Mind Your Own Business

July/August 2009

Top Five Mistakes

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Mind Your Own

Going Global

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Volume 33, Issue 6 Feature: Mind Your Own Business!

7 Getting Down to Business: Things to Consider Roberto Noce Q.C. When you start your own business, lots of decisions with legal implications have to be made.

11 Before the Work Begins: The Top Five Legal Mistakes in Starting a Small Business Carole Aippersbach Small business owners sometimes go astray (legally speaking) when setting up their businesses.

16 Patent Protection and Small Business Doug Thompson A brilliant idea is often the basis for starting a small business, but it may be getting tougher to protect that idea.

18 Mediation and Arbitration to the Rescue Is it the best of times, or is it the worst of times…to start a small business? With the economy in turmoil, should entrepreneurs take the chance? Some say our economic recovery depends on it!

Departments

Jim McCartney If a small business encounters problems, mediation and arbitration can provide timely and cost-effective solutions.

21 Selling Your Business Mark Borkowski You’ve built it; now you want to sell it. What does it take to successfully sell your business?

4 Viewpoint 6 Bench Press

Special Report on Going Global: Canadian Legal Expertise 27 Joining Hands to Stop Domestic Violence in Africa

Columns 36 Not-for-Profit Law 38 Human Rights Law 40 Employment Law 42 Online Law 44 Aboriginal Law 46 Follow-Up on Famous Canadian Cases

Cover photo credit: © Rjmiz | Dreamstime.com

Kevin Smith British Columbia’s Law Courts Education Society is working with partners in Ethiopia and South Africa to confront domestic violence.

30 Access to Law = Access to Justice Connie L. Mah There are many Canadian organizations working around the world to help developing countries improve access to justice. Here are three of them.

33 Pro Bono Students Canada: Canadian Law Students are Leading Change Noah Aiken-Klar This organization channels the enthusiasm and idealism of law students so that they can help to build better justice systems at home and abroad.

School's In 23 Dogged Determination Susan Galloway

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The contents of this publication are intended as general legal information only and should not form the basis for legal advice of any kind. Opinions and views expressed are those of the writers and do not necessarily reflect the opinion of the Legal Resource Centre of Alberta Ltd. Permission to reproduce material from LawNow may be granted on request.

Viewpoint Dr. Wm. A. Preshing

Publisher Diane Rhyason Editor/Legal Writer Teresa Mitchell Production Assistant Jaime Bury Editorial Assistant Karen Klak Illustrator Melanie Eastley Layout, design and production some production!

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Small Business in Canada The theme of this issue of LawNow w focuses on small business. If a Canadian is thinking about beginning a small business in today’s challenging economic climate, what information does he or she need to make an informed decision?

Let’s begin by defining what we mean by the term “small business”? Do we define it by size or by monetary value? Industry Canada, in its July 2008 report Key Small Business Statistics, defines small business as a firm with fewer than 100 employees. It points out that just over one million Canadian firms fall into this category and that each year, approximately 139,000 new small businesses are created in Canada. It also notes: “The size of a business can be defined in many ways, by the value of its annual sales or shipments for example, or by its annual gross or net revenue, the size of its assets or the number of its employees. Many institutions define small businesses according to their own needs – the Canadian Bankers Association classifies a company as ‘small’ if it qualifies for a loan authorization of less than $250,000, whereas the Export Development Corporation defines small or ‘emerging’ exporters as firms with export sales under $1 million.

Industry Canada has often used a definition based on the number of employees – goods-producing firms are considered ‘small’ if they have fewer than 100 employees, whereas for service-producing firms the cut-off point is 50 employees. The smallest of small businesses are called micro-enterprises, most often defined as having fewer than five employees.”

Significance of Small Business in Canada Some highlights from the Industry Canada Report are: • on average, small businesses that have fewer than 50 employees contribute about 23% to Canada’s GDP; • as of 2007, small businesses employed approximately 5 million individuals in Canada, or 48% of the total labour force in the private sector; • small businesses created about 100,000 jobs in 2007, accounting for over 40% of all jobs created in Canada. Over the 1997 to 2007 period small firms accounted for 37% of all jobs created on average in the private sector; • approximately 15% of all employed workers in the Canadian economy in 2007 were self-employed; • on average, small business employees in Canada earned around $694 per week in 2007, less than the overall average of $762; • small businesses account for over two thirds of employment in five Canadian industry categories: non-institutional health care, construction, accommodation and food, forestry, and other services; and • roughly 25% of small businesses operate in Canadian good-producing industries; the remaining 75% operate in service industries.

There is, to an extent, a mythology about small business – the little guy with the big idea taking on the world.

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Survival of Small Business A study done by the Canadian Federation of Independent Business (CFIB) found that 55% of businesses “…begun in bad times survived for at least five years.” The Industry Canada study concluded: • Failure rates for small businesses in Canada are high for the first 3 years and decline over time. About 70% of small businesses that enter the marketplace survive for 1 full year; half survive for 3 years. Approximately 25% of small businesses are still operating after 9 years.

• The number of business bankruptcies in Canada fell by 50% between 1997 and 2007 to about 6300 in 2007.

Women in Small Business Women play a particularly significant role in small business in Canada. A report data by B.C. Women’s Enterprise Centre, based on 2003, outlines female participation in small business: • there are more than 821,000 women entrepreneurs in Canada; • women in Canada make up a larger share of the self-employed than in any other country; • women contribute in excess of $18 billion to Canadian economy each year; • since 1976, the average annual growth rate for self-employed women has been 5.3% compared with 2.2% for men; • one-third of self employed Canadians are women; • women entrepreneurs hold ownership in about 45% of Canadian small and medium enterprises; • the likelihood of self-employment for women increases with age and most selfemployed women are between the ages of 35 to 54; • the age of women who start a business is gradually increasing (currently 33% of start-ups are over the age of 45); • the average earnings for women business owners are lower than for employed women; • 17% of self-employed women make more than $30,000 a year, compared with 42% of men; • half of self-employed women work at home; • women tend to own firms in slower growth and higher risk sectors such as

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retail and service, in which access to financing is relatively more challenging; and • between 1990 and 2003, the number of women entrepreneurs rose from 27% to 33%, which may indicate that women stay in business longer and their survival rates are higher.

Some Closing Thoughts There is, to an extent, a mythology about small business - the little guy with a big idea taking on the world. While true to an extent, in today’s society there is considerably more assistance available for the small business owner/manager in terms of government grants, loans, etc. As Philip Dement notes in his CBC broadcast, “Unlike with large companies, all the political parties have good things to say about smaller firms. Governments give them favourable tax treatment and sometimes hire bureaucrats whose job is to cut the mountains of red tape through which corporate Canada must wade in order to set up and run operations.”

As well, today there is a marked difference in the attitude of banks and lending institutions with regard to commercial support, compared to a number of years ago.

