The Other Party Won’t Follow our Court Order – What do I do? Book a consultation with us Name Phone Number Email Message Send “Orders are not suggestions” is a common sentiment in family court.In light of the time, money, and effort that is involved in securing a final court order, it is no wonder that someone would become frustrated by the other party’s refusal to comply with its terms.A common question faced by lawyers, is what to do when one party fails to abide by an order – What are the options?One form of legal recourse is to bring a contempt motion, asking the Court to find that the other party is in contempt of the court order. In family law proceedings, motions for contempt are governed by the Family Law Rules. Payment orders may not be enforced by a contempt motion.Being found in contempt is a legal consequence for non-compliance with an order. The goal is to deter individuals who feel that they do not need to comply with some or all of the terms of an order. Parties who fail to comply not only interfere with the court process, but obstruct the course of justice. The consequences for being found in contempt range from fines to jail time. Ultimately, the objective with a finding of contempt is compliance.In determining whether a party should be found in contempt, the Court will consider the following:Was the party aware of the order’s existence at the time of the alleged breach?Did the order clearly and unambiguously state what should or should not be done?Did the party who allegedly failed to comply do so in an intentional way?Was the conduct demonstrated beyond a reasonable doubt? This is in part because findings of contempt are quasi-criminal in nature.It is important to keep in mind that a finding of contempt is a remedy of last resort. The Court found in Hefkey[1] that a contempt finding should be made sparingly and with great caution.In family law cases, the Court will be especially concerned with whether the parties have acted in a way that accords with the children’s best interests. In Jackson[2], The Court noted that a party may be excused for non-compliance if it was objectively in the best interests of the child(ren). The Court also acknowledged the complex emotional dynamics that are involved in family law disputes, and the desire to avoid escalating the conflict further.The importance of complying with the terms of a court order cannot be understated, and the Family Law Rules provide the Court with a range of remedies for non-compliance. That said, the Court will often exercise their discretion to find a party in contempt sparingly, and are hesitant to do so when there are other reasonable options available to send a message that the court order must be followed.If you have more questions related to family law matters, please visit our website or contact Sarah Robus at Devry Smith Frank LLP to discuss any questions regarding family law and your options at 249-888-4642 or sarah.robus@devrylaw.ca.This blog was co-authored by Law Student, Kathleen Judd.“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 situations and needs.” [1] Hefkey v Hefkey, 2013 ONCA 44[2] Jackson v Jackson, 2016 ONSC 3466 By Fauzan SiddiquiBlog, Family LawOctober 27, 2022April 5, 2024
Employers Must Exercise Fair and Reasonable Discretion in Awarding Discretionary Bonuses By David Heppenstall and Abby Leung Bowen v. JC Clark Ltd., 2022 ONCA 614 (CanLII) If an employee is terminated without cause, are they entitled to discretionary bonuses? In Bowen v JC Clark Ltd,[1] two portfolio managers at JC Clark were terminated on a without-cause basis and were each given two weeks’ salary plus $577 in lieu of notice. The managers commenced a wrongful termination action against JC Clark, claiming that they were owed $1.3 million in performance fees. The managers argued that this was a term of their employment for the portion of 2014 that they worked prior to their termination. The trial judge dismissed their claim, determining that they were not entitled to be paid performance fees by JC Clark. The portfolio managers appealed the trial decision. The Ontario Court of Appeal allowed the appeal in part. While the Court of Appeal rejected the appellants’ submissions in relation to their entitlement to performance fees, the Court of Appeal found that the trial judge erred in preventing the appellants from arguing their entitlement to a discretionary bonus. In determining what would be considered fair and reasonable calculation of bonuses given the factual context of the case, the Ontario Court of Appeal awarded each appellant $115,000. In making this decision, the Court of Appeal held that employers should exercise their discretion reasonably and in good faith and that the discretionary nature of performance bonuses does not bring with it unfettered discretion. Background The portfolio managers were first hired by a senior investment professional to manage a hedge fund that he created. The fund was sold to JC Clark in 2012 and as part of the sale, the senior investment professional agreed to allow JC Clark to hire the managers to manage the day-to-day activities of the fund. The investment professional entered into an agreement with JC Clark which provided that for four years after the fund’s sale, the investment professional would receive a share of the management and performance fees earned by the fund. The investment professional then entered into side agreements with the managers where he intended to share 50% of his management fees and 100% of his performance fees with them. Subsequently, the managers entered into employment agreements with JC Clark which provided that “at the total discretion of the Company, you may be eligible for a bonus at the end of each fiscal year depending on factors that include your personal performance and the profitability of the Company.”[2] The fund performed exceptionally well during the first half of 2014 under the managers’ supervision—which was when JC Clark terminated their employment without cause. At trial, the judge dismissed the managers’ claim, finding that the investment professional had paid them the performance fees that they were entitled to for the portion of the year they worked in 2014 and that they were not entitled to the share of performance fees directly from JC Clark. In possessing this knowledge, the trial judge determined that the managers signed employment agreements which did not provide for any performance fees that would be paid by JC Clark. The managers appealed. Ontario Court of Appeal’s Decision The Ontario Court of Appeal allowed the appeal in part. In reviewing the employment agreements, the Court of Appeal dismissed JC Clark’s argument that the discretionary nature of the bonus provision in the employment agreements meant that the employer was entirely unconstrained as to how discretion should be exercised. If an employment agreement provides for a discretionary bonus, the employment agreement contains an implied term that discretion will be exercised in a fair and reasonable manner.