July 21, 2017

Shared Ownership and Joint Tenancy

When doing estate planning people often consider sharing ownership of financial assets with adult family members or friends. There are a number of different reasons for sharing ownership of these assets, which may include assistance with financial management or the desire to give the other party a gift of survivorship rights to the assets. While shared ownership can apply to such things as bank accounts, houses or motor vehicles, it is important to understand the legal implications of the various forms of shared ownership before making a decision as to how you want to share the assets or have them managed. Two of the most common forms of shared ownership of houses are tenancy in common and joint tenancy.

Tenancy in Common

If you transfer ownership in your house to another person as a tenant in common, each person holds a separate interest in the property, which may not necessarily be in equal shares. You may, for instance, give a gift of a 1/3 share in the house to one of your children. When you die, your share of the tenancy in common then gets transferred to your estate and distributed to your beneficiaries, and if the other tenant in common dies before you do, their share gets transferred to their own estate.

Joint Tenancy

If, on the other hand, you are the owner of the house and you add one person as a joint tenant the result is that you transfer ownership in an equal portion to that other person, who then becomes a ½ owner of the property. In this situation, the other joint tenant is presumed to have the same legal rights to the house as you do. If you die before the other joint tenant, then your legal interests may be automatically transferred to the other joint tenant by right of survivorship. As such, the ½ interest you had in your house may not pass to your estate and, if that occurs, your beneficiaries will not receive a share of the value of house.

Legal Issues in Joint Tenancies

In my experience, two of the most common problems in joint ownership arise from severing title in joint tenancies and challenges to the “beneficial interest” in the property.

Severing Title in a Joint Tenancy

After you create a joint tenancy with one or more people, the joint title can be broken or severed in a number of ways, including mutual consent of the parties or by the unilateral action of a joint tenant. Indeed, they can sever the joint tenancy without your knowledge or consent. They can do this by transferring their share of the joint tenancy to themselves or another person, without even notifying you beforehand. When this is done they in effect create a tenancy in common with you and you lose the right of survivorship in their share of the property. As such, if they die before you do then their interest in the property would pass to their estate and would be divided among their beneficiaries.

Legal Title vs. Beneficial Interest

It is important to keep in mind that even after a joint tenancy is created, there is a difference between beneficial interest and legal title in the property. People who have a beneficial interest in property may claim ownership to some or all of the property because it was properly given to them as a gift, or because of contributions they made to the property at the time of its purchase or afterwards. People who make such contributions and claim beneficial ownership may not be registered as having legal title to the property.

On the other hand, in some situations people who have legal title to property may only hold title for other people who have beneficial interest in the property. This type of situation can arise when the owner of property transfers legal title to another person, thereby creating a joint tenancy, only for the purpose of avoiding probate or to manage an estate, but with no intention to give the other person any beneficial or “real” ownership in the property. This is illustrated in a trial I conducted in which I successfully argued that a mother’s transfer of title to her Vancouver house into a joint tenancy with one of her daughters was only done for estate planning purposes, with no intention to give the daughter a survivorship right to ownership of the house. The trial judge found that after the mother’s death the daughter did not have a survivorship right to the house, but held title to it in trust for the mother’s estate and therefore, the proceeds of the sale of the house were distributed among all of her children as beneficiaries of her estate. You can read the judgment here and the Court of Appeal’s decision upholding the judgment here.

Ways of Avoiding Legal Problems in Joint Tenancies

In order to avoid costly legal problems, it is important to have properly prepared documents confirming the owner’s intention in creating shared property arrangements. For example, if the owner of a house creates a joint tenancy with another person only for the purpose of managing the house or avoiding probate then this should be confirmed in a document that both parties sign. This document may then be used to reverse the severance of a joint title if the new joint tenant attempts to do that unilaterally.

If the owner of a house intends to give another person both legal and beneficial ownership of the house it would be prudent to sign a deed of gift that clearly sets out the owner’s purpose for the transfer. This deed of gift could then be used as evidence against claims that the new joint tenant is only holding legal title in trust for other parties.

 

Gene Fraser is a lawyer with CBM Lawyers. To learn more about estate planning or to schedule a consult with Gene or someone else from our team, please contact us at 604-533-3821.

July 7, 2017

Sued for Having Sex (Transmitting STDs)

With summer coming, your dating life may soon ‘pick up’. And, when dating someone, there is a lot to discuss, such as family, work, and future goals. But, how about whether or not you have any sexually transmitted diseases/infections (STDs)?

While not a fun topic, it should be on the radar (as there can be legal consequences). STDs are very common (more common than you might think). Gonorrhea is the most common bacterial STD worldwide and chlamydia is the most common bacterial STD in Canada. Approximately 16% of adults are infected with genital herpes. An estimated 75% of Canadians will be infected with human papillomavirus in their lives and 10-30% are infected at any one time. And approximately 75,000 Canadians are living with HIV.

Imagine this: you start dating someone and, before engaging in sexual activity, you ask them whether or not they have an STD. They tell you they don’t and you engage in sexual relationship. After some time, you develop rashes/sores/whatever, which is later diagnosed as an STD. Your partner then confesses that they have the STD, but were too afraid to tell you.

