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LANGE ON LAW Defending or Launching Lawsuits Welcome to Lange on Law. Here you will find over 100 legal columns written by Donald and published in the Highlands Communicator, a newspaper in the County of Haliburton with a circulation of over 8,000 copies per issue. Click on a topic and read what Donald has written about the law.
AGENTS
Agent and Principal Law
The relationship of principal and agent occurs when one person (the principal) empowers another person (the agent) to act on behalf of the principal in such a way as to affect the principal’s legal relationship with others (third parties). This is called the law of agency. An example is when an agent is authorized to make contracts on behalf of the principal with third parties. A principal is legally vulnerable in such a relationship. The general rule is that the principal is vicariously liable for the wrongful acts of the agent committed within the scope of the agent’s apparent authority. A company, which buys and sells cars and pays a person a commission on cars sold by that person, will be liable for that person’s fraudulent misrepresentation in the sale of the car. The social policy behind vicarious liability is that the agent is often not in a financial position to compensate a person who is injured by the wrongful act. Who should bear the loss, the employer or the innocent victim? The answer is the principal because the principal can and should secure protection from the risk of the agent by insurance, the cost of which forms part of the general cost of carrying on business and is ultimately borne by the general public. There are many factors in the complex law of agency. One factor is in the lawsuit itself. Let us assume that a victim sues both the agent and the principal. The victim must choose between them when it comes time to sign judgment. There cannot be a judgment against both. If the victim only sues the agent and obtains judgment against the agent, the victim cannot later sue the principal when it is discovered that the agent has no money or other assets and that collecting on the judgment is impossible against the agent. The reason for this is that, where a judgment has been obtained against the agent, the factual and legal basis for the lawsuit has been exhausted and the victim cannot sue again, on the same basis, against the principal. In legal terms, this is called the doctrine of alternative liability. One or the other may ultimately be liable but not both.
APPEALS
Appealing a Judgment
A civil lawsuit that ends in a judgment of the court can be appealed to a higher court. If it is a Small Claims Court judgment, the appeal is to one judge of the Superior Court. If it is a Superior Court judgment, the appeal is to three judges of the Court of Appeal. A party has a right to appeal to these courts in civil cases but no right to appeal further to the Supreme Court of Canada. The party must obtain permission to appeal to the Supreme Court and very few civil cases are given that privilege. The Court of Appeal is really the court of last resort for almost all civil cases. Some unsuccessful litigants think that, if they appeal the judgment, the appellate (appeal) court will reassess the trial judge’s decision on the evidence. An appeal does not give a party a reassessment of the evidence and an appellate court will not interfere with the trial judge’s decision on the evidence. The reason for this is that the trial judge is in a better position to assess a witness’s credibility because the witness is right there before the judge. All the appellate court sees is a typed transcription of the evidence. To succeed on an appeal, a party must convince the appellate court that the trial judge erred in the application of the law to the facts of the case as decided by that judge. For example, a party might argue that the trial judge misunderstood the legal principle involved or applied the principle even though there were not sufficient facts proven at trial to warrant its application. If the plaintiff and defendant settle their case out of court, there is no way of appealing the settlement. BUSINESS
The Corporate Veil
Some businesses conduct themselves as sole proprietorships. The business may have a business name but it is owned and operated by an individual who is personally liable to the world at large for the conduct of the business. Some businesses are incorporated. When this occurs, the business enjoys a separate legal personality from its owner called the “corporate veil.” The owner has shares in the company and, if it is a small business, the owner is often the sole shareholder, director and officer (president) of the company. There are two good reasons to incorporate a business. A company usually enjoys a lower tax bracket than an individual and, most importantly, the owner of the company, as shareholder, director, and officer, is not personally liable for the conduct of the business. This means that personal assets, such as a home, are not at risk. However, courts may “pierce the corporate veil” by setting aside the separate legal personality of the company and attaching personal liability to the shareholder, director, or officer. Courts in Canada are extremely reluctant to pierce the corporate veil. The dominant rule is that company decision makers, acting in good faith, should not be personal liable for the acts of the company. There are exceptional circumstances when the corporate veil will be lifted to create personal liability. One exception is when a company is found by the court to have been incorporated to do something that is illegal or improper for its shareholders to do personally, such as to commit fraud or to avoid legal obligations. Fraud may occur when there is a misrepresentation to a third party that the third party is dealing with an individual with assets when, legally, the third party is really dealing with a company with no assets. As well, a company may have a legal obligation to a third party, such as a debt, but transfers its assets to the shareholders in order to render itself incapable of fulfilling the legal obligation. Another exception is the “sham” company, that is, when the company is nothing more than the “alter ego” of the shareholder and being used as a shield for an improper purpose. The test is usually whether the company is completely dominated and controlled by a single person. These exceptions are often applied in conjunction with a vaguely defined principle of unfairness before a court will pierce the corporate veil.
Winding-up a Company’s Business
Many businesses conduct themselves under the umbrella of an incorporated company. The company is often owned by one shareholder and this makes the conduct of the business a fairly simple matter. However, if the company is owned by two or more shareholders, troubles may arise as in any relationship. For example, there may be a deadlock between two equal shareholders which makes it impossible for the company’s business to be carried on. Or, the company may be owned by a majority shareholder and a minority shareholder and the minority shareholder is experiencing a lack of confidence in the management of the company’s business by the majority shareholder. Disgruntled shareholders may look to the courts to resolve their problems by applying to have the affairs of the company wound up and the assets liquidated. A winding up order creates a “fire sale” situation. Courts naturally view such an order as a drastic measure to be resorted to only in extreme cases where there is no reasonable alternative to resolve the problems facing the shareholders. To avoid this drastic measure, the courts have adopted a creative approach to resolving shareholder problems. A common approach is to give a shareholder an opportunity to buy out the disgruntled shareholder, or vice versa, after a proper valuation of the shares. An order to wind up the company will only be made if the share purchase does not take place. If the company owns land as well as a business, the court may order that the land be appraised by an independent appraiser and that the business be appraised separately by an independent qualified accountant. The bottom line is that the courts strive to implement a solution to dissolve the shareholder relationship in order to avoid the dissolution of the company itself.
