Human Rights and Employment Law Update - Vriend Restrospective

VRIEND v. ALBERTA

 15^th Anniversary of a Human Rights Milestone in

Constitutional Law and Employment Law

Darryl A. Aarbo, Barrister and Solicitor

Calgary, Alberta

This year represents the 15^th anniversary of a landmark decision in the area of human rights law, employment law and constitutional law. In 1998 the Supreme Court of Canada came out with a unanimous decision in Vriend v. Alberta [1998] 1 S.C.R. 493. This decision has had a huge effect on these three areas of the law over the last 15 years. It is a decision taught throughout the world and studied by students internationally, not just by lawyers but by constitutional experts and human rights advocates.

At first blush the decision looks like it is a gay rights case dealing with sexual orientation. Nevertheless, it is far more than that, although it is without question an important case for the LGBTQ community. 

Mr. Vriend worked as a laboratory coordinator at a college in Alberta. He held a full-time position and all of his evaluations were extremely positive. There were no blemishes on his employment record whatsoever. The college was a Christian college. It initially had no policy on sexual orientation but when it learned of Mr. Vriend’s sexual orientation then it came out with the policy and insisted upon his resignation. When he declined to resign, he was terminated. The sole reason given was his sexual orientation. The college was explicit that it was terminating him because of his sexual orientation.

Mr. Vriend attempted to file a complaint with the Alberta Human Rights Commission on the grounds that his employer had discriminated against him because of his sexual orientation, but the commission advised him that he could not make a complaint under the legislation because it did not include sexual orientation as a protected ground. 

Mr. Vriend sued the provincial government of Alberta because its human rights legislation did not cover sexual orientation. He did not sue the college or file a complaint against the college, but he went after the government because its legislation omitted sexual orientation in its protection.  This is the essential nature of the dispute and the basis for its complexity and why it had such a massive impact on constitutional law.

To put this case into its proper context for younger people or people living outside of the province of Alberta, the government of the province of Alberta at the time was a socially conservative group of individuals relative to other governments. Further, it was a big issue of the government at the time that unelected Judges were imposing their will on an elected legislative assembly.  Thus, when presented with an issue of gay rights and the possibility of the Courts imposing its will upon the government, the government opposed this litigation vehemently.

The case became a regular news item.  There were rallies and protests. There were fundraisers and organizations set up on both sides of the argument. It was extremely polarizing and contentious throughout Alberta and Canada. Interveners joined in the arguments on both sides. It was the modern Canadian equivalent of Edwards v. Canada (the “Persons Case”), the 1928 Canadian Supreme Court of Canada decision that found women were “persons”  and therefore eligible to sit in the Canadian Senate.  It could also be compared to Brown v. Board of Education, the landmark 1954 decision for the civil rights movement in the United States.  The Vriend case became a rallying point for human rights advocates on one side and socially conservative persons opposed to judicial intervention on the other.

Why was it such an important?  First, many argued that the Court was trying to regulate private activity. A misunderstanding of many people is that the Charter of Rights and Freedoms regulates the day-to-day lives of private citizens in Canada.  It does not.  The Constitution of Canada, which the Charter of Rights and Freedoms is a part of the, only regulates the various levels of governments in Canada. Constitutions throughout the world seek to regulate government activity, not private activity. In this instance many argued that what was being proposed was actually regulating private activity because Mr. Vriend was a private citizen who worked for a private college (although receiving government funding).  The Court found that it was not regulating private activity because it was dealing with government legislation. The twist here was that the government legislation in question did regulate private activity because it was human rights legislation.  Human rights legislation does govern acceptable behaviour of private citizens. Nevertheless, the decision only applied to the legislation, which was the activity of government in its regulation of private activity.

Second, and more important, the reason this case was so controversial at the time was that the Alberta’s human rights legislation omitted any reference to sexual orientation. Further, the Canadian Charter of Rights and Freedoms, a part of the Canadian Constitution, also omitted any explicit reference to sexual orientation. In its decision the Supreme Court of Canada read-in sexual orientation as a prohibited ground of discrimination into Alberta’s human right legislation and to do that it interpreted the Constitution of Canada as including protection for sexual orientation even though it was not explicitly written down by the drafters.  It expanded the scope of the Constitution itself by its own decision. It did so based upon well-established precedent and constitutional law and there were decisions leading up to this case that laid the foundation for what the court did, but it was considered by many to be an extraordinary example of judicial activism.

