Dispute Over Real Estate Transaction Deadline: Ontario Court of Appeal Affirms Vendor’s Termination of Contract In a recent appeal before the Ontario Court of Appeal, the Court showcased once again the significance of the “time is of the essence” clause. In, 3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes), 2024 ONCA 6, the parties entered into an Agreement of Purchase and Sale (APS) with 3:00 pm being the closing time specified on the completion date. The purchasing party missed the closing time by a mere 35 minutes and despite having delivered the purchase price, the Vendor terminated the contract. The appellant, 3 Gill Homes Inc., contested the application judge’s ruling in favour of the respondent vendor, 5009796 Ontario Inc., trading as Kassar Homes (“Kassar Homes”). In rendering its decision the Ontario Court of Appeal had to balance well-established rules of contractual interpretation and strict reading of the contract negotiated and entered into by the parties. Key Issues Did the application judge err in finding that: the payment closing time was 3:00 pm; time was of the essence in relation to the payment closing time; the 3:00 pm closing time was not unconscionable; damages could not be fairly determined on a written record; and Are the application judge’s reasons sufficient for appellate review? Court’s Decision The Court of Appeal dismissed the appeal, upholding the application judge’s ruling. Here’s the breakdown of the court’s reasoning: Payment Deadline: The court affirmed the application judge’s determination that the payment deadline of 3:00 p.m. was clearly stipulated in the APS. This timeframe was essential, and failure to adhere to it justified the vendor’s termination of the contract. “Time is of the Essence” Clause: The court agreed with the application judge’s interpretation of the “time is of the essence” clause. This clause made it clear that adhering to the closing date and time was crucial, empowering the innocent party to terminate the contract upon breach. Unconscionability: The court found no basis to interfere with the application judge’s conclusion regarding the absence of unconscionability. The parties’ familiarity with real estate transactions and the terms of the APS weighed against the appellant’s claim of unfairness. Sufficiency of Reasons: The court determined that the application judge’s reasons were adequate for appellate review. The judge’s analysis of relevant case law, the APS terms, and factual circumstances provided a clear rationale for the decision. Damages Determination: Since the court upheld the application judge’s ruling on the merits, it deemed the issue of damages determination unnecessary for consideration. Opinion Many commentators would describe the Ontario Court of Appeal’s decision as harsh, given the fact that the Purchaser missed the closing payment deadline by a mere 35 minutes. This case underscores the significance of honouring contractual agreements in real estate transactions. The court’s decision not to interfere with the contractual deadline reflects a commitment to upholding the parties’ bargained-for terms. In essence, if parties agree that funds must be provided by a specific time, irrespective of other deadlines, the court will honour that agreement. In this instance, the vendor was within their rights to terminate the contract when the funds were not deposited into their lawyer’s trust account by 3:00 p.m., as specified in the APS. It is a common practice for such clauses to be included in pre-construction agreements. Upon entering into an APS, purchasers would do well to insert a solicitor review condition to ensure they are advised of all contractual timelines. While the transfer deed, the document in which ownership is transferred from vendor to purchaser, can occur on or prior to 5:00 pm, the parties could insert additional timelines for certain deliveries in the APS. Conclusion The Ontario Court of Appeal’s decision in 3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes), 2024 ONCA 6 reaffirms the importance of respecting contractual obligations in real estate transactions. By upholding the parties’ bargained-for terms, the court ensures clarity and fairness in contractual dealings. This case serves as a reminder for parties to carefully review and negotiate their agreements to avoid disputes over contractual deadlines in the future. If you have questions about real estate transactions, please contact Louis Gasbarre, lawyer at Devry Smith Frank LLP at 416-446-5853 or louis.gasbarre@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.” This blog was co-authored by Mohadeseh Bakhtiari. By AlyssaBlog, Real EstateMarch 11, 2024March 11, 2024
Permanent Residents of Canada – The Repercussions of a DUI Conviction A change in 2018 that now allows a maximum penalty of 10 years imprisonment for impaired driving has impacted the eligibility of those who have been convicted of an impaired driving charge and are seeking or have permanent resident status in Canada. In 2018, Bill C-46 became law and cracked down on drivers under the influence. This change means that an impaired driving charge may now result in 10 years imprisonment. This has had a significant impact on those seeking, and those who have obtained permanent resident status in Canada. The Immigration and Refugee Protection Act (“IRPA”) lays out the inadmissible conduct that falls under “serious criminality”. Section 36(1) reads as follows: 36 (1) A permanent resident or a foreign national is inadmissible on grounds of serious criminality for (a) having been convicted in Canada of an offence under an Act of Parliament punishable by a maximum term of imprisonment of at least 10 years, or of an offence under an Act of Parliament for which a term of imprisonment of more than six months has been imposed; (b) having been convicted of an offence outside Canada that, if committed in Canada, would constitute an offence under an Act of Parliament punishable by a maximum term of imprisonment of at least 10 years; or (c) committing an act outside Canada that is an offence in the place where it was committed and that, if committed in Canada, would constitute an offence under an Act of Parliament punishable by a maximum term of imprisonment of at least 10 years. As laid out above, there are a number of offences under this section of IRPA that would deem an individual “inadmissible” to Canada. With the changes that came into force with Bill C-46, impaired driving is now one of them. The result is that it does not matter whether you were sentenced to the maximum penalty. If you were convicted of an act that is punishable by a maximum term of imprisonment of at least 10 years, you are inadmissible to Canada on grounds of serious criminality. For foreign nationals seeking entry into Canada, the repercussion of