COLLECTIONS
Enforcing a Judgment for Money
A successful lawsuit leads to a judgment for money but not to payment of the judgment. If the defendant does not voluntarily pay the judgment, the plaintiff must commence enforcement proceedings against the defendant. There are two common ways to enforce a judgment. One way is for the plaintiff to issue a court document called a writ of seizure and sale. The writ is filed with the sheriff of the county and empowers the sheriff to enforce the judgment. The plaintiff directs the sheriff to enforce the judgment by, for example, telling the sheriff to attend at the defendant’s bank branch and seize money in the defendant’s bank account to satisfy the judgment. When filed in the registry office, the writ also acts as a lien against land owned by the defendant in the county. Another way to enforce a judgment is for the plaintiff to seize the defendant’s wages. If the plaintiff knows where the defendant works as an employee, the plaintiff may commence garnishment proceedings to seize (“garnish”) the wages. The plaintiff issues a court document called a notice of garnishment, which sets out what is due and owing, and sends it to the employer. The employer is obligated to hold back a portion of the defendant’s wages from each paycheck and send it to the sheriff who, in turn, sends it to the plaintiff. If the employer fails to co-operate, the employer may be liable to the plaintiff for the amount that should have been held back. For a defendant who owns land or earns wages that can be seized, it is prudent to pay the judgment and avoid further legal costs and the risk of a bad credit rating.
CONSTITUTIONAL LAW
Constitutional Law
Canada is governed by a federal constitution. The main constitutional documents are the Constitution Act, 1867, (formerly known as the British North America Act, 1867) and the Canadian Charter of Rights and Freedoms. In our federal system, sovereignty is divided between two levels of government. The constitution distributes powers and responsibilities by two lists of categories or classes. One list is for the federal parliament, the section 91 powers. The other list is for each of the provincial legislatures, the section 92 powers. By far the most important of the class of subjects assigned to the exclusive jurisdiction of the provincial legislatures in section 92 is that of "property and civil rights in the province" since all legislation affects civil rights in one way or another. Some authorities have viewed the subject of "property and civil rights" as encompassing the entire field of law-making apart from criminal law. The Constitution Act has divided responsibility for criminal law between the federal and provincial levels of government. Under section 91(27), the federal parliament is given the exclusive power to enact criminal law and criminal procedure. However, the enforcement of the criminal law is allocated to the provinces pursuant to section 92(14), which provides that the provinces have exclusive power in relation to the "administration of justice in the province." Thus, the provinces have the right to lay charges, to prosecute offences, and to establish and maintain police forces. Criminal prosecutions are also conducted in courts established and maintained by the provinces. In our federal system, the judiciary has the authority to resolve disputes over the distribution of powers in order to ensure that neither level of government exceeds the powers that are allocated to it under the constitution. Over the last century, there have been many important decisions about our constitution. Quite a few of them were made in England by the Judicial Committee of the Privy Council which was the court of last resort for appeals from Canada via the Supreme Court of Canada until 1949 when it ended.
The Rule of Law
The preamble of the Canadian Charter of Rights and Freedoms begins with the phrase; “Whereas Canada is founded upon principles that recognize the supremacy of God and the rule of law.” The "rule of law" is a cornerstone of Canadian constitutional order and it is expressed in our lives in various ways. Most importantly, the Constitution Act itself states that any law that is inconsistent with the provisions of the Constitution is of no force or effect. Statutes enacted by the federal parliament or a provincial legislature which conflict with the Constitution are invalid and, technically speaking, do not become law. Since any law which is inconsistent with the Constitution is invalid, any actions or decisions taken by government officials in reliance on such law are also invalid since these actions or decisions will have been taken without legal authority. The application of constitutional law, therefore, primarily focuses on whether particular laws are valid or invalid under the Constitution. In order for the rule of law to work, there must be the assurance of an independent judiciary. There must be a system of legal representation through an independent legal profession. And there must be effective and impartial enforcement of law and order through police services. These are necessary for, and protected by, the rule of law. The maintenance of the rule of law would be impossible if unconstitutional laws could not be challenged in the courts. As a result, the Supreme Court of Canada has held that the guarantee of access to the courts for the determination of a person’s legal rights is embodied in the rule of law. So, the next time you read in the newspaper that someone is challenging a particular law as being unconstitutional because it violates a provision of the Canadian Charter of Rights and Freedoms, the rule of law is at work.
CONSTRUCTION LIENS
Construction Trades and Property Owners
A construction tradesman, whether electrician, plumber, or carpenter, may find himself not being paid for work performed for a property owner. The tradesman’s work improves the value of the property and makes the property owner subject to a “construction lien.” The tradesman may register the construction lien against the property to protect himself. This lien acts like a mortgage securing the property as collateral for the value of the work performed until the property owner pays what is due and owing. Registering a lien on a property is a fairly simple matter of filing certain forms in the registry office where the property is situated. That is why it is often thought that, when a construction tradesman has not been paid, he should lien the property. But registering the lien is just the beginning. A registered lien is only valid for 45 days. For the tradesman to “perfect” the claim for lien, other legal steps must be taken. The tradesman must commence a lawsuit with a statement of claim and then obtain a court order for a “certificate of action.” The certificate declaring the lawsuit then must be registered on the property within the 45 day period. Where a relatively small amount of money is involved, taking the construction lien route, with court appearances, may not be the most cost effective route to collect a construction debt. If the construction tradesman knows that he can collect from the property owner once the dispute is over, a simple lawsuit for collecting the debt may suffice.
CONSUMER PROTECTION
Consumer Protection
In earlier days in Toronto, there used to be door-to-door sales people who would come around trying to sell you a vacuum cleaner or the ten volumes of the Encyclopaedia Britannica. Today, there still are door-to-door sales people selling the usual goods but they now also sell such things, as internet services and other telecommunication products. In 2002, Ontario enacted a new Consumer Protection Act consolidating 6 older consumer protection laws and reforming the area to reflect today’s technological world. A typical example of consumer protection under the new Act is a sale in your own home. If you purchase goods or services from a door-to-door sales person, you have a right to cancel the sale at any time from the date of signing the purchase agreement until 10 days after receiving a written copy of the agreement. The 10 day period is usually referred to as the “cooling-off period.” Such a period of time allows a consumer an opportunity to have second thoughts about the purchase. All the consumer needs to do is to notify the seller of the decision to cancel. The consumer need not give a reason. The seller has 15 days to return your money and also has the right to the return of the goods by either picking them up or paying for the costs of sending them back. You should be aware that this consumer protection does not apply if you buy the goods or services at the seller’s place of business or other sales locations, such as a market place, an auction, a trade fair, or at your office. There are other types of contracts which are also protected for consumers. Pre-paid goods or services, where some part of the contract occurs in the future, such as a fitness membership, are protected. Time share agreements and internet agreements are also protected. Compared with city dwellers, the residents of the County of Haliburton are not pestered as much by door-to-door sales people but the same consumer protection applies here.