 So, what happens next?

Well, many things, including a big argument. But, in addition to that, it is possible that the ‘perpetrator’ (defendant) could be found liable (i.e. has to pay money). This may sound strange, but think of it like any other personal injury matter: a person suffers loss/harm as a result of another person’s negligent, fraudulent, or malicious conduct (and is, of course, entitled to compensation for that loss/harm).

So, what is the loss/harm in this type of case? Well, to start, the ‘victim’ (plaintiff) could require medical treatment, such as medication and/or psychological treatment. There may also be expenses related to pregnancy management (to ensure that the STD is not passed to the child). The plaintiff may also suffer severe emotional distress and, depending on the STD, they may also require time off work (resulting in lost income).

Don’t think these lawsuits actually happen? Well, they do (but not often).  In 2003, in a highly publicized case, Michael Vick, former Atlanta Falcons quarterback, had a sexual relationship with a 26-year-old health care worker, knowing that he had herpes and failed to disclose it. Afterwards, the woman commenced a lawsuit against Vick, which was later settled out of court.

For a case closer to home, consider this Quebec case: L. (J.) v. N. (A.), 2007 QCCS 3226.  In this case, a woman questioned her new partner on his sexual history and was told that he did not have an STD. The man did not, however, disclose that he had not been tested in some time.  Relying on that information, the woman agreed to engage in unprotected sex. Later, she began experiencing burning sensations, which was later found to be herpes (transmitted from her partner). The woman then commenced a lawsuit for losses that she suffered.

At trial, the Court found that the man had deceptively driven the woman to engage in unprotected sex and was found liable for the woman’s medical costs and emotional distress. But, with that said, the Court also found that the woman accepted the risks and took the man at his word. As a result, some of her claim was denied.

Civil claims like this are rare.  It may be because these cases can be hard to prove. For instance, it can be hard to prove that the plaintiff did not know about the STD (prior to sexual contact) or that the plaintiff actually contracted the STD from that particular defendant. It may also be because losses can be small/trivial, such as for a bacterial STD that can be easily treated, making a lawsuit ‘not worth it’. It may also be because people are not aware that this type of recourse exists.

Civil claims aside, it should also be noted that not disclosing sexual health could lead to criminal charges.  Since the landmark case of R. v. Cuerrier, [1998] S.C.J. No. 64, there have been numerous cases in which people, who have failed to disclose their HIV status, have been charged and convicted with Criminal Code offences, ranging from aggravated assault to murder.

So, here’s the bottom-line: be honest, have safe sex, and don’t get sued.

 

Jeff Zilkowsky is a lawyer with CBM Lawyers.  To learn more about family law or to schedule a consult with Jeff or someone else from our family team, please contact us at 604.533.3821.

June 23, 2017

The Ly Decision: Dismissing Probationary Employees in British Columbia

A landmark decision released earlier this year carries significant implications for employers in British Columbia who place their new hires on probation periods.

In Ly v. British Columbia (Interior Health Authority), 2017 BCSC 42, the plaintiff was hired by Interior Health into a senior management position. The employment contract included a probation clause permitting the employer to dismiss the plaintiff without any severance pay within his first six months of employment.

Unfortunately, the plaintiff had difficulty with his new position from the very beginning. The employees under his supervision chafed at his management style and criticized him behind his back. The situation deteriorated to the point where two of the employees the plaintiff was managing threatened to quit.

To address these difficulties, the plaintiff reached out to his own supervisor in a genuine effort to improve his performance. In an email that proved decisive to the case as a whole, the plaintiff requested a meeting to discuss his progress, receive constructive feedback and create a plan for improving his job performance. After seemingly ignoring this email for a number of weeks, the plaintiff’s supervisor eventually responded by setting up a meeting with the plaintiff, as requested. However, instead of opening a dialogue or discussing the issues outlined in the plaintiff’s email, the supervisor simply dismissed him. The plaintiff had only been on the job for two months.

The plaintiff decided to challenge the employer’s actions in court, claiming unjust dismissal. Interior Health argued that the plaintiff had been let go because he was unsuitable for the position. Because he was dismissed for unsuitably during the six-month probation period, so the argument went, the plaintiff was not entitled to any severance pay.

The BC Supreme Court disagreed with Interior Health. In doing so, the Court clarified the law relating to probation periods in British Columbia. A significant portion of the decision was dedicated to pinning down exactly what “unsuitability” is for the purposes of a probation period.

First, the Court confirmed that “unsuitability” is an entirely different standard than “just cause”. Just cause, which entitles an employer to terminate an employee without severance during the regular course of an employment relationship, constitutes quite a high bar to meet. Although the exact meaning of just cause could easily fill another blog post, suffice it to say that it requires a fundamental breakdown in the relationship between employer and employee.