Lastly, and of importance, is data which indicates that, in spite of the long hours and lower income levels which characterize much of small business, there are high levels of satisfaction. A number of studies have indicated that slightly more than 80% of small business owners are extremely satisfied being their own bosses and would repeat the experience. In a 2005 Leger Marketing poll, 40% of Canadians think entrepreneurship is the most rewarding career option. So, is this a good time to start a new small business? New entrepreneurs must carefully weigh the risks and rewards to reach the decisions that are right for them.

Dr. William A. Preshing is Professor Emeritus of the School of Business at the University of Alberta, Edmonton, Alberta.

Letter to the Editor RE: “A Tough-on-Crime Approach to Justice,” (January/February, 2009, by James C. Morton) When contemporary, mainstream media in Canada is dominated by “war on crime” rhetoric, angry denunciations of the criminal justice system as being “soft on criminals,” and scathing condemnation of criminal defence lawyers and judges in general, it is refreshing to read a thoughtful and eloquent statement in LawNow w of an alternative approach to dealing with the large mass of repeat offenders who are responsible for most of the petty crime in our society. The writer, James C. Morton, has succinctly named the elephant in the room. The majority of chronic offenders who commit the smash-and-grab thefts, shopliftings, corner store hold-ups, and muggings are stealing something that they can quickly either convert to cash, or indeed, are taking cash itself to purchase drugs to satisfy their immediate need for a hit. Were our justice system to implement the alternative proposed by Mr. Morton, i.e. involuntary commitment of such repeat offenders to addiction treatment facilities, there could be significant reductions to the cost of maintaining our criminal justice system. Furthermore, the addictions of many of these repeat offenders could be treated and these persons put on the road to healthier, more productive, and ultimately, happier lives. What a shame that Mr. Harper and his “tough-on-crime” supporters cannot see another approach that would also be “tough-on-crime,” but in a more meaningful way; and one that, ultimately, could be less of a drain on the public purse.

Brian Seaman Research Associate Alberta Civil Liberties Research Centre

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Bench Press Teresa Mitchell Facebook as Evidence A plaintiff in Ontario has been ordered to produce his private Facebook pages so that the defendant in his case can examine them.

John Leduc is suing for damages for personal injuries he suffered in a car accident, and claims that he has experienced a significant loss of enjoyment of life. The Ontario Superior Court of Justice ruled “It is reasonable to infer that his social networking site is likely to contain some content relevant to the issue of how Mr. Leduc has been able to lead his life since the accident…to permit a party claiming very substantial damages for loss of enjoyment of life to hide behind selfset privacy controls on a website, the primary purpose of which is to enable people to share information about how they lead their social lives, risks depriving the opposite party of access to material that may be relevant to ensuring a fair trial.”

Leduc v. Roman, 2009 CanLII 6838 (ON S.C.)

Insurance Caps: Courts in Nova Scotia and Alberta Disagree Several years ago a dramatic jump in car insurance premiums caused a number of provincial legislatures to pass laws capping compensation for minor soft tissue injuries. In 2008, Justice Wittmann of the Alberta Court of Queen’s Bench ruled that such a cap in the Alberta Insurance Actt violated the equality provisions of the Charter of Rightss and struck it down as unconstitutional. Now, Justice Goodfellow of the Nova Scotia Supreme Court, has reached a different conclusion, dismissing all of the Charter challenges to the compensation cap on minor injuries in a similar Nova Scotia statute. He added that even if there had been infringements, they would have been justified under s. 1 of the Charter, r which allows reasonable limits on Charterr rights if they are demonstrably justified in a free and democratic society. Justice Goodfellow noted that his decision would almost certainly be appealed.

The wording of the compensation caps is

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different in the two acts, which may have led to the difference in the two decisions. Nevertheless, it seems inevitable that the Supreme Court of Canada will have to decide the constitutionality of compensation caps.

Morrow v. Zhang, 2008 ABQB 98 (CanLII) Hartling v. Nova Scotia (Attorney General), 2009 NSSC 38 (CanLII)

Jail Term for Elder Abuse When 78-year old Kathleen Grant died, she was suffering from severe malnutrition, severe gangrene of both legs, and sores on her arms, back, buttocks, and ears. A doctor who examined her said he had never seen “an elderly person present in such a terrible state of neglect.” Her daughter, Margaret, was charged with negligence causing death, and homicide by criminal negligence. She pled guilty to the lesser charge of failing to provide the necessities of life. Judge Sivret of the New Brunswick Provincial Court stated that the sentence needed to meet the objectives of denunciation and deterrence, and sent Margaret to jail for four years. Seniors advocates believe this is the toughest sentence that has been given in Canada for elder abuse.

R. c. Margaret Grant, 2009 NBPC 17 (CanLII)

Government of Canada Must Act to Protect Citizens Two recent decisions by the Federal Court of Canada deal with the obligation of the Government of Canada to defend the interests of its citizens abroad, even if those citizens are charged with serious offences, and are controversial.

Omar Khadr is a Canadian citizen held at Guantanamo Bay, charged with murder, conspiracy, and support of terrorism. He wants to be repatriated to Canada to face trial. Justice O’Reilly of the Federal Court of Canada ruled that the Prime Minister and the government have a duty to assist Mr. Khadr.

He stated that the government’s ongoing refusal to request Mr. Khadr’s repatriation is a policy decision that is subject to judicial

review. He wrote: “Generally speaking, decisions about foreign affairs fall naturally and properly to the executive. Still, Canadian courts have determined that the executive’s prerogative in that area is subject to review under the Charter.” When a person’s Charterr rights to life, liberty, and security of the person are threatened, Canadian officials must respect principles of fundamental justice. He concluded that, as a principle of fundamental justice, the Prime Minister and the government are obliged to protect Mr. Khadr by taking appropriate steps to ensure that his treatment meets international human rights standards. He concluded that the appropriate step is for the government to request Mr. Khadr’s repatriation to Canada, and he ordered it to do so as soon as practicable.

On March 4, 2009 Federal Court Justice Barnes ruled that the federal government must assist Canadian citizen Ronald Smith in seeking a commutation of his death sentence.

He wrote: “In the realm of diplomatic assistance to its citizens in legal trouble in foreign jurisdictions, everything pales in significance to the cause of one’s imminent execution and the corresponding interest in avoiding it …

My concern, then, is not with the authority of this Court to tell the Canadian government how to formulate foreign policy or how to conduct its business with the Governor of Montana, but, rather, with the Court’s obligation to ensure that the Governor’s decisions in that regard are made fairly and with appropriate regard to Mr. Smith’s legal interests.” Justice Barnes decided that the federal government’s decision to withdraw support for Mr. Smith was in breach of its duty of fairness to a Canadian citizen, and he ordered the government to apply the policy of clemency on behalf of Canadians facing the death penalty in any foreign state.

Khadr v. the Prime Minister of Canada et al., 2009 FC 405 Ronald Allen Smith v. Attorney General of Canada et al, 2009 FC 228

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Feature Report on Small Business

Getting Down to Business:

Š Rjmiz | Dreamstime.com

Things to Consider

Roberto Noce, Q.C.

