® Fall 2005

Fall 2005
®
A straightforward look at law and business
Sorbara, Schumacher, McCann LLP is a fifteen-lawyer local law firm
with offices in Kitchener and Guelph specializing in all areas of business law
Time Really is of the Essence
I
n a recent decision from the Ontario Superior
Court of Justice, the Court confirmed that the
standard “time is of the essence” clause that
appears in most purchase and sale agreements is
just as important as any other clause and will be
enforced by courts as such in appropriate
circumstances.
1473587 Ontario Inc v. Jackson involved an
agreement of purchase and sale between the
owners of a farm property near Fergus, Ontario
and a major grocery store operator for the
purchase of a 12 acre portion of a 56 acre parcel
of land at a price of $150,000 per acre. As is the
case with most commercial purchase and sale
agreements, the agreement included provisions
which provided that time was to be in all respects
“of the essence of this agreement” and that no
extension of time for the making of any payment
or the doing of an acts thereunder was to be a
waiver or modification of that principle. Pursuant
to the terms of the agreement, the purchaser was
required to deliver a deposit of $75,000 to the
vendors within five days of the date of execution
of the agreement. Through inadvertence, the
purchaser failed to comply with this requirement
but instead delivered the deposit within seven
days of the date of execution. Since the purchaser
failed to comply with the deadline for delivering
the deposit, the vendors opted to treat the
agreement as discharged and proceeded to
negotiate and execute a second agreement with
another purchaser for the sale of the entire 56 acre
parcel at a price of $125,000 per acre.
Both purchasers brought actions before the
Court to seek to enforce their respective purchase
and sale agreements and the actions were
consolidated and decided as one motion for
summary judgment.
The initial purchaser took the position that the
delay in providing the deposit was a minor
oversight and did not permit the vendors to treat
the agreement as discharged. It further argued that
the vendors had verbally extended the time for
delivery of the deposit and had, therefore, waived
the “time is of the essence” clause as it related to
the deposit.
The Court rejected these arguments and
confirmed that the failure to deliver the deposit
within the time set forth in the agreement
constituted a breach of an essential term of the
contract. Accordingly, the late delivery
constituted a fundamental breach of contract
which entitled the vendors to treat the agreement
as being at an end. On the issue of waiver, the
Court determined that any waiver of the “time is
of the essence” provision would have to be
explicit and fully proven. It also confirmed that
such an amendment to a written agreement for the
purchase and sale of land would have to be made
in writing to be effective. The Trial Court’s ruling
on the issue of waiver was upheld on appeal to the
Ontario Court of Appeal.
While the result in this case may appear to
some to be harsh in light of the fact that the
deposit was only late by two days, the Court has
sent a strong message that a “time is of the
essence” clause does have meaning and will be
enforced if either party fails to comply with a
time-sensitive obligation.
There are several lessons to be learned from
this case. First and foremost, if timing is an
essential element of the agreement, there should
be an appropriate “time is of the essence” clause
in the agreement - the Court’s characterization of
the late delivery of a deposit as being a
fundamental breach of contract in this case was
dependent upon the existence of such a provision
in the agreement at issue. Second, if an agreement
contains such a provision, the parties should be
sure to strictly comply with all time-sensitive
obligations contained therein. Lastly, if a party
wishes to rely upon an extension of time or a
waiver of the “time is of the essence” clause (or
any clause for that matter), the waiver must be
explicit and should be reduced to writing.
THE INSIDE LOOK!
Regulation of Paralegals
Congratulations to Loon in Balloon Inc.
pg 2
Regulation of paralegals in Ontario is on the way.
Spousal Support Remains Hot Topic in the Courts
The Court of Appeal rules on the issue of retroactive support.
pg 3
Local publishing company publishes its first book.
Employers Need to be Careful Not to
Interfere with Former Employees
Watch what you say and who you say it to.
Around the Firm
pg 4-5
The excitement continues at SorbaraLaw.
Organ Donation Requests
Leaving these important decisions to your Will may not be effective.
pg 6
pg 6
pg 7
Some Good Deeds are Punished
Teenage girls subject to a small claims Court
judgment after a random act of kindness.