“Unsuitability”, on the other hand, is not so rigorous a standard. It can be evaluated on the basis of more intangible factors such as “fit” and attitude of an employee. For example, imagine you have a new hire. He is fully qualified for the position, picks up the required skills on the job quite quickly and has a great work ethic. However, this employee does not fit well with the company’s culture and does not get along with his co-workers. Surprising as it may seem, this alone could be grounds for unsuitability during a probation period, although it would almost certainly not qualify as just cause for dismissal.

Unsuitability, then, is a somewhat nebulous concept that is a far cry from just cause. Nevertheless, the Ly decision also confirms that the test of unsuitability in no way provides employers the power to dismiss their employees arbitrarily. In fact, Ly affirms that there are significant procedural components an employer must meet before letting an employee go for unsuitability. In short, the employer must approach the task of assessing suitability in good faith and with some measure of transparency.

More specifically, Ly states that an employer’s conduct in dismissing an employee for unsuitability during a probation period will be scrutinized for various factors, including:

  1. whether the probationary employee was made aware of the basis for the employer’s assessment of suitability before, or at the commencement of, employment;
  2. whether the employer acted fairly and with reasonable diligence in assessing suitability;
  3. whether the employee was given a reasonable opportunity to demonstrate his suitability for the position; and,
  4. whether the employer’s decision was based on an honest, fair and reasonable assessment of the suitability of the employee, including not only job skills and performance but also character, judgment, compatibility, and reliability.

It is clear, then, that the result in Ly likely would have been very different, and much more favourable to the employer, if the employer had communicated its expectations and standards to the plaintiff and given him an opportunity to meet these standards. Instead, the employer could not rely on the probation period clause and was ordered to pay three months’ severance to the plaintiff. This is a significant payout in light of the fact that the plaintiff had only worked at Interior Health for a total of two months.

So what are the practical implications for employers?

One of the major implications of the Ly decision is that implementing probation periods may be of little use to employers. The Ly case demonstrates the dangers of engaging in a probationary period where the parameters are not clearly communicated and not properly developed in the employment contract. To avoid large severance awards such as that awarded in Ly, it is likely simpler and safer to restrict severance payments to the minimums required by the Employment Standards Act.  For example, under the Employment Standards Act, one week’s severance pay is required after three months of employment. Probation periods are required to comply with these statutory minimums, and if they fail to do so, such clauses are null and void, leading to the possibility of even greater severance awards. It may be better to avoid these risks altogether.

However, for employers who continue to use probation periods, the Ly decision underscores the need for employers to prepare a clear, written statement as to their expectations of new employees and to communicate such expectations to the employee at the commencement of the employment relationship. Moreover, employees must be given a fair chance to demonstrate that they are suitable.

Regardless of which method employers use to limit their liability for severance pay, a carefully considered and well drafted employment contract is essential to avoiding the legal pitfalls exposed by the Ly decision. Ultimately, a strong employment contract used at the beginning of the employment relationship can help employers avoid countless legal and financial headaches once that relationship comes to an end.

Scott Payne is a lawyer with CBM Lawyers. To learn more about employment law or to schedule a consult with Scott, please contact us at 604.533.3821.

June 9, 2017

Begging for Money

In 2013, I was a guest speaker on CKNW radio, talking about panhandling and the laws around it.  In 2015, I was on CBC radio, speaking about the same topic: Panhandling is illegal in Langley. With summer coming up and the frequency of pedestrian traffic soon to increase, I thought I would share some of that research with you, again.

To start, there are actually a lot of laws that attempt to regulate how people can panhandle.  In 2004, the provincial government created the Safe Streets Act. It was an attempt to make a bunch of different types of panhandling illegal.  The prime motivating factor behind this law was that a lot of businesses were complaining about panhandlers harassing their customers.  Also, tourists were being “put off”, especially in Vancouver.

So, the new laws made it illegal to ask for money in an “aggressive” way. Now, what does that mean?

Well, it means that panhandlers can’t follow someone for money, they can’t use threatening or rude gestures, they can’t block someone’s path, and they can’t repeatedly ask someone for money. If someone violates these rules, then they can receive a $115.00 fine.

The new laws also made it illegal to panhandle in certain places, basically creating “no go” zones for panhandlers. So basically, panhandlers can’t ask for money within 5 metres of a bus stop, a public toilet, a pay phone, or an ATM. It basically made it illegal for panhandlers to ask a person for money if that person is standing in a place and is being held ‘captive’, not being able to walk away (because they are waiting for the ATM or whatever else). There is an $86.00 fine for this offence.

Now, the provincial government didn’t REALLY have to pass these laws – this is because a lot of municipalities already have very similar laws. Cities, such as Kelowna, Kamloops and Vancouver have laws that outlaw nearly the same type of panhandling. In fact, the municipalities’ laws are often ‘tougher’ on panhandlers. For instance, Kamloops, Kelowna and West Kelowna make it illegal to ask for money within 10 METRES (rather than 5 metres) of an ATM or bus stop.

But, really, what’s the point of giving a fine to someone who is panhandling? If you thought this, you’re exactly right.