[3] The Court of Appeal held that what constitutes a fair and reasonable exercise of discretion is dependent on the factual context of the case. The managers argued that their discretionary bonus should be calculated in comparison to two similar portfolio managers employed at JC Clark, whose fund did not perform as well as the appellants but received a greater portion of discretionary bonuses in 2014. The portfolio managers provided further evidence that in December of each calendar year, the employer considered the allocation of discretionary bonuses from a pool of funds set aside for that purpose. Distribution of discretionary bonuses was determined by a variety of factors including corporate performance, individual performance, attitude, teamwork, seniority, position within the company, and their length of employment at the company.[4] Taking these factors into account, the Ontario Court of Appeal concluded that a fair and reasonable calculation of bonuses would involve the fund’s performance and bonuses rewarded to other portfolio managers at the time. Ultimately, the Court of Appeal held that the portfolio managers were entitled to a discretionary bonus and awarded each portfolio manager $115,000 in damages. Conclusion This case serves as a reminder for employers that discretion should be exercised in a fair and reasonable manner, taking into account all of the factual context and objective criteria. In doing so, employers are strongly encouraged not to take an unconstrained approach that is inconsistent with exercising discretion in a fair and reasonable manner. In determining how to distribute discretionary bonuses, employers are encouraged to consider objective criteria, including individual performance, position within the company, and whether discretionary bonuses will or were awarded to similarly situated employees. “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 situations and needs.” This blog was co-authored by student-at-law, Abby Leung [1] 2022 ONCA 614. [2] 2022 ONCA 614 at para 9. [3] Ibid at para 35. [4] Ibid at para 41. By Fauzan SiddiquiBlog, Employment LawOctober 19, 2022September 26, 2023
My Employer Wants me to Return to Work In-Person. Can I refuse? Probably not. (But There are Exceptions) The end of the COVID-19 pandemic is in sight. Ontario has lifted many public health mandates and restrictions. Many Ontarians are resuming their pre-pandemic lives—including returning to work in-person. Some have welcomed the transition from working-from-home to returning to the office, while others worry about the loss of the advantages of remote work. Remote work offers the possibility of a better work-life balance, flexibility for childcare, and the time and money saved on commuting. As such, many question whether employers have a right to demand continuing to work remotely, and whether employees may have a basis for refusal. In most cases, employers do have the right to demand their employees return to the office, and employees, generally, do not have a right to refuse.[1] However, this principle may not apply to all employment situations as there are a number of factors that must be considered to determine the rights and obligations of both parties to an employment agreement. These factors include the terms of the employment contract, human rights laws, and occupational and health regulations. Employment contract Specific attention should be paid to the express and implied terms of the employment contract. Express terms are those are the clearly outlined in the agreement itself. Examples might include the wage amount, or the starting date of employment. Implied terms are not expressly stated in the agreement, but are implied by law. Thus, implied terms will largely depend on the province in which the employment takes place. An example might be where the employment contract does not provide for a termination notice period, in which case, the minimum standards as set out in employment standards legislation, would be implied into the contract.[2] If the employment contract expressly and unconditionally permits the employee to work from home, then the employer would not have the legal basis to require this employee to return to into-person work, and the employee, in turn, would have a legitimate ground to refuse this demand. Human Rights Laws Human rights laws may also provide employees with a basis of refusal, but it must be on a prohibited ground of discrimination.[3] In Ontario, the Human Right Code lists the following grounds: race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, marital status, family status or disability.[4] Employers cannot force an employee to return to work, if it would be discriminatory to do so. For example, if an employee cannot return to in-person work due to a disability (which is a prohibited ground of discrimination), the employer has a duty to accommodate, and this accommodation may be allowing for continued remote employment. Occupational Health and Safety Regulations Employers have a statutory duty to safeguard the health and safety of their employees pursuant to the Occupational Health and Safety Act (OHSA).[5] By law, an employer must take every reasonable precaution to maintain a safe working environment.[6] These steps include following any remaining COVID-19 public health guidance in good faith. Employees generally have a right to refuse work which they have a “reasonable basis” to believe is unsafe or a danger to their health.[7] This being said, the reasonableness of this belief is ultimately decided by a government inspector, who would be called to evaluate the working conditions should the employer and employee be unable to address and redress such concern before-hand, and on their own.[8] The standard of review for such decision is that of correctness, and based on the conditions at the time the work was refused.[9] The following situations are examples of unsafe working conditions granting a right to refuse work: driving a vehicle, which by certain characteristics, is not safe to operate;[10] or failure to provide roofing employees with anchoring technique/guard in case of fall.[11] Courts have not tested whether simply attending a physical workplace during a pandemic qualifies as an unsafe working condition. Arguably, a workplace could be unsafe where the employer does not follow public health official guidelines, mandates, or restrictions. However, this alone may not necessarily be sufficient to refuse to attend the workplace. Every situation and workplace is different. It is important for employers to carefully strategize through their return-to-work plans and ensure they are aware of each and every one of their various obligations. It is also important for employees to be aware of their rights to refuse unsafe work — despite the uncertainty as to what that could mean during a global pandemic. Conclusion Employers do have the right to demand their employees return to the office, and employees, generally, do not have a right to refuse. However, the employment contract, human rights legislation, and occupational health and safety regulations, each prove an added layer of complexity to that statement. If an employment contract expressly and unconditionally permits the employee to work from home, then the employee would have a legitimate ground to refuse an employer demand to return to the workplace. Additionally, employers cannot force an employee to return to work, if it would be discriminatory and a violation of human rights to do so. Finally, employees have the right to refuse unsafe work — but there remains uncertainty as to what qualifies as an unsafe workplace during the