Should the Government Ban “Double-Ending” in Real Estate Deals?

The practice of “double-ending” has become commonplace in Toronto’s real estate market.

Earlier this year, the government of Ontario launched the Fair Housing Plan, a multi-phase effort to update various aspects of real estate and residential tenancy law in the province. This included an upcoming review of the practice known as “double-ending”, in which a real estate agent represents both the buyer and seller in a transaction.

Currently, there’s no rule against realtors double-ending in Ontario. But one does not require a depth of knowledge about real estate law to see why the practice is questionable.

Ontario real estate agents are governed by a body called the Real Estate Council of Ontario and the Real Estate and Business Brokers Act. The law prevents realtors from manipulating deals or using confidential information to give clients an unfair advantage.

However, the freedom to double-end deals gives agents ample opportunity to violate those rules.

The problem is conflict of interest. When it comes to a real estate transaction, buyers and sellers have entirely different interests. Sellers want to maximize their profit, while buyers want to get the best bang for their buck. The seller’s ideal price is not what’s best for the buyer.

That’s part of why people retain realtors in the first place. Real estate agents are meant to protect their clients’ interests and help them negotiate the best deal.

When your clients’ interests are directly opposed, there’s no way you can represent both of them to the fullest.

Law societies have recognized this for centuries. Avoiding and managing conflicts of interest is one of a paralegal or lawyer’s most important duties. Here in Ontario, the rules for both professions expressly forbid a licensee from representing both sides of a dispute, regardless of how friendly the opposing parties claim to be.

This is also true for lawyers practicing real estate law. There’s an exception for lawyers acting for relatives transferring properties from one to another, but the Law Society still cautions against this.

While a single realtor can represent both the buyer and seller, those parties will have to retain separate law firms for the same transaction. The double standard is clear.

The first phase of the review ended on July 24, with the government ending public comment on the issue. We’ll wait and see whether they’ll tackle double-ending before the next election. If the Liberals drag and delay on this issue, I expect the practice will live on, as the Progressive Conservatives are traditionally friendlier with the real estate industry than their colleagues in government.

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Why Sears Canada Can Legally Deny its Employees Severance

Former Sears Canada employees are left waiting in line with Sears’ other unsecured creditors for statutory severance pay.

One June 22nd, Sears Canada sought protection from its creditors under the Companies’ Creditors Arrangement Act, laying off 17% of its 17,000 employees and closing 59 store locations. Now, those 2,900 former employees are stuck in limbo, unsure if they will ever receive severance the law entitles them to claim.

Severance Law in Canada

In Canada, the provinces and territories have the authority to set laws governing the employment relationship. However, it’s the federal government that has jurisdiction over bankruptcy law.

Ontario’s Employment Standards Act gives workers the right to notice of termination or severance pay when the employer terminates their employment without cause. Courts can also grant an employee greater severance than the minimum standards based on a number of common law factors, including the employee’s age, years of service, and ability to find another job in the same field.

But that all goes out the window when bankruptcy law comes into play.

Companies can begin bankruptcy action under two laws in Canada: the Bankruptcy and Insolvency Act, or the Companies’ Creditors Arrangement Act. The BIA is more restrictive, as it involves an independent trustee who acts on behalf of all creditors, including former employees with severance claims. The CCAA, on the other hand, lets companies apply to the court for permission to suspend severance and other employee benefits without a trustee’s involvement.

That’s what Sears did in this case. Now, its former employees have to wait in line with Sears’ other creditors to see if they’ll get paid at the end of this so-called “financial restructuring”. And since the workers aren’t secured creditors, there’s no guarantee they’ll get the money they’re entitled to under the law.

Sears plans to continue operating its other stores during this period, and it has secured $450 million to help it re-brand in hope of bouncing back. However, it has also applied to stop paying benefits to its retirement plan that provides life insurance and medical/dental benefits to thousands of former Sears employees. On this, the court compromised; Sears has to continue paying until the end, at which point the retirees are left without benefits.