The typical ways that are used to get money from people (who owe fines or debts) don’t really apply to people who are begging for money. After all, if they had assets to collect or wages to garnish, they probably wouldn’t be panhandling in the first place…  So, what do authorities do? Well, let’s not forget the Criminal Code, which arguably has more ‘teeth’.  The Criminal Code makes it illegal to threaten someone or disrupt someone’s right to enjoy their property (while panhandling).  And, make no mistake: the Criminal Code is used against panhandlers. For instance, in Victoria in 2012, a man was arrested and charged with mischief (a Criminal Code offence) for repeatedly entering into businesses and asking customers for money.  Clearly, there are a lot of laws that surround panhandling.

And, as a ‘final thought’, let’s not paint all panhandlers with the same brush. Sure, some people will act aggressively but, others are simply down on their luck and don’t deserve to be treated with disrespect. So, be nice.

And now you know.

 

Jeff Zilkowsky is a family lawyer with CBM Lawyers.  To learn more about the services we offer please contact us at 604.533.3821.

May 26, 2017

How Can a Family Mediator Help Me?

Family disputes are a reality of life, and some require outside assistance to resolve.  When those issues relate to the dissolution of a family and the parties can’t negotiate an agreement between themselves (the “kitchen table” style agreement), it can feel like a court action is the only solution.  But what if you don’t want to go to court?  Family mediation can be a strong option, and there is a type of mediator that’s specifically trained to deal with family-related disputes.

Certified Family Mediator

A “Certified Family Mediator” has special knowledge of family law, and received training in the dynamics of families.  Often, family mediators are or have been practicing family law lawyers.  This means that they’ve spent years helping families through the grief cycle of separation and have drafted hundreds of family-related agreements.  They have a clear understanding of the many issues that can arise within the family context, a broad perspective of the options, and a pretty good idea of what tends to work, and what doesn’t.  This helps to ensure that any settlement reached by the parties is fair and realistic.

Disadvantages of Court as an Option

The main alternative to the parties resolving a dispute themselves or using a mediator is to go to court.  Normally when going to court, both sides would engage legal counsel.   Costs include fees for your counsel as well as court filing fees, potential expert witness fees, travel costs, evidence preparation costs… the list goes on.   It’s likely you’ll need to wait at least four to six months before you can actually get into a court room where the judge has the authority to make an interim decision and a year or more for a trial.  Once finally there, parties must abide by the decisions and solutions of the judge.  There is no room for negotiation.   In summary, court can be time-consuming, expensive, acrimonious and even the “winner” isn’t always happy with the details of the decision.

Cost and length of Mediation

On the other hand, family mediation can occur more quickly and can cost much less than going to court.   A mediation can happen once a mediator is mutually agreed on by the parties, often within a week or two.   The time required for an actual mediation differs according to each case and whether lawyers accompany the parties or not.  Sometimes it can be done in as little as single long day; other times it is best to break it up into a few two or three hour sessions spaced a week or so apart.  The cost for the mediation would include the mediator’s hourly rate for the time used, including any preparation time or pre-mediation meetings.  Parties have the option of meeting with the mediator themselves or being accompanied by their lawyer (which would of course affect costs).  The parties would split the cost of the mediator (and pay for their own counsel).

Benefits of Family Mediation

Mediation enables all parties to voice their perspectives, and to negotiate their own agreements and settlements.  This gives them far more control over the outcome.  But most importantly, family mediation can help with the establishment of a workable relationship between the parties.  A separation or divorce agreement might result in a complete severing of the relationship; but there are some family disputes that require that the parties maintain an ongoing relationship.  For example, they might need to continue to raise their children together, or they may need to continue to manage joint property.  As parties in a family mediation have worked together to create a solution, it can increase the chances of a workable ongoing relationship if that is required.

If you have a family matter that you want to resolve, but don’t want to go to court, consider engaging a family law mediator to help you.  It can be a faster, less expensive and less adversarial than many of the alternatives.

 

Tarel Swansky is a certified family mediator with ten years’ experience as a family law lawyer.  She can be reached at [email protected] or 604 533-3821.

May 19, 2017

Toking Resistance: Minimizing Marijuana in the Workplace

Like it or not, recreational marijuana will be legal in Canada in little more than a year. To many British Columbians, the impending legalization of marijuana may appear to be little more than a mere formality. After all, it’s difficult to walk a block or two in Vancouver without running into one of its completely illegal (yet fully operational) marijuana dispensaries. Nevertheless, the proposed Cannabis Act will indeed cause a significant change in the legal landscape of cannabis use.

Employers should be prepared well ahead of time to meet the legal challenges presented by the legalization, and increased accessibility, of marijuana.

Under the proposed Cannabis Act, recreational marijuana will become legal on July 1, 2018. The Cannabis Act will permit Canadians who are 18 years or older to:

  • possess up to 30 grams of cannabis;
  • share up to 30 grams with other adults;
  • purchase dried or fresh cannabis from a provincially licensed retailer;
  • grow up to 4 cannabis plants; and
  • make cannabis-infused food and drinks.

Although these provisions may be tweaked in the run-up to July 2018, what is clear is that legalization is coming very soon and will provide employees in all industries with much easier access to marijuana.