It is a monumental decision because it is an example of the old maxim that the constitution is a “living tree” or a “living document”.  The Courts interpreted the Constitution to protect a group of individuals who were being discriminated against at the time when the general population was only becoming more favorable to the idea of protecting their rights. Just as the Persons Case and the Brown decision were controversial in their time, this decision was also very controversial.  History judges the Persons case and the Brown case positively as progression towards equality for all and the Vriend decision is a long line of decisions where the Court’s protecting minority group not being protected by elected representatives. Further, the single most important aspect of this decision is that it leaves open the protection for groups that governments or the majority of people may not consider worthy of protection today.

Darryl Aarbo

darrylaarbo@courtneyaarbo.ca

What Happens to your Will if you get Married -- Family Law / Estate Planning Law

What Happens To Your Will If You Get Married/Divorced?

By Anthony Pranata, Barristers & Solicitors

October 15, 2013

This post will focus on two questions:

1. What happens to my Will if I get married/enter into an adult interdependent partner relationship (ex. common law relationship)?

2. What happens to my Will if I get divorced/terminate an AIP relationship?

Prior to February 2012, getting married or entering into an AIP relationship would have normally revoked your Will. This sometimes yielded undesirable results. For example, if you had a valid Will, then got married, and then passed away before making a new Will, you would have died without a Will.

Also prior to February 2012, getting divorced or terminating an AIP relationship had no effect on your Will. This also yielded undesirable results at times. For example, if you were married and you created a Will where you left everything to your spouse, then divorced, and then you passed away before changing your Will, you would have died leaving everything to your ex-spouse.

The answer to the above questions changed in February 2012 when the Alberta government consolidated several statutes and enacted the Wills and Succession Act of Alberta.

Under the Wills and Succession Act:

1. Getting married/entering into an AIP relationship DOES NOT REVOKE your current Will.

2. Getting divorced/terminating an AIP relationship DOES NOT REVOKE your current Will, but DOES REVOKE any gift or interest in property that you give to your ex-partner in your Will. The exception to this rule is if a court of law finds that you clearly intended to give that gift or interest in property to your ex-partner despite the divorce/termination of the AIP relationship.

For more information, please contact the law office of Courtney Aarbo Fuldauer LLP, Lawyers at:

Address:              3^rd Floor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4

Phone:                (403) 571-5120

Email:                    info@courtneyaarbo.ca

Anthony Pranata

Barrister & Solicitor

www.courtneyaarbo.ca

*The information contained in this blog is not legal advice. It should not be construed as legal advice and should not be relied upon as such. If you require legal assistance, please contact a lawye

Unanimous Shareholder Agreements -- Corporate Law

Unanimous Shareholder’s Agreements

By Gary Courtney, Barrister & Solicitor

A typical unanimous shareholders agreement (USA) is an agreement signed by some or all (usually all) shareholders of a private corporation to deal with certain issues that may come up in the life of a corporation in the manner agreed to.

To back up a bit, in a corporation with no USA, it’s day to day affairs are run by a board of directors, who are elected annually by voting shareholders. The power of the shareholders to manage the corporation is basically limited to being able to vote in or out a director, and having to approve by a 2/3rds vote, fundamental changes to the Articles of Incorporation of the corporation (see the Alberta Business Corporations Act).

A typical USA will take some powers away from the board of directors and give them instead to the shareholders to approve. A ‘shareholders agreement’ can set out that certain action requires unanimous consent or less than unanimity of shareholders is needed red  (for example 67%).

Issues to be voted on by shareholders often include ones such as going into debt, spending money above a certain amount, issuing new shares, bringing in new shareholders, moving business locations, etc… Shareholders agreements also typically may deal with long term major issues, like;

-         How personal guarantees by shareholders of corporate debt will be handled, and that risk shared;

-         Provide remaining shareholders with a right of first refusal to buy a departing shareholders shares;

-         Provide for a trigger to force a buy out of a shareholder where it is necessary for him/her to be bought out, called a ‘shotgun’ clause;

-         Provide for buyouts on death, disability, or personal crisis in the lives of shareholders;

-         Set out a valuation formula for shares in any of the above situations;

-         A non-competition clause, confidential clause, and/or non-solicitation clause in the event of a shareholder leaving;

-         A dispute resolution mechanism for handling shareholder’s disputes.

Obviously USA’s are a key mechanism to deal with the longer term serious issues that are certain to come up in the life of a corporation where there is more than one shareholder. For example, unless all shareholders agree to wind up/ sell the business at the same time, there will be a future scenario where a shareholder leaves, and the remaining shareholders want to continue on. The USA allows this to occur without major disruption.

Another reason to consider having a USA deals with minority shareholders protection. If there are 3 shareholders owning 60%, 20%, and 20% of voting shares for example, the bottom line is without an agreement the 60% shareholders largely controls the corporation (there are a few restrictions on what a majority shareholder can do under the Business Corporations Act). A USA agreement requiring say an 80% or 100% vote for certain important issues will protect the minority shareholder.