Introduction

Sole Proprietorship

There are many issues to consider when setting up a business. This article provides an overview of some of the legal requirements and issues that should be dealt with prior to starting your business venture. This list of issues is not exhaustive; however, it will provide enough information to help a potential business operator ask the right questions.

Setting up a sole proprietorship has both advantages and disadvantages. It is the simplest way to set up a business, and the start-up costs are low. However, the sole proprietor is personally responsible for all debts and obligations related to the business. In other words, the sole proprietor bears unlimited liability.

Partnership

Corporate Structure There are three common types of business structures: sole proprietorship, partnership, and corporation. People often ask which business model is the best, but the answer will vary depending on your needs, resources, and intentions.

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A partnership is the relationship that exists between two or more persons carrying on a business in common with a view to profit. As with any relationship, partners should consider putting together some form of partnership agreement in the event of a disagreement or dissolution of a partnership. The

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Any business operator must recognize the importance of minimizing claims from current and former employees. The most common issue relating to employment matters is the wrongful dismissal action.

partnership model has its advantages, such as the relative ease in putting it together, low start-up costs, and limited regulations. The disadvantages of a partnership include, but are not limited to, the fact that partners have unlimited liability and a partner may bind the other partners to a legal agreement, for example, without their approval or knowledge.

Corporation A corporation, also known as a limited company, is a legal body which is separate and distinct from its shareholders. The relevant provincial legislation for corporations incorporated in Alberta is the Business Corporations Act. Some corporations are incorporated at the federal level; however, this article will focus on Alberta incorporated corporations.

Incorporating has many advantages, such as limiting the shareholders’ personal liability in any legal dispute. For example, if a creditor had a claim against the company, the creditor would normally have no rights against the shareholders. As well, incorporating allows for income splitting and other possible tax advantages.

However, as with any business model, there are disadvantages. Incorporating is costly to pursue, it has extensive record requirements such as the preparation of a minute book and corporate resolutions, and in some limited instances, shareholders may still be held personally liable.

Most lawyers are asked to assist an owner-operated company where all the shareholders are actively involved in the day-to-day operations. The corporation must decide how many shareholders will be in the business, determine the various classes of shares, and decide how involved the shareholders will be in the business’ day-to-day operations. Consideration must be given to setting up the management of the business such as the election of directors and the appointment of officers. Who will be the directors, the president, and the secretary? Will there be an opportunity for new shareholders to buy into the business?

If a business operator chooses to incorporate, it is essential that the shareholders develop a method by which to define their relationship and determine

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how to resolve disputes. The agreement between the shareholders is usually called the Unanimous Shareholders’ Agreement (USA). Spending time drafting a USA and anticipating contentious issues will enable the corporation to focus on its day-to-day operations as opposed to spending time and expense resolving disputes and other issues between shareholders. Notwithstanding a USA, issues will undoubtedly crop up and litigation may ensue. However, an agreement between the shareholders will reduce the likelihood of costly litigation for a business. A dispute resolution mechanism is an important component of any USA and should identify a forum for resolving disputes such as mediation, arbitration, or court process.

A well-drafted agreement will greatly help to ensure the long term success of the shareholder relationship, thereby contributing to the long-term success of the business.

Any agreement should also address the issue of how to buy one shareholder out from the company through the use of some form of buy/sell provision or “shotgun clause”. Under a shotgun clause, a shareholder (offeror) r would be permitted to offer his/ her shares for sale (offer price) e to the other shareholders (offerees) and those shareholders (offerees) would have the opportunity to purchase the shares at the offer price or to sell their shares to the shareholder (offeror) r at the same offer price. The benefit is that the parties would be forced to accept a fair price for the shares because the person offering to sell the shares to the other shareholders does not know whether or not his/her offer would be accepted.

In addition, shareholders should consider including non-competition and confidentiality provisions in the USA to restrict any departing shareholder from getting involved in the same type of business with a competitor or starting a similar type of business.

Finally, as with all agreements, the parties should include a provision that sets out the manner in which the agreement may be terminated.

Employment Any business operator must recognize the importance of minimizing claims from current and former employees. The most common issue relating to employment matters is the wrongful dismissal action.

In the absence of a written employment contract, every employment relationship is governed by an unwritten employment contract with terms that are implied by law. Those implied terms include all minimum standards as set out in the Employment Standards Codee of Alberta, as well as reasonable notice provisions found at common law. Employers are free to draft their own employment contracts provided the terms meet or exceed the minimum requirements set

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out in the Employment Standards Codee of Alberta. Business operators may want to consider entering into written agreements with their management employees and taking the time to ensure that all employees understand their responsibilities.

The law allows an employer to terminate any employee at any time – with or without cause. Any employee terminated without cause must be given reasonable notice or payment in lieu of notice. It is important that business operators consider the reasonable notice periods and understand that if they fail to provide reasonable notice, the business may expose itself to a legal action. What is reasonable notice depends on the particular facts relating to the employee’s history of employment.

If an employee is terminated with cause, there is no need to provide reasonable notice or make any payment in lieu of notice. However, keep in mind that the threshold for terminating an employee with cause is high. A business operator must have written documentation to establish that the employee was properly terminated.

All small business operators must recognize that there are a number of employment law issues that will arise from time to time. It is important to manage their employees’ performance and to seek legal assistance when issues arise.

Contracts Regardless of what type of business is being operated, there will be the need to enter into contracts with third parties. Generally, a contract is formed when there is an offer and acceptance, consideration, an intention on the part of the parties to form an agreement, and an understanding of the terms such as price and subject matter of the agreement. It is important to identify the names of the parties on the written contract so that there is no doubt as to who the contracting parties are. Any contract should also address remedies upon breach, and if the business is based in Alberta, the contract should indicate that Alberta laws govern.

Business operators should take the time to review any contract before signing it and ask for assistance where necessary. Once they have signed an agreement, they are deemed to have read the agreement even though they may later claim that they did not read or understand it. Although there are exceptions to the rule, it would be prudent on the part of business operators to read every paragraph in any contract before signing it. If they do not understand a particular clause, they should ask their lawyer or ask the other party to make changes to the wording so that it is clearer to both parties. The signing of contracts ought not to be taken lightly.

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Generally, a contract is formed when there is an offer and acceptance, consideration, an intention on the part of the parties to form an agreement, and an understanding of the terms such as price and subject matter of the agreement.

Leases With the exception of home-based businesses, most businesses need to have a place to operate. Often, these places of business are located in buildings owned by a third party. A signed lease agreement between the owner of the building ( landlord) and the business operator (tenant) will be required.

Commercial leases generally favour the landlord.

There are several types of leases that a landlord may present to a business operator. Most leases provide a landlord with a net return. A landlord may attempt to shift other costs, such as utilities, common area costs, and HVAC (heating, ventilation, air-conditioning), to the tenant. A business operator should seek legal assistance prior to signing the lease agreement.