being deemed inadmissible means that they would likely be refused entry into Canada even for a short visit. For permanent residents of Canada, being deemed inadmissible means that they may lose their permanent resident status and are at risk of facing deportation. Whether convicted of a DUI in Canada or another country, the risk remains the same. After a DUI conviction, Canada Border Services Agency (“CBSA”) will notify the offender that the offence is considered a “serious criminality” offence. The offender would then have an opportunity to respond and CBSA would determine whether or not to prepare a Section 44 report to commence the deportation process and hold an admissibility hearing. The admissibility hearing is held before the Immigration Division of the Immigration and Refugee Board of Canada (IRB). This hearing is to determine whether CBSA was correct in labelling the offender as someone who meets the definition of “Serious Criminality” under the Act. If the Board determines that the offender meets the “Serious Criminality” definition, the offender is now inadmissible to Canada, and the Board will issue a removal order. It is important to note that there is no appeal option for permanent resident DUI offenders who were sentenced to 6 months or more of prison time. It is imperative that permanent residents of Canada fully understand the immigration repercussions of a DUI conviction before entering a guilty plea to a DUI charge. Criminal lawyers will often wisely advise their client to plead guilty (often when presented with multiple charges being dropped in exchange for a guilty plea to the DUI), but without fully considering or understanding the effect this will have on their client’s permanent resident status in Canada. If you are currently a permanent resident in Canada and have been charged with impaired driving, or are seeking permanent resident status in Canada, you may have options. If this is the case, an experienced lawyer, knowledgeable in the complex intricacies of Canadian immigration law, is essential in solving your immigration needs. If you are interested in seeking further guidance on this topic, please contact Benjamin Grubner, immigration lawyer at Devry Smith Frank LLP at 416-446-3328 or Benjamin.grubner@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.” This blog was co-authored by articling student Samantha Lawr. By AlyssaBlog, ImmigrationFebruary 22, 2024February 22, 2024
Can I Inherit My Spouse’s Estate if They Died Without a Will While We Were Separated? In an effort to modernize estate law practice, several amendments to Ontario’s inheritance laws have recently been implemented. These changes were largely prompted by the enactment of the Accelerating Access to Justice Act, 2021, which introduced significant amendments to the Succession Law Reform Act (“SLRA”), the legislation governing inheritance matters in Ontario. Traditionally, under intestacy rules, if a married couple lived separately and one died without a will, leaving behind only a spouse, the spouse would inherit the deceased’s property outright. However, if the deceased left a spouse and one child, the spouse’s entitlement would be half of the estate remaining after the payment of the spousal preferential share, currently set at $350,000. In cases with multiple children, the spouse would still receive their preferential share, with the remaining estate divided between the spouse and the deceased’s children. However, on January 1, 2022, an amendment to section 43.1 of the SLRA introduced significant changes regarding separated spouses in intestacy matters. This amendment not only exempts separated spouses from intestacy rules but also provides a comprehensive definition of what constitutes a “separated” spouse. The aim is to bring clarity and fairness to estate distribution in situations where marital relationships have broken down. Who qualifies as a “spouse” under the SLRA? Under the SLRA, “spouse” has the same meaning as in section 1 of the Family Law Act (“FLA”). Section 1 of the FLA defines “spouse” as two persons who: (a) are married to each other, or (b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right. According to section 43.1 of the SLRA, a spouse is considered “separated” from the deceased person at the time of their death if: (a) Before the person’s death, i. they lived separate and apart as a result of the breakdown of their marriage for a period of three years, if the period immediately preceded the death, ii. they entered into an agreement that is a valid separation agreement under Part IV of the Family Law Act, iii. a court made an order with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage, or iv. a family arbitration award was made under the Arbitration Act, 1991with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage; and (b) at the time of the person’s death, they were living separate and apart as a result of the breakdown of their marriage. It’s essential to note the difference between common-law spouses and married spouses regarding property rights. Unlike married spouses, common-law partners do not have the same legal treatment and do not automatically possess equivalent property rights. By providing clarity on the treatment of separated spouses in intestacy cases and defining the term “separated” spouse, the amendment aims to promote fairness and equity in estate distribution practices. However, it also underscores the ongoing need for individuals to be aware of their legal rights and obligations, particularly in the realm of family law and estate planning. The experienced legal team at Devry Smith Frank LLP is here to assist you in navigating the intricacies of Ontario’s legal landscape. For more information regarding Estates and Estates-related topics, please contact Kelli Preston at Devry Smith Frank LLP at (416) 446-3344 or kelli.preston@devrylaw.ca. This post was co-authored by Kelli Preston and Articling Student, Owais Hashmi. “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 AlyssaBlog, Wills and EstatesFebruary 14, 2024