Visit us on the web at www.sorbaralaw.com
"LegalEase" and the "LegalEase" logo and "SorbaraLaw" and the "SorbaraLaw" logo are registered trade marks of Sorbara, Schumacher, McCann LLP.
pg 8
Regulation of Independent Paralegals
in Ontario is On the Way
S
ince paralegals started emerging within the
legal community thirty years ago, they
have attempted to branch out from fighting
traffic tickets and handling small claims court
matters to more complicated areas such as
preparing wills, real estate transactions,
incorporations, immigration matters and WSIB
complaints. This had lead to growing concern
within the legal community regarding the lack
of regulation and accountability for paralegals
and the potential perils that their clients may
face as a result.
In 2004, the Law Society of Upper Canada
voted in favour of accepting the role of
regulating paralegals and the Ministry of the
Attorney General undertook the task of drafting
legislation to provide the Law Society with
authority to regulate independent paralegals
working in advocacy and to put in place a
framework for this regulation. At that time, it
was expected that a bill on the regulation of
paralegals working in advocacy would be
tabled in the spring of 2005 but, to date, this
has yet to happen.
As a result, paralegals continue to operate in
a legal ‘no-mans’ land. They are not regulated
or licensed by any governing body and many
independent paralegals are uninsured. Until
this new legislation is enacted, the Law Society
has no authority over paralegals, except to the
extent that it can initiate prosecutions for the
unlicensed practice of law. No professional
standards exist by which paralegals’ conduct
can be measured and no formal training or
2
qualifications are required before a person can
offer services as a paralegal. Moreover,
consumers have little protection or recourse if
they receive substandard or negligent services
from a paralegal.
This problem was recently highlighted in an
Ontario Superior Court of Justice decision in
which the Court ordered a paralegal to pay
$25,000.00 in damages to a client who spent
two nights in the Don Valley Jail because the
paralegal failed to perform its duties in a
competent or adequate fashion. In another case,
a woman was successful in a case against the
paralegal that provided erroneous advice and
failed to file necessary documents on her behalf
in a worker’s compensation benefits matter. As
a result of the paralegal’s conduct, the woman’s
benefits were terminated. The Court found that
the woman received nothing of value in return
for the fees she paid to the paralegal and it
reimbursed the same to the woman and
awarded damages for emotional distress.
Under the proposed regulations that are
expected from the Attorney General,
independent paralegals that provide advocacy
services will have to be licensed and they will
be expected to adhere to standards of
competence in areas of education, good
character, and ethics in the interest of consumer
protection. They will also be required to obtain
liability insurance. However, it is expect that
these regulations will fall short of complete
protection to the public because they will target
only a small group of independent paralegals
Fall 2005
and will exclude other practice areas where
paralegals work extensively including estates,
corporate law and real estate. In fact, it is
estimated that fewer than 1,000 out of
approximately 2,000 paralegals will be affected
by the proposed legislation.
It is clear that there is a need and a place in
today’s legal environment for properly trained
and regulated paralegals. Indeed, paralegals are
able to provide meaningful services in some
areas of law and facilitate access to justice for
those who may not be cannot afford the
services of a lawyer in certain matters or in
matters which may not justify the expense of,
or require the expertise of, a lawyer. Regulation
of paralegals will provide credibility for those
paralegals that are properly trained and
qualified and it will provide protection for
members of the public who engage the services
of independent paralegals.
However, in the absence of appropriate
regulation, consumers may still be at risk of
having their legal rights seriously compromised
by unqualified and inept paralegals, without
any legitimate recourse. It is important,
therefore, that consumers scrutinize the
qualifications of proposed paralegals and take
proper precautions to ensure that the people
they choose to represent them are properly
trained and qualified to carry out the task.
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Spousal Support Remains
a Hot Topic in the Courts
I
n our last issue of LegalEase, we reported on
Parliament’s introduction of the new spousal
support guidelines that were designed to bring
some certainty to the issue of spousal support.
While it is still too early to tell whether or not
the guidelines have been successful in this
regard, it is clear that spousal support remains
a litigious issue.
In particular, there has been much debate
recently over the issue of retroactive spousal
support – ie. the obligation to pay support
dating back to the date of separation even
though a formal request for support had not
been made at that time. While it is expected
that the Supreme Court of Canada will soon
release a decision dealing with retroactive
support, a recent Ontario Court of Appeal
decision has redefined the issue by clarifying
what notice is required in order to trigger a start
date for the entitlement to retroactive support.