pandemic. “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 situations and needs.” [1] Geoff Nixon, “Why your options may be limited if your employer wants you back in the workplace”, CBC News, 4 July 2022, online: https://www.cbc.ca/news/business/canada-employers-wfh-office-return-1.6507545 [2] Employment Standards Act, 2000, S.O. 2000, c. 41, ss 57-58. [3] Ontario, Human Rights Commission, COVID-19 and Ontario’s Human Rights Code – Questions and Answers, (News Report), 18 March 2020, online: https://www.ohrc.on.ca/en/news_centre/covid-19-and-ontario%E2%80%99s-human-rights-code-%E2%80%93-questions-and-answers [4] RSO 1990, c H.19, s 2. [5] RSO 1990, c O.1 [OHSA]. [6] Ibid, s 25(2)(h). [7] Ibid, at s. 43(3). [8] Government of Ontario, Part V: Right to refuse or to stop work where health and safety in danger retrieved from: https://www.ontario.ca/document/guide-occupational-health-and-safety-act/part-v-right-refuse-or-stop-work-where-health-and-safety-danger [9] Fletcher v Canada (Treasury Board – Solicitor General Correction Service), 2002 FCA 424. [10] Morey v CAT, 2022 ONSC 4621. [11] Ontario Ministry of Labour) v Vixman Construction Ltd, 2019 ONCJ 955. By Fauzan SiddiquiBlog, Employment LawOctober 11, 2022July 5, 2023
Settlement Agreements Are Not a Done Deal! Is the Court bound by the agreement between the parties? The court explores – Whether the court is bound by an agreement made between the parties in order to reach a settlement? In the recent Court of Appeal decision, Richardson[1], the court looked at a trial decision that was contrary to a settlement that the parties had negotiated. The Court of Appeal was faced with the question of whether the trial judge’s refusal to accept the negotiated settlement between the parties was contrary to the best interests of the children, the principles of fundamental justice, and indicative of bias. The Court of Appeal said no and concluded that they would not interfere with the trial judge’s decision to not accept the settlement between the parties. In the court process, parties often negotiate a settlement in order to avoid trial. A settlement can be reached at any time during the process. One of the goals of the family court process is to encourage resolution between the parties when possible. An offer to settle should set out all the ways in which the disputed issues can be settled. Parties are strongly encouraged to consider ALL offers because rule 18(14) provides costs consequences for failing to accept an offer if the party who made the offer obtains an order that is favourable as or more favourable than the offer. If the other party makes you an Offer to Settle, you do not accept that Offer, and the order ultimately made by the court is as favourable or more favourable to the offering party than their Offer was, the offeror is entitled to their legal costs, unless the court orders otherwise, to the date the Offer was served, and full recovery of costs from that date. In other words, if the offer that is presented to you ends up being better than what you received when you went to trial, you may have to pay substantial costs to the other side. In the Richardson[2] case, the parties advised the trial judge, during the trial, that they were negotiating a settlement. The trial judge granted an adjournment but advised the trial would continue the following day whether or not a settlement had been reached. The proposed settlement was presented to the judge the following day. The settlement contained language that the children would move from one party’s primary custody (father) to the other party’s primary custody (mother); however, the final decision-making would remain with the father. This move involved significant travel (Niagara Falls to Ottawa). The trial judge reviewed the proposal and refused to approve it. No reasons provided. The trial judge decided that a move from one party’s residence to the other was not in the children’s best interest; furthermore, the trial judge amended the time sharing to reduce travel, ultimately reducing the mother’s access to the children. This case was brought to the Court of Appeal to explore the rejection of the proposed settlement. It is well established that judges have the authority to review settlements and to reject them if they are not in the best interests of the children[3]. The Court of Appeal stated: “whether a settlement is in the children’s best interests should take into account more than just the settlement terms. It should also consider the general benefits to children that flow from parents resolving their disputes through compromise rather than litigation”. While rejecting the proposed settlement undermines the settlement process and the court’s duty to help the parties settle their case[4], the Court of Appeal found that: “the findings of the trial judge, which were made after a full hearing on the merits and are not contested on appeal, make clear that sound bases exist for rejecting the proposed settlement”. This decision leaves the question – given the strongly encouraged process of settlement, how and why was the Richardson agreement not upheld? Ultimately, this decision reveals that, even when a settlement is proposed, the judge can reject the proposal if it fails to meet the threshold of “best interests of the child”. In this case, the dissent of Justice Nordheimer is noteworthy. He stated: “In my view, the conduct of the trial judge with respect to his rejection of the parties’ settlement, without reasons, so tainted the conduct of the proceeding that his disposition cannot be allowed to stand. To do otherwise fundamentally undermines the need for court proceedings not only to be fairly conducted but, as importantly, be seen to have been fairly conducted”. If you are contemplating a settlement outside the trial process, it is worthwhile to discuss your case with a family lawyer prior to signing. If you have more questions related to Family Law, please visit our website or contact Kenna Bromley at Devry Smith Frank LLP to discuss any questions regarding your specific family law situation and your options 249-888-6641 or kenna.bromley@devrylaw.ca. This blog was co-authored by Law Student, Kathleen Judd. “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 situations and needs.” [1] Richardson v. Richardson, 2019 ONCA 983 [2] Ibid [3] Martin v. Martin, 1981 CarswellBC 773 (C.A.), at para. 7; C.T.G. v. R.R.G., 2016 SKQB 387, 86 R.F.L. (7th) 312, at para. 11; and Harper v. Harper (1991), 1991 CanLII 8330 (ON SC), 78 D.L.R. (4th) 548 (Ont. Gen. Div.), at p. 553 [4] Family Law Rules, O. Reg. 114/99, r. 2(5)(c) By Fauzan SiddiquiBlog, LitigationOctober 4, 2022July 5, 2023