Title Insurance 101 You just moved into your new property. You go to install a new fence, and you discover that it’s not on the property line – 6 inches of your land has been on your neighbor’s side of the fence for years! Uh oh… now what? Title insurance might save the day! What is Title Insurance? Title insurance is a type of insurance policy that protects property owners and lenders from losses associated with title issues or other covered risks. “Title” describes your legal right of ownership to the land. Effectively, title insurance allows purchasers to insure against future potential title issues, rather than conducting additional due diligence at the outset of the transaction. Title insurance requires one-time payment, with the policy being effective for as long as you own the property. Common Coverage Offered by Title Insurance The following is a non-exhaustive list of potential issues that a standard title insurance policy may cover: Title defects Unmarketability of title Legal issues involving access Encroachment issues, adverse possession, property line disputes Easements over the property (i.e. Someone has a legal right of way over the property) Liens or charges on title Work orders from a municipality Tax or utility arrears from previous owner Certain violations of municipal regulations Title fraud or forgery Title insurance policies also usually contain a litigation provision in which the insurer undertakes to defend your title and other insured risks in any court case that is based on the provisions in your policy. For example, if a neighbour was to build a structure that encroached onto your land, if covered under the policy, the title insurer may assist in retaining counsel on your behalf, commencing a proceeding, and may pay for all legal fees and expenses incurred to rectify the issue. What is Not Covered? Title insurance policies often contain numerous exemptions or restrictions that are not typically afforded under a standard policy. Some title insurers will provide additional endorsements, depending on the circumstances at hand, to meet your specific needs. If title insurance does not insure over an issue, you will need to speak with your lawyer for further direction on how to proceed. The following is a non-exhaustive list of issues that are not usually covered by a standard title insurance policy: Physical and structural defects to the property Certain governmental powers/intervention (i.e. expropriation, violation of by-law etc.) Environmental risks Risks that are created by, allowed by, known to, or agreed to by the insured A common area of confusion lies in the distinction between title insurance and home insurance. While home insurance protects an insured from unexpected loss or damage to the physical property, title insurance protects the insured from loss or defects relating to the legal title of the property. It is imperative to note that title insurance is not an alternative to home insurance. Is Title Insurance Mandatory? It is not mandatory to purchase title insurance when acquiring a property in Ontario. Nevertheless, a lender may refuse to provide financing if a title insurance policy is not taken out on their behalf (i.e. a lender policy). The most common alternative to title insurance is to obtain a solicitor’s opinion on title. This alternative requires your lawyer to conduct numerous “off-title” searches that can be costly and time consuming. You would also need to provide your lawyer with, or obtain, an up-to-date survey of the property. The cost to obtain an up-to-date survey alone would likely exceed the cost of a standard title insurance policy, which is why many mortgagors opt to obtain title insurance. Furthermore, the only recourse that a purchaser may have in relation to a missed title defect would be against the lawyer who provided the opinion, which may be further limited given the circumstances and conduct of the parties. Given the potential liability for giving a solicitor’s opinion on title, many lawyers refuse to act on transactions that are not title insured. Working with your Lawyer While title insurance may provide coverage for certain losses, it is not an alternative to retaining a lawyer on your transaction, and there is no replacement for sound legal advice and competent representation. Title insurance and lawyers work in conjunction to provide maximum protection to homeowners. For example, if you do find yourself needing to commence litigation against a neighbor, it is often worth first checking if your issue is covered by title insurance. If you have questions about property-related litigation or title insurance, please contact Graeme R. Oddy, lawyer at Devry Smith Frank LLP at 416-446-5810 or Graeme.oddy@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.” This blog was co-authored by Articling Student Jaimin Panesar* By AlyssaBlog, LitigationJanuary 31, 2024
My ex-spouse’s income has increased substantially since separation. Am I entitled to more spousal support? If you find yourself in a situation where your ex-spouse has experienced a substantial increase in income since the time of your separation, you may be wondering whether you are entitled to a reassessment of spousal support. What is Spousal Support? Spousal support is financial assistance that one spouse may be required to pay to the other spouse after a separation or divorce, ensuring the recipient’s financial stability. Spousal support is usually paid on a monthly basis; however, it can also be paid as a lump sum. According to section 15.2 of the Divorce Act and further discussed in the Supreme Court of Canada case, Bracklow v. Bracklow, there are three reasons a spouse would be entitled to spousal support: Compensatory spousal support, which is meant to compensate the lower-income earning spouse for sacrifices and contributions made during the marriage; Non-compensatory spousal support, which is meant to allow the recipient spouse to enjoy a similar lifestyle as they did while married; and, Contractual. In determining whether to award spousal support, a judge must consider many factors, including: The parties’ financial situations; The length of time the spouses cohabited; The roles of each spouse during the marriage; The impact of the breakdown of the marriage on each party’s financial situation; The ongoing responsibilities for the care of children; and, Any previous arrangements made regarding spousal support. The Spousal Support Advisory Guidelines provide parties and the Court with some guidance in determining the quantum and duration of when calculating reasonable spousal support. It is important to remember, however, that the Court retains discretion and the Guidelines are advisory only – they are not law. Are you entitled to increased spousal support if your former partner’s income increases? If one party experiences a significant change in their income after a spousal support arrangement has been made, it may constitute grounds for seeking a variation in spousal support, and the receiving party may be eligible for a reassessment of spousal support amounts. Whether you are entitled to an increase in spousal support if your former partner’s income increases is largely discretionary and is dependent on the circumstances and basis of the entitlement to spousal support. A spousal support order would not change automatically, and it is the responsibility of the recipient spouse to apply to vary the order. According to section 17(4.1) of the Divorce Act, before the court varies a spousal support order, it must be satisfied that a change in the condition, means, needs, or