Consumer Agreements
The Consumer Protection Act received Royal Assent on December 13, 2002 but the legislation could not be proclaimed in force without the regulations which detail the many requirements. After drafts of regulations in 2003 and 2004, a final regulation was introduced in 2005 and passed. So, although the legislation was in place in 2002, it did not come into force as law until July 30, 2005. A consumer agreement is an agreement between a supplier and a consumer in which the supplier agrees to supply goods or services for payment. The agreement is typically drafted by the supplier. The new Act sets out many rights and obligations which now apply to all consumer agreements. The Act provides that any ambiguity that allows for more than one reasonable interpretation of an agreement will be interpreted in favour of the consumer. “Fine print” is pretty well abolished. If a supplier is required to disclose information in the agreement, the supplier cannot hide it in fine print. The information must be delivered in a form which the consumer can easily read. The goods sold to a consumer are subject to an implied warranty that they are fit for the purpose intended. In other words, if a supplier sells a “forever” sharp bread knife that is rust-free, it had better work. Prior to the new Act, suppliers of personal development services, such as services for fitness and diet, were not subject to an implied warranty. Now the supplier is deemed to warrant that the services supplied under a consumer agreement are of a reasonably acceptable quality. If a consumer agreement includes an estimate, the supplier cannot charge the consumer an amount that exceeds the estimate by more than 10 per cent. If the supplier tries to charge more, the consumer may demand that the supplier provide the goods and services at the estimated price.
Lemon Law
You buy a brand new snowmobile with state of the art technology from a local dealer. You take it out for its first weekend trip of the winter season. Within 10 minutes of using the snowmobile, it bogs down, or cuts out, on you despite the fact that your hand is on the throttle giving the engine gas. The bogging down occurs sporadically during the course of the weekend trip. Sometimes it happens in five minute or ten minute intervals, or nothing would happen for one hour and then it would occur again. You deliver the snowmobile back to the dealer to get it repaired. The dealer and the manufacturer think the problem is with the computer that controls the snowmobile. They re-programme the computer and tell you that everything is fine now. You go on another trip. Same problem. The dealer repairs it again. You go on another trip. Same problem. You ask the dealer for your money back. The dealer says no. You sue the dealer and the manufacturer on the basis that you bought “a lemon”. In these circumstances, a court will likely make a finding in your favour against the dealer. The test is this: the snowmobile is “a lemon” if it completely fails to function for the purpose intended despite repeated attempts to repair it. There are two legal principles at work in lemon law. There is a fundamental breach of the contract with the dealer because you did not get what you bargained for. There is also legislation that protects you, the Sale of Goods Act. Every purchase of goods comes with an implied warranty that what you purchased works. The snowmobile dealer is liable because it breached the implied warranty. What about the manufacturer? In many cases, manufacturers give you an express warranty only to repair defective parts. In this case, since you did not buy the snowmobile from the manufacturer, the manufacturer is not liable for the breach of contract or the breach of the implied warranty which is part of the sale of the goods. It is only liable within the terms of its express warranty to repair defective parts. A court may find that the manufacturer is only liable for the cost of a new snowmobile computer. However, if personal injury had resulted from the bogging down, such as a rear-end collision by another snowmobile, the manufacturer may be directly liable because of negligent manufacture. If the vehicle had been a truck used for business instead of a snowmobile, the manufacturer may be liable to the truck owner for loss of profit.
CONTRACT
The Law of Contract
The law of contract governs our lives every day in many ways from hiring a tradesman to purchasing a product. The traditional theory of contract is that it is based on a bargain. A bargain requires an offer, the acceptance of that offer, and the exchange of “consideration” between the parties to the contract. For example, a vendor offers to sell an appliance to a person for $50 and that person accepts the vendor’s offer. The exchange of offer and acceptance gives rise to an enforceable contract for the sale of the appliance. The vendor’s contractual consideration is the appliance. The purchaser’s contractual consideration is the $50 payment. Each party to the contract acquires a mutual obligation to the other party to exchange the consideration promised. If either party fails to perform the obligation, there is a breach of the contract and the other party may enforce it in court. Some cases defy the traditional theory of contract because they cannot be explained by a bargain analysis. An example is a “unilateral” contract. Everyone has seen an advertisement offering a reward for finding a missing pet. A unilateral contract is created between the parties when a person responds to the offer of a reward. The “promisee” need not communicate to the “promisor” that he or she will look for the missing pet. The offer is accepted by the promisee’s performance, that is, by looking for the pet. If the promisee finds the pet and returns it to the promisor, the promisee is entitled to the reward. Fortunately, in this example, there will be a happy owner waiting with open arms and the reward will be paid. However, in other circumstances where the reward is not forthcoming, the unilateral contract is enforceable in court. An objective standard is applied to determine whether a contract arises between the parties. Although the actual intentions of the parties are considered, they are not as important as what a reasonable person would conclude about the parties’ actions despite what they actually thought. Certain contracts must be in writing, such as an agreement of purchase and sale relating to land. However, many contracts are simply oral agreements. If an oral agreement meets the objective standard for establishing a contract, it is as enforceable in court as a written contract.
Frustrated Contracts
Believe it or not, there is such a thing as a frustration of a contract. The “frustration” has nothing to do with people’s feelings. It is governed by the doctrine of frustration of contracts at common law and under the Frustrated Contracts Act. The frustration may come about when the parties to a contract cannot perform it, or cannot continue to perform it, due to some outside event not related to the conduct of the parties or contemplated by them. There can be no frustration if the outside event results from the voluntary act of one of the parties, or if the possibility of such event was contemplated by the parties and provided for in the agreement. Illness or physical incapacity is an example. A contract of employment may be frustrated, or declared to be at end without compensation to either party, due to an employee's illness or incapacity. This will depend on the terms of the contract, the type of employment, the expected duration of employment, and most importantly, the prospects of recovery for the employee. The Tenant Protection Act expressly provides that the doctrine of frustration of contracts and the Frustrated Contracts Act apply to tenancy agreements in Ontario. Here are the facts of a decided case. A tenant leased a room located above a laundromat for one year. The laundromat created a lot of heat from the clothes dryers and the tenant’s room had poor cross-ventilation. The landlord had installed air conditioning in the room to compensate for the poor ventilation. However, the lease did not require such installation. For a period of three months in the summer, the air conditioning was not working because it broke down. Two months before the end of the lease, the tenant informed the landlord that she was being transferred in her employment, and thereupon vacated the premises. The tenant refused to pay the rent for the last two months because the air conditioning had not been operating for the three month period in the summer. The landlord sued for the two months rent but the action was dismissed. One of the legal grounds for the court’s dismissal was that the lease had been partially frustrated because of the breakdown of the air conditioning equipment. Was the case correctly decided on the basis of a frustration of contract? I will leave it to you to decide.