When Volunteers are Actually Employees: Ontario Court Sets a New Precedent and Approves Settlement Reclassifying Volunteers as Employees Montaque v. Handa Travel Student Trip Ltd., 2020 ONSC 3821 In 2017, several college-age students thought they were signing up for a “job of a lifetime” as trip leaders with S-Trip to travel and assist with executing activities, excursions and parties.[1] While the students were told to expect 14-hour workdays, evening shifts, and long hours, trip leaders did not receive a paycheque and were called “volunteers” in internal documents. S-Trip would only pay the students a small honorarium — well below the province’s minimum wage. A class action lawsuit was launched against S-Trip and its affiliates with the suit alleging that the trip leaders were wrongfully classified as volunteers while doing the work of an employee. It was contested whether the students were entitled to receive benefits for employees as specified under the Employment Standards Act (“ESA”)[2]. An Ontario court has approved the settlement between the former trip leaders and the organization with the firm’s Toronto-based parent company, I Love Travel. The court has agreed to a $450,000 settlement and reclassifying staff on future trips as employees rather than volunteers.[3] This case is the first volunteer misclassification class action in Canada.[4] In addition to setting a new precedent, the case has the potential to significantly impact employment law moving forward. Background Despite the fact that S-Trip advertised full-time salaried positions on their job board, S-Trip trip leaders were required to sign contracts specifying that they were volunteers providing services to the company and that no employment relationship was established between the trip leader and the company.[5] Trip leaders were responsible for performing various tasks related to pre-trip planning and procedure, travel organization, airport and flight procedures, briefing sessions, and return trip organization and procedures.[6] While staff were granted an honorarium, it was calculated by the number of trips they completed and differentiates based on position.[7] Income tax, employment insurance, and Canadian pension plan deductions were not deducted from the honorarium.[8] The Class Members argued that the following factors established an employment relationship: The Class Members are the main point of contact between the customers and S-Trip; S-Trip’s operations along with the duties performed by the Class Members serve no civic, religious or charitable purpose; S-Trip is a for-profit company; Class Members are subject to a six-step interview process, which includes a Garda Pre-Employment Background Check; Class Members are provided with extensive guidelines and manuals; Class Members are assigned mandatory duties and working schedules; The duties assigned to Class Members are obligatory and not voluntary; Class Members are compensated for their work – e., the honorarium; and The compensation provided to Class Members increases with seniority.[9] Settlement Approval The Ontario Superior Court of Justice approved the proposed settlement in the all-inclusive amount of $450,000. Justice Morgan first reviewed the principles in which the court must take into account in assessing the reasonableness of a settlement including the likelihood of success, the presence of good faith, and the future expense and likely duration of litigation.[10] In applying these principles to the settlement, Justice Morgan found that the settlement proposal was reasonable and provided several benefits including that it avoided delays associated with trial and appeals, provided for pro-rata payments based on the length of the trips taken by class members, and it achieved behaviour modification as the defendants agreed to reclassify class members as employees for future trips.[11] Justice Morgan further noted that the settlement struck a balance between individual compensation of class members and an efficient and expeditious overall distribution.[12] The court concluded by noting that the settlement achieved was a good one as it will put money in the pocket of class members that they would not likely be able to achieve on their own.[13] Conclusion As Justice Morgan noted, this is the first volunteer misclassification class action in Canada and will have a significant impact in labour and employment law moving forward. The case is significant for employers in particular as it reflects what type of resolution in class proceedings would fall within the “zone of reasonableness” required by the Class Proceedings Act, 1992.[14] While a settlement is not a binding precedent in law, the Court’s approval of the settlement provides a cautionary tale for employers. For example, employers would be well-advised to carefully consider if the volunteers in their organization may actually be considered employees by law. Further, class actions are becoming a more effective method for employees to seek claims against employers as it provides class members with a less expensive and more efficient litigation vehicle to pursue their claims. “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 situations and needs.” This blog was co-authored by student-at-law, Abby Leung [1] Lauren Pelley, “S-Trip accused of exploiting volunteer ‘trip leaders’ who work long hours” CBC August 24, 2017: https://www.cbc.ca/news/canada/toronto/s-trip-employees-1.4246725 [CBC]. [2] SO 2000, c. 41 [3] 2020 ONSC 3821 at para 6 [Montaque]. [4] Ibid at para 13. [5] CBC, supra note 1. [6] Montaque, supra note 3 at para 3. [7] CBC, supra note 1. [8] Ibid. [9] 2020 ONSC 3821 [Statement of Claim, Plaintiff at para 40]. [10] Montaque, supra note 3 at para 5. [11] Ibid at para 6. [12] Ibid at para 8. [13] Ibid at para 13. [14] S.O. 1992, c.6. By Fauzan SiddiquiBlog, Employment LawSeptember 27, 2022June 10, 2023
Ontario Court of Appeal Finds Termination Clause Unenforceable Due to Illegal Conflict of Interest and Confidentiality Clauses Henderson v Slavkin et al, 2022 ONSC 2964 In 2015, Rose Henderson, a receptionist at a dental office, was asked by her employers to sign a new employment contract. The contract contained a provision limiting her entitlements only to those under the Employment Standards Act, 2000 (“ESA”)[1]. While the termination clause itself did not raise concern, the contract’s confidentiality clause and the conflict of interest clause provided that a failure to comply with these clauses would constitute cause for termination without notice or compensation in lieu of notice.[2] Henderson challenged the enforceability of these provisions, arguing that the provisions were contrary to the ESA. As a result of her challenge, she was (wrongfully) terminated. Henderson’s former employers contended that the contract was neither illegal nor unconscionable and that Henderson’s entitlements pursuant to the ESA were fully satisfied. Ultimately, the Ontario Superior Court ruled that the confidential information and conflict of interest provisions within the contract indeed violated the ESA and as a result, eighteen (18) months’ reasonable notice was owing to Henderson. The takeaway from Henderson is that a single contractual clause which violates the ESA with respect to termination can threaten the enforceability of that provision. This reinforces and goes beyond the Ontario Court of Appeal’s earlier ruling in Waksdale v Swegon North America Inc.[3] that a contract’s termination provisions must be read as a whole. To the effect that if any aspect of the termination clause is found to contravene the ESA, the entire clause will be rendered null and void for all purposes. Henderson provides that any agreement or policy that states that a breach of that policy will lead to termination without compensation could invalidate any other enforceable termination clause. The law will continue to evolve in response to these developments. Background In Waksdale, the Court of Appeal’s decision revolutionized employment law by ruling that the “without cause” termination provisions in employment contracts can be legally unenforceable if the wording of any other termination provisions elsewhere in that same contract contravene any aspect of the ESA or its regulations. The Court further stated that the severability clause could not save provisions of a contract that have been made void by statute.