other circumstances of either former spouse has occurred since the making of the spousal support order. For example, since non-compensatory spousal support is intended to allow the lower-income earning spouse to enjoy a similar lifestyle as they did while married, an increase in income would usually not be relevant. A recipient’s entitlement to post-separation increases in income is more likely to be found in cases of compensatory support. Chapter 14.3 of the Spousal Support Advisory Guidelines discusses that “a rough notion” of causation is applied to post-separation income increases for the payor when determining if the income increase should impact spousal support entitlements. As such, it will depend on the length of the marriage, the roles adopted during the marriage, the time elapsed between the date of separation and the income increase, and the reason for the income increase. The likelihood of full or substantial sharing becomes more likely with child support cases, given the fact that there is a strong compensatory nature of the claim. If there is no child support in question, the Court will consider the following: long traditional marriages; medium-length and longer marriages; strong compensatory claims where there is primary responsibility for child-rearing; strong compensatory claims in longer marriages; prior agreements discussing future increases in income; support/cohabitation while in school; payor spouse continuing in the same job or area of work post-separation claims that were impacted by an inability to pay; and, income increases shortly post-separation. Varying the Spousal Support Order If the payor spouse does not consent to vary the spousal support order, it may be necessary to commence a Motion to Change. If applying for a variation, the applicant must meet the threshold to prove that there is a material change in the circumstances. The material change must be substantial and continuing, and if known at the time of the initial order, would likely have resulted in a different order. Determining what constitutes a material change is up to the court’s discretion. Conclusion Navigating the complexities of spousal support in the face of a significant increase in your ex-spouse’s income requires a careful understanding of the legal framework due to its highly discretionary nature. For more information regarding spousal support and/or family law-related topics, please contact Laura Dyke at Devry Smith Frank LLP at (416) 446-3327 or laura.dyke@devrylaw.ca This blog was co-authored by Articling Student, Toni Pascale. “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.” By AlyssaBlog, Family LawJanuary 25, 2024
Wealth and Estate Planning Resolutions for the New Year As you embark on a new year filled with possibilities, consider prioritizing resolutions that ensure lasting financial security and peace of mind for you and your loved ones. Take these proactive steps in wealth and estate planning to safeguard your legacy and make certain that your wishes are honoured: Make or update your Will Assets: Provide a comprehensive inventory of your assets, including real estate, investments, and personal property. Beneficiaries: Clearly outline who will inherit your assets, specifying individuals or groups of individuals. Guardians: For parents of minor children, appoint guardians who will provide care and support in your absence. Executorship: Choose a reliable executor to oversee the distribution of your assets in accordance with your wishes. Funeral Wishes: Communicate your preferences for funeral arrangements, alleviating the burden on your loved ones during a challenging time. Charitable Donations: If philanthropy is close to your heart, include provisions for charitable donations in your will. Powers of Attorney POA for Personal Care: Appoint an individual responsible for making determinations regarding your healthcare, nutrition, living arrangements, clothing, hygiene, and safety in the event you lack the capacity to make these decisions independently. POA for Property: Appoint an individual to manage your financial affairs, covering everything from bill payments and managing debt to handling investments and property transactions in the event you lack the capacity to make these decisions independently. Managing Assets outside of your Will (not included in your Estate) Life Insurance: Review and update life insurance policies to align with your current financial situation and protect your loved ones. Designate beneficiaries to ensure the life insurance proceeds can be distributed without the need for Probate. TFSA and RRSPs: Strategically manage Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs) to maximize tax advantages. Designate beneficiaries to ensure the life insurance proceeds can be distributed without the need for Probate. Joint Accounts: With a joint bank account comes the right of survivorship. This means that when one of the account owners passes away, the surviving owner will take full ownership of the account. In theory, the bank account will not form part of the deceased’s estate since the surviving owner has full legal title to the account through the right of survivorship. Joint Tenancy: A joint tenancy creates a right of survivorship, which means that if one party dies, their interest is automatically transferred to the surviving tenant(s). Digital Assets Social Media Accounts: Develop a plan for the management or closure of social media accounts, preserving your digital legacy. Financial Accounts: Safeguard access information for online financial accounts to facilitate a smooth transition for your loved ones. Cryptocurrency: Provide clear instructions on how to access and manage cryptocurrency holdings, addressing a frequently overlooked aspect of estate planning. Password Management: Implement secure password practices and communicate access details to trusted individuals. Business Succession Planning Sole Proprietorships: If the business is a sole proprietorship, it ceases to operate upon the owner’s death. Develop a comprehensive plan for the seamless transfer of ownership and management responsibilities. Partnerships: Partnerships may or may not dissolve upon the death of a partner depending on the partnership agreement. Alternatively, a deceased partner’s interest may be transferred to a designated party such as a spouse. It is important to make provisions for transfer of ownership upon the death of a partner to determine whether the business will continue to operate and if so, with whom at its helm. Corporations and Shareholder Agreements: A Shareholders’ Agreement typically covers crucial business transition matters such as ownership of shares, the transfer or sale of shares, procedures in the event of a shareholder’s death, and the resolution of disputes among shareholders. Ownership