Fixing Broken Bankruptcy Laws

Not all companies take advantage of the CCAA to get out of paying its employees their dues. Target, for example, set aside a $70 million reserve fund to ensure its employees got severance when it sought bankruptcy protection in 2015. However, this event has demonstrated what many consider to be a gaping hole in Canada’s typically progressive employment laws.

Stuart Rudner, an employment lawyer, says reforming the law to make company directors liable for wages and severance would help protect employees in the future. The government could also amend the law to give workers secured creditor status to ensure they aren’t last in line for payment in the event of a bankruptcy.

Others have called on provincial and federal governments to act. Premier Kathleen Wynne said her government is saying “very close attention” to the Sears situation, but says there’s no real role the province can play in defending the workers. That’s because the law governing these proceedings, the CCAA, is a federal law. But Catherine Fife, an MPP from Kitchener-Waterloo, wants to see Wynne lobbying the federal government for change.

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Ontario Legal Clinic Challenges Aggressive Panhandling Law

Staff at the Fair Change Community Legal Clinic in Toronto is pursuing a constitutional challenge against Ontario’s Safe Streets Act, which criminalizes “aggressive panhandling” in the province.

This is the second legal challenge to the law since it was enacted in 1999. The previous challenge failed,  but the latest case has a broader focus and incorporates more evidence of the effects of the law over the past 18 years.

The Safe Streets Act

The Safe Streets Act was conceived by the former Premier Mike Harris’s Progressive Conservative government in 1999. It came in response to complaints about the behaviour of so-called ‘squeegee kids’ in Toronto, referring to homeless panhandlers who clean the windshields of vehicles stopped at red lights and demand payment from drivers for the unsolicited service.

This manner of panhandling has long been a source of tension in Toronto. Some drivers complain about homeless youth with squeegees moving in and out of busy traffic and the “aggressive” manner in which they solicit payment. There have been at least two violent incidents between drivers an squeegee kids since 1999.

The law makes it illegal to:

  • Threaten a person with physical harm for failing to respond to a solicitation
  • Block the path of someone during or after solicitation
  • Use abusive language during or after solicitation
  • Follow someone after they reject a solicitation
  • Solicit while under the influence of drugs and alcohol
  • Persistently solicit after being rejected
  • Solicit someone using or waiting for an ATM, public toilet, payphone, taxi, or transit
  • Solicit someone stopped on a roadway

Criticism of the Act

Joanna Nefs, the executive director of the Fair Change Community Legal Clinic, argues the Safe Streets Act is too vague, too broad, and infringes on peoples’ freedom of expression and equality rights under the Charter.

In a Toronto Star editorial, Nefs writes the Act, “criminalizes the poor for being poor, compounding inequality, clogging up the already overburdened court system and draining public coffers in the process.”

She says the Act, which has cost Toronto Police over $1 million to enforce between 2000 and 2010, disproportionately impacts people who have mental health or addiction issues, or who are aboriginal or visible minorities. These groups are all protected under s.15 of the Charter.

The previous legal challenge to the Safe Streets Act occurred in 2001. This case focused on the impact of the law on squeegee kids, advanced on behalf of 13 people charged under the act. The Ontario Court of Appeal ruled that although the act did breach their Charter rights to freedom of expression, the breach was justifiable in the interest of public safety.

Nefs says the new challenge has a chance of success because of its broader focus and evidence of the act’s effects on vulnerable populations in Ontario. It also argues the s.15 equality rights angle, noting that the Liberal government amended the act in 2005 to allow solicitation on behalf of registered charities. This, she argues, is an arbitrary distinction that triggers s.15 protection.

There is also a bill to repeal the Act making its way through the Ontario legislature. New Democratic MPP Cheri DiNovo introduced the bill earlier this year. The bill is through first reading, but the Ministry of the Attorney General has so far declined to comment on whether the government will support it.

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Should the Law Society Limit Contingency Fees in Ontario?

A committee report finds many lawyers and paralegals are not following the current rules in place for contingency fees.

What’s best for lawyers and paralegals isn’t always best for the people they serve.

The Law Society of Upper Canada regulates the legal professions in Ontario in the public interest. It’s part of its mandate to ensure the public gets a fair shake when it comes with dealing with lawyers and paralegals. That’s why legal professionals can’t just do what they want – they have to follow the Rules of Professional Conduct and the Paralegal Rules of Conduct respectively.