[4] As the Supreme Court of Canada denied leave, Waksdale is the binding authority in Ontario for interpreting the validity of an employment agreement. Subsequent decisions including Gracias v. Dr. David Walt Dentistry[5] and Rahman v. Cannon Design Architecture Inc[6] reference the Waksdale ruling that an invalid just cause provision renders other termination provisions unenforceable. Waksdale provides its analysis using the just cause standard but it is important to note the difference between the just cause standard and wilful misconduct in employment law. In order to be disentitled from ESA entitlements under the “wilful misconduct” standard in the Regulations, the employee must do something deliberately, knowing that they are doing something wrong.[7] This test is higher than the test for “just cause”: the employer must demonstrate that the employee purposefully engaged in conduct that he or she knew to be serious misconduct.[8] Careless, thoughtless, or inadvertent conduct would not meet this standard.[9] Differentiating between these standards is crucial in determining whether an employee was terminated for just cause or for wilful misconduct. The Case of Henderson v. Slavkin et al Henderson reinforces the reasoning behind Waksdale. The Ontario Superior Court of Justice found that the contract’s provisions relating to confidential information and conflict of interest violated the ESA. The Court outlined the basic principles forming the framework for the determination of the enforcement of a termination clause: Employees have less bargaining power than employers when employment agreements are made; Employees are likely unfamiliar with employment standards in the ESA and thus are unlikely to challenge termination clauses; The ESA is remedial legislation, and courts should therefore favour interpretations of the ESA that encourage employers to comply with the minimum requirements of the Act, and extend its protection to employees; The ESA should be interpreted in a way that encourages employers to draft agreements which comply with the ESA; A termination clause will rebut the presumption of reasonable notice only if its wording is clear, since employees are entitled to know at the beginning of an employment relationship what their employment will be at the end of their employment; and Courts should prefer an interpretation of the termination clause that gives the greater benefit to the employee.[10] Where an employment agreement is not consistent with the ESA, the agreement becomes invalid and the terminated employee becomes entitled to common law damages.[11] The Court found that the clause in the conflict of interest and confidential information provisions that provided that a failure to comply would constitute cause for termination without notice or compensation in lieu of notice was unenforceable. For both of these provisions, what constitutes a breach is overly broad and ambiguous to the extent that it exceeds the concept of wilful misconduct under the ESA.[12] The Court rejected the employers’ argument that the provisions only apply to wilful misconduct or wilful neglect of duty as the Court was unable to conclude that that was the case based on the wording of the provisions.[13] As the clauses were not in compliance with the ESA, the employment contract was invalidated. Conclusion The Court’s decision in Henderson should be a cautionary lesson for employers. It holds that a single ESA-violating clause that deals with termination within an employment contract can threaten the enforceability of a termination provision. Employers should review the provisions together, in addition to any employment policies that government termination of employment, to ensure that the employment provisions do not offend the ESA. “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 situations and needs.” This blog was co-authored by student-at-law, Abby Leung. [1] SO 2000, c. 41. [2] Henderson v Slavkin et al., 2022 ONSC 2964 at para 13. [3] 2020 ONCA 391. [4] Ibid, para 14. [5] 2022 ONSC 2967. [6] 2022 ONCA 451. [7] Render v ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310 at para 79. [8] Ibid. [9] Ibid. [10] Wood v Fred Deeley Imports Ltd, 2017 ONCA 158 at para 28. [11] 2022 ONSC 2964 at para 26. [12] Ibid at para 38. [13] Ibid. By Fauzan SiddiquiBlog, Labour LawSeptember 21, 2022June 10, 2023
Time Keeps Moving On, and On, and On… But What Resets the Clock? Ontario’s Common Law Rolling Limitation Period In Ontario, the ability to sue or bring a civil claim against a person or other party is subject to a statutory limitation period, which is essentially a time limit for a party to commence, or bring forth, a claim against another party. Though subject to some exceptions, the statutory limitation period in Ontario is typically two years from the date the claimant discovers the claim. This general rule is outlined in sections 4 and 5 of Ontario Limitations Act (the “Act”) which provides the following: Basic Limitation Period 4 Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. Discovery 5 (1) A claim is discovered on the earlier of, (a) the day on which the person with the claim first knew, (i) that the injury, loss or damage had occurred, (ii) that the injury, loss or damage was caused by or contributed to by an act or omission, (iii) that the act or omission was that of the person against whom the claim is made, and (iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and (b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a). An exception to the standard two year limitation period is found in instances where there is a reoccurring breach of a contractual obligation such that it creates a ‘rolling limitation period’. This common law exception was established by the Ontario Court of Appeal in Pickering Square Inc. v. Trillium College Inc. (“Pickering Square v Trillium College”).[1] The court in Pickering Square v Trillium College held that where an ongoing obligation is owed by one party to another under a contract, the limitation period will ‘reset’ each time there is a breach. Due to the ongoing nature of the obligation, each instance of a failure to perform one’s duties under a contract will be considered a separate breach for the purpose of determining the limitation period. In Pickering Square v Trillium College, the commercial tenant was deemed to have committed a breach each day it failed to operate its business in the rented premises pursuant to the lease agreement. Therefore, the limitation period would reset every day the unit was vacant until the end of the lease term. Rather than treating the breach as a singular event which occurred on the date the unit was vacated and thus statute barred, the Landlord was able to claim damages for each day a breach occurred in the two years prior to the claim being brought. The common law rolling limitation period was revisited and clarified in Marvelous Mario’s Inc. v. St. Paul Fire and Marine Insurance Co., 2019 ONCA 635 (“Marvelous Mario’s v St. Paul”).