Contract Interference
Tim Horton’s was a franchisor and had a franchise agreement, or contract, with Donut King, a franchisee, which ran 12 Tim Horton franchises in Ontario. A male employee of Donut King was apparently sexually harassing female employees of Donut King which was contrary to Tim Horton’s workplace harassment policy with Donut King set out in the franchise agreement. This led to the termination of the franchise agreement between Tim Horton’s and Donut King. Tim Horton’s then sued the Donut King employee, among other defendants, alleging that the employee had interfered with Tim Horton’s economic relations with Donut King by inducing the breach of contract. The basis of this lawsuit is the tort (“the wrong”) of intentional interference with contractual relations. Tim Horton’s had to prove five things against the employee: (1) knowledge of the contract, (2) an intention to bring about a breach of the contract, (3) conduct which results in the breach, (4) damage to Tim Horton’s, such as loss of profit, and (5) the lack of anything that might justify what the defendant did. Fortunately for the employee, the court did not think that he intended to bring about a breach of the franchise agreement and he was let out of the lawsuit. Other scenarios may bring a different result. A high-powered insurance agent has a binding contract with his broker and makes a lot of money for the broker. The competing broker in town offers this agent a better deal and the agent moves over to the competing broker. Has the competing broker interfered with economic relations? The position of professionals is another matter. For example, a lawyer may advise a client that it is a good idea to breach his employment contract because the company is in financial trouble. A doctor may recommend to a patient that he should leave his job because it is too stressful. Neither professional will be exposed to the scourge of litigation for performing their professional duties. Even the president of a company is protected from an allegation of contractual interference when he or she decides in good faith that it is not in the best interests of the company to perform a contract.
CRIMINAL LAW
Sentencing in Criminal Law
Punishment for crimes committed, of course, goes back millennia. The biblical phrase “an eye for an eye” readily comes to mind. In Canada, the criminal law, including the law of sentencing, derives almost entirely from the Criminal Code which was first enacted in 1892. The Code owed a great deal to English law and, prior to 1892, the criminal law of England, including its law of sentencing, applied to Canada. Sentencing is the modern process for determining an appropriate sanction for a crime committed. Sentencing comes in various forms and in various degrees because the fundamental principle under the Criminal Code is that a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender. Punishment has been the most common sanction throughout history because people viewed it as a retribution or revenge for the crime. It has a deterrent value as well. It is meant to deliver a message to the individual offender to deter him or her from future crime. It is also meant to be a general deterrence to others who may be contemplating crimes and know that punishment is the end result when caught. Incarceration, the strictest form of sentencing, removes the criminal risk from society for the period of the sentence. Obvious examples are imprisonment for murderers and sex offenders. But, sentencing may include the positive element of post-offence rehabilitation, not just the negative element of deterrence. Rehabilitation will depend on the nature of the offence committed. Thus, a drunk driving conviction may require the offender to attend programmes on alcohol addiction and abuse. A “John” who is convicted for picking up a police officer posing as a prostitute invariably leads, in Toronto, to a “classroom” programme with other Johns conducted by a former prostitute who explains the world she came from. As in most areas of the justice system, there is an element of discretion in sentencing which rests heavily on the shoulders of the judge. A judge must consider the many aggravating and mitigating factors in the decided cases when sentencing an offender. Aggravating factors include the brutality of the offence, the use of weapons, and multiple victims or incidents. Mitigating factors include a guilty plea, evidence of remorse, and prior good character.
Identity Theft
I was recently told a story about identity theft. My friend was sitting in his office in Haliburton one day, and unknown to him, his charge card was being used in Hamilton at a sporting goods store to purchase over $4,500 of sporting goods. He went to Toronto the next day to do some shopping. While shopping, his charge card was suddenly rejected on a purchase. He thought that was strange and so he phoned the charge card company. The charge card company told him that they had already left a phone message in Haliburton asking to verify the large sporting good purchase in Hamilton because it was not the usual pattern of his purchases and raised suspicion. The charge card had reached its limit and so the Toronto purchase was rejected for that reason. Of course, my friend was nowhere near Hamilton the day before. The charge card company explained to my friend that they regularly monitor patterns of purchase to detect fraud. An unusual purchase pattern raises suspicions. The company said that what probably happened was that, when a normal purchase was made by my friend, and he was not keeping an eye on his card, the store swiped the card a second time using a concealed electronic device (perhaps under the counter) to copy the magnetic strip on the back. A new physical card was then created with the friend’s name and with the magnetic strip. My friend’s identity had been stolen. The charge card company immediately sent my friend a new card and cancelled the old card. They conducted an investigation and determined it was fraud. My friend was not charged the $4,500. Have you noticed that most stores no longer ask for identity of the person using the charge card? The retail store had to pay the $4,500 because the store had not checked for identity. If you do not want to be a victim of identity theft, always keep an eye on your charge card when making a purchase. Good advice, but certainly difficult to do in a restaurant, or on the Internet. Be suspicions, as well, of phone calls asking for charge card information. “Identity theft” is really a new buzzword in the electronic age for good old-fashioned fraud. The forgery of signatures or the impostoring of a person are classic examples of identity theft.
Relitigation in Criminal Law
You may have seen the movie “Double Jeopardy” about an accused and a murder. There is a very old principle of criminal law that an accused may not be charged twice for the same offence because that would place the accused in jeopardy twice. Since about 1900 in Canada, criminal lawyers have also been applying principles barring relitigation of issues in criminal cases. This is called “issue estoppel,” meaning that the relitigation of the issue or fact is estopped, or stopped, because the issue has already been decided in a previous criminal proceeding. For example, an accused may be charged with separate and distinct offences but both offences arise from the same alleged facts. If the accused is acquitted of one of the charges, the court has made a finding that the alleged facts sustaining the charge were not proven. The issue of those alleged facts has been determined. The Crown is, therefore, estopped from relitigating this issue in the second charge. Usually, the second charge is withdrawn. The test is that the question of fact in both offences must be vital and fundamental to convicting the accused. A decision from a jury trial, rather than from a judge alone trial, is problematic for issue estoppel when a general verdict of not guilty is rendered since it is not be possible to determine on which issue the jury based its verdict. Issue estoppel in criminal law is not reciprocal as it is in civil law where it can be used by both sides of a dispute. It is not available to the Crown. It is solely a defence for the accused.