of voting and preferred shares for a corporation can become a heavily contested matter if adequate provisions are not made. Creditor Protection Transferring Assets inter-vivos: Explore strategies for transferring assets to spouses or children during your lifetime as a gift to avoid complications with Probate. Bankruptcy Protection: Bankruptcy protections are afforded to certain assets, such as PRDSPs, RRSPs, RRIFs, and DPSPs. Contribution to these plans over an individual’s lifetime can ensure their family and dependants are guaranteed to receive some amount from their estate, especially if beneficiaries are designated from the outset. Timing Considerations: Be mindful that contributions to the aforementioned assets (as PRDSPs, RRSPs, RRIFs, and DPSPs) and inter-vivos transfers made within 12 months of declaring bankruptcy may not receive the same level of protection. By taking these proactive steps and deliberate measures, you can be confident that your loved ones will be well-provided for in the future. The experienced legal team at Devry Smith Frank LLP is here to assist you in navigating the intricacies of Ontario’s legal landscape. For more information regarding Estates and Estates-related topics, please contact Kelli Preston at Devry Smith Frank LLP at (416) 446-3344 or kelli.preston@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 Articling Student, Owais Hashmi. By AlyssaBlog, Wills and EstatesJanuary 3, 2024
Demystifying the Confusion – Maintaining PR Status in Canada Residency Requirements to Maintain Canadian Permanent Resident Status If you are seeking to maintain your permanent resident status in Canada, you must meet the residency requirements set by Immigration Refugees and Citizenship Canada (IRCC). As a general rule, to keep your permanent resident status, you must have been in Canada for at least 730 days over the course of the last five (5) year period. It is important to note that these 730 days do not need to be continuous. A permanent resident is generally free to leave and enter Canada at any time with a valid permanent residence card. Most permanent resident cards expire after five years. There are some exceptions in relation to this residency requirement, as some of the time you spend outside of Canada may count towards your permanent resident status. The following are three exceptions to the permanent residency requirement: You are sent to work outside of Canada full-time by a Canadian employer with the expectation that you will return and resume your employment in Canada You accompany your spouse, common-law partner or parent who is a permanent resident and who is sent to work full-time outside Canada by a Canadian employer with the expectation that they will return and resume their employment in Canada. You live outside of Canada with your spouse, common-law partner or parent who is a Canadian citizen. If you meet any of the above-noted exceptions, the time spent in a foreign country during these activities may be credited as time spent in Canada, towards the 730-day requirement. These exceptions only apply to maintaining your permanent resident status. Residency Requirements to Apply for Canadian Citizenship When applying for Canadian citizenship, you must meet distinct residency requirements, in addition to the other eligibility criteria as outlined by Immigration Refugees and Citizenship Canada (IRCC). To meet the residency requirements for citizenship, you must have been physically present in Canada, as a permanent resident, for at least 1095 days in the preceding five (5) years from the date you sign the application. There are two (2) counting exceptions that may allow for time spent outside of Canada, or time spent in Canada prior to becoming a permanent resident, to be credited toward the 1095-day citizenship requirement. The following exceptions are only applicable to citizenship applications: You are legally in Canada as a “temporary resident” or a “protected person” You are outside of Canada as a Crown servant or are accompanying a family member who is a crown servant. It is important to note that each day spent in Canada as a temporary resident or protected person only counts as one-half day when calculating the number of days for your citizenship application, to a maximum of 365 days. For example, if you were a student legally studying at a Canadian university for 500 days (i.e. a temporary resident), only 250 of those days would be credited as time spent in Canada for your application. Furthermore, if you studied in Canada for 800 days, you would only be credited with 365 days, as this is the maximum number of days that can be credited as a temporary resident or protected person. Time That Does Not Count Towards Any Residency Requirements If you are incarcerated, under a probation order, a paroled inmate, or illegally present in Canada (i.e overstaying your visa), this time will not count towards any of the above-noted residency requirements. Failing to Meet the Residency Requirements A failure to meet the residency requirements does not automatically result in the loss of your permanent residence status. Even if your permanent resident card expires, you do not lose your status. Permanent resident status can only be lost in certain circumstances, such as voluntarily renouncing your status or having a removal order made against you. If you wish to maintain your permanent residence status but have not met the residency requirements in the preceding five (5) years, you have the option of waiting to apply until you meet the above-noted criteria. However, during the time that your permanent resident card is expired, it is not advisable to travel outside of Canada. If you are outside of Canada when your permanent resident card expires, you will need to apply for a “Permanent Resident Travel Document”, which may delay your return to Canada. In any event, you must be in Canada to apply for a new PR card. Likewise, if you are seeking to become a Canadian citizen and have not met the residency requirements in the previous five (5) years, you can simply wait to apply until you have met the 1095-day requirement in the preceding five (5) years from your application date. An experienced lawyer, knowledgeable in the complex intricacies of Canadian immigration law, is essential in solving your immigration needs. If you are looking to submit an application to Immigration Refugees and Citizenship Canada or are interested in seeking further guidance in US or Canadian immigration law, please contact Benjamin Grubner, lawyer at Devry Smith Frank LLP at 416-446-3328 or at Benjamin.grubner@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.” This blog was co-authored by Articling Student Jaimin Panesar* By AlyssaBlog, ImmigrationDecember 26, 2023December 22, 2023