So when is an agreement needed? At Courtney Aarbo Barristers & Solicitors we recommend one be considered anytime there is more than one shareholder. The more shareholders there are, the more important having a USA becomes.

If you have questions about unanimous shareholders agreements, or in fact any issue facing your corporation, the lawyers at Courtney Aarbo would be happy to discuss the issue with you.

For more information contact Courtney Aarbo Fuldauer LLP at www.courtneyaarbo.ca or at info@courtneyaarbo.ca or phone 403-571-5120. We are located at 3^rd Floor, 1131 Kensington Road N.W., Calgary, Alberta T2N 3P4.

Gary C. Courtney

Courtney Aarbo Fuldauer LLP

www.courtneyaarbo.ca  

Insurance Contract Legal Information for Small and Medium Sized Businesses

Insurance Contracts

By Gary Courtney,  Barrister & Solicitor

Providing Information to Assist Small Businesses

Typically most businesses will have fire insurance, business interruption insurance, and general liability insurance. Less common types of insurance include motor vehicle insurance, life insurance for owners and employees, and disability insurance for owners and employees.

Obviously insurance contracts can be critical to the life of one’s business, or for yours or your employees well being. For virtually all of us, the only time insurance policies are gone through in detail is when a claim is being made. Sometimes the policy will first be reviewed when the insurance company has denied a claim.

Insurance policies tend to be very long, very difficult to read and understand, and have a good deal of “fine print”. In spite of this, these agreements need to be thoroughly reviewed BEFORE one needs to make a claim. If is important for any business to obtain the advice of a good insurance broker or agent, with experience in assisting business owners.

If one does not have the time or inclination to review insurance policies exhaustively, one can lessen the risk of not obtaining proper coverage by making it clear to the insurance agent/broker, what kind of insurance coverage is desired, to cover what eventualities. Your request for advice from the agent/broker should be in writing, keeping a copy for yourself. In the event that a claim is made for insurance coverage of the kind you instructed the agent/broker you wanted, and it turns out that coverage was not provided, it is possible that one will be able to claim negligence against the agent/broker,

It is good practice to ask the insurance agent/broker to explain (in writing), the exclusions under the insurance policies. In the event your claim is later denied for an exclusion that was not set out, one may be able to successfully claim against the agent/broker, or insurance company for coverage.

Never give false information, or omit to provide relevant information to an insurance company. Information that one fails to mention in an insurance application, often will be grounds for a denial of coverage when a claim is made.

It is good practice to review the adequacy of insurance coverage periodically as one’s business grows and changes.

In the event that a claim for insurance is denied, consult with a lawyer. When one makes a claim on insurance, one becomes a liability to the insurance company, which liability the insurance company often attempts to minimize. Sometimes an over zealous insurance adjuster will interpret terms of the insurance contract in ways that will not stand up if challenged. It may be that a letter from the lawyer will change the adjusters decision. Courts generally will interpret provisions of insurance agreements strictly against the insurance company.

For more information contact Courtney Aarbo Barristers & Solicitors at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta T2N 3P4 or info@courtneyaarbo.ca or phone 403-571-5120.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors

www.courtneyaarbo.ca

Commercial Leases -- Ten Common Problem terms from a Corporate Lawyer

Ten Common Problem Terms in Commercial Leases

By Gary Courtney, Barristers & Solicitors

Providing Information to Assist Small Businesses

One of the important and costly agreements entered into by virtually all businesses new and old is a commercial lease for their premises.

What follows is some commentary on terms of commercial leases that often cause tenants difficulty:

1. Commencement of the Lease Term. When reviewing a lease one will normally find that a Landlord will only agree to use its best efforts to deliver the premises on a specific date, and be released from liability for any damages which may arise as a result of late possession. For the tenant a fixed possession date might be critical. There should be a provision setting an outside date by which possession must be delivered. The commencement date should provide the Tenant ample time move in and open for business.

2. Percentage Rent. Many Leases contain provisions for additional rent to be paid based upon a percentage of gross sales. The definition of gross sales is critical and those items included and excluded from gross sales should be carefully reviewed. Better yet, try to have this clause omitted.

3. Operating/ Additional Cost. The definition of these costs is critical to the overall costs to the tenant of the lease, as these cost payments can be substantial. The definition of occupancy costs should be reviewed carefully to ensure that there is no double charging, for example, by including both a depreciation charge and a capital cost replacement charge for parts of the building that need replacing. Care should be taken to ensure that the portion payable by the tenant is the proportion the leased premises bears to the whole of the rented and rentable area of the building. In the event there is a vacant space in the building, the Landlord should bear the common area costs in respect of such vacant area. It is also essential that your agreement provide proper and full accounting of the claimed costs.