DAMAGES
Personal Injury Damages
When a person (“the plaintiff”) sues another person (“the defendant”), the plaintiff seeks remedies from the court. Most of the remedies sought are to compensate the plaintiff financially. These remedies are called damages. One type of damages is general damages in a personal injury case which are awarded for intangible losses that a person suffers due to physical injuries allegedly caused by the defendant, such as pain and suffering and loss of enjoyment of life. In 1978, a group of damages cases called “the trilogy cases” was decided by the Supreme Court of Canada. At that time, the court placed a ceiling of $100,000 on personal injury damages. The court was very concerned that such awards could vary too greatly across the provinces and escalate beyond acceptable levels as had happened in the United States. Over time, the ceiling, or rough upper limit, has increased to take into account inflation. Thus, by the year 2000, the ceiling was in the range of $275,000. When a plaintiff sues for pain and suffering, the plaintiff must work within the confines of the rough upper limit and should not expect a lot of money for minor injuries. A person who ends up in a wheel chair with little, if any, use of his or her arms, could expect to be in the upper limit range while a slip and fall accident causing the plaintiff some temporary back strain would probably be worth no more than a couple of thousand dollars. Although it would appear that the trilogy cases set up a kind of “meat chart” analysis, the relevant question for the court is not simply how serious the plaintiff's injuries are but what function money can serve in the circumstances. The Supreme Court expressed it this way: “[The award] should not depend alone upon the seriousness of the injury but upon its ability to ameliorate the condition of the victim considering his or her particular situation. It, therefore, will not follow that, in considering what part of the maximum should be awarded, the gravity of the injury alone will be determinative. An appreciation of the individual's loss is the key and the “need for solace” will not necessarily correlate with the seriousness of the injury.” The court also stated: “The award must be fair and reasonable, fairness being gauged by earlier decisions, but the award must also of necessity be arbitrary or conventional. No money can provide true restitution.”
Punitive Damages
One type of damages you may read about in the newspaper, especially about cases in the United States, is punitive damages. As the name suggests, punitive damages are designed to punish a wrongdoer. To meet the test in Canada, the conduct of the wrongdoer must not be ordinary conduct. The conduct must be so high-handed, malicious, vindictive, and oppressive as to offend the court and warrant the court’s censure as being unacceptable to community standards. One Ontario case of interest dealt with fraudulent transfers of property and mortgages by one of the defendants to his wife, friends, certain companies, and a family trust. The court found that the family trust was a complete sham because that defendant was really the owner indirectly of all of the assets of the trust. What really got the court upset, however, was how the defendants conducted their defence in the litigation. Here are some of the judge’s comments: “In light of the conduct of the defendants throughout the proceedings to obfuscate, delay, be less than forthright in their evidence, their conduct warrants punitive damages . . . This was accomplished through lies, deceit, false affidavits, and fraudulent conduct involving municipal authorities. All of this behaviour, directly or indirectly, had a profound affect on the plaintiffs and the litigation.” The plaintiffs had already been awarded $2 million in general damages. The court added another $200,000 in punitive damages. In England, punitive damages are more narrowly applied than in Canada. They are limited to situations such as oppressive or arbitrary conduct of government officials or where the defendant's conduct results in profit that cannot be fully restored to the plaintiff by general damages. The United States, of course, is notorious for awarding large punitive damages compared to Canada. One reason is that they have more jury trials. U.S. juries hear evidence relating to the harm not only suffered by the plaintiff but also to the harm suffered by third parties from the systemic wrongdoing of the defendant. Recent U.S. examples are the cases of corporate financial wrongdoing where juries are willing to "make an example" by awarding large punitive damages. I wonder what will happen to Lord Black.
Death and Damages
In the early days of the law, if you were the breadwinner and died because of the wrongful act of another, the family had no recourse in the courts for compensation (“damages”) against the wrongdoer. The saying was that the wrongdoer was better off killing the breadwinner than injuring him or her because, if the breadwinner survived, he or she could launch a lawsuit for damages for injuries suffered. This changed in England, where much of our law originated, in the 1850’s. Today, all of the provinces in Canada have legislation in place permitting family members to launch a lawsuit. The damages in an action for wrongful death are not for the grief of the loss or pain and suffering but for actual financial losses. When the breadwinner dies, there is great impact on the spouse and children because of the lost financial support. Claiming this loss from the wrongdoer is the primary claim for wrongful death. A car accident is an example of wrongful death. Calculating this loss is an accounting issue and will depend on such things as the age of the deceased breadwinner, the type of employment and benefits, and how young the dependant children are at the time of death. What about the wrongful death of a woman who was an unpaid homemaker? This was debated by the Supreme Court of Canada as early as the 1880’s when a wife was killed at a railway crossing. The court was divided. Some judges viewed the loss of homemaker services, not as an economic loss, but as a “sentimental loss” not quantifiable in dollars. Surprisingly, given the times, the majority of the court disagreed. Here is what one of them stated: “I must confess myself at a loss to understand how it can be said that the care and management of a household by an industrious, careful, frugal and intelligent woman, or the care and bringing up by a worthy loving mother of a family of children, is not a substantial benefit to the husband and children; or how it can be said that the loss of such a wife and mother is not a substantial injury but merely sentimental, is, to my mind, incomprehensible. And if the injury is substantial, the only mode the law could provide for reimbursing the husband and children is by a pecuniary compensation, and so, in my opinion, in the eye of the law, the injury is a pecuniary injury.” Thus, in 1885, the court ordered that the railway pay the family the, then, large sum of $5,800. DRINKING AND DRIVING
Drunk Driving
It is a criminal offence to drive a motor vehicle with over 80 mg per 100 ml of alcohol in your blood. This is commonly called an “over 80” charge and applies whether or not you show any physical signs of impairment due to the alcohol. The over 80 offence does not take into account the tolerance of alcohol which some people have, thus beguiling the physical signs of impairment. It is also an offence to drive while your ability to drive is impaired by alcohol as evidenced by physical signs of impairment whatever your blood alcohol level is. While the over 80 charge is proven by the technical evidence of breathalyzer samples, impaired driving requires evidence based on a police officer’s observations. Physical signs of impairment, as you can imagine, include slurred speech, bloodshot eyes, and problems with walking the line when invited to police headquarters. In practice, both charges are laid when the blood alcohol level is over 80 but one charge is dropped or stayed, usually the impaired driving charge, when the other charge is proven because you cannot be convicted twice for an offence based on the same material facts. Double jeopardy! The principles of sentencing which are applied to other criminal code offences apply to drinking and driving offences. In considering a fine or imprisonment in addition to a suspended driver’s licence, the court considers mitigating and aggravating factors when sentencing the convicted person. Some of the aggravating factors are: a recent criminal record for driving charges, committing the offence when disqualified from driving, a blood alcohol level of over 160, bad driving on a busy road, and causing an accident, especially physical injury. Mitigating factors include: being a first offender, simply being stopped by the RIDE programme, no evidence of bad driving, and the completion of alcohol treatment or counselling programme as a result of previous drinking and driving convictions.