Recently, the Law Society changed the rules for referral fees and advertising. Now, it’s tackling contingency fees.

What’s a Contingency Fee?

Lawyers and paralegals can structure their fees in a few different ways. Most often, they charge a running hourly rate for their services. Sometimes, they charge a fixed or block fee to perform a certain task. They can also charge contingency fees.

In a contingency arrangement, the fee is based in whole or part on the amount of money the client wins in the case. In other words, if the representative doesn’t win the case, the client doesn’t pay.

The idea of a contingency fee is that it gives clients who can’t afford hourly or fixed fees a change to get legal representation. The lawyer or paralegal takes on the case knowing there’s a chance they won’t get paid at the end.

Contingency fees aren’t allowed in criminal or quasi-criminal (provincial offences, like by-laws) cases, since that would jeopardize the representative’s loyal to the client and the rules of conduct. But just about every other area of law involves contingency arrangements some of the time. It’s especially common in personal injury cases with the potential for a big payout at the end.

Why Limit Contingency Fees?

Recently, the Law Society formed a committee to study issues in advertising and fee arrangements for lawyers and paralegals. It just released its interim report on contingency fees, which found significant issues in the matter.

According to the report, many licensees are failing to follow the current rules on contingency fees. Contingency fees are supposed to be fair, reasonable, and confirmed in writing. People aren’t doing that.

As a result, the committee finds, change is necessary to protect clients.

The committee recommends requiring a mandatory standard form agreement to make sure the client understands how the fee works before they agree to it. It also suggests additional safeguards, such as hard limits on fees (either a percentage of the settlement or the amount), requiring the client get independent legal advice before paying the fee, and new reporting requirements.

Reaction to the Recommendations

Changing the rules of conduct always creates some debate in the legal community, and this is no exception. It’s especially contentious among personal injury lawyers, whose practices often run on contingency fees.

Andrew Spurgeon, a personal injury lawyer who sits on the committee, supports the changes. He says the goal is to come up with an approach that protects the public by ensuring fees are reasonable and transparent. “The present system is archaic and needlessly complicated. It’s very difficult to explain how it works to a client. So the first thing we have to do is simplify it.”

Claire Wilkinson, head of the Ontario Trial Lawyers Association, disagrees. “Well intentioned as it may be, imposing an arbitrary cap could prove counter-productive, against the public interest and subvert the benefit of the access to justice that could otherwise be provided to many people.”

Another personal injury lawyer, Steve Rastin, echoes what Wilkinson says. “I don’t think there is ever going to be a problem getting lawyers to take on a large case. I think that a cap may function as a disincentive in smaller cases as an access to justice issue to get people to take them on.”

At this point, a cap on contingency fees won’t happen without a fight. Liberal MPP Mike Colle unsuccessfully tried to go around the Law Society and introduce a 15% cap in a private member’s bill last spring. However, I think the standardized contingency form is likely to pass, if only to force lawyers and paralegals to comply with the rules already in place.

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The Case Against Administrative Monetary Penalties (AMPs) in Ontario

Backlog is a problem in Ontario’s courts, but administrative monetary penalties are not the solution.

In most cases, real-life court proceedings are far from the spectacles you see every night on TV. They’re slow, measured, and fairly soft-spoken. Lawyers and paralegals do most of the talking, and since everyone in town knows each other, they tend to maintain a pretty high level of decorum.

Of course, there are exceptions. Traffic Court is one of them.

There, you’ll find ordinary men and women standing their ground, defending themselves from charges like speeding and parking infractions. You’ll watch a practiced Justice of the Peace plow through dozens of cases a day. You’ll see lawyers and paralegals cutting deals with the Crown to resolve cases expediently. Occasionally, you’ll get a longer trial based on complex legal issues, but for the most part, it’s the people’s court.

Not everyone sees this as a good thing.