Recreational Marijuana

First of all, it should be of some comfort to employers that the distinction between recreational and medical marijuana will remain a meaningful one. Even though an employee will be entitled to enjoy recreational marijuana in his or her spare time, the proposed legislation in no way permits impairment in the workplace. As an employer, you are still required by law to maintain a safe work environment. This obligation extends to drug use in the workplace.

Regulation 4.20 (a very aptly numbered provision) of the British Columbia’s Occupational Health and Safety Regulation states:

The employer must not knowingly permit a person to remain at any workplace while the person’s ability to work is affected by alcohol, a drug or substance so as to endanger the person or anyone else.

 In this sense, recreational marijuana will be akin to alcohol. As you already know, it is perfectly legal for anybody to have a drink or two on their own time and in their own home. However, as an employer, this doesn’t mean you would start letting your employees do shots on their coffee break. The same approach extends to impairment caused by marijuana.

It’s important to realize that employers are not merely permitted to prevent workplace impairment, but are legally obligated to do so. In fact, an employer’s failure to provide a safe workplace may lead to criminal charges. Section 217.1 of the Criminal Code states:

Every one who undertakes, or has the authority, to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person, or any other person, arising from that work or task

The liability to the employer will often vary depending on the nature of the workplace. After all, from a safety perspective, an impaired crane operator is likely to be a greater concern than an impaired accountant. Nevertheless, all employers in British Columbia must be aware of their duty to prevent impaired employees from endangering themselves or others in the workplace.

Medical Marijuana

Despite the importance of maintaining a safe work environment, employers must at the same time be wary of adopting an overly heavy-handed or rigid approach to preventing impairment. Otherwise, employers run the risk of inviting a complaint under British Columbia’s Human Rights Code.

The risk stems from the fact that employees are entitled to use marijuana for legitimate medical purposes. Under the Human Rights Code, mental and physical disability is a prohibited ground of discrimination. As a result, if an employer were to dismiss or otherwise adversely treat an employee because of that employee’s use of medical marijuana, this could be grounds for a claim in discrimination.

Consequently, employers must step very carefully where medical marijuana is involved. If there is indeed an underlying medical condition for which marijuana has been prescribed by a doctor, the employer has a duty to accommodate that employee’s use of medical marijuana as they would any other prescription drug. This duty to accommodate must be met in good faith. For example, even if an employer determines that an employee’s use of medical marijuana makes them ineligible to continue their safety-sensitive position, the employer should consider whether there are alternative positions for that employee for which safety is less of a concern.

At the same time, a prescription for medical marijuana does not give an employee license to smoke in the workplace, arrive to work late without permission or compromise the safety of the workplace. The employer must take care to balance their own legal responsibilities with the right of the employee to use medical marijuana.

Finding a Balance

From a legal perspective, the impending legalization of recreational marijuana does not relieve employers from the need to perform a difficult balancing act. On the one hand, employers must ensure that they are maintaining a safe work environment. On the other hand, they must avoid infringing the rights of employees who consume marijuana for legitimate medical reasons. The right approach will often depend on the nature of the individual workplace and to what degree safety is a concern.

As an employer, what practical steps can you take in order to strike the right balance?

 

1. Create a written policy

It is crucial to have clear, written policy that is effectively communicated and consistently enforced. You should prepare written policies and ensure that managers and regular employees are familiar with its terms.

 

2. Spell out the consequences

Everyone in the workplace should understand that you are dedicated to maintaining a safe workplace. As a result, it should be clear to each employee what will happen if he or she is unacceptably impaired in the workplace. The consequences could include progressive discipline or perhaps even termination.

 

3. Require proof of a medical prescription

You should insist that any prescription relied on by the employee is provided by a recognized and legitimate healthcare professional in accordance with the existing laws. After all, if an employee is alleging that he or she is using medical marijuana, he or she is required to disclose the nature of the disability as well as the medical authorization to use marijuana.

 

4. Train your staff

A policy is little use to anyone if it is not enforced properly. You should ensure that their managers and supervisors fully understand the policy. Moreover, they must know how to recognize and address marijuana-related impairment in the workplace.

 

Scott Payne is a lawyer with CBM Lawyers. To learn more about employment law or to schedule a consult with Scott, please contact us at 604.533.3821.

May 12, 2017

Arbitration – What is it and will it work?

No corporation enjoys legal disputes. Many people assume that a dispute will involve lawyers, great expense, great delay, unwanted publicity, frustration, and a real sense that they simply “won’t be heard”.

You can choose to go to trial, but you should always consider arbitration. The process will still be somewhat expensive, and it will still involve lawyers, but it will happen a lot more quickly than a trial, you will be a lot less frustrated, and you will be heard, because the “judge” will know your industry!

 

What is an arbitrator?

An arbitrator is a lawyer who has been trained to act as an arbitrator. In a sense, she or he is a judge. The advantages are that an arbitrator will be selected by the parties, and the lawyers   invariably pick someone who is well familiar with the issues at hand. Conversely, many judges are generalists, and for good and valid reasons may not be familiar with your particular type of industry, or the issue to be dealt with.