Tavern Drinking
There are many sad stories in the law books about drinking in a tavern and driving home. In one case, a man had been drinking in a tavern where he regularly drank to excess. He lost control of his car, hit a rock wall in a single car accident, and was rendered quadriplegic as a result. In another case, two men were drinking in a tavern for some time. One of the men left the tavern and went to his car which was located in the tavern parking lot. He was tired and concerned about driving after drinking several beers. He sat in the passenger side of the car with his feet up. A few minutes later, the other man went to the car from the tavern. The man in the car told him to come back in about an hour to check and see if he was ready to drive. The other man went back to the tavern. The man in the car turned on the car radio and placed the car keys in the glove compartment. The next thing he recalled was hearing the other man shouting a warning. He was still in the passenger seat. The other man was driving the car, lost control, and was killed. Many tavern owners have been sued. The law is clear, both under the general law and under the Liquor Licence Act, that a commercial vendor of alcohol, such as a tavern, has a duty to its patrons and others to ensure that the tavern does not serve alcohol in quantity which would either intoxicate or increase the patron's intoxication. Taverns do not escape liability simply because a patron does not exhibit any visible signs of intoxication. And if drinks are refused when a patron exhibits signs of intoxication such as being too loud, starting arguments, knocking over drinks, falling down, creating problems for the staff, or upsetting other patrons, that is not good enough. Taverns also have a duty to take affirmative action to prevent intoxicated patrons from driving. Where it is reasonable to expect that a patron has come by car, there is a heavier duty on the tavern staff to keep an eye on the patron when the patron departs to check to see if the patron is driving and to arrange safe transportation, such as, a taxi. Many tavern owners and their servers are certified with the Server Intervention Program set up by the Addiction Research Foundation of Ontario to assist them to evaluate and monitor patrons’ drinking and to prevent intoxicated patrons from driving.
Social Hosting
Everyone entertains guests at their homes and often there are some refreshing beverages served. Some parties do get a little out of hand (even I have been to them) and excessive alcohol consumption by your guests can occur. Last year, the Supreme Court of Canada rendered their first decision in what they called social hosting, that is, home entertaining. Here are the tragic facts of this case. There was a New Year’s Eve party at a private home. The party was a BYOB party. The host provided only a small glass of champagne to each guest at midnight. One of the guests left the party at 1:30 a.m. He was drunk and drove his car right into oncoming traffic and collided head-on with another car. One of the passengers in the other car was killed and three others seriously injured. The driver had drunk 12 beers at the party over two and a half hours and blew well over 80: 225 mg per 100 ml at the time of the accident. He is now serving 10 years in jail. A unanimous seven member panel of the court heard from the plaintiffs and the defendants but also from MADD Canada and the Insurance Bureau of Canada. The law relating to duty of care can be complicated and is often fact driven with results depending on the case. The court recognized that claims against private hosts for alcohol-related injuries to the motoring public caused by a guest constitute a new category of claim under the law. In other words, a duty of care may or may not arise depending on the facts. On the particular facts of this case, the host had no duty of care to the motoring public partly because it was a BYOB party. There were no facts in the case to prove that the host was implicated in creating a risk to the motoring public. “It might be argued that a host who continues to serve alcohol to a visibly inebriated person knowing that he or she will be driving home has become implicated in the creation or enhancement of a risk sufficient to give rise to a prima facie duty of care to third parties . . . We need not decide that question here. Suffice it to say that hosting a party where alcohol is served, without more, does not suggest the creation or exacerbation of risk of the level required to impose a duty of care on the host to members of the public who may be affected by a guest's conduct.” The Supreme Court case is new. It recognizes, in principle, the duty of care of social hosting and will be applied depending on the facts. In the meantime, be careful when hosting parties.
EMPLOYMENT
Dismissal from Employment
An employer and employee are not married for life. Often, an employer will bid farewell to an employee for business reasons, such as downsizing, and, in these circumstances, the employee will be dismissed with compensation based on the length of employment. Dismissal from employment without compensation involves the issue of whether the employer dismissed the employee for just cause, that is, for good reason. Examples of just cause are poor work performance or absenteeism from work. If just cause is proven, the employer is not required to compensate the dismissed employee. The employee, however, may wish to argue that he or she was wrongfully dismissed, that is, dismissed without just cause, and should receive compensation. The employee has one of two forums to contest a dismissal from employment. One forum is to file a claim under the Employment Standards Act with the Ministry of Labour. Under the Act, the maximum that an employer can be ordered to pay is $10,000. The other forum is the courts. An employee may sue in the small claims court for under $10,000 or in the superior court for higher amounts. An employer can only be made to respond to a wrongful dismissal allegation once, so if an employee loses in one of the forums chosen, that is the end of the case against the employer.
Constructive Dismissal
An employer and employee are not married for life. One of the ways the employment relationship is severed is by constructive dismissal. This may occur when an employer acts unilaterally to change the terms or conditions of employment. Such conduct often amounts to a repudiation of the employment contract by the employer which then permits the employee to sue for damages for wrongful dismissal. Constructive dismissal may arise in several ways. An obvious example is money. There is very little debate that a significant reduction in the remuneration of an employee will constitute constructive dismissal. An area of dispute is whether the employee was hired to perform a particular job or whether the employer may assign the employee to other duties. Many court decisions maintain that an employer does have the right to change an employee’s duties where there is no compelling evidence of the terms of the contract. However, where there is such evidence, the assignment of a new position, inferior in status and different in scope from the prior position, may amount to a demotion and hence, constitute constructive dismissal. Another area of concern is a change in the geographic location of the workplace by the employer. The general rule is that an employer has the right to make a reasonable change in the location of the workplace provided that there is no written contract restricting relocation. In other words, an employee is not entitled to a job for life in a place of the employee’s choosing. However, the employee is entitled to reasonable compensation for the move. The issue of day to day treatment may also be litigious. An employer owes a duty to its employees to treat them fairly and with respect. An employer who subjects employees to treatment that renders competent performance of their work impossible or continued work intolerable may be faced with a constructive dismissal lawsuit.
Employment and Non-Competition Clauses
An employer and an employee may enter into a contract of employment when the employee is hired to work in a business. If the business has clients or trade secrets it wishes to protect, the employer may require the employee to sign a non-competition agreement relating to what happens after the employee is no longer working in the business. The agreement is called a restrictive covenant and it prevents a former employee from soliciting the clients of the business or from using the trade secrets of the business. There has been much litigation over restrictive covenants. A business often seeks an injunction to stop a former employee from soliciting its clients or using its trade secrets. The former employee may defend such a lawsuit on the basis that the restrictive covenant is not enforceable as a matter of public policy because it is an unreasonable restraint on trade. Courts scrutinize the meaning and effect of restrictive covenants. To enforce a covenant, a business must show that it has a proprietary interest requiring protection. Trade secrets are commonly protected. Clients of a business may also be protected where there is a significant degree of customer loyalty in the business. If the restrictive covenant goes beyond the immediate protection of the proprietary interest to restrain competition generally, the covenant is most likely to be struck as unenforceable because the employee has the right to use the personal skill and knowledge acquired in the former employment elsewhere. The covenant, in addition, must be reasonable between the employer and employee in regard to geographical space and time. Covenants prohibiting client solicitations within a 20 mile radius of a business for one or two years have been upheld by the courts. An example is a local insurance broker and its clients. Unequal bargaining power is another factor considered by the courts. Before entering into an employment contract, it is prudent for each party to the contract to obtain the advice of a lawyer on the enforceability of a restrictive covenant contained in it.