Ontario’s court system, like all Canadian courts, faces a heavy backlog of cases. That weighs heavily on taxpayers, not to mention the people left waiting for months on end to have their day in court. Hiring more judges and justice may provide temporary relief, but it doesn’t solve the inefficiencies that created this problem in the first place. Eliminating court backlog and increasing access to justice will take new ideas and radical changes.

One radical change that has been proposed has been to take certain provincial offences (like minor Highway Traffic Act offenses) out of the court system and replace them with administrative monetary penalties.

Administrative Monetary Penalties

People often talk about Canada as three levels of government: the federal government based in Ottawa, the provincial and territorial governments, and the municipal or local governments within each province. Truth is, municipalities don’t have much inherent power. They’re more like an extension or a downloading of the provincial government’s power.

In Ontario, it’s the Municipal Act, 2001 that delegates powers to local governments. It grants municipalities to pass by-laws and sets out their responsibilities in terms of transportation, waste management, public utilities, cultural and recreational spaces, and parking, among other things.

Section 434.1 of the Act lets municipalities establish a system of administrative monetary penalties to help it enforce its by-laws. Some municipalities already use these penalties to resolve by-law issues, like parking infractions.

For example, parking illegally in Markham will net you an administrative penalty rather than a parking ticket. Unlike a parking ticket, you can’t dispute this penalty in court — instead, you must request a Screening Review appointment with the city. If the Screening Officer doesn’t let you off, you can appeal to another municipal officer for a second review. But that’s where your right to appeal ends. There’s no court date, no justice to hear your case.

To some, this system is an improvement on the current state of affairs. Administrative penalties are seen as a more efficient way for municipalities to resolve these cases. After all, who really needs to go to court over a ticket?

When people picture backlog in the provincial courts, they often think of the irresponsible speeder who refuses to admit his wrongdoing, or the inconsiderate driver who parked in a loading zone. They don’t think of the trucker who risks losing his livelihood, the novice who was confused by a poorly-placed street sign, or responsible driver who had a tough break on a patch of black ice.

Depriving people of the right to a court hearing, even for minor offences, is not a solution to court backlog. The whole problem with the backlog is access to justice —both for the accused people stuck in limbo for months before their hearings, and the victims who see an accused go free due to unconstitutional delay.

Taking access to justice away from one group in an attempt to restore it for others is no justice at all.

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Why Paralegal and Police Textbooks Need a Canadian Perspective

The internet has had a profound effect on the textbook industry. Many publishers now offer online courses and learning material in addition to ink-and-paper books. The books themselves often take the form of ebooks, which students appreciate for being lighter on their wallets (and backpacks). It’s also allowed smaller publishers to enter the sphere, offering niche textbooks with a Canadian perspective.

Students in Canada benefit from Canadian textbooks, especially in areas like police foundations and paralegal studies. The Canadian legal system different from that of other Commonwealth nations, and working in the law – either in law enforcement or as a legal representative – requires knowledge of the unique characteristics of Canadian society, including the history of injustice in our country.

These are just some of the reasons why educators should choose Canadian police foundation and paralegal textbooks.

Canadian History

Canada is just 150 years old, and its constitution is under 50. Canada’s legal system is unique among Commonwealth countries, incorporating both British common law tradition and French civil law. Britain was the main influence on the Canadian system, but recent decisions have looked to precedent set by the United States and other nations as well. It’s important for police and DDE’s paralegal textbooks to explain how these origins impact the courts today.

Canadian Law

There are huge differences between the Canadian and American legal systems. To start, criminal law is the exclusive jurisdiction of the federal government, with single Criminal Code setting the law in all provinces and territories. But many other areas of law, like traffic, the environment, and human rights, are different across the country.

There are also many significant differences in how the courts operate. For example, many American paralegal textbooks refer to jury trials, which are rare in Canada, and are outside the scope of paralegal practice.

Canadian Society

People often say we’re becoming more and more like our neighbours to the south. While this may be true, Canadian society is still vastly different from that of the United States, and this has a huge impact on our approach to policing. One major difference, of course, is the absence of gun culture and less availability of guns in Canada. Canadian and American police also undergo different training, with American police focusing more on protocol and Canadian police on problem-solving.

