars a party was to “indicate that the matters in dispute proceeded to mediation and were resolved, and [the parties] will confine their remarks to this statement” (Acadia at para 3). Alleged Breach of the Confidentiality Provision Despite this provision, Mehta was quick to take to social media and make comments such as “I got the vindication I was seeking,” “I have left the university on my term[s] as opposed to the administration’s or union’s terms” and, in response to one of Dr. Mehta’s Twitter followers’ comments “Hope you got a nice sum monz,” Mehta’s reply that “All I will say is that I left with a big grin on my face.” Arbitration As a result of Mehta’s alleged breach of the confidentiality provision in the Minutes, the matter went to arbitration. The arbitrator, William Kaplan, stated that Mehta’s tweets were a clear breach of the Minutes. As a result, the university was no longer required to honour the payment provision in the Minutes and therefore Mehta essentially lost his settlement payment. The Importance Confidentiality Provisions in Settlement Agreements Settlement privilege refers to the common law principle that, with very few exceptions, discussions and documents surrounding a possible settlement of a matter cannot be disclosed. This encourages settlement by preventing settlement discussions from eventually being used as leverage against one of the parties if the matter proceeds through trial. The privilege also generally extends to settlement agreements themselves (see, for example, Sable Offshore Energy Inc v Ameron International Corp, 2013 SCC 37 at paras 17-18). While Dr. Mehta’s consequences for failing to uphold the confidentiality provision of the Minutes may seem harsh, it is important to understand why settlement agreements should be kept confidential. If a settlement agreement could be freely disclosed it could result in prejudice to one or more parties to the settlement. For example, in the case of a labour dispute, such as that in Acadia, an employer may fear that if it settles a grievance and other employees become aware of the amount of the settlement, some of the other employees may be encouraged to commence grievances of their own with the goal of obtaining a similar settlement payment. This in turn could make an employer less willing to settle, which may result in more lengthy and expensive hearings. While settlement privilege provides protection to parties to a settlement agreement, it may not cover all aspects of a settlement agreement. This is why a party to a settlement agreement should ensure that the agreement also contains confidentiality provisions, which specify the extent to which the agreement is subject to confidentiality requirements. In Mehta’s case the provision was clear that no part of the agreement was to be disclosed. One of the reasons the outcome for Dr. Mehta was so severe is because the arbitrator noted that Mehta was involved in the negotiation of the agreement and its provisions. Importance If you are ever involved in mediation or settlement discussions, despite the principle of settlement privilege, make sure that any agreement you reach contains confidentiality provisions to protect yourself from disclosure of the agreement and possible prejudice. If you are a party to a settlement agreement, Acadia illustrates the importance of abiding by confidentiality provisions in the agreement and demonstrates that failing to do so could result in a complete loss of your settlement payment. If you have any further questions about settlement agreements and confidentiality provisions, please contact Marty Rabinovitch at 416-446-5826 or marty.rabinovitch @devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment LawJuly 18, 2019September 30, 2020