EVIDENCE
Judging Credibility
Judging credibility is considered by some to be an art. One veteran trial judge had the following to say about judging credibility: “With respect to the oral testimony of the witnesses I have heard and observed, I am entitled to believe the whole or a part, or to disbelieve the whole or a part, of the testimony of any witness, and to weigh the evidential value of the testimony that I find acceptable and believable, and therefore, credible. Credibility concerns, generally, the assessment and weighing of the testimony of a witness. It is in essence, believability; the recognition of a witness's worthiness to be believed; the truthfulness of his testimony. Testimony that is not plausible or reasonable in itself may be rejected on that basis alone, that is, that it is not plausible or reasonable and, therefore, not worthy of belief. There are numerous factors to be considered in determining credibility generally, and no real set of rules to follow. It is a matter in which many human characteristics, both strong and weak, must be taken into consideration. Ultimately, the task is left to good common sense and the accumulated wisdom and experience of years of ordinary, everyday living. In assessing the credibility of a witness generally, the Court may consider the integrity and intelligence of the witness, and the witness's appearance of sincerity and truthfulness in the witness stand; whether the witness was candid, frank and fair, forthright and responsive to questions asked or evasive or hesitant; and whether the witness was biased or had a personal interest or lack of personal interest in the outcome of the trial. More specifically, the Court may consider the witness's memory, the capacity to remember, and the ability to describe clearly what was seen and heard; whether or not the witness has any particular reason to assist him in recalling the precise event and what was said; and whether or not there were inconsistencies in the witness's testimony at trial, or in what the witness said at trial and on a prior occasion under oath or otherwise. Innocent discrepancies in minor matters are often unimportant. Discrepancies portrayed in detail on relevant matters may be deemed to be something more than innocent discrepancies, and they must be looked at very carefully in assessing credibility.”
Judging Credibility #2
Our sage, veteran trial judge had the following additional guidelines about the art of judging credibility: “The appearance and demeanour of the witness and the impression made as to the witness' honesty and truthfulness is also only one of the factors to consider in determining the witness' credibility. The finding of credibility should not depend solely on which witness made the better appearance of honesty and sincerity in the witness stand. If credibility was decided on that basis alone it would lead to a purely arbitrary finding, and justice would depend to a large extent on how and who made the best impression in the witness stand. Where there are conflicting and contradictory accounts, the judge should consider what facts are beyond dispute or indisputable, add to those facts such other facts as seen very likely to be true, and then examine which of the conflicting accounts best accords with those facts. The conflicting testimony of a witness may be judged to be unreliable if his evidence is, in any serious respect, inconsistent with the undisputed or indisputable and otherwise found facts. When the judge has done his best to separate the true from the false by these more or less objective tests, the judge should consider which story is more probable. The test of the truth of the story of a witness in cases of serious conflict must be its harmony with the preponderance of probabilities which a practical and informed person would readily recognize as reasonable in the light of the existing circumstances and conditions. The judge endeavours to determine, if possible, which of the conflicting stories is more consistent with the probabilities and the surrounding circumstances and conditions when examined in the background of the evidence as a whole. ”
Hearsay
You have all heard the phrase “it’s hearsay.” Hearsay evidence is an oral or written statement made in court by one person about a statement made out of court by another person. The object of the court evidence is to establish the truth of what is contained in the out of court statement. However, the statement is inadmissible in court. There are two reasons for the exclusion of hearsay evidence. The out of court evidence is not given under oath and it is not subject to cross-examination. The rule against hearsay evidence is of great antiquity and can be traced back to the 1400’s in England where such evidence was first rejected on the basis that it was not evidence given under oath. By 1700, the hearsay rule was well established in a growing urbanized and industrialized England and the evidence was further rejected at that time on the basis that cross-examination of the out of court person was not available. There is an interesting exception to the hearsay rule. A hearsay statement of a dying person may be admissible in court in homicide cases provided certain requirements are met. A critical requirement is to prove that the dying person must have believed that death was imminent when the statement was made. Courts have looked at the point of death as so solemn an event that every motive to commit a falsehood is gone inducing the dying person to speak the truth before God as if under oath before a court of law. Other hearsay statements are also admissible in court. If a person makes a statement against his or her interest, the statement may be admissible. An example is a statement made against the person’s pecuniary interest, such as “I owe the money.” Confessing to a crime is often considered to be a statement made against a person’s penal interest. Claims by Canadian aboriginals to fishing and hunting rights over specific lands have been proven by the admissibility of oral history to establish that such activities occurred in the past.
Expert Evidence in Court
Most evidence at a trial involves testimony on subjects with which we are all familiar. Examples are testifying on the type of shoes a person was wearing when that person slipped and fell in an icy parking lot or whether the driver of a car smelled of alcohol at the time of a car accident. However, a trial judge will at times need specialized evidence to assist in the determination of a case. This specialized evidence is called opinion evidence and often involves the issue of negligence of a professional person. Such an allegation requires proving the accepted standard in the industry for the delivery of professional services. This is done by calling an expert in the field to give an opinion on what the standard is and whether the professional on trial has met or fallen below that standard. If the professional has fallen below the standard, negligence is proven. For example, in a medical malpractice lawsuit, a doctor will be called by each of the plaintiff and defendant to prove the accepted standard in the industry. This may involve a “battle of the experts” debating, for example, whether the standard of a doctor practising in a rural community is different from the standard of a doctor practising in a city like Toronto. Another example is a contractor who builds a house but the roof collapses due to the snow load in the winter. Was the roof properly built? Should engineered trusses have been used? These are questions to be answered by experts. Whether your case is in the Small Claims Court or in the Superior Court of Justice, always keep in mind that you cannot prove or defeat an allegation of professional negligence without the assistance of expert evidence.