City Council Greenlights ‘Luxury’ Home Tax: Incoming Changes to Toronto’s Municipal Land Transfer Tax (MLTT) A land transfer tax (LTT) is a government-imposed fee applied when ownership of a property transitions from one owner to another. Typically borne by the buyer, this tax is calculated as a percentage of the property’s purchase price and varies based on location and local government policies. Land transfer taxes serve to generate revenue for the government, which can then be used to fund essential public services, such as healthcare, education, and infrastructure. The Municipal Land Transfer Tax (MLTT) was originally introduced on February 1, 2008, and is in addition to the provincial Land Transfer Tax (LTT) on residential properties transferred within the City of Toronto In early 2023, the Toronto City Council (the “Council”) sought additional housing-related revenue to address a funding shortfall. Initially, the Council proposed a 1% increase to the MLTT for “luxury” homes priced over $2 million. The proposed increase aimed to boost the housing supply and provide financial relief for homebuyers after the unprecedented surge in housing prices during the COVID-19 pandemic. Facing a concurrent 5.5% property tax increase, organizations like the Toronto Regional Real Estate Board (TRREB) contested the proposal. They argued that such an increase would deter “move-up” buyers from listing their properties, adversely affecting housing supply and affordability. Instead of proceeding with the proposed 1% increase, on September 6, 2023, the Council approved graduated MLTT rates with additional thresholds for high-value residential properties containing at least one, and not more than two, single-family residences. The new additional MLTT threshold rates will be applicable to any property transfers that are either officially registered or for which the MLTT becomes due on January 1, 2024, or any date thereafter and will impact high-value residential properties that are valued at $3 million or above. The current and new additional MLTT rates are broken down by the applicable thresholds and rates as follows: Current MLTT Rates Value of Consideration MLTT Rate Up to and including $55,000 0.5% $55,000.01 to $250,000 1.0% $250,000.01 to $400,000 1.5% $400,000.01 to $2,000,000 2.0% > $2,000,000 2.5% Additional MLTT thresholds and rates, for property valuations greater than $3 million, effective January 1, 2024: Additional MLTT Rates Value of Consideration MLTT Rate > $3M to $4M 3.5% > $4M to $5M 4.5% >$5M to $10M 5.5% >$10M to $20M 6.5% >$20M 7.5% The MLTT is calculated based on different tax rates for different portions of the property’s value. For example, if you were purchasing a property for $3.5 million, your current MLTT calculation would be broken down as below: Current MLTT for a $3.5M Residential Property Graduated Calculation Amount 0.5% on the first $55,000 Calculation: 0.005 * $55,000 $275 1.0% on the next $195,000 ($250,000 – $55,000) Calculation: 0.01 * $195,000 $1,950 1.5% on the next $150,000 ($250,000 – $400,000) Calculation: 0.015 * $150,000 $2,250 2.0% on the next $1,600,000 ($2,000,000 – $400,000) Calculation: 0.02 * $1,600,000 $32,000 2.5% on the remaining $1,500,000 ($3,500,000 – $2,000,000) Calculation: 0.025 * 1,500,000 $37,500 TOTAL MLTT: $73,975 Teraview provides a free MLTT calculator with the current rates here. Therefore, if you were purchasing a property prior to January 1, 2024, for $3.5 million, the MLTT would be $73,975. As of January 1, 2024, a property purchased for $3.5 million in Toronto, would incur an MLTT of $78,975 resulting in an additional $5,000 in MLTT. MLTT for a $3.5M Residential Property as of January 1, 2024 Graduated Calculation Amount 0.5% on the first $55,000 Calculation: 0.005 * $55,000 $275 1.0% on the next $195,000 ($250,000 – $55,000) Calculation: 0.01 * $195,000 $1,950 1.5% on the next $150,000 ($250,000 – $400,000) Calculation: 0.015 * $150,000 $2,250 2.0% on the next $1,600,000 ($2,000,000 – $400,000) Calculation: 0.02 * $1,600,000 $32,000 2.5% on the next $1,000,000 ($3,000,000 – $2,000,000) Calculation: 0.025 * 1,000,000 $25,000 3.5% on the next $500,000 ($3,500,000 – $3,000,000) Calculation: 0.035 * 500,000 $17,500 TOTAL MLTT: $78,975 The City of Toronto website provides a free MLTT calculator with the new rates here. In addition to the applicable MLTT, the LTT is also calculated on a gradual basis and charged at the time of registration of the transfer of the property. For a purchase price of $3.5 million, you would be paying $73,955 in LTT in addition to the MLTT costs above, irrespective of whether the transaction is completed prior to, or after January 1, 2024. Teraview provides a free LTT calculator here. This approved increase in the MLTT on residential properties valued at $3 million and above, is one revenue stream that the City of Toronto is utilizing as part of its approved long-term financial plan, to aid in its budgetary shortfall for 2024. The long-term repercussions of the MLTT rate increase on the residential real estate market are uncertain. This adjustment has the potential to discourage prospective purchasers from entering the luxury market, leading to the emergence of a segment of buyers more attuned to pricing sensitivity. It might also incentivize buyers to explore properties below the MLTT increase threshold, fostering a market that is more stable and sustainable. If you are considering purchasing a high-value residential property with a valuation over the $3 million threshold, it may be prudent to take advantage of the opportunity to complete the transaction prior to January 1, 2024, to avoid increased MLTT expense. For more information, assistance, or any other questions regarding new home purchases, renovations, or other real estate transactions, please contact Ashley Almeida at Devry Smith Frank LLP at (416) 446-3335 or at ashley.almeida@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 Articling Student, Owais Hashmi. By AlyssaBlog, Real EstateDecember 18, 2023December 15, 2023