Some of the things to consider when reviewing a commercial lease are: • the net rent; • the duration of the agreement; • any additional rent or costs; • the tenant’s responsibilities under the lease agreement such as hours of operation and repairs; • the landlord’s responsibilities under the lease agreement; • whether there are any competition restrictions in the building; • parking and access issues; • how to deal with a default under the lease agreement (i.e., arbitration, mediation, or court process); • a renewal option clause; and • the ability of the tenant to assign or sublease, and whether or not consultation and approval of the landlord is required.

Some landlords may provide a tenant with free rent for a certain period to allow the tenant to set up its business operations. If the lease agreement does not provide for this, a tenant may request this opportunity.

It is also useful to consider and review the provisions in the lease agreement that deal with the sale, demolition, or redevelopment of the building by the landlord. Some lease agreements allow a landlord to terminate a long-term lease with six months’ notice

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Prior to entering into any binding offer to lease or other lease commitment, it is essential to take the time to review the zoning of the property to ensure that the intended type of business can in fact operate on that property.

if the landlord decides to demolish or redevelop the building. This may put a business operator’s investment at risk.

Business operators should consult a lawyer prior to signing any commercial lease agreement to avoid expensive roadblocks in the future.

spaces, costly building code compliance, and safety upgrades. As part of the due diligence process, it is important to take the time to review the applicable zoning provisions and building code requirements for the proposed leased premises.

An offer to lease should be conditional, not only on the proposed use being permitted, but also on the proposed plans receiving at least tentative, preferably final, approval from municipal officials. Without the appropriate prior due diligence, a tenant could find its proposed use prohibited under applicable zoning bylaws, or find the cost of complying with applicable codes and other requirements extremely costly. Again, retaining a lawyer to assist in securing the appropriate zoning at this stage can reduce costs, uncertainties, and headaches later on.

Conclusion Municipal Regulations Most municipalities in Alberta have established business regulations and fees for businesses. Accordingly, most businesses will require a business licence in order to operate legally within the municipality. If a business operates without a business licence, most municipalities have the authority to impose fines.

An owner may also be required to pay a fee ranging from $150 to as much as $3000 to the municipality depending upon the nature of the business. Business licence fees can range from about $150 to as much as $3000.

In addition to a business licence, a development permit may be required from the municipality. Prior to entering into any lease commitment, it is essential to take the time to review the zoning of the property to ensure that the intended type of business can operate on that property. Even if the proposed use is permitted, it may require additional parking

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Although the concept of starting a business sounds simple at first, it can be challenging in many ways. It requires a great deal of time, effort, and planning on the part of the business operator. To move forward with your business idea, take the time to retain the services of a lawyer, accountant, and other professionals to assist you with your business venture.

Corporate lawyers are trained to look at business plans, anticipate potential problem areas, and help business operators to successfully navigate around them. The money spent on legal counsel early on will go a long way in ensuring the long-term success of a business.

Roberto Noce, Q.C. is a partner with Miller Thomson LLP (Edmonton) and a former City Councillor with the City of Edmonton (1995 – 2001). This article reflects the views of the author only.

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Feature Report on Small Business

Before the Work Begins: The Top Five Legal Mistakes in Starting a Small Business Carole Aippersbach So you want to start a small business? You have your business plan at the ready, you can get a startup loan with an interest rate that is at an all-time low, and your determination is at an all-time high. You are ready to go. Ironically, now – during this flurry of energy, excitement, and enthusiasm – is the time when you should slow down and become careful and contemplative. The decisions you make could have an enormous impact on whether your business succeeds or fails. Legal mistakes are amongst the most deadly. Knowing some of the pitfalls to avoid can make all the difference.

Mistake #1. Choosing the Wrong Ownership Choosing an ownership structure is one of the most important decisions you will make. Your decision should be based on a careful consideration of the specific needs of both your business and yourself as well as a thorough understanding of your options and how these options relate to your needs.

There are three general business structures: sole proprietorship, partnership and corporation. Each has different and important implications for matters such as liability, risk, taxation, and succession. For

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a detailed description of each structure, see Roberto Noce’s article at page 7. In deciding which of these options will suit you best, you should consider the following questions.

What are the risks involved in your proposed business?

Some businesses are more financially risky than others. Are you building houses or selling office supplies? In a sole proprietorship, you, the business owner, can be held personally liable for the debts and obligations of the business. This includes loans, taxes, money owed to suppliers and landlords, and any judgments against the business. This risk can even extend to liabilities resulting from acts or omissions by employees. While you can protect yourself against lawsuits by buying business liability insurance, this won’t help you with business debts. You could potentially lose everything you own if the business debts are not paid. For the case of partnershps, because partners can make commitments that bind the entire business (without even consulting you first), your liability may be even greater than in a sole proprietorship.

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Operating agreements are often over-looked. This is especially true in cases where the business partners are related or are friends. In such instances, the partners enter into the transaction assuming the best of one another and not anticipating the number of things that can go wrong over the life of a business.

A corporation, on the other hand, has limited liability. This means that normallyy no shareholder can be held personally liable for the debts, obligations, or acts of the corporation. However, in certain limited circumstances, a judge can look behind the corporation and hold one or more shareholders liable (this is known as “piercing the corporate veil”). For example, this may happen if a shareholder personally guarantees a debt, or if the corporation is a sham company used for nefarious purposes. The limited liability advantage can also be undermined if one or more of the shareholders sign any personal guarantees.

addition, it is the owners that benefit from all of the profits. In a corporation the profits and losses belong to the company and have to be distributed accordingly.

Are you the kind of person who wants to be in full control of all decision-making?

In a sole proprietorship, you are in control of all decision-making. Any future sale, transfer, or dissolution of the business is entirely at your discretion. In partnerships and corporations there can be a broader management base. This can lead to divided authority and the potential development of conflict between partners or shareholders.

Can you adapt to many formal business requirements?

In sole proprietorships and partnerships, there are few formal business requirements. However, partnerships do require an operating agreement, and this creates slightly more record-keeping than a sole proprietorship. In contrast, corporations are very closely regulated. Corporate record-keeping is extensive and can be complex.

How much start-up capital do you have?

Do you have all you need or will you need investors? Sole proprietorships and partnerships have lower start-up costs as you do not incur the costs of setting up a corporation. In addition, sole proprietorships and partnerships are easy to form; there is no long list of statutory requirements as there is for a corporation.

How do you plan on obtaining any additional capital?

Investors won’t usually invest in sole proprietorships. For partnerships, there are more potential sources of investment capital (for example, through the concept of the limited partnership), but many investors prefer shares in a corporation. Before accepting any additional capital from a new partner, you will want to ensure that this partner is suitable and that the addition of this new partner conforms to the partnership agreement. For a corporation, it is easier to raise capital as investors know that they will not be held personally liable for business debts. A corporation also has many avenues to raise money, such as selling current shares, or creating new types of shares, such as preferred shares, with different voting or profit rights.

What are your expected profits and losses in the first few years?

Will you need to deduct losses from other income?

Sole proprietorships and partnerships offer numerous personal tax advantages, because, as an owner, you can deduct business losses from your other income. In

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Do you want or need statutory name protection?