In Mackinnon v. MacKinnon, the wife had
made several requests for financial disclosure
dating back to August 2000 for the purpose of
negotiating spousal support, among other
things. The husband did not provide financial
www.sorbaralaw.com
disclosure in response to these requests but the
wife did not formally apply for spousal support
until the husband brought an application for
divorce in March 2002. The main issue before
the Court of Appeal was whether or not the
initial requests for financial disclosure from the
wife were sufficient to constitute a start date for
the purposes of retroactive support.
Traditionally, the start date for retroactive
support was considered to be the date upon
which the application or other court proceeding
in which spousal support was claimed was
commenced. The rationale for this approach
was that this formal proceeding clearly put the
other side on notice that a claim for spousal
support was forthcoming and that there was a
possibility that the court could award spousal
support for the period from that date until the
date of judgment.
The Court of Appeal found in favour of the
wife and determined that the wife’s prior
requests for financial disclosure constituted
sufficient notice to the husband of the potential
claim for spousal support and it considered the
date of the initial request as the start date for
Sorbara, Schumacher, McCann LLP
her entitlement to support. In so doing, the
Court characterized spousal support from the
request for disclosure until the date of
judgment as "prospective" support as opposed
to "retroactive" support. Prospective support is
the support a court determines should have
been paid from the date the party is given
notice that a support claim is being pursued
until the date of judgment. An applicant who
requests financial disclosure for the purpose of
negotiation and litigation and who reasonably
proceeds to the disposition of the claim will, if
entitled, be granted "prospective" support from
the date of the requested disclosure. As a result,
the husband was required to pay the spousal
support he should have been paying since the
wife’s request for disclosure.
With this decision, the Court of Appeal has
sent a message that prompt and complete
financial disclosure is required in family law
matters and a support payor cannot escape
support obligations by simply refusing to
disclose the necessary financial information.
3
Around
O
n October 13, 2005, Sorbara, Schumacher,
McCann LLP officially celebrated the 25th
anniversary of the firm with a party at The
Rotunda in Kitchener City Hall. The event was
designed as a way for us to thank area businesses
and the community for helping to make our past
25 years so successful.
To commemorate the occasion and
demonstrate our gratitude, the firm made a
$25,000 donation to the Wilfred Laurier School
of Social Work which is currently renovating and
will soon operate from the former St. Jerome’s
High School building in Downtown Kitchener.
This is an exciting aspect of the rejuvenation of
Downtown Kitchener and we are honoured to
have contributed to it. The party was a
tremendous success and we would like to thank
everyone who was able to attend and help us
celebrate this significant event.
This article appeared in the KW Record
on October 17, 2005.
We are also pleased and excited to announce
that, effective October 24, 2005, we have
officially moved our Guelph office to the new
location at 457 Woolwich Street. Our new
mailing address appears on the back cover of
this newsletter and all of our other contact
information in Guelph remains the same.
As part of our commitment to better serve
our clients and the community, the partners and
staff of Sorbara, Schumacher, McCann LLP are
pleased to announce the addition of three new
members of our team.
4
Fall 2005
Visit us on the web at
the Firm
Vishal (Vinny) Chaudrhi joined our litigation
department on September 26, 2005 and will be
practicing primarily out of our Kitchener office.
Vinny graduated from Punjab University in
Chandigarh, India with a Bachelors of Law in
1997 and practised in India as a litigator for
several years, handling a variety of matters
including insurance, employment, contract and
commercial disputes as well as personal injury
matters. Vinny immigrated to Canada in 2001
and completed his accreditation requirements to
practise law in Ontario at the University of
Windsor. Vinny completed his articling term at
a full service law firm in London, Ontario. In
addition to his education in India and Ontario,
Vinny also obtained a certificate in International
Human Rights, Education and Monitoring from
Hemline University in St. Paul, Minnesota.
College at the University of Waterloo before
earning her law degree from the University of
Windsor’s Faculty of Law. Jennifer will be
working primarily out of our Kitchener office
and will gain exposure in all our areas of
practice over the course of the coming year.