The Problem With “Do-It-Yourself” or Holographic Wills in Ontario As we described in a previous blog, testators can make two kinds of Wills in Ontario: formal Wills, which are typed, often drafted by a lawyer, signed by the testator, and require two witnesses to attest to the testator’s signature; and Holographic Wills, which are simply handwritten by the testator and signed. Despite the lack of formality surrounding holographic Wills, they are just as legally binding as formal Wills in Ontario: courts have held that holographic Wills can revoke a prior formal Will[1] and revive a previously revoked formal Will.[2] Moreover, as holographic Wills don’t require the services of a lawyer, they can be created quickly and at little to no cost. However, there is good reason why holographic Wills are not the preferred testamentary instrument of most Ontarians – this blog will highlight several problems which can arise with holographic Wills and lead to lengthy and costly disputes for your estate and beneficiaries. (1) Legislative Requirements While the legislative requirements surrounding holographic Wills are more relaxed than formal Wills, there are still mandatory elements that a holographic Will must have to be valid. Section 6 of the Succession Law Reform Act (SLRA) sets out the basic elements of a holographic Will: 6 A testator may make a valid will wholly by his or her own handwriting and signature, without formality, and without the presence, attestation or signature of a witness. First, a holographic Will must be entirely in the deceased’s handwriting. It cannot be partially typed or a “fill-in-the-blanks” document. Testators also cannot use the doctrine of incorporation by reference to incorporate a typed Will into a holographic Will, as the court held in Re: Lacroix Estate.[3] In Lacroix, the testator was hospitalized with cancer during the COVID-19 pandemic in 2020. Due to restrictions on visitors in the hospital, the testator could not execute the formal Will prepared by her lawyer. Instead, the testator attached the following handwritten document to her draft Will: Tuesday, May 26, 2020 I, Rebecca Stephanie Lacroix, declare that this holographic will shall constitute my last will and testament and I hereby incorporate into this my will the attached draft will which I have initialed on each page for identification purposes. RSLacroix The court found that this written document satisfied the SLRA requirements for a holographic Will; however, it alone was not a valid testamentary document, as it did not independently dispose of any property.[4] Moreover, as the draft Will was typed and not handwritten by the testator, it could not form part of a holographic Will.[5] Second, a holographic Will must be signed by the testator. Section 7 of the SLRA states that the testator’s signature should be at the end of the Will, whether formal or holographic. In general, any dispositions or instructions underneath the signature, or inserted after the document was signed, will not be effective.[6] However, since Ontario’s shift from a strict compliance regime to a substantial compliance regime in January 2022, courts have the discretion to declare a Will valid even if it does not meet all of the legislative requirements. Under section 21.1(1) of the SLRA, if the Superior Court of Justice is satisfied that an improperly executed document sets out the testamentary intentions of a deceased, they can, on application, order that the document is valid and fully effective, as if it had been properly executed. Despite these reforms, section 21.1(2) of the SLRA maintains Ontario’s ban on electronic Wills and codicils, per section 31(1) of the Electronic Commerce Act. (2) Testamentary Intent and Language In addition to the legislative requirements in the SLRA, there is also a common law requirement that a holographic Will must contain “a deliberate or fixed and final expression of [the testator’s] intention as to the disposal of property upon death.”[7] This intention does not have to be expressed in explicit testamentary language; it can be inferred from the context of the document itself and its contents. For example, the court in Laframboise v Laframboise held that a document was a holographic Will, despite its use of “Informal” in the title of the document, failure to appoint an estate trustee, and failure to use traditional testamentary language. Here, after reading the document as a whole, the court found that the use of “Informal” referred to the fact that the Will was not typed, witnessed, and created with the assistance of a lawyer.[8] Similarly, the court has also inferred intention from the surrounding context of the document. In Rezaee (Re), at a dinner party, the testator wrote out and signed the following document: I, Kamran Rezaee, hereby give all my wealth and property to my close friend Mr. Siamak Naftchi. (signed) Kamran Rezaee, March 20, 2018. The court found that this was a valid holographic Will and showed testamentary intent, from the context of the testator being diagnosed with terminal cancer and undergoing cancer treatments for a year and a half at the time of writing the document.[9] This is not always the case; the court in McKenzie v Hill held that the following handwritten document created by the deceased was not a valid holographic Will: October 28, 2014 An Agreement to Transfer Property I Joyce B. Hillman residing at The Red Woods Seniors Retirement (sic) do solemnly states (sic) that I wish to transfer my property at 12 Clarence Street, number 12 unit, Ottawa, Ontario, K1N 5P3 to my Brother Cecil McKenzie to be the sole owner. He can sell it at any time he wishes to do so without any interference by anyone. I have appointed him guardian and to be in full control of my finances. I set my hand this 28th day of October two thousand & fourteen and sign this agreement. Signed Joyce B. Hillman Witness: Audrey E. Logan Here, the court could not find any testamentary intention: the document does not refer to the deceased’s death, suggest that the transfer was to be triggered by the deceased’s death, and is titled as an “Agreement”, not a Will.[10] As indicated in the cases above, absent clear testamentary language, holographic Wills are left open to challenges from interested parties and interpretation by the courts. Even when the Wills were ultimately upheld, the proceedings to validate the Wills resulted in a significant cost and delay to the administration of the estate. Moreover, as many holographic Wills are prepared by laypeople without a thorough understanding of the law, issues of uncertainty, ambiguity, and omission may also arise and require judicial intervention. For instance, in Laframboise, the testator failed to appoint an estate trustee. Testators may also fail to account for certain outcomes in their estate, such as if a beneficiary pre-deceases them if there are not enough assets in the estate to cover the bequests, and what happens to the residue, or remainder, of the estate after the specific bequests. (3) Capacity Challenges All testators, whether executing a formal or holographic Will, must have testamentary capacity. Hall v Bennett Estate states that a testator must have a “sound disposing mind”, which requires that they: understand the nature and effects of a will; understand the nature and extent of their property; understand what they are disposing of under the will; remember the people they are expected to benefit under the will; and where applicable, understand the nature of claims that may be made by people they excluded from the will.