If name protection is important to you, you may wish to incorporate your business. Part of the process of incorporation is ensuring that the name you choose is not the same as, or too similar to, other corporate names in the jurisdiction. The same protection will be offered to your corporation once it is set up.

In general, there is no such automatic name protection for sole proprietorships and partnerships. You can find exact details about other name protection options (such as the registration of trade names) in provincial business name legislation.

What are your plans for the business should something happen to you?

Sole proprietorships and partnerships lack continuity of business in your absence. The business has no separate existence, so you will need to make a succession plan through a Power of Attorney, a Personal Directive, and a Will. A corporation, on the other hand, as a separate legal entity, does not depend on the continued existence or membership of any of its shareholders, directors, or officers.

Mistake #2. Not Having an Operating Agreement (Partnerships and Corporations) An “Operating Agreement” is a contract between the founders of the business. This includes people involved in the management, people who provide capital, and people who do both. This agreement sets out operative issues in advance such as who does

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what, when they do it, and how they do it. This ensures that everyone knows what needs to be done, and, as a result, the cost of solving problems will be kept to a minimum.

The types of issues often addressed in an operating agreement include: • how much time and effort each person contributes; • what each person’s responsibilities are; • how much capital each person contributes; • what happens if the business needs more capital; • what happens when a person leaves the business; • what happens when a person dies; and • any additional details imperative for, or unique to, the business.

Operating agreements are often over-looked. This is especially true in cases where the business partners are related or are friends. In such instances, the partners enter into the transaction assuming the best of one another and not anticipating the number of things that can go wrong over the life of a business.

However, the consequences of not having an operating agreement usually emerge quite quickly. What happens when expected capital is not provided? What happens when a married partner gets divorced? What happens when partners disagree? These kinds of issues arise frequently and can get very messy very quickly. They can destroy both business and personal relationships.

Just as important as having an operating agreement is understanding it. It needs to be clearly drafted, and everyone who signs it needs to know what is in it. Failure to understand the terms of the operating agreement is one of the most common causes of in-house disputes and partnership conflicts. When a dispute arises, the operating agreement will be the decisive document in settling the dispute – its creation and comprehension are critical.

Mistake #3. The Contents of Leases When you start a small business, you will need to consider where that business will be located. If your business is not a home-based one, this may be the first time you have had to deal with a commercial lease.

Although such leases generally favour the landlord, there is some room for negotiation, and you should take advantage of that opportunity.

As a starting point, it is important to understand that business leases are nott like residential rentals.

With a residence, rent is usually restricted to a set monthly price, which may or may not include utilities.

The landlord is responsible for repairs, and the terms of the Residential Tenancies Actt help protect the rights of tenants. With business leases, on the other hand, there are often many other costs beyond the base monthly rent; for example, common area mainten-

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A good business property insurance policy should cover matters such as equipment and machinery; office furniture (including computers and accessories); inventory and supplies; company cars; and employees’ personal property kept at the business site.

ance costs, the costs of certain repairs, and possible personal guarantees.

A second consideration: put everything in writing.

Make certain that everything that you discussed and agreed upon (especially if they are changes to a previous draft) is included in the written agreement. No matter what the promise, if it is not included in the lease, it will likely be excluded by a clause that says something like “this lease is the entire agreement between the parties.”

It is imperative that you read the lease very carefully, watch for errors, and ensure that you understand the terms to which you are agreeing. A thorough understanding of the lease clauses will help you avoid surprise costs (which could sink your business). The following are a few examples of the clauses that could cause trouble if they are wrong or misunderstood.

Parties: An error in identification can have serious repercussions. For example, if you are forming a corporation and you list your personal, not corporate name, you may become personally responsible.

Premises: This includes the address, the unit number, and any additional space not included in the base units (such as access to storage rooms, conference rooms, parking, and kitchen facilities). Base charges are often calculated by the square foot – be sure to confirm all measurements.

Term: This describes the length of the lease. Some leases specify the starting and ending dates. Other leases start as of the date the landlord finishes the building adjustments that you requested, or the date the lease is signed. You may have financial responsibilities even if you have not yet taken possession. Be sure you know and agree to the date that your responsibilities will start.

Use: These provisions limit how you are allowed use the space. The limitations can be as broad as what business you will conduct or as narrow as what

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specific services or products you will offer. In general, the fewer such restrictions, the better for you.

Rent: In commercial leases, rent is often far more than a base monthly amount. Make sure you understand which parts of the landlord’s operating costs will be passed on to you.

Non-disturbance: This clause ensures that if the landlord sells the building, your lease will be honoured by the purchaser. Without such a clause, you might find yourself without business premises. If this clause is not in the landlord’s standard lease, you may want to consider negotiating for it.

Assignment: An assignment occurs when someone takes over a lease (one of the parties is replaced by a third party). Leases generally require the consent of the landlord for an assignment. Some even provide specific requirements in order for the landlord to consent. Take note of any such requirements so that you can determine if you can meet them and so that you know what you need to do when the time comes.

Also note whether you will remain liable for the lease after you have assigned it.

Maintenance: Such a clause concerns your duty to care for the rented space. Some of the maintenance costs will be yours – be sure you know which ones and that you can live with the proposed arrangement.

Insurance: Insurance is available to cover the risks of leasing commercial space. Sometimes a lease requires certain kinds of insurance as well as certain minimum dollar limits. Be sure you know and understand these clauses before you arrange for insurance coverage and before you move into, and start using, the business premises.

Renewals: With any luck, your business will thrive.

After the expiry of your lease, you may wish to stay in your current location. In anticipation of such a possibility, you may want to negotiate renewal options at the outset. Options include an automatic renewal (if you want it); a right of refusal (meaning the landlord must offer the space to you first); a fixing of the future rent for that renewal; and a formula for the determination of that rent.

Mistake #4. Not Being Adequately Insured New businesses often have insufficient insurance.

In deciding what kind and how much insurance to secure, a new business owner should carefully examine the needs of the business. Here is a summary of the most common forms of insurance coverage.

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Property Insurance It is always a good idea to purchase enough property insurance to cover your business’ assets. Even if you form a corporation, which protects your personal assets from business liabilities, you still risk losing your business if disaster strikes. A good business property insurance policy should cover matters such as equipment and machinery; office furniture (including computers and accessories); inventory and supplies; company cars; and employees’ personal property kept at the business site.

You also need to understand which types of losses are covered. The kinds of things to look for include fire, explosions, storms, smoke, riots, vandalism, theft, sprinkler leaks, floods, broken windows, falling objects, water damage, and loss of business income. If you have a lease, check for leasehold insurance. This protects you if your lease is cancelled and you have to rent elsewhere at a higher rent. Many of these things are not covered under a basic policy – a fact that surprises many business owners.

Also note that some items are specifically excluded.

This, too, can be surprising. For example, in some areas where earthquakes are common, damage from earthquakes is specifically excluded from basic policies. If you want to have that kind of coverage you must obtain separate coverage. While the premiums for such additional policies are more expensive, they may be worth it if your business faces multiple or unusual risks.