 

How do I get into arbitration?

It is important to engage in arbitration at the earliest possible time. Your supply contracts and the customer contract should all provide for arbitration. If there is no written agreement to submit to arbitration, both parties have to consent and you may find someone is not willing to do so.

 

What happens when arbitration starts?

You should hire a lawyer, and your lawyer should contact the lawyer for the other side. The arbitration clause should be engaged then you and your lawyer should review a list of possible arbitrators. Arbitrators are available through BC AMI or a number of other service providers. Since you are choosing your own “judge” your lawyer should take some time to select the best possible arbitrator; one who knows the nature of the industry, who is reasonably inexpensive, and one who is available as soon as it is possible to start the process.

 

What happens next?

The arbitrator will ask for a retainer “up-front” and she or he will arrange a pre-arbitration meeting. At the pre-arbitration meeting, everyone will agree as to how the arbitration will be conducted, who will be called to give evidence, how documents will be handled, and how any preliminary objections might be resolved.

 

The hearing

On the date set, which will likely be within six months of the arbitration being initiated, everybody goes to a particular room, the arbitration commences, documents are filed and people are sworn to give evidence – this means they will give oral testimony in response to their lawyer’s questions and will be cross-examined by the other side’s lawyer. The arbitrator may also ask questions.

Shortly after the hearing concludes, the arbitrator will make her or his “award” which is basically who wins, and sets out the reasons why the arbitrator’s decision has been made. The arbitrator will then render an account.

 

What happens afterwards?

Typically, the parties simply comply with the arbitrator’s award. If one party is reluctant to do so, an application can be made to court for a court order to enforce the arbitrator’s award.

 

Give me an example

Our firm was involved on behalf of a company that supplied industrial material. (This example is a composite of several cases, to protect confidentiality.)  After completing an extensive industrial site, they were having trouble getting paid and the owner of the property alleged that the work had not been properly completed. After several heated email exchanges, it also became apparent that the person who drew up the blueprints at the architect’s office may have made some errors. Everybody went to see their lawyers and it became obvious that a very lengthy trial might result which would likely cost each party $100,000 and take many years to resolve. This was going to be complicated. If the dispute became public – such as it would in the event of a court filing  –  a number of people were going to be embarrassed and probably unnecessarily so.

Fortunately, the supply contract provided for arbitration. As well, the three parties and their lawyers were fairly practical in their approach. An initial meeting was held between the lawyers only, and an arbitrator was chosen in downtown Vancouver. A preliminary meeting was held between the parties, including the insurance company for the architect, and an arbitration date was set to start in 180 days. A second preliminary meeting was held to narrow down the documents and to discuss whether expert witnesses were to be used.

The arbitration commenced, and the proceedings took four days. The arbitrator was an experienced commercial litigator who had in the past acted for both contractors and owners and who had experience with almost exactly the same sort of dispute. Everybody spoke the same language. The hearing was held in complete confidence. After 14 days, the arbitrator handed down her ruling. To no one’s surprise, not everybody got everything they wanted, but everyone was surprised about the knowledge that the arbitrator brought to the dispute and her very practical rulings. The parties agreed with the arbitrator’s decision and within 12 months of the dispute arising, the matter was completely resolved and everybody went back to work.

 

Interested? Call Jon Goheen at our firm if a dispute is pending. Call Scott Johnston of our firm to have an arbitration clause put into your standard contracts.

April 13, 2017

Social Media and Personal Injury Claims

We live in a world where people are quick to hit “post.” It’s become a second nature. We share what we had for lunch, where we went yesterday, what we’re doing tomorrow. Nothing is off limits. What’s more, we tend to avoid posting the bad, and focus on posting the good. We splatter the internet with photographs of us smiling and at our best. We want our friends to think that our lives are exotic, adventurous, active, and happy.

So, what does this mean if you’ve been in a car accident and you have a personal injury claim?

 

The Reality

ICBC and Defence lawyers are aware of the sharing nature of our society. If you were injured in a car accident, ICBC has designated investigators to search out your online presence. This includes Facebook, Twitter, Instagram and your blog. It doesn’t take a special investigator to find you online; even a simple search on Google can reveal a lot about a person. They will scour the internet for anything that seemingly contradicts your injury claim.

 

What does this mean?

It matters what you post online.  Your Facebook posts can be used against you in your personal injury claim.

For example, in Neyman v Wouterse, 2013 BCSC 741 the 31-year-old Plaintiff was injured in a car accident in October of 2007. She testified at trial that she continued to have a driving phobia. She also said that she had to buy an automatic car in 2011 because the clutch on her standard aggravated her hip injury. In 2009 the Plaintiff had posted on her Facebook page about driving her mom’s standard transmission BMW late at night and at high speed. The Plaintiff had also made several posts on Facebook that suggested she was pursuing a strenuous work and school schedule after her car accident. As a result, the British Columbia Supreme Court concluded that this Plaintiff was “an unreliable historian.”