[11] While testamentary capacity is assumed absent evidence to the contrary, problems can arise when the circumstances surrounding the creation of a holographic Will are suspicious or raise questions about the testator’s capacity. In Laframboise, after separating from his wife, the testator prepared a holographic Will, leaving only his wedding ring and wedding pictures to his wife, and then took his own life. His wife challenged the Will on the basis of lack of testamentary capacity. The court rejected this argument. The court found that the testator was depressed, but that there was no evidence that the depression impacted any of the factors laid out in Hall above.[12] The letters to his wife and family before his death “indicate a full appreciation of what he was about to do and why he felt compelled to do it…[and] indicate a tortured mind, not a deranged mind.”[13] Likewise, in McGrath v Joy, after a day of heavy drinking and marijuana use, the testator wrote a suicide note and took his own life. In the note, the testator stated that he did not want his wife to get anything under a previous Will he drafted in 2016, and asked his named estate trustee to make sure that this happened. Here, the Court of Appeal found that the note was a valid holographic Will and that the testator had the requisite capacity, as he met the factors in Hall.[14] The Court found that the application judge erred in not finding that the testator had capacity by basing their opinion on the testator’s use of drugs and alcohol, and not the legal principles set out in Hall.[15] Although the testators in Laframboise and McGrath were ultimately found to have capacity, the circumstances surrounding the creation of the Wills provided a sufficient basis for a Will challenge. Without a drafting lawyer to attest to the testator’s capacity, the courts were also left to determine capacity based on expert evidence and witness testimony, both of which added time and cost to the proceedings. Conclusions The ultimate purpose of a Will is to provide you with peace of mind that your beneficiaries and assets will be properly taken care of after your death. While a holographic Will seems like an easy, cheap, and convenient way to do so, particularly with the new substantial compliance regime, it comes with significant risks which could lead to costly and lengthy litigation and your final wishes being disregarded. As is the case with most legal matters, the safest option is to consult with an experienced Wills and estates lawyer to ensure that your Will is clear, certain, and enforceable. If you have questions about Wills or another estate matter, please visit our website or contact Jillian C. Bowman from Devry Smith Frank LLP at 249-888-4639 or Jillian.Bowman@devrylaw.ca. This blog was co-authored by law student, Leslie Haddock. “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.” [1] For example, see Niziol v Allen, 2011 ONSC 7457. [2] For example, see Estate of Harold Franklin Campbell (Re), 2023 ONSC 4315. [3] 2021 ONSC 2919. [4] Ibid at paras 25-26. [5] Ibid at para 26. [6] Succession Law Reform Act, RSO 1990, c S26, s 7(3). [7] Bennett v Toronto General Trusts Corp, 1958 CanLII 49 (SCC) at p 396. [8] 2011 ONSC 7673 at paras 14-16 [Laframboise]. [9] 2020 ONSC 7584 at para 30. [10] 2022 ONSC 4881 at paras 31-32. [11] 2003 CanLII 7157 (ON CA) at para 14. [12] Laframboise, supra note 8 at para 21. [13] Ibid at para 25. [14] 2022 ONCA 119 at para 51. [15] Ibid at para 67. By AlyssaBlog, Wills and EstatesDecember 11, 2023
Garnishment: Frequently Asked Questions What is garnishment? Garnishment is a legal process often initiated when individuals default on their financial obligations. Garnishment orders allow creditors to seize assets – typically a person’s wages – from third parties. These orders can also be used to access funds in a debtor’s bank account. This financial recourse is usually pursued by creditors when they have exhausted other means of debt collection. In most cases, garnishment can only be sought after a creditor has obtained judgment against a debtor. However, in some instances, like with debts owed to the Canada Revenue Agency (CRA), garnishment can occur without the necessity of obtaining a court order. Who can seek an order for wage garnishment? Various types of creditors and institutions can obtain a garnishment order to recover the money owed to them. These entities encompass a wide range of financial institutions and government bodies, including credit card companies, collection agencies, government agencies (such as the Family Responsibility Office or CRA), entities responsible for collecting student loans, payday lenders, banks, and private lenders. To what extent can wages be garnished? The extent to which wages can be garnished varies based on the type of debt and the jurisdiction in which you reside. Generally, if someone owes debt in Ontario, the maximum percent of their wages that can be garnished is 20%. However, when it comes to the enforcement of an order for support or maintenance, a maximum of 50% of a person’s wages can be garnished. Ultimately, a court has the ability to determine the amount to be garnished based on each individual’s finances. What cannot be garnished? Not all types of income are subject to wage garnishment. The Ontario Works Act, provides that basic financial assistance is not subject to garnishment, attachment, execution, or seizure. This safeguard ensures that individuals who are already in vulnerable financial situations can maintain access to essential support. Similarly, government pension income, such as the Canada Pension Plan and Old Age Security, is shielded from garnishment from standard creditors. However, it should be noted that such income can be seized by the CRA. Can you stop a garnishment? The short answer is no. One of the only ways to stop a wage garnishment order is to pay off the debt. Otherwise, if your financial situation calls for it, you can make a consumer proposal or file for bankruptcy, both of which create an automatic stay of proceedings. Conclusion Garnishment is a legal process implemented to facilitate the repayment of debts when other avenues have been exhausted. It is a tool used by creditors and government agencies. The regulations governing it can vary by jurisdiction and the type of debt. Understanding the limits on garnishment and the protections in place for certain types of income can help individuals navigate the complexities of debt repayment and maintain their financial stability during challenging times. For more information regarding Bankruptcy, Collections, Fraud, and/or Trusts related topics, please contact Hyland Muirhead at Devry Smith Frank LLP at (416) 446-5092 or hyland.muirhead@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 Articling Student, Toni Pascale. By AlyssaBlog, Collections and Mortgage RecoveryDecember 4, 2023November 30, 2023