First Nations Issues

It’s impossible to overlook how the legal system is inextricably tied to Indigenous issues in Canada. First nations communities are disproportionately represented in the Canadian criminal justice system, and they can face difficulty accessing justice in other areas of the courts.

It’s important that paralegals know the legal issues specific to representing Aboriginal clients, such as how this background can impact sentencing. Police foundation textbooks must address challenges Indigenous people face in the system, including the history of injustices towards these communities and systemic racism in law enforcement agencies.

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Have Your Say On Marijuana Legalization in Ontario

Ontario is asking residents for their feedback on the upcoming legalization of marijuana.

 

Have something to say about marijuana legalization? You’re in luck. The Ontario government is running an online survey on cannabis legalization in the province.

Residents have until July 31, 2017, to share feedback on how Ontario should approach the sale and regulation of marijuana in the province.

So what does the government want to know? And what could it mean? Today, we’re going to take a break from more complex legal stories and discuss they survey section-by-section.

Introductory Questions

The first three questions in the marijuana survey ask:

  • How familiar you are with legalization efforts;
  • How you feel about legalization; and
  • Whether you’ve ever used cannabis (and, if not, whether you plan on trying it once it’s legal).

The last question caught my attention. In addition to gauging the public’s interest and feelings on the issue, the survey could also be used to predict the demand for cannabis once it’s legal.

Minimum Age

Though the federal government’s Cannabis Act suggests people must be at least 18 years old to possess and purchase marijuana, provinces and territories can raise the age if they choose. This part of the survey asks:

  • How strongly you support setting the minimum age to 19; and
  • Which factors are most important when it comes to setting a minimum age: road safety, scientific evidence, preventing young people from buying cannabis illegally, or keeping cannabis out of the hands of children and youth.

Interestingly, the survey includes this tidbit of information:

“Health experts caution that cannabis may impact a person’s developing brain until the age of 25. At the same time, setting the minimum age too high could lead young people to continue relying on the illegal market.”

To me, this is a strong indication the Ontario government plans to set the minimum age to 19.

Location

Provinces and territories can decide where people are allowed to smoke, vape, or use cannabis in other ways. The survey notes there are already laws in place limiting where people can smoke or drink in Ontario, and asks:

  • Whether the government should restrict where people can use cannabis in public places;
  • Whether landlords should be allowed to restrict tenants and condo owners from smoking or vaping cannabis in units; and
  • Same as the above, but in common areas like rooftops and courtyards.

If you answer “yes” to the first question, you’re given the following options for no-cannabis-zones:

  • Areas around schools and child care
  • Places of worship
  • Areas around public buildings
  • Parks and patios
  • Sidewalks
  • Everywhere but private residences

We could see some overlap with landlord and tenant law here in Ontario. Smoking is already banned in indoor public spaces, such as common areas and foyers. Landlords can force a no-smoking clause on new tenants, but they cannot impose such a policy on existing tenants. However, landlords can move to evict a tenant if their smoking interferes with another tenant’s reasonable enjoyment.

Keeping Our Roads Safe

The survey outlines the new driving laws slated to come into force along with the Cannabis Act, and asks:

  • Whether you support the Ontario government putting stricter penalties in place for drug-impaired driving;
  • Which penalties we should consider, given “limits to the technology to test drug impairment”; and
  • What we should invest in to deal with drug-impaired driving (the options being technology for roadside cannabis testing, drug recognition training for police, more RIDE programs, or public education campaigns).

It was often said that this whole legalization business will never get off the ground until we can easily test for cannabis use at the roadside. That doesn’t seem to be the case. At this point in time, there is no reliable equivalent to the “breathalyzer” test for cannabis. To add to the confusion, THC doesn’t scale the way blood-alcohol content does, so that kind of test isn’t a reliable way of determining impairment.

With the fabled pot breathalyzer out of reach, that leaves us with three options: RIDE programs, police training, or public education campaigns. It’s likely we’ll see a combination of the three.

Sale of Cannabis

Who should be in the business of selling cannabis? The government, the private sector, or both? The survey doesn’t delve into the types of organizations that should be selling cannabis (pharmacies, gas stations, dispensaries, etc.), but it’s interesting to me that ‘private sector only’ is an option. Some people don’t want the LCBO sticking its nose in this business.