FAMILY LAWPaternity
Who is the father? The determination of paternity is a necessary and material step in the establishment of the obligation to support a child. Unlike support and custody, which can change with different circumstances, the issue of paternity is a biological fact and a decision on it is binding on everyone, not just on the child and mother. In family law, the determination of paternity is usually bound up with an application for support. Generally speaking, courts are reluctant to make a finding of non-paternity upon technical grounds, or upon the failure to tender evidence. A fact situation will illustrate the point. In an application for support, the mother did not appear for a blood test and did not appear in court on her application. The support application was dismissed. Another support application was brought three years later and the alleged father argued that the issue of paternity had been determined in the first application on the basis that the application was dismissed for want of prosecution because of an adverse inference drawn by the court on the failure to appear for a blood test. However, the court held that the second application was not barred because the first application was not heard on its merits. The court noted that it must be careful not to overlook the best interests of the child despite the neglect of the mother in not submitting to a blood test. The only way in which the best interests of the child could properly be determined was for the court to hear evidence on the issue of paternity and then make a determination of the issue. However, courts may discourage the relitigation of a paternity issue between young unmarried parents. One judge has stated the reason this way: “In many circumstances such as this, when the parties enjoy a relatively pleasant relationship the “possible father” may agree to a paternity finding and later when the relationship has deteriorated or when more personal sexual information is discovered concerning the private matter of sexual intercourse between the mother and other men, i.e., other “possible fathers”, the matter is sought to be placed back before the court. This does not seem to be consistent with the best interest of the child . . .”
Spouses and Family Law
In family law, there are two kinds of relationships which create legal rights and obligations between spouses, married relationships and common law relationships. In order for such rights and obligations to arise between common law spouses, the spouses must have been cohabitating continuously for a period of three years, or the spouses will be considered to be in a common law relationship if they are in a relationship of some permanence as the natural or adoptive parents of a child. Married spouses and common laws spouses have the same rights and obligations with respect to financial support if the relationship breaks down. However, that is not the case with respect to property, such as the house that they may be living in. Under The Family Law Act, only married spouses may apply to the court for an equal division of the property they may own, such as the matrimonial home. The intention of the Act is that the value of all assets acquired by either or both spouses by virtue of the marriage relationship be shared equally upon marriage breakdown. The Act does not address this issue as between common law spouses. This does not mean that the common law spouses have no rights or obligations with respect to property once their relationship breaks down. The courts have utilized general law doctrines called equitable doctrines, or fairness doctrines, to try to achieve a just result between common law spouses. For example, if the male spouse owns farm land where they live but both common laws spouses partake in the farm chores to maintain the farm business and operation, a court may apply equitable doctrines to give the female spouse some percentage of the farm based on her working contribution once the relationship breaks down. As well, if she made a financial contribution to the farm, that may also be taken into account. Common law spouse may wish to consider entering into a domestic contract to clarify their relationship with respect to property.
Parental Responsibility
Parents beware! You may be liable to pay for property damage caused by your child. Consider this scenario. When you are away at work on weekends, you usually have your 18 year old daughter babysit your 15 year old son so that he does not get into trouble. That arrangement is successful for a while but one day the 18 year old falls asleep on the sofa giving the 15 year old a unique opportunity. He takes the keys to the parents’ car, takes it for a spin, but gets into a car accident causing property damage to another car. The property damage is repaired through insurance. What can the insurance company do to recover the cost of the repairs? It can sue the parents in the small claims court. The lawsuit is governed by the Parental Responsibility Act which became law around 2000. In this legislation, there is a reverse onus. Once the car accident has been proven, the parents must satisfy the court that they were exercising reasonable supervision over their son at the time that he took the car for a ride. The legislation lists several factors that the court may consider in determining whether the parents were exercising reasonable supervision at the time. Some of the factors are: the age of the child, the prior conduct of the child, the potential danger of the activity, the physical or mental capacity of the child, including any psychological disorders, and the parents’ parenting skills generally. In defending the lawsuit, the parents might argue that they were completely unaware that their son had an interest in driving the car. The incident was completely out of character for the son and not foreseeable. The son was a normal healthy teenager giving no reason for the parents to be concerned about him engaging in any type of dangerous activity. The weekend regime established by the parents regarding the supervision of their son was prudent and reasonable and was working well before this incident. The standard imposed by the Parental Responsibility Act is one of reasonableness, not perfection. The standard is an objective one determined by taking into account both the practical realities of what ordinary people do and what judges believe they ought to do. It is recognized by the courts that the reasonable person may make mistakes and errors of judgment for which there is no liability. The Act only applies to the small claims court with a monetary jurisdiction of $10,000.
INJUNCTIONS
Injunctions
Injunctions are obtained through a lawsuit and they are of two kinds: injunctions to prohibit someone from doing something and injunctions to require someone to do something. Normally, the lawsuit will seek an interlocutory injunction so that the injunction is in place immediately, until the trial occurs. At the trial, the plaintiff will then seek a permanent injunction. In granting or refusing an interlocutory injunction, the court applies three tests. The first test is that the plaintiff must demonstrate that the lawsuit has a serious question to be tried. An example of a serious question is someone blockading a right of way to property. The first test will be determined by the judge on the basis of common sense and an extremely limited review of the lawsuit on its merits. Unless the lawsuit is frivolous or vexatious, a judge must consider the second and third tests. In the second test, the plaintiff is required to demonstrate that “irreparable” harm will result if the interlocutory injunction is not granted. “Irreparable” refers to the nature of the harm rather than its magnitude. If the nature of the harm is financial losses, rather than access to property, the harm may or may not be irreparable depending on the circumstances. In the third test, the court must assess the balance of inconvenience to the parties until the trial occurs. There is a clear inconvenience to the user of a right of way if the user is blockaded from his or her property. Indeed, where an interlocutory injunction is sought to prohibit interference with property rights, the injunction is so strongly favoured by the courts that it is more accurate to state that the injunction is the presumed remedy. A plaintiff seeking an interlocutory injunction must make an undertaking (“a promise”) to the court to pay for any financial losses if it ultimately appears at trial that the granting of the interlocutory injunction has caused damage to the defendant.
INSURANCE
Lawsuits and Insurance
An insurance policy is a contract between you and your insurance company that protects you in two important ways. The policy will pay for your loss if your home is accidentally damaged by fire or by water pipes bursting. It will also pay for a lawyer to defend you if you are sued for a peril that is covered under your policy, such as a slip and fall on your property. If you are a tradesman with negligence insurance, your insurance company will also pay for a lawyer if, for example, you are sued because the roof of the building you worked on collapsed. In construction litigation, many trades are named as defendants but not all may be found to be negligent by the courts. Even if you think that you were not negligent, you must defend the lawsuit and the expense of a lawyer, which can be costly in this kind of litigation, will be paid by your insurance company. An insurance company may refuse to pay for a loss or refuse to defend you on the basis that you were not i | |