This is an extreme example. Here the Plaintiff’s testimony was directly at odds with her Facebook posts. But this isn’t always the case. For example, let’s say that despite being injured in a car accident you decided to tough it out for a Saturday afternoon bike ride with a friend. You came home after this bike ride and you paid for it for the rest of the day. You spent the rest of your day and night laying on the couch with an ice pack on your back. While you’re lying on your couch you decide to upload the picture you took of you and your friend Sarah at a rest stop half way through your ride. There you both are, smiling, helmets on, bikes straddled. You caption it:

“A beautiful day for a ride with a friend! #fitfam #goodlife”

Then you hit post and that smiling, seemingly care-free picture of you riding your bike is out there for the world to see. No one knows you spent the next 12 hours flat on your back and out of commission. You can bet that this picture is going to come up and you’re going to have to explain it. Even if you do explain it, it could keep coming up throughout the course of your personal injury claim.

So, what should you do about social media?

 

The Rules

The easiest thing to do is to avoid using social media if you are in the middle of a personal injury claim. As you can see, even an innocuous photo when taken out of context can create an unnecessary hurdle so why open the door for questions unnecessarily?

If you’re too attached to cut ties with social media then before you post anything online, ask yourself: do I want ICBC to see this? If the answer is no, then don’t post it. You need to consider how a third party would perceive the post. When you post a photo to Facebook it is date stamped as of the date that you posted it online. This means that a third party can’t tell that the photo is five years old.

“It’s okay – I never use social media!”

You also need to consider if anyone close to you does. How about your husband? Your wife? Your daughter? Your son? Your sister? You should make your friends and family aware that you don’t want them posting about you on their social media pages while you’re pursuing a personal injury claim.

“It’s okay! My Facebook page is private!”

A private Facebook page won’t stop a Court from ordering you to produce your photos to the Defendant.

One example of this is in Fric v Gershman, 2012 BCSC 614. Master Bouck considered an application by the Defendant to force the Plaintiff to produce the contents of her private Facebook profile page, including photographs of the Plaintiff participating in a sports tournament and of her travelling. The Plaintiff refused to answer any questions about her Facebook page at her examination for discovery. This young Plaintiff had been injured in a car accident while attending the University of Victoria. Master Bouck ordered the Plaintiff to disclose any photographs or videos that showed her at the sports tournament or on vacation since the car accident. This included any photographs stored on her private Facebook page. In making the order, Master Bouck said:

Photographs which show the plaintiff engaging in sporting or physical recreational activity – from hiking to scuba diving to curling to dancing – are relevant in discovering the plaintiff’s physical capacity since the accident.

Master MacNaughton considered a similar application in Cui v Metcalfe, 2015 BCSC 1195. Among other things, the Defendant wanted the Plaintiff to produce relevant entries, photographs, or videos stored on her Facebook page. The Plaintiff was a 33 year old woman who had been injured in a car accident. She claimed that her injuries affected her ability to engage in her athletic lifestyle, including her circus training. The lawyer for the Defendant directed Master MacNaughton to several photographs and one video that the Defendant had already found online showing the Plaintiff participating in difficult physical activities since the car accident. Master MacNaughton ordered the Plaintiff to produce any photographs or videos that showed her participating in pole, aerial, silk or hoop dancing, circus acrobatics or Tough Mudder competitions.

 

The Bottom Line

Using social media carelessly can create unnecessary hurdles for your claim. It’s important to be smart with social media when you’re pursing a personal injury claim.

 

Erin Ryskamp is a lawyer with CBM Lawyers.  To learn more about your personal injury case contact us at 604.533.3821.

 

April 4, 2017

Family Law is Emotional (So, Keep a Cool Head)

I don’t normally write about family law, despite practicing it.  But, I’m going to break that trend this week… And, I’m going to start from scratch, from the basics.

In case you didn’t know, family law is an incredibly emotional area of law.

Here’s a fact for you: family law lawyers generally receive more complaints about their work than any other type of lawyer.

In fact, of all the complaints made against lawyers to the Law Society, family lawyers have accounted for more than 25% of all those complaints!

Now, let’s back up a bit…

I had a few different jobs when I was a student and before I was a lawyer. And, like a lot of college students, I worked in both the construction industry and the service industry.

I had great jobs, and, I had great co-workers.

Some of my co-workers, though, were going through or had gone through a divorce. I still remember the comments that some of my co-workers made about family lawyers. You can probably guess the nature of those comments… Let’s just say that they weren’t complimentary.

And, that has stuck with me.

From that, I work hard to keep my clients happy and I do my best to ensure that my clients know and understand everything that is happening in the process. It’s because that’s where some lawyers fail…and that’s where a lot of complaints come from.

So, with that, what’s some of the advice that I give to my family law clients?

Well, here’s one of my best tips: when resolving your marriage breakup, don’t do it in a courtroom; do it outside the courtroom.

What do I mean by that?

Well, a lot of people who get served with court documents from their ex asking for a divorce go into ‘full-on attack mode’. They hire a lawyer and give instructions to that lawyer to be a “pit-bull”. It’s as if they want to punish their ex.

If you’re doing that, then STOP…and take a breath.