4. Insurance. The types and dollar levels of insurance required of the tenant should be reviewed with insurance advisors to confirm a tenant is able to comply with such requirements.

5. Caveats. Commercial Leases normally prohibit the tenant from filing a copy of the Lease with the Land Titles Office. This provisions is inserted as Landlords do not wish the business terms of each Lease transaction to be available for public scrutiny. However, the Lease should not prevent the tenant from filing a Caveat at Land Titles on title to the property to protect its interest in the lease, (only available if the Lease term is three years or more). It is critical to register this caveat or else you risk having your lease ignored by a future buyer or financier of the property.

6. Subletting and Assignment. Any prohibitions that require a landlord’s consent should be qualified by the proviso that such consent will not be unreasonably withheld. These clauses are very complex and need to be carefully reviewed. These clauses become critical if the tenant wants to move location for example.

7. Option to Renew. Should be contained in virtually all Leases. The Option to Renew usually provides that if the lease is renewed for a new term it will be on the same terns as the initial lease, except for the amount of rent. An option to renew should provide for some fair method of determining the rent for the new term.

8. Default. All default provisions (except perhaps for a default in the payment of rent) should be qualified by the requirement for the landlord to give notice to the tenant and provide the tenant with a reasonable period of time within which to remedy any default before the landlord is permitted to exercise its remedies under the lease.

9. Demolition Clause (Sale Clause). Allows for the termination of the lease in case of demolition or sale of the premises. If the landlord wants one the tenant should investigate what is happening at the property and perhaps argue for terms compensating him if the clauses are acted upon.

10. Environmental Clauses. These terms should be carefully reviewed to insure the tenant does not have to pay for the clean up of environmental problems for which it is not a fault.

For more information contact Courtney Aarbo Barristers & Solicitors at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta T2N 3P4 or info@courtneyaarbo.ca or phone 403-571-5120.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors

www.courtneyaarbo.ca

Commercial Lease Basics -- Lawyer Tips for Small and Medium Sized Businesses

Commercial Lease Basics

By Courtney Aarbo, Barristers & Solicitors

Providing Information to Assist Small Businesses

One of the most important, and costly agreements entered into by virtually all businesses new and old, is a commercial lease for their premises.

The standard lease agreement for commercial space will almost always be the longest and most difficult to understand “standard form” agreement one will have to deal with. The lease agreement of the 50 page variety will almost without exception be extremely one sided providing the Landlord with everything conceivable, and the Tenant with the minimum possible protection.

Despite what the leasing agent of the landlord lets on, the Tenant has a lot of bargaining power. Many of the one sided terms in the standard form lease blank can be eliminated or amended, resulting in large savings to the Tenant.

Given all these factors it is a very wise investment to retain professional help such as a lease broker and / or lawyer to help.

What follows are general recommendations when dealing with lease negotiations and the lease itself:

1. The commercial leasing agent, while useful to advise you efficiently as to the rental space on the market, is not the best person to provide you with advice on whether you are getting a “good deal”. Remember, the leasing agent is paid usually a percentage commission by the Landlord, only if he rents the space.

2. It is critical that you have an idea as to the market rate for space before you start bargaining on a specific location. Look around. Make inquiries. You should  approach your search in a fashion similar to how you would look for a house.

3. Everything is negotiable (within reason).

4. Gross rent usually means the total amount the tenant will pay to the Landlord- it is a fixed sum. Net rent plus operating costs is not a fixed sum. The net rent to the Landlord (his “profit”) is fixed, but the operating costs will fluctuate (usually going up) through the lease term. Often the operating costs are more than the net rent. With Gross rent you should have a known fixed sum per month for you to pay during the entire term.

5. Most commercial leases involve net rent plus operating costs. It is crucial that you obtain a history of the operating costs for the space and that you have a good assurance as to what to expect during the lease term. For example, if a property tax reassessment is in the works- it has been known for operating costs to double in one year due to property tax increases. It is critical that you obtain a detailed definition of what is included in operating costs. Sometimes Landlords try to charge inappropriate items as operating costs. It is critical that the lease stipulates that the tenant get a proper account of the operating cost charges each year.

6. If you operate through a corporation, personal guarantees of the rent payment by your corporation are almost always requested, but can frequently be eliminated or reduced in negotiations. Remember that you set up a corporation to avoid personal liability, so it is obviously unwise to lose the protection through a huge personal guarantee.