Be sure you understand the limits of your policy.

These include maximum coverage in certain circumstances, any deductibles or co-payments required, and how the insurance company pays claims. For example, “guaranteed replacement cost”” insurance will reimburse you what it costs you to replace the property.

If your computer equipment is destroyed, this type of coverage will pay you as much as you’ll need to replace it. This is very different from insurance that only provides the “actual cash value”” (which is often depreciated) of the damaged property.

Lastly, keep in mind that the location of your business may affect your insurance needs. If you have a business lease, your lease may require that you obtain a specific amount or type of property coverage. Be sure to check your lease beforee you purchase a policy.

If, on the other hand, you have a home-based business, your home-owner’s policy may be voided entirely if you run a business from home. If that is the case, you will need to upgrade your insurance policy.

Liability Insurance Liability insurance covers your legal liability resulting from injuries to, or property damage of, a third party.

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There are several types to consider, for example: • general liability, which covers damages that your business must pay to someone who is injured on your property; • product liability, which protects you from lawsuits by customers who claim to be hurt by a product you produced and/or provided; and • auto liability, which covers damage to vehicles in a business-related accident. This, however, may not include damage which occurs when your employee was using his or her personal vehicle for business purposes. You may need to have your employees change their personal auto insurance policies.

Not all policies cover all of these kinds of liability insurance. Be sure to consider your needs and read carefully!

Professional Liability This kind of insurance protects you from liability arising from negligence committed while rendering professional services. This is also known as Errors & Omissions insurance. It is not available for all professional activities. As a business owner, you should ensure you know whether such insurance is available (or required) for your employees.

Workers’ Compensation Board (WCB) Most business operations are required to have workers’ compensation coverage. If a worker is injured or contracts an occupational disease while on the job, the WCB covers the worker’s medical and wage-loss costs. Employers who are uncertain about their need to register for compensation coverage should contact their provincial WCB for information.

Directors and Officers (D&O) Insurance This kind of insurance is for businesses that are incorporated. In general, the recovery of any damages incurred by the corporation will be limited to corporate resources, but this is not always the case.

Sometimes, courts will allow plaintiffs to receive damages directly from corporate officers or directors.

In general, D&O insurance provides coverage against the wrongful acts committed by directors and officers (but it can also include officers and senior management staff). Specifically, if such an insured person is found to have committed a wrongful act and, as a result, must pay damages to an injured party, those damages will be covered by the insurance (this is known as “indemnification”).

So what is a “wrongful act”? Generally, the term “wrongful act” includes actual or alleged errors, mistakes, or omissions that occur in the discharge of duties; misleading statements; and neglect or breach of fiduciary duty. However, wrongful acts generally

July/August 2009

do not include criminal activities such as false arrest or libel, slander, and infringement of a copyright or trademark.

It is important to carefully read and understand exactly who is insured (and who is not), deductibles and exclusions, and any coverage limits. For example, there are often limits on general coverage (both per claim and the total allowed annually) and defence costs (a promise to indemnify may not be a promise to defend).

Mistake #5. Not Getting a Lawyer for your Business As the owner of a business, you would likely never try to do all of your own accounting, computer support, and cleaning – you would probably hire someone. After all, you are there to run the business part of your endeavour – that is what you know, that is what you do well, and that is why you started your business. When it comes to legal matters, however, many small business owners seem to think differently (at least at the outset). Despite the complexity, intricacy, and sheer volume of detail involved in legal matters, numerous business owners try to do their own legal work.

The other four mistakes are only the tip of the iceberg when it comes to some of the legal matters faced by small business owners. Every business has its own set of issues to consider: contract law, agency law, employment law, human rights law, intellectual property, corporate & commercial law, tax law, zoning law … just to name a few.

As a business owner, you need some basic understanding of the law. There is, however, a difference between having a basic understanding of the most common issues and having a thorough knowledge of every possible legal matter that will affect your business. Lawyers have been trained to find the information for you. Let them help.

Final Words Starting a small business is always risky. It takes significant effort and forethought. As part of this process, small businesses may make mistakes about legal matters. This happens all the time and can never be completely avoided. That said, some mistakes can be disastrous. Your business may end up incurring substantial expenses that could have been avoided with good legal planning. Dare to be prudent!

Carole Aippersbach is a lawyer with the Legal Resource Centre in Edmonton, Alberta.

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Feature Report on Small Business

Patent Protection

and Small Business Doug Thompson The percentage of applicants who had their patent applications approved in the United States Patent and Trademark Office (USPTO) in 2008 was a dismal 44%. This is down from historical averages of 66%.

Stated another way, 22% of Applicants who would have obtained patent protection prior to 2006, were denied patent protection in 2008, in what amounts to a confiscation of the patent rights they formerly would have had. This article will explore the factors that lead to this significant decline, some bizarre problems caused by zealot examiners, the current environment and a glimpse into the future.

Getting Tougher In 2005 the USPTO was coming off a year in which the rate of allowed patents had climbed to 73%. They were being subjected to ridicule in the media for patents, such as U.S. Patent 6,368,227 (Olson) entitled “Method Of Swinging On A Swing”, as people questioned what contributions such patents made to the economy. An administrative decision was made to restore some pride and get tougher. Examiners were instructed to be tougher and, in some technology areas, a double review was required. It took a while for this administrative decision to have an effect, but the effects are apparent now.

A critical stage in the processing of a patent is responding to the first communication from an examiner. In this first communication the examiner raises potential objections based upon prior patents. If you explain to the examiner the differences between your invention and the prior patents the examiner has iden-

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tified, it normally results in allowance of the patent. In today’s tougher environment, the second communication from the examiner still usually confirms that the arguments submitted were convincing and all previous objections are withdrawn. However, all too frequently, further objections are raised based upon other prior patents.

KSR International v. Teleflex Decision Even if an invention is “new”, the invention can be considered to be “obvious” if you are combining known components in a conventional manner.

For example, putting a head rest on a folding chair would not be patentable. Folding chairs are wellknown and head rests for car seats and dentist chairs are well known. Putting a head rest on a different type of chair, such as a folding chair, would be considered to be “obvious”. Prior to the KSR decision in 2007, there were limits on what patents an examiner could rely upon when considering whether your patent application was “obvious”. The traditional tests required there to be some teaching, suggestion, or motivation that would lead one to combine existing patents to arrive at an invention. The KSR decision indicated that there are some combinations that would be considered “obvious” even without a teaching, suggestion, or motivation: “A person of ordinary skill in the art is also a person of ordinary creativity, not an automaton … In many cases a person of ordinary skill in the art will be able to fit the teachings of multiple patents together like pieces of a puzzle”. This has resulted in the examiners reaching outside of their normal bound-

July/August 2009

aries to find relevant patents. By way of example, I recently had a patent relating to a building with hinged walls rejected by an examiner because, in the examiner’s opinion, the building resembled a hinged lunch box.

An administrative decision was made to restore some pride and get tougher.