We are also pleased to welcome Brenda
Hooton to the firm as our new litigation
assistant. Brenda is a welcome addition to our
litigation department and brings with her
considerable experience in the areas of motor
vehicle, personal injury and medical malpractice
matters.
their second son, Carson, on October 7, 2005.
We also wish to congratulate our litigation
associate, Justin Heimpel, and his new wife,
Doreen Weise, on the celebration of their recent
wedding. Doreen and Justin were married on
September 30, 2005 during a beautiful
ceremony at Hauser Hall in Heidelberg. We
wish them all the best in their married life
together.
Brenda will be working closely with Greg
Murdoch, a partner and the head of our litigation
department. Greg has developed a great deal of
experience and expertise in the areas of personal
injury and medical malpractice. Greg recently
presented a paper entitled "Assessing Clinical
Practice Guidelines" to the Medical Malpractice
section of the Ontario Trial Lawyers Association
on September 23, 2005.
Brenda has joined the firm in part to assist us
while our long-time litigation assistant,
Adrienne Hummel, is off on maternity leave. In
this regard, we wish to congratulate Adrienne
and Rob who recently celebrated the birth of
Doreen & Justin’s Wedding
LegalEase is a seasonal publication and is intended only as a source of general information on a
broad range of interesting and important subjects. The views expressed are those of the author and
are not intended to constitute legal advice. Before acting on any information contained in
LegalEase, Sorbara, Schumacher, McCann LLP urges readers to obtain professional legal advice, as
Vishal (Vinny) Chaudrhi
each situation has its own unique set of circumstances. For further information on any of the
material contained in this issue, please feel free to call or write to us. ©2005 Sorbara, Schumacher,
Vinny now resides in Kitchener with his wife
and daughter. Vinny is fluent in English, Hindi,
Punjabi and Urdu.
McCann LLP. All rights reserved.
Your privacy is very important to us. Your personal information may be used to send you this
newsletter. It will also be used for Sorbara, Schumacher, McCann LLP’s internal marketing research
Jennifer Black also joined the firm this past
September as our articling student for the 2005
– 2006 term. Jennifer is a life-long resident of
Kitchener. She completed her undergraduate
studies in History, Legal Studies, Criminology
and Peace and Conflict Studies, at St. Jerome’s
www.sorbaralaw.com
purposes. We may also use third parties to process some aspect of the personal information for your
use, provided that they similarly agree to protect your privacy. If you have a privacy question or do not
wish to receive future issues of our newsletter, you may contact Greg Murdoch in writing at: Sorbara,
Schumacher, McCann LLP, 300 Victoria St N , Kitchener N2H 6R9 or email
[email protected].
Sorbara, Schumacher, McCann LLP
5
Organ Donation Requests in Your Will May Not be
the Best Way to Express Your Wishes
T
he idea of organ donation or donation of a
body to science after the death of an
individual has gained increasing popularity
with all of the medical advancements and
scientific breakthroughs over the past few
decades. In dealing with wills and estates
matters, we are often faced with questions from
clients about how to properly address organ
donation issues in their Wills. However, a Will
may not be the most effective way to deal with
these issues in large part because the Will is
often not read until it is too late to properly
affect an organ donation.
The Trillium Gift of Life Network Act was
enacted by the Ontario Legislature in 2000 to
regulate when and how organ donation
decisions can be made and to provide a
framework in which to carry out these
donations in a dignified and efficient manner.
The Act created a non-profit corporation
known as the "Trillium Gift of Life Network"
whose mandate is to, among other things, plan,
promote, co-ordinate and support activities
relating to the donation of organs for transplant
and activities relating to education or research
in connection with the donation of organs.
Under the Act, a person who is at least
sixteen years of age, mentally competent to
consent, and able to make a free and informed
decision may consent in writing to the removal
of an organ during his or her life for the
purpose of a transplant. Likewise, any person
over the age of sixteen may consent in writing,
or orally in the presence of at least two
witnesses during his or her last illness, to the
use of his or her body or parts thereof for
therapeutic purposes, medical education or
scientific research. In addition, where a person
has not given consent for use of his or her body
after death for these purposes, the Act permits
certain designated people to make such
determination as to the use of the person’s body
after his or her death.