The survey also polls Ontarians on which health and safety measures they consider most important when it comes to selling cannabis:

  • Stopping underage and intoxicated people from buying
  • Secure storage
  • Staff training
  • Background checks on staff
  • Restrictions on where stores can be located
  • Hours of operation
  • Safety of the product
  • Packaging and health warnings
  • Restrictions on advertising

Personally, I can’t form an opinion on these issues until we know exactly who will be selling it in the first place.

Next up: more market research! The final part of this section asks you to rank factors that would influence your decision to purchase cannabis on a scale of one  (not important) to five (very important).

I was surprised to see online ordering and delivery on the list. It’s only recently the LCBO began home delivery, and the Beer Store is testing it out this summer. If the government does decide to roll cannabis into the offerings of the LCBO, we could see home delivery soon after legalization.

Public Education

In the months since the federal government announced legalization, I’ve heard more about public education than anything else surrounding this issue. The survey asks:

  • Which issues are most important when it comes to public education (health risks, impaired driving, etc.)
  • Who should be involved (police, schools, health experts)

Given that the big day is less than a year away, we’ll likely be seeing the fruits of these efforts very soon. The perceived success or failure of these education campaigns will likely have a big impact on how people perceive this issue. I, for one, look forward to seeing what they come up with.

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CTV Kitchener Cuts Sports Division: Will Kitchener Employment Lawyers Soon Have Their Hands Full?

Earlier this year, CTV announced cuts to local news stations around the country. Among the cuts were the long-standing sports division of CTV’s Kitchener branch.

The end of local sports programming is a sad loss to a community and its fantastic varsity teams, but the loss is surely greater to the three full-time and five part-time employees who now find themselves without work. The union representing the employees says it will soon meet with the station to try and get the best deal for these workers.

So, will those former CTV employees soon be knocking on the doors of Kitchener employment lawyers?

As with all things legal, it depends on the circumstances.

Terminating Employment in Ontario

At common law, both employers and employees have the right to end the employment contract at any time without cause by giving notice of termination or pay in lieu of notice. Since the CTV Kitchener employees were laid off as part of company re-structuring, it’s safe to assume the employer did not have cause to dismiss.

When it comes to terminating employment without cause, the employer has two options:

  1. Give the employee working notice; or
  2. Compensate the employee in lieu of notice, in an amount equivalent to the pay and benefits the employee would have earned during the required notice period.

There are two standards for how much notice (or pay in lieu) an employer must give someone: the minimum standards under the Employment Standards Act (ESA), and the common law factors that impact reasonable notice.

Notice Under the Employment Standards Act

In general, the longer an employee has been with the company, the more notice he or she gets under the ESA. Under s.57 of the act:

  • Under three months’ employment = no notice (this is known as the “probationary period”)
  • Three months to one year’s employment = one weeks’ notice
  • Between one and three years’ employment = two weeks’ notice
  • For each year over three, add one week’s notice to a maximum of eight weeks

The standard changes in situations where an employer terminates 50 or more employees in a four-week period. Under those circumstances, notice required depends on the number of employees terminated in the period:

  • 50-199 employees = 8 weeks’ notice
  • 200-499 employees = 12 weeks’ notice
  • 500 or more employees = 16 weeks’ notice

Certain employers must also pay severance in addition to any termination pay. As summarized by the staff at a law firm in Kitchener:

“The Act also provides an employee with five or more years of service to severance if the employer has an annual payroll of 2.5 million or more. Severance is one week’s salary for each year and partial year of service up to a maximum of twenty–six weeks.”

Reasonable Notice

Employees may be entitled to more than the minimum notice required under the ESA depending on other factors. Today, courts also consider the following factors in determining reasonable notice:

  • Character of employment
  • Length of service
  • Employee’s age
  • Availability of similar employment, looking at the employee’s training, experience, and qualifications
  • Employer’s policy or practice on reasonable notice
  • Industry customs

Though there is no hard limit to reasonable notice, courts have generally applied an upper limit of 24 months.

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