Your pain is completely understandable. But, if you can resolve your breakup with your ex in an objective and amicable way, such as talking and settling your legal issues CHEAPLY, then do that.

Granted, you can’t always do that. Sometimes, going to court IS necessary. But, if it’s not and you can resolve your issues with your ex outside the courtroom (which typically involves a lawyer, too), then absolutely do that.

There’s no sense in having an expensive legal matter with your ex if you don’t have to.

Remember: don’t spend thousands of dollars to keep dollar store vases.

And now you know.

 

Jeff Zilkowsky is a lawyer with CBM Lawyers.  To learn more about family law or to schedule a consult with Jeff or someone else from our family team, please contact us at 604.533.3821.

 

March 31, 2017

Russian Roulette Anyone? Shotgun Clauses in Shareholders’ Agreements

In a previous posting, I provided a rudimentary overview of the legal documents known as “shareholders’ agreements” for corporations in British Columbia. A corporation is a form of business organization that is wholly owned by individuals (or corporations or other entities) known as “shareholders”. The shareholders subscribe for the bundle of legal rights known as “shares” in the authorized share structure of the corporation and are provided share certificates to provide a tactile representation of their proprietary rights in the capital.

Shareholders agreements attempt to clarify the relationship among the shareholders of a British Columbia corporation and to define in advance their respective responsibilities and obligations, both to each other and to the business itself. Just as even the same types of businesses differ in their actual operations, shareholders’ agreements are not “cookie cutter” documents and vary considerably in their terms and conditions. That being said, shareholders’ agreements often set out what happens to the venture in the event of a dispute among the shareholders. Sadly, sometimes all that glitters is not gold and shareholders require a coherent exit strategy.

Buy-Out Mechanisms

Provisions contained in shareholders’ agreements that deal with disputes among shareholders fall into a general category described as “compulsory buy-out” mechanisms. The lion’s share of British Columbia corporations consists of private small businesses, in that the shares are not publicly traded on any of stock exchanges like the TSX Venture Exchange. As such, a shareholder in a private corporation cannot freely trade his or her shares in an active market of outside vendors and purchasers, where liquidity and valuation of the shares is independently established. If shareholders of a corporation listed on a stock exchange have a falling out with the others, it usually only takes a phone call to a stockbroker to wash their hands of the situation.

Compulsory buy-out mechanisms in shareholders’ agreements commonly attempt to resolve the lack of an active market by providing for the compulsory buy-out of shares by the corporation itself or other shareholders upon the trigger of certain events, including a dispute. Arguably the most drastic of compulsory buy-out mechanisms is known as a “shotgun” clause whereby a shareholder may be effectively forced out of the corporation in a process somewhat akin to a round of Russian Roulette.

Shotgun Clause

A “shotgun” clause provides that a shareholder who wishes for an exit strategy (likely due to some egregious squabble with the others), may give written notice requiring the other shareholders to elect to either: (a) sell all of their shares in a corporation to him or her at a set price; or (b) buy all of his or her shares in the corporation at the same price. Under the written “shotgun” notice the terms and conditions of the options of purchase or sale are identical. The instigator sending the notice has therefore loaded the shotgun by setting the value of the investment and effectively pointed the firearm at the other shareholders to see if they will fire back.

Where all of the shareholders of the corporation are of comparatively equal financial means and resources, a “shotgun” clause is a simple and effective way to determine who will end up owning the business. However, if the angry shareholder initiating the “shotgun” mechanism is very wealthy and the other shareholders are not, then this process may work in a relatively unfair manner. In other words, if you know that the other shareholders do not have enough money to buy you out of the business at the price you set, then providing them with that option is a somewhat contrived gesture. In reality, the “shotgun” clause may prove to be more of a Machiavellian device for the affluent shareholder to gain control of all of the shares of the corporation.

By way of illustration, in previous posts I have described the misguided wholesale “pre-owned” discount barbeque sales and repair business incorporated under the name “420 Holdings Ltd.” by Ricky and Julian as a British Columbia corporation. Ricky and Julian each own an equal amount of shares and enter into a shareholders’ agreement for 420 Holdings Ltd. that includes a “shotgun” clause. Due to a heated disagreement over the correct preparation of frozen chicken fingers, Julian decides that he no longer wants to be involved with Ricky in the venture. As there is no active market on a stock exchange for his shares, Julian employs the “shotgun” mechanism set out in the shareholders’ agreement and sends a written notice to Ricky requiring him to either fish or cut bait. However, Ricky has no money and cannot afford to purchase Julian’s shares in 420 Holdings Ltd. Accordingly, Ricky elects to sell his shares to Julian for the price set out in the “shotgun” notice and Julian must now pay Ricky for his interest in the enterprise. By operation of the “shotgun” clause and after payment of the purchase price, Julian will now hold all of the shares of the corporation and be able to carry on the barbeque redistribution business on his own terms.

Scott T. Johnston is a Partner of Campbell Burton McMullan LLP.  To learn more about business structures, shareholders agreements and shotgun clauses, or any  other business-related legal advice, contact Scott at [email protected] or 604.533.3821.