The medical professionals charged with
retrieving organs after death are obligated to do
so with respect and dignity and in a manner that
will not to interfere with funeral practices.
Organs that can be donated after death include
the heart, liver, kidneys, pancreas, lungs, small
bowel, corneas, heart valves, bone and skin.
Gift of Life Network provides donor cards for
individuals to fill out in order to affect an organ
or tissue transplant upon their death. Similar
donor cards are also available for those
interested in donating their bodies to science.
These cards should then be carried with you at
all times.
While issues of mortality are often difficult
to think about and/or discuss with loved ones,
organ donation is something that is better dealt
with sooner rather than later as these difficult
decisions will be left to a person’s loved ones if
he or she has not made appropriate
arrangements. For more information about this
important topic, please contact Trillium Gift of
Life Network at 1-800-263-2833 or the
University of Waterloo, School of Anatomy at
1-519-888-4567, ext. 6363.
In the case of donations of a body for
scientific study, a person can select the specific
school of anatomy to which the body is to be
donated. Locally, a whole body donation
may be made to the University of
Waterloo’s School of Anatomy.
Persons
interested
in
donating their organs for
therapeutic purposes or
their body for scientific
study upon their death
should be sure to make
their intentions known
to their loved ones and
family members. In
addition, the Trillium
Congratulations to Loon in Balloon Inc.
S
orbaraLaw would like to congratulate our client, Loon
in Balloon Inc., upon the publication of its first novel,
Murder at Mussel Cove, by PEI author, Hugh MacDonald.
World famous Canadian author, Alistair MacLeod, calls
this moody mystery set in Nova Scotia "a fast-moving,
action-packed novel filled with suspense". Mr. MacLeod,
the author of the best-seller, No Great Mischief, says that
"Hugh MacDonald writes with a sure hand".
6
You can pick up a copy of this novel at your favourite book
store or online at www.chapters.indigo.ca or www.amazon.ca.
If you have any questions about any aspect publishing
law, please feel free to contact either Denise Kocher or
Sam Sorbara at either of our offices.
Fall 2005
Visit us on the web at
Employers Need to be Careful Not
to Interfere With Former Employees
n a recent decision from the Ontario Superior
Court of Justice, a major employer in the
Windsor area had its wrists slapped quite hard
for deliberately interfering with a former
employee’s future employment opportunities.
I
The case involved Cogeco Cable, a cable and
fibre optics provider which enjoys a virtual
monopoly in the cable and fibre optic industry in
Windsor and Mastec, an independent contractor
of Cogeco that provides installation services to
it. In the Windsor area, Cogeco is by far Mastec’s
largest customer.
The employee in question had worked for
Cogeco for 15 years until he resigned in
December 1999 to pursue opportunities in the
cable industry in the United States. Two years
after leaving Cogeco, the employee returned to
Windsor and was hired by Mastec. However,
before he began work in this new position, he
was informed by Mastec that it did not actually
have a position available for him. At that time, a
Mastec employee had asked the employee why it
was that his boss at Cogeco had not liked him.
The employee contacted a lawyer who then
corresponded with Cogeco and accused it of
interfering with the employee’s contractual
relations. Cogeco’s Human Resources
Department then provided a letter to counsel in
which it stated there had not been any direct
instructions given by Cogeco to Mastec not to
employ the employee. The employee then
presented this letter to Mastec and it rehired him
immediately. However, on the first day that he
reported to work for the second time, the
employee was informed by Mastec that Cogeco
had made it known that the employee could not
be employed by Mastec if it meant that he would
be required to attend on Cogeco property during
the course of his employment. Shortly thereafter,
Mastec terminated the employee’s employment.
with the economic relations of former
employers.
The evidence presented at trial confirmed that
all of the employee’s performance reviews at
Cogeco had been positive and that he was a
highly skilled and competent technician. The
employee had left Cogeco on his own accord
under what appeared to be positive
circumstances - his co-workers even presented
him with a gift and a card signed by everyone in
the office upon his departure. Nevertheless, it
turned out that there was one Cogeco manager
who had an issue with the employee and took it
upon himself to pass on unsubstantiated
allegations about the employee to Mastec upon
the employee’s return to Windsor. It was this
conduct that lead to Mastec’s decision to
terminate the employment.