[2] In this case, the insured plaintiff suffered business interruption losses for which it sought insurance coverage. The defendant insurer’s commercial insurance policy provided a contractual limitation period of one year, and because over one year had elapsed since the initial loss was discovered, the insurer attempted to argue the claim was statute barred. The trial judge found that a rolling limitation period applied and that each day the insurer failed to pay the limitation period renewed. The Ontario Court of Appeal clarified the basis of a rolling limitation period as follows: The jurisprudence suggests that a rolling limitation period may apply in a breach-of-contract case in circumstances where the defendant has a recurring contractual obligation. The question is not whether the plaintiff is continuing to suffer a loss or damage, but whether the defendant has engaged in another breach of contract beyond the original breach by failing to comply with an ongoing obligation. In cases where there have been multiple breaches of ongoing obligations, it is equitable to impose a rolling limitation period.[3] Determining when a limitation period has begun and whether a dispute will be subject to rolling limitation period will ultimately depend on the facts. If you have any questions about limitation periods or commercial law generally please contact Ryan Stubbs at (416)-446-3309 or Ryan.Stubbs@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 situations and needs.” This blog was co-authored by Chloe Carr* [1] Pickering Square Inc. v. Trillium College Inc., 2016 ONCA 179 (CanLII). [2] Marvelous Mario’s Inc. v. St. Paul Fire and Marine Insurance Co., 2019 ONCA 635 (CanLII). [3] Ibid at para 35. By Fauzan SiddiquiBlog, LitigationSeptember 15, 2022June 10, 2023
Drawing the Line: Extended Families May Face Conspiracy Claims In Assisting Child Support Evasion – Leitch v Novac 2020 ONCA 257 When a couple divorces, it is common for extended family to provide support for their loved ones. Some families get involved and assist with finances while others provide emotional support for the separated spouse. While most families are invested in the outcome of a couple’s divorce, some families take extreme measures to ensure that the separated spouse reduces his or her financial obligations for support or property. In the past, when a spouse hides income or assets with the assistance of extended family, the court’s sanctions have largely been limited to an order of costs against the offending spouse or a finding of contempt. While claims against extended family members have been made in the past, these claims were uncommon and were largely unsuccessful. In recent years, the Ontario Court of Appeal changed the landscape on conspiracy in permitting a conspiracy claim against a spouse’s family for assisting him to divert income payable for child support. In Leitch v Novac 2020 ONCA 257, the wife sued her husband, her husband’s parents, a family corporation, and several trusts and trustees, alleging that her husband’s family and entities conspired to defeat her family law claim and conceal her husband’s assets and income. After the couple separated, the husband’s father incorporated a company to provide management services to a casino operation. The father and husband agreed orally that the husband would receive 40 percent of the management fees over the life of the contract. Before the contract ended, the casino owner bought out the contract for nearly $6 million and the lump sum was paid to the father’s corporation. Instead of providing the husband’s 40 percent share for spousal and child support, the husband’s father kept all the income from the buyout. The father, the corporations, and the trusts brought a motion for partial summary judgment to have the claims of conspiracy dismissed before trial. The motion judge awarded partial summary judgment, concluding that there was no unlawful conspiracy and that the wife did not establish damages but that the wife could still pursue a claim to impute additional income for the purpose of determining support. The wife appealed the summary judgment order, the costs award and the order for security for costs and preservation of assets to the Ontario Court of Appeal. The Court of Appeal was asked to consider whether the motion judge erred in law in awarding partial summary judgment and in her analysis of the tort of conspiracy. Ontario Court of Appeal Allows Appeal Against Extended Family For Conspiracy In order to claim conspiracy against the extended family and the related entities, the wife had to prove whether or not the means used by the father and the husband were lawful or unlawful, whether the predominant purpose of their conduct was to cause her injury, or if the conduct was unlawful, whether the father and the husband should have known that injury to the wife was likely to result. The Ontario Court of Appeal allowed the wife’s appeal and emphasized the importance of the tort of conspiracy in family law where a third party assists a payor in hiding income or disclosure. Justice William Hourigan asserted that if the tort of conspiracy was not available, co-conspirators would be able to facilitate non-disclosure and are willing to “break both the spirit and letter of the family law legislation to achieve their desired result, including by facilitating the deliberate hiding of assets or income.”[1] If the Court of Appeal accepted the motion judge’s analysis, co-conspirators who engage in conspiracy could do so with impunity. The Court of Appeal noted that the tort of conspiracy would allow judgment against a co-conspirator which is often the only means by which a recipient will be able to satisfy a judgment. Further, the Court of Appeal addressed the denial of justice that may occur in family law cases where third parties assist litigants, referring to these third parties as “invisible litigants”. Beyond providing emotional support, invisible litigants become active participants in litigation to achieve their desired result which includes facilitating nondisclosure and deliberating hiding assets and income. Using the tort of conspiracy would be necessary in certain situations to ensure fairness and justice in family law cases. Conclusion The Court of Appeal’s decision in Leitch expands the tort of conspiracy in family law within Ontario. This case should be regarded as a reminder that non-disclosure and deliberate concealment of assets and income would not be tolerated. Family members who act as invisible litigants are not immune from liability and should be cautious in interfering with family law disputes. If you have any questions about your family law matter, please contact the Family lawyers at Devry Smith Frank LLP at (416)-449-1400 or info@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 situations and needs.” This blog was co-authored by Abby Leung [1] 2020 ONCA 257, para 45. By Fauzan SiddiquiBlog, Family LawSeptember 9, 2022October 18, 2023