Examiners were instructed to be tougher and, in some technology areas, a double review was required.

Zealots The new administrative guidelines were embraced with vigor by some examiners. This was fueled, in part, by the fact that examiners who did not follow the guidelines and granted patents “too easily” were fired. In order to ensure that they did not grant patents “too easily” some examiners became creative in their rejections. This caused headaches for patent lawyers, such as myself, and angst for the poor clients. By way of example, a patent for bending drywall to form curved walls was rejected by an examiner relying upon a patent that had nothing to do with bending or drywall. This situation was different than the lunch box example given above, where both the building and the lunch box had hinges. The patent relied upon did not mention bending and the material could not be bent without being damaged. The creative rationale by the examiner was that, as no range of degrees was given for the “bend”, it would include a “radius of zero degrees”.

Current Environment The current environment has had a noticeable effect upon the advice that patent lawyers give their clients.

It has become more difficult for the lawyer to provide certainty in a search and patent opinion, as the examiner may cite a lunch box or some other completely unrelated prior art. It has become difficult for the lawyer to give assurance that arguments submitted will result in the patent being approved, as the examiner may provide a new set of rejections based upon some further patents. With an allowance rates as low as 44%, the lawyer must seriously discuss trade secrets and other alternatives to patent protection with the client.

What This Means To Small Business In Canada Historically, the patent system has enabled small business to compete against large business interests that have superior financial resources. Anything that makes obtaining a patent more costly hurts the small business owner and favours large business interests. Prior to committing precious resources toward patenting, a small business owner needs to have assurances that the invention is patentable. It is now more difficult to provide such assurances. If the patent is initially rejected, a small business owner does not mind spending the money to respond; if he has some reasonable expectation that the patent will be

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approved. A second or third round of rejections can strain the small business owner’s budget and force the small business owner to abandon the patent application. Although this change has been initiated and first noted in the United States, it has and will continue to affect Canadian small business. Canadian and United States patents are usually packaged together in a licensing or sale transaction. In some technology areas there is not much interest in solely a Canadian patent.

A Canadian patent, by itself, does not command anywhere near the same price. Trends initiated in the United States tend to “spill over” into Canada. When examining the same patents, Canadian Examiners are strongly influenced by their United States counterparts. This will inevitably result in a tightening of the Canadian patent system, although not to the same degree.

The Future In response to repeated rejections, applicants resorted to the procedural rules of the USPTO by filing Requests For Continued Examination, Continuation Applications, and Continuation in Part Applications. The USPTO responded by placing limits on these types of applications. A court challenge was launched against the authority of the U.S. Commissioner of Patents and an injunction was granted to delay implementation of the new procedural rules.

On March 20, 2009 the U.S. Court of Appeals and Interferences rendered its decision. It confirmed the authority of the U.S. Commissioner of Patents to implement most of the new rules. The path has been cleared for limiting rules to be put in place. This could potentially further reduce the allowance rate.

The Commissioner of Patents is a political appointee. As this article is being written, newly elected President Obama is in the process of appointing a new Commissioner of Patents. It remains to be seen whether the new Commissioner of Patents will pursue the same course of action taken by the Bush administration. It also remains to be seen how these developments in the United States will affect the dayto-day operation of the Canadian Patent Office. It finally remains to be seen how small business will respond to this new challenge.

Douglas B. Thompson is a lawyer with the firm of Thompson and Associates in Edmonton, Alberta.

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Feature Report on Small Business

Mediation and Arbitration to the Rescue

Jim McCartney The high cost of traditional dispute resolution – litigation in the courts – has been the subject of much high-level discussion in recent years. In January, 2009, Canada’s Chief Justice, Beverley McLachlin, said there is a profound disconnect between the ideal of the right to justice and the reality that many people face. While praising Canada’s justice system as among the best in the world, she said there are more and more people who are being hindered by barriers such as cost, delay, and complex procedures. The Chief Justice said increased mediation and arbitration, further development of pro bono services and the creation of hubs where people can obtain information about court procedures are elements vital to improving access to justice.1 The Vancouver Sun reported on January 29, 2009, after a forum at which the Chief Justice expressed concern that access to justice is in jeopardy: Barriers are everywhere – exorbitant costs, high legal fees, needless delays and archaic procedures.

The legal system is becoming a last resort for those who can afford it, not a remedy for those who need it.

Yet it’s not the poor primarily who are losing their right to a day in court; they often qualify for legal aid or pro bono help.

It’s the middle class that takes it in the teeth: Too well off for a handout and not rich enough to pay the cost of exercising their constitutional rights.

These comments seem equally applicable to many small businesses – the middle class of the business world.

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Industry Canada, in a 2009 report called Key Small Business Statistics, stated that “Fully 98% of businesses in Canada are considered small and they employ 48% of the labour force.” It might be reasonable to assume that those same small businesses are the source of most of the business litigation in the country. They face high costs and long delays in having their disputes resolved in the courts.

Are there current alternatives?

Alternative Dispute Resolution (ADR) The civil justice system includes the courts, judges, and court administrators who work in those courts, along with the rules, processes and procedures for how to get a claim before these courts. In response to the perceived shortcomings of this system, alternate methods of dispute resolution have developed. Two commonly used alternatives are mediation and arbitration.

Mediation is a process in which adversaries agree to appoint an independent, unbiased, mediator to help them reach a voluntary settlement. The mediator does not decide the settlement; rather, he/she creates a neutral context for positive discussion that helps the participants move to resolution of their issues.

Arbitration is a process in which adversaries appoint (or have appointed for them) an independent, unbiased arbitrator. The process results in a binding decision or “award” applying the law (or some other agreed upon standard) to the evidence presented during the process.

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Mediation Advantages Sceptics often ask how a mediator can be of any value: we are adults, we can work this out without the intervention of some “neutral”. I invite them to remember the last time they had a heated argument with a family member. It is interesting that people will often say things to a family member that they would never dream of saying to someone else. This is sometimes true in the workplace too, where (as the saying goes) familiarity might be seen to breed contempt. Just imagine that a stranger was present in the room observing and listening. Would the conversation have taken a different tone? Now imagine that the stranger had actual expertise in helping people to have conversations about matters in dispute. Would that have made an even bigger difference? Almost everyone agrees that it would and that is one of the reasons that mediation has been so successful – it helps to change the tone and style of the conversation.

Perhaps more importantly, a skilled mediator can help the parties to identify what is really at the bottom of their dispute and to express how each of them is affected by the events that gave rise to the dispute. The discussion that then follows can help the parties generate options that might resolve the dispute in a gain/ gain result, rather than a win/lose result. Consider this example.

Two sisters simultaneously reach for the last orange in the bowl. They tug back and forth on it, making various arguments as to why one or the other of them should have it. (I was here first, you had the last one, etc.)

Eventually, the sisters decide to cut the orange in half, thinking they have developed a creative solution to their small problem. One sister squeezes the juice out of her half into a glass and drinks. The other peels off some rind and uses it in a pie she is making. Oops!