Having said that, it is clear that this case is an
example of extreme misconduct in
circumstances where there was no justification
for the representations made about the
employee. This case should not be taken as a
general rule that employers are not permitted to
make any negative representations about former
employees. Indeed, if an employer is contacted
as a reference and has to truthfully answer
questions in a negative way, it can do so without
fear of reprisal so long as the information being
passed on is accurate.
The Court found that Cogeco had
“blackballed” the employee with Mastec and
other cable technician and installation providers
in Windsor which severely limited the
employee’s ability to find employment in the
area in his chosen field. The Court granted
judgment against Cogeco for the wrongful act of
procuring the termination of the employee’s
employment with Mastec and awarded damages
to the employee for all of the losses he suffered
as a result. In this regard, the Court awarded the
employee over $135,000.00 for loss of income
and over $60,000 as damages for humiliation,
loss of reputation and loss of career
opportunities.
Another important lesson for employers is
that they will be held vicariously liable for the
improper conduct of their employees in
circumstances such as this. Consequently,
employers would be well advised to make sure
that its management team and supervisory
employees are given proper training with respect
to representations regarding former employees.
Likewise, employers should establish a protocol
for dealing with reference inquiries for former
employees and a method for recording what
information was provided in response to such
inquires to ensure that a uniform and appropriate
approach is taken in each case.
This decision was a costly lesson for Cogeco
but is a good warning to other employers that
they ought to be mindful of their conduct
regarding former employees and ought not to
take improper steps to intentionally interfere
LegalEase is circulated seasonally to over 1,000 businesses and individuals in
and around Waterloo Region and Wellington County. If you would like more
information about LegalEase or are interested in contributing to upcoming
issues, please feel free to contact Justin Heimpel at our Kitchener office.
www.sorbaralaw.com
Sorbara, Schumacher, McCann LLP
7
Some Good Deeds Attract
Punishment Rather Than Reward
I
n a recent Small Claims Court decision from
Colorado, two teenage girls were required to
pay their neighbour $900 in damages after they
had the audacity to bake, package and leave
homemade cookies on her doorstep.
The seventeen and eighteen year old girls
were members of the "T and L Club", a group
whose mandate was to surprise neighbours and
others with simple and random acts of
kindness. Unfortunately, the girls really did
surprise a woman in their neighbourhood one
evening when she observed two dark figures on
her doorstep and called the police in a state of
fright at 10:30 p.m. The local Sheriff arrived at
the neighbour’s house to find nicely packaged
homemade cookies on the doorstep with a heart
shaped note simply stating "Have a great night.
Love the T and L Club."
The next day, the neighbour, fearing that she
was experiencing heart failure, visited a
hospital. Tests were completed and the woman
was found to be suffering from anxiety attacks.
She blamed these anxiety attacks upon the
teenage girls and their "thoughtless" act. The
woman’s hospital bill amounted to $900 and,
although the girls’ parents offered to pay for
this bill, she refused to accept the payment as a
settlement and instead brought a claim for
payment of the hospital bill and for punitive
damages.
Samuel O. Sorbara
Brian McCann
Mark W. Schumacher
J. Greg Murdoch
Gary A. Keller
Grace Sun
Elizabeth A. Waywell
Ronald J. Nightingale
As the case progressed, it gained notoriety
throughout the United States as some onlookers
wrote letters in support of the girls and others
defended the woman’s claim. While many
expected the case to be laughed out of Court
entirely, the woman was partially successful.
The Small Claims Court found the girls liable
for the cost of the woman’s hospital bills but it
dismissed the claim for punitive damages.
Justin J. Heimpel
Denise M. Kocher
Catherine A. Brohman
Sebrina Schoen
Vishal (Vinny) Chaudrhi
Mervyn J. Villemaire, QC, Counsel
Steven K. Kenney, Counsel for Medical
Malpractice and Catastrophic Injury
Do-gooders beware – it appears that
kindness is now a matter of perspective and can
have unintended legal consequences.
300 Victoria Street North
Kitchener, ON N2H 6R9
Tel: (519) 576-0460
Fax: (519) 576-3234
457 Woolwich Street
Guelph, ON N1H 3X6
Tel: (519) 836-1510
Fax: (519) 836-9215
www.sorbaralaw.com