Ruling From the Grave – Are Conditional Gifts in Wills Valid? A Will serves the function of expressing the testator’s last wishes. However, for public policy considerations, not all requests should be granted. While putting conditions on how the beneficiary uses or receives the gift is permissible, there are requirements testators must follow if the gift is to be legally acknowledged. Condition Precedents A condition precedent in the context of wills is a condition or occurrence that must occur before the gift can be acquired. Examples of Valid Condition Precedents To receive the money set aside for them, the beneficiary must complete college within 5 years. The beneficiary must marry before obtaining the automobile left in the testator’s estate. The beneficiary cannot get the testator’s shares in Company X until they turn 22. Conditions should be written in a specific way in order to give the condition a reasonable chance of being followed. A gift cannot, among other things, impose an unreasonable restraint on the beneficiary’s ability to marry, require the beneficiary to commit a crime, or discriminate against others on the basis of race, religion, or nationality. There is no exhaustive list of voidable conditions. Conditions Subsequent A condition subsequent imposes a condition after the gift has already been received. Specifically, a condition subsequent revokes a gift if a specific event occurs. For instance, a testator leaves land to a specific beneficiary on the condition that the beneficiary never constructs a commercial building on it. In most cases, testators cannot rule from the grave, meaning that if you leave certain assets or gifts for certain individuals, you cannot unduly restrict their use of them. The In Terrorem Doctrine In certain cases, it may be necessary to challenge the terms of the conditional gift in the Will. An In terrorem clause is a conditional gift in a Will, wherein a beneficiary will lose all entitlement to the gift if they breach or fail to adhere to the condition attached to the gift. It is generally used by a testator to encourage or dissuade particular conduct by a potential beneficiary. In the British Columbia Supreme Court decision of Kent v McKay, the Court held that for the in terrorem doctrine to apply and to find the condition in question void, the following three conditions must be met: The legacy in consideration must be real property, personal property, or a combination of the two; The condition must be in restraint of marriage or one which forbids challenges to the Will; and The threat must be “idle”; that is to say that the condition must be imposed solely to prevent the beneficiary from undertaking that which the condition forbids. If the condition meets the standards of the in terrorem doctrine, it will be deemed null and void, and the gift will be absolute, regardless of whether there was a preceding or succeeding condition. According to this principle, a court will not uphold a no-contest clause that is a “mere” threat. In order to be enforceable, a no-contest condition usually requires the designation of a substitute beneficiary for the gift (either a particular person or the residual estate). By doing so, the threat becomes “real” because an actual provision is made to gift another person (i.e., a “gift-over”). Public Policy Prevails The Will under question in Kent contained the following no-contest provision: “I HEREBY WILL AND DECLARE that if any person who may be entitled to any benefit under this my Will shall institute or cause to be commenced any litigation in connection with any of the provisions of this my Will other than for any necessary judicial interpretation thereof or for the direction of the Court in the course of administration all benefits to which such person would have been entitled shall thereupon cease and I hereby revoke all said benefits and I DIRECT that said benefits so revoked shall fall into and form part of the residue of my Estate to be distributed as directed in this my Will.” In determining whether the aforementioned no-contest clause passed the three-part test, Justice Lander found that it was not in terrorem because it contained a gift-over provision to the residue, which was sufficient to pass the test’s third requirement. However, the Court noted that despite the no-contest clause surviving the in terrorem doctrine, the clause was nonetheless void for public policy reasons. The no-contest clause, according to Justice Lander, was intended to prohibit any litigation in connection with any of the provisions of the Will. Therefore, it would have prevented a beneficiary from exercising their legal right to request support for dependents. Conclusion Although an individual is free to manage their estate however they see fit, the Kent decision demonstrates the limits of testamentary freedom when provisions of a Will are inconsistent with public principles or may cause social harm. The decision has been followed in a number of jurisdictions in Canada, including Ontario. For more information regarding Wills, testamentary gifts, or any other trusts and estates related topic, please contact Colleen Dermody at Devry Smith Frank LLP at (705) 408-0344 or colleen.dermody@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 situations and needs.” This blog was co-authored by Owais Hashmi* [1] Kent v McKay, [1982] 6 WWR 165 By Fauzan SiddiquiBlog, Wills and EstatesSeptember 2, 2022June 10, 2023
Health and Medical Practitioners Not Liable for Failing to Disclose Unusual Risks to Medical Treatments if a Properly Informed Person Would Have Consented Anyway Warlow v Sadeghi[1] In 2010, Elaine Warlow began experiencing a painful toothache. It was a gum infection—probably due to some impacted food. Dr. Ali Sadeghi, an oral surgeon, recommended the removal of an impacted wisdom tooth where the infection was concentrated. Ms. Warlow consented. During the surgery, Dr. Sadeghi struck a nerve. As a direct consequence, Ms. Warlow was injured and left with chronic pain. Ms. Warlow’s life was devastated. Prior to the surgery, she was in good health, athletic, maintained an active social life and was about to begin a promising new career. Following her injury, her new career was finished before it could start, her earning ability decreased, she stopped exercising, and she became socially isolated. Ms. Warlow brought an action for damages against Dr. Sadeghi. At the Supreme Court of British Columbia, the core issue was whether Dr. Sadeghi properly informed Ms. Warlow about the risks of the procedure to remove the wisdom tooth. Although Dr. Sadeghi warned of the risk that she may experience “pins and needles” or “numbness,” there was no mention of the potential for permanent nerve damage. By this omission, Ms. Warlow’s consent was not informed. However, the trial judge concluded that a reasonable person in Ms. Warlow’s shoes with full knowledge of that risk would have proceeded with the surgery. Consequentially, the action against Dr. Sadeghi was dismissed. The Court of Appeal for British Columbia upheld that dismissal. The importance of health and medical practitioners providing sufficient information for patients to make informed choices about their care is paramount. But, if they fail to do so, they may not face legal liability if a properly informed person would have consented anyway. Background The fundamental first step of any medical treatment is to ensure that the patient consents.[2] Under the Ontario Health Care Consent Act, 1996, unless it is an emergency, no treatment may be performed unless consent is given by a patient who has the capacity to consent.