7. Tenant inducements like several “free” months rent, or money towards tenant improvements are regularly given by Landlords (and appreciated by tenants starting out in business). Nothing comes “free” however, as most Landlords will have calculated the payback for the tenant inducements by requiring higher rent during the balance of the term. If you don’t require tenant inducements, then require lower rent.

8. Most commercial leases involve a 5 or 6 page “Offer to Lease” and a 50 page lease (to be signed later) The Offer to Lease is a binding legal document that may in fact constitute a binding lease. Most major terms are set out in the offer. Going to your lawyer for advice on matters covered in the Offer to Lease, after it is signed is too late. At a minimum make sure the offer contains a term that it is subject to approval by your lawyer, and that your lawyer can propose reasonable amendments to the lease itself. Better yet, call the lawyer in during negotiations, where he or she can do the most good.

9. Get any “verbal” assurance put into the offer and lease. Virtually all offers and leases have a clause that says there have been no representations except what is in the document in writing. If it is not written in, you may not get the concession.

10. That 50 page document which the leasing agent says is “standard” contains 50 pages of detailed legal clauses, many of which you will have difficulty understanding and many of which should be eliminated or amended. These clauses are important. The fact that it is the “Landlord’s Standard Lease” should tell you that it is written for the Landlord’s benefit, not yours. Have your lawyer review it before you sign it.

For more information contact Courtney Aarbo Barristers & Solicitors at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta T2N 3P4 or info@courtneyaarbo,ca or phone 403-571-5120.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors
www.courtneyaarbo.ca  

Selling Residential Rental Properties in Alberta- How to Terminate a Tenancy

By Courtney Aarbo Barristers & Solicitors

Providing Information to Assist Small Businesses

It has been our experience at Courtney Aarbo that in sales of rental property there is some confusion about what is required to be done by seller’s to comply with the “Residential Tenancies Act of Alberta”. Failing to comply with this legislation can result in great complications or even not being able to close the real estate deal.

As a first point one should note clause 2 (1) of the Act, which exempts certain types of rental properties from its provisions. These include rentals of mobile homes and rooms rental within the landlord’s home (boarders).

Assuming the Act applies, and the Seller is attempting to sell a home or condo that is rented with either a yearly or monthly lease, and the Buyer is planning to move in as apposed to continuing to rent, then the Seller is going to need to properly terminate the lease as of the sale closing date, or earlier. Failure to do so will breach the Seller’s obligation to provide the Buyer vacant possession under the contract.

If the Lease is a ‘month to month’ lease then section 8 (1) (b) of the Act requires the landlord (the Seller) to give the tenant notice on or before “the first day of the notice period.” The notice period is defined as being 3 consecutive ‘Tenancy months’. By way of example, if the sale is to close on July 1^st, then the month to month tenant must be given proper notice to vacate by no later than April 1^st.

If the Lease is a yearly tenancy then section 9 of the Act requires that a landlord give notice to the tenant “on or before the 90^th day before the last day of the tenancy year”, to be effective at the end of the lease year. Section 10 (c) does allow a notice to terminate a yearly tenancy that is late to be effective 90 days later so long as it is served before the end of the tenancy year. By way of example, if the lease year ends June 30, a notice would need to be served on the Tenant on or before April 2^nd to be effective June 30^th. If however it was served on June 1^st, it would be effective 90 days later. If the landlord (the Seller) did not serve the tenant until July 1^st, into a new tenancy year, the notice would not terminate the tenancy until June 30^th the following year- obviously a problem if the real estate deal close date is only one month later.

Please note that by section 10 of the Act the notice to terminate must

a)      be in writing;

b)      be signed by the person giving the notice (landlord) or the landlord’s agent;

c)      set out the reason for terminating the tenancy example: a sale of the property;          

d)      identify the premises for which the notice is being served; and

e)      state the date on which the tenancy is to terminate.

Service of the notice can be effected under Section 57 of the Act by personal service, registered mail, or certified mail. If the landlord cannot serve because the tenant is absent from the premises, it can be left with an adult or posted to the premises door.

Of course if the Buyer is purchasing the property with the idea of not continuing to rent it, then provided the Buyer wants the existing tenant, no notice to terminate needs to be given. The Seller will however have to assigned the tenancy agreement to the Buyer, notify the Tenant of his or her new landlord, and properly adjust on closing for rent paid and damage deposits. These adjustments are usually calculated by the Seller and Buyer’s respective lawyers.

For more information contact Courtney Aarbo Barristers & Solicitors at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta T2N 3P4 or info@courtneyaarbo.ca or phone 403-571-5120.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors
www.courtneyaarbo.ca