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Madorin, Snyder LLP is a full service law firm

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Madorin Snyder LLP Remembers Joseph Lieberman

On June 15, 1991, after 59 years of practicing law in Ontario, Joseph Wolfe Lieberman received his L.L.B. degree from Osgood Hall Law School of York University.

Joe was called to the Bar in 1932, having studied law at Osgoode Hall. He began his career as a lawyer in Toronto, working for free on many occasions, just to gain experience. It was after all during the height of the Great Depression. After a few years in Toronto, Joe moved to the Timmins area, where he practiced law until 1951, when he, his wife Esther and their two children moved to Kitchener. Joe quickly became known in the Kitchener-Waterloo area as a tenacious advocate for his clients. His practice flourished.

 Joe was appointed Queen's Counsel in 1959, served as President of the Waterloo Law Association, and in 1982, after completing fifty years at the Bar, he was appointed a Life Member of the Law Society of Upper Canada.

And finally, after 59 years of "practicing law", Joe received his LLB degree. It's not that it took Joe that long to get it right. It's just that prior to 1960, Osgoode Hall students did not receive the degree of Bachelor of Laws upon completing law school. At a Special Convocation held on June 15, 1991, marking Osgoode Hall's centenary, lawyers from across the country who had graduated from Osgoode Hall prior to 1960 received their LLB Degrees.

With his degree in hand, Joe continued to practice law, finishing his career as Counsel to Madorin, Snyder in the late 1990's.

Joe loved the law and loved being a lawyer. Throughout his illustrious career which spanned more than sixty years, Joe practice law with dignity, integrity and a sense of humour. Joe was a tribute to the profession, exemplifying that practicing law was and is an honourable profession.

Joe passed away on June 6, 1998.

Stephen R. Grant is a solicitor at Madorin, Snyder LLP a full service law firm serving Kitchener, Waterloo, Cambridge, Guelph and the surrounding area. Please visit our construction law page.

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

 

 

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Are Marriage Contracts Enforceable?

Two of the more common financial issues to be sorted out when a married couple in Ontario gets divorced are entitlement to spousal support and the division of net family property. Spousal support is typically payable if there is a significant difference in the income between the former partners. Furthermore, the law provides that the value of any property that was acquired by a spouse during the marriage and still exists at separation must be divided equally between the spouses.

 

Married couples in Ontario can enter into marriage contracts (a.k.a domestic contracts or prenuptial agreements) that vary the rules for spousal support and the division of property in the event of a separation or divorce.

The default rule in Ontario is that marriage contracts are enforceable as they relate to spousal support and the division of property. However, section 56(4) of the Family Law Act allows a party to apply to set aside a marriage contract if the circumstances surrounding the negotiation and signing of the contract were unfair. Section 56(4) of the Family Law Act provides as follows:

 

56 (4) A court may, on application, set aside a domestic contract or a provision in it,

 

(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;

 

(b) if a party did not understand the nature or consequences of the domestic contract; or

 

(c) otherwise in accordance with the law of contract.

 

Section 56(4)(c) codifies the common law position that ordinary contract principles apply to marriage contracts. Under the law of contract, contracts can be set aside if:

  • there was undue influence at the time of signing;
  • there was duress at the time of signing;
  • unconscionability;
  • there was a mistake as to an essential element of the contract;
  • there was fraud or material misrepresentation; or
  • there was a repudiation of a term in the contract.

Furthermore, with respect to spousal support, the Family Law Act also permits the Court to set aside a marriage contract that was fair at the time that it was entered into if the effect of the marriage contract as at the date of separation or divorce is unfair. Section 33(4) of the Family Law Act provides as follows:

 

Setting aside domestic contract

 

33(4) The court may set aside a provision for support or a waiver of the right to support in a domestic contract and may determine and order support in an application under subsection (1) although the contract contains an express provision excluding the application of this section,

 

(a) if the provision for support or the waiver of the right to support results in unconscionable circumstances;

 

(b) if the provision for support is in favour of or the waiver is by or on behalf of a dependant who qualifies for an allowance for support out of public money; or

 

(c) if there is default in the payment of support under the contract at the time the application is made.

 

The 2015 decision of the Ontario Superior Court of Justice in Shair v. Shair illustrates the application of these rules.

 

Shair v Shair involved a couple who married in 1996. The husband was Canadian. He met his future wife while travelling in Romania. He was 42 years old. She was 29. She was working as a cosmetician and pursuing a degree in social psychology. The couple got engaged and moved to Canada together. The husband operated a small mechanic’s shop and owned the property where the shop was located. Furthermore, he was twice divorced. The husband insisted that the couple enter into a marriage contract. Before the marriage, they entered into a marriage contract with the following terms that applied at the breakdown of the marriage:

  1. There shall be no equalization of net family property; and
  2. Each party released the other from spousal support.

In 2014 the husband applied for a divorce. The wife moved to set aside marriage contract.

 

On the one hand, the Court refused to set aside the marriage contract and permit the wife to pursue a claim for equalization of net family property. The marriage contract was valid at the time that it was entered into despite a number of red flags. First, the wife was a vulnerable party at the time the contract was signed, but the husband did not exploit her vulnerability. He arranged for her to get independent legal advice from a lawyer who advised her not to sign the contract. He also arranged for a Romanian interpreter to ensure that she understood the advice she was given. Second, the husband had failed to make adequate disclosure of his financial affairs. Having considered all the circumstances, however, the Court concluded that further financial disclosure would not have stopped the wife from signing the agreement. She would have signed the marriage contract even if she had adequate financial disclosure. Therefore, the marriage contract was valid at the time that it was entered into, and it was enforceable at the end of the marriage. The Court refused to permit the wife to pursue a claim for equalization of net family property.