[3] Where the patient lacks capacity, their substitute decision-maker must give the consent. Consent must be voluntary, without misrepresentation, and it must relate to the nature of the proposed treatment.[4] Consent may be either express or implied, and it may be withdrawn at any time.[5] Consent must also be informed. For a patient to be properly informed, they must be advised of the nature and expected benefits of the treatment, but also the material risks and side effects.[6] The properly informed patient would also be advised of alternative courses of action and the possible consequences of not undergoing the treatment. Lastly, the patient must have the opportunity to ask questions, and their questions must be answered. In sum, the patient must be given all of the information “that a reasonable person in the same circumstances would require in order to make a decision.”[7] Practitioners could be liable if they fail to provide this informed consent—even if they were otherwise performing within the appropriate standard of care.[8] Failing to provide the proper information is a distinct cause of action from an action in negligence. The Case of Warlow v Sadeghi In the case against Dr. Sadeghi, the trial judge found that he failed to properly inform Ms. Warlow of the risk that temporary or permanent nerve pain could result from the procedure to extract her wisdom tooth.[9] Dr. Sadeghi testified that he did indeed describe to Ms. Warlow the alternatives, the risks of the treatment, and the risks of not undergoing the treatment—all in a conversation which lasted only a few minutes.[10] In particular, Dr. Sadeghi informed Ms. Warlow that doing nothing could lead to hospitalization or death due if infection were to recur. Dr. Sadeghi conceded that he did not specifically articulate the risk of “permanent nerve pain” or “permanent neuropathic pain.”[11] Although he did state that there was a ~2% chance of injuring a nerve, he described the possible outcome as limited to “pins and needles” or “tingling.”[12] The trial judge described this somewhat benign characterization as quite different from the risk of permanent pain.[13] Dr. Sadeghi made the conscious choice not to inform Ms. Warlow of the risk of permanent pain because he felt that it was very remote. He had never seen any study or encountered a single case of permanent pain from this type of nerve injury.[14] In this respect, the risk was “unusual.” Nonetheless, the court held that Dr. Sadeghi should have disclosed the risk of permanent pain. As he did not, Ms. Warlow’s consent to the treatment was not properly informed. Lacking informed consent, the question then shifted to what would have been decided if Dr. Sadeghi did properly inform his patient. Establishing Liability Under the Modified Objective Test To establish liability for the health or medical practitioner where consent is not informed, the Supreme Court articulated the “modified objective test,” as stated in Reibl v Hughes and affirmed in Arndt v Smith.[15] After the plaintiff proves that a “material, special, or unusual” risk was not disclosed which ought to have been, the plaintiff must prove that a reasonable person in that position would not have agreed to the treatment even if adequately advised of the risks.[16] This next issue is a question asked in two stages, as per the Ontario Court of Appeal decision of Bollman v Soenen.[17] At the first stage, the question is: what would the patient themselves have done? At the second stage, the question is: what would a reasonable person in the shoes of the patient have done? At both stages, the answer must be that informed consent would not have been given in light of the new information. In Ms. Warlow’s case, the trial judge could make no determination as to what she would have done if she was properly informed. Ms. Warlow had the burden to testify as to what she would have done, but she did not.[18] Although she stated that she would not have given consent if she knew that she would “end up like this,” this was not helpful.[19] No one would consent to treatment if they knew they would be worse off. The issue was: if she was aware of the risk, would she have consented? Ultimately, the first stage could not be answered; Ms. Warlow’s informed choice could not be inferred. At the second stage, the trial judge reviewed the relevant circumstances to determine what an adequately informed reasonable person would have done in Ms. Warlow’s position. To answer this question, the trial judge considered how Dr. Sadeghi outlined that extraction of the wisdom tooth was the best option under the circumstances and that it was a common procedure.[20] The trial judge ultimately concluded that a reasonable person in Ms. Warlow’s position would have consented to the treatment even where properly informed of the consequences of nerve injury and the risk of permanent pain.[21] Given the fact that Ms. Warlow’s informed choice could not be inferred and that an adequately informed reasonable person would have consented to the treatment, Dr. Sadeghi was found not liable for any damages to Ms. Warlow. On appeal, the Court of Appeal for British Columbia upheld the lower court’s decision.[22] Conclusion The notion of informed consent is enshrined as critically significant by the legislature and by the judiciary. Absent circumstances of emergency, health and medical practitioners must provide their patients with all of the requisite information necessary for them to make informed choices about medical treatments. This information includes the benefits, risks, side effects, alternatives, and possible consequences of not undergoing the treatment. Where a health or medical practitioner fails to provide information about a risk to their patient which ought to have been disclosed—even if that risk is “unusual”—they may face liability for the damages which may result. However, even if informed consent is not given, practitioners will not face any liability if the properly informed patient and a properly informed reasonable person would have consented to the treatment nonetheless. If you have any questions related to medical malpractice, please contact David Derfel to discuss any questions and your options at 416 446-5096 or david.schell@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 situations and needs.” Sources [1] Warlow v. Sadeghi, 2021 BCCA 46 (CanLII) [Warlow]. [2] Male v Hopmans et al, 1967 CanLII 146 (ON CA). [3] SO 1996, c 2, Sched A, ss 10, 18(4), 25(1). British Columbia has a similar statutory regime for medical consent; see: Health Care (Consent) And Care Facility (Admission) Act, RSBC 1996, c 181, s 5. [4] Ibid, s 11(1). [5] Ibid, ss 11(4), 14. [6] Ibid, ss 11(2)-(3). [7] Ibid. [8] Watson v Dr Shawn Soon, 2018 ONSC 3809 (CanLII) at paras 81-82. [9] Warlow, supra note 1 at para 3. [10] Ibid at paras 21-22. [11] Ibid at para 23. [12] Ibid at para 20. [13] Ibid at para 25. [14] Ibid at para 23. [15] Reibl v Hughes, 1980 CanLII 23 (SCC) cited by Arndt v Smith, 1997 CanLII 360 (SCC) cited by ibid at para 18. [16] Warlow, supra note 1 at para 33. [17] Bollman v Soenen, 2014 ONCA 36 (CanLII) at para 21. [18] Warlow, supra note 1 at para 39. [19] Ibid at para 38. [20] Ibid at para 41. [21] Ibid at para 27. [22] Ibid at para 42. By Fauzan SiddiquiBlog, Commercial Litigation, Personal InjuryAugust 4, 2022June 10, 2023