 

On the other hand, the Court set aside the marriage contract to allow the wife to pursue a claim for spousal support. Section 33(4) of the Family Law Act required to the Court to look at the circumstances since the marriage contract was entered into. At the time that the parties entered into the marriage contract both assumed that the wife would re-establish herself in the workforce within a few years of the marriage. Instead, the parties had a traditional marriage where the wife was financially dependent upon the husband. Enforcing the terms of the marriage contract in those circumstances would be unconscionable. The Court set aside the release in the marriage contract as it related to spousal support and allowed to the wife to pursue a claim for support.

 

The Shair decision illustrates two broad generalizations concerning marriage contracts. As it relates to the division of property, a marriage contract in Ontario will usually be enforceable provided the circumstances at the time the contract was entered into were fair. However, as it relates to spousal support, a marriage contract will only be enforceable if the marriage contract was fair at the time it was entered into and the enforcement of the marriage contract after the breakdown of the marriage is not “unconscionable” or highly unfair.

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

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Termination Clauses In Employment Contracts: Getting it Right

The essential reason for a formal employment agreement is to provide some certainty about numerous issues that arise during and after the employment relationship. A prime example of uncertainty relating to an employment contract is how much compensation an employee is entitled to if and when the employee is terminated without cause.

 

An employee that has been terminated without cause may be entitled to two sources of compensation.

 

First, the employee is entitled to the payment and benefits required by the Employment Standards Act. An employee’s right to salary and benefits pursuant to the Act is readily ascertainable. The Employment Standards Act provides one week's notice for each full year of service up to a maximum of eight weeks, or salary and benefits in lieu of notice.

 

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.

 

Second, the common law requires an employer to provide an employee with "reasonable notice" in advance of their termination. An employer who terminates an employee without cause, and without giving the employee reasonable advance notice, must pay the employee salary and benefits in lieu of notice. The problem is that the amount of notice to which an employee is entitled is unpredictable. Judge's ruling on such cases consider a variety of factors and their decisions seem to vary widely. For example, the amount of common law notice awarded to a three year employee at a trial can range between two and twelve months, depending on the circumstances and the judge.

 

Section 5 of the Employment Standards Act provides that an employee cannot contract out of their rights pursuant to the Act. Section 5 of the Act provides that any clause in an employment contract that reduces or eliminates an employee's rights under the Act is null and void:

 

No contracting out

 

5. (1) Subject to subsection (2), no employer or agent of an employer and no employee or agent of an employee shall contract out of or waive an employment standard and any such contracting out or waiver is void.

 

On the other hand, an employee can contract out of their right to common law damages. Employers can craft termination clauses in their written employment contracts that reduce or eliminate an employee's entitlement to common law damages if the employee is terminated without cause. However, such termination clauses are closely scrutinized by the Courts. As illustrated in Stevens v Sifton Properties Ltd, a poorly drafted termination clause may not be enforceable.

 

Stevens v Sifton Properties Ltd is a 2012 decision of the Ontario Superior Court of Justice. The issue in the case was the enforceability of the termination clause in the employee’s employment contract. The termination clause provided as follows:

 

13. With respect to termination of employment, the following terms and conditions will apply:

 

(a) The Corporation may terminate your employment for what it considers to be just cause without notice or payment in lieu of notice;

 

(b) The Corporation may terminate your employment without cause at any time by providing you with notice or payment in lieu of notice, and/or severance pay, in accordance with the Employment Standards Act of Ontario.

 

(c) You agree to accept the notice or payment in lieu of notice and/or severance pay referenced in paragraph 13(b) herein, in satisfaction of all claims and demands against the Corporation which may arise out of statute or common law with respect to the termination of your employment with the Corporation.

 

The Court found that the termination clause was void pursuant to section 5 of the Employment Standards Act because, based on the strict wording of the clause, it eliminated any requirement on the employer to provide benefits in accordance with the Act. The employee was entitled to common law damages in addition to compensation pursuant to the Employment Standards Act since the termination clause was held to be void.

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

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Claiming Interest on Overdue Accounts

Is an invoice purporting to charge interest on overdue accounts at "2% per month" valid? Not necessarily. 

 

First, a supplier cannot unilaterally impose a rate of interest on overdue accounts upon a customer. A supplier is not entitled to claim interest on its invoices unless there is a prior agreement with the customer to pay interest on overdue accounts at that rate. If the customer has not agreed to pay interest on overdue accounts, then the supplier issuing the invoice can only recover interest at the nominal rates prescribed by the Courts of Justice Act.   

 

Second, even if there is a prior agreement between the parties to pay interest on overdue accounts, the agreement is invalid unless the rate of interest is expressed as annual rate.  Section 4 of the Interest Act, states that no agreement to pay interest in excess of 5% per year is enforceable unless the rate of interest is expressed in the contract at an annual rate. If the rate of interest in the contract is only expressed at a monthly rate, then the supplier is limited to interest at 5% per year. 

 

Any business claiming interest on its invoices should review its practices to ensure that its claim for interest is valid.

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

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