If only each had asked the other why she wanted the orange. Had they done so, each would have had 100% of what she wanted, rather than just 50%.

Had a mediator been present, the sisters likely would have stated their respective positions (I was here first) t but would have been encouraged to say more: to disclose their underlying interest in wanting the orange (to drink the inside or use the outside). It wouldn’t have taken them long to come to a quick, gain/gain solution.

The advantages of mediation are many. It is a quick and economical way to resolve disputes. It can be used before too much harm has been done to the relationship between the parties and can result in outcomes far more creative than courts may impose. The parties have enormous input into the process and the outcome.

The result is “theirs” and they are more likely to abide by an agreement they crafted than a result imposed upon them. Relationships can be repaired through the

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… a skilled mediator can help the parties to identify what is really at the bottom of their dispute and to express how each of them is affected by the events that gave rise to the dispute. process of mediation and this can be of considerable value to businesses that are locked into ongoing relationships with one another.

Mediations are conducted in private and are generally agreed to be without prejudice to the rights of the parties if they fail to reach an agreement. They are usually quite informal and provide an outstanding opportunity to learn what has prevented the parties from reaching agreement.

The ADR Institute of Canada publishes National Mediation Rules that include rules for the conduct of a mediation, a code of conduct for mediators, and a mediation agreement (http://adrcanada.ca/rules/mediation.cfm). The Institute also offers a model dispute resolution clause that can be made part of agreements, so that when a dispute arises, there is already an agreement between the parties as to the process they will use to resolve the dispute.

Arbitration Advantages Arbitrations are like a private court. They are conducted in private and the results can remain private (except in some limited situations such as labour grievances). The parties can choose the arbitrator, or, in commercial disputes, a panel of three arbitrators. The parties can choose someone with subject area expertise, with or without legal experience. If they cannot agree on whom to choose, they can have the arbitrator appointed by one of several organizations or by the court.

Arbitrators have wide powers to direct the process of the arbitration and to subpoena witnesses. They can order specific performance, injunctions and other equitable remedies. Their awards must be in writing and state the reasons on which they are based. Any party may apply to the court for a judgment to enforce an arbitration award.

The Alberta Arbitration Actt sets out broad guidelines for the conduct of arbitrations, but the parties are free to agree to change or ignore many of those provisions. They can agree on what procedures to follow in the process. They can even agree that the arbitrator is to decide the dispute based on something other than law and equity, such as fairness, or some standard that is peculiar to their businesses. The Actt requires the arbitrator to treat the parties equally and fairly.

Section 35 of the Actt provides that the arbitrator may, if the parties consent, use mediation, conciliation or similar techniques during the arbitration to encour-

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Relationships can be repaired through the process of mediation and this can be of considerable value to businesses that are locked into ongoing relationships with one another.

age settlement of the matters in dispute. If the matter does not settle, the arbitrator may resume his/her role as arbitrator without disqualification.

Arbitration is a very powerful dispute resolution mechanism that, in most cases, can generate a result for the parties far more quickly than the traditional court process and at far lower cost. One of the significant procedural advantages of arbitration is that the parties can have access to the arbitrator (for things such as procedural directions and adjournment requests) much more quickly than they could access a judge. They can probably have such matters dealt with by way of a conference call rather than an inperson attendance.

Of course, the parties will have to pay the arbitrator for the time he/she spends on their case. This will involve some pre-hearing conferences, reading material to prepare for the hearing, conducting the hearing, and writing the award. However, the relative informality of the process and the speed with which a result can be obtained will often result in less cost than would court appearances.

The ADR Institute of Canada publishes National Arbitration Rules (http://adrcanada.ca/rules/arbitration.cfm) for the conduct of an arbitration. The parties are free to amend the Rules to suit their circumstances. The model dispute resolution clause mentioned above includes an option that disputes between the parties are first to be mediated, and then, any remaining items of dispute are to be arbitrated.

ADR Initiatives Alberta Justice has many ADR initiatives in place (see the many resources, including an online video at: www.albertacourts.ab.ca/CourtServices/MediationPrograms). The Civil Division of Provincial Court (where the claim limit is $25,000) hears many small business disputes. There is a mediation program in place at no cost to the litigants. The program has a success rate exceeding 65% of claims that are referred into it.

The Court of Queen’s Bench in Edmonton and Lethbridge/Medicine Hat has had a pilot program for mediation for several years. A party can ask for mediation and a private mediation (at the parties’ cost) is arranged. The new Rules of Court (expected to be in force in January 2010) will contain a requirement that

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litigating parties in most cases must engage in some form of ADR before their case can be set down for trial.

The General Insurance OmbudService (“GIO”) offers low-cost mediation services to home, car and business insurance policy-holders and their insurance companies. (www.gio-scad.org) Many business contracts already contain arbitration clauses. Examples include wireless telecoms, cable, and delivery services. The Standard Specifications for Highway Construction in Alberta contain an extensive dispute resolution procedure. The Alberta Condominium Property Actt specifically refers to mediation and arbitration as available dispute mechanisms and provides a mechanism for appointing a mediator or arbitrator when the parties cannot agree. The Farmers’ Advocate Office has partnered with the Alberta Arbitration and Mediation Society to provide rural Albertans with enhanced mediation and arbitration services in a pilot program that began in November 2008. The partnership is known as the FAO Umpire Network.

Resources The ADR Institute of Canada has affiliate member organizations across Canada. The Alberta affiliate is the Alberta Arbitration and Mediation Society. Both have excellent websites that provide a wealth of information about ADR and links to other resources. (See www.adrcanada.ca and www.aams.ab.ca.)

While mediators and arbitrators are largely unregulated, the ADR Institute of Canada has developed the professional designations of Chartered Mediator, Qualified Mediator, and Chartered Arbitrator. Practitioners must meet minimum training and experience criteria to obtain the designations and, as of January 2009, Chartered and Qualified Mediators must meet established continuing education and engagement (“CEE”) requirements to maintain their designations. Chartered Arbitrator CEE requirements are currently under review.

When considering the various dispute resolution options that might work for your business dispute, you are well-advised to explore the information available through ADR Canada and AAMS. Consider, too, what qualifications you are looking for in your mediator or arbitrator. Both organizations’ websites have practitioner directories.

Jim McCartney, LL.B., C. Med., C. Arb., is an arbitrator and mediator in Calgary, Alberta.

Notes 1. National Post, January 29, 2009. www.pbla.ca/ news/article.232785

July/August 2009

Feature Report on Small Business

Selling Your Business © Vicza | Dreamstime.com

Mark Borkowski

What is involved in advising a client selling a small business? Think of it this way: the lawyer is the director and the client is the theatre performer!

When entering the center stage spotlight, the business owner as the star performer must know his or her role, the script, the story, the other major players, and the parts they will play. The goal is to achieve a certain response from a specific audience for the portrayal of the story. And, whether it is rave reviews for the actor or offers to buy the business from the owner, an experienced director is key to making the presentation a success.

Putting metaphors aside, a good legal advisor is directing and orchestrating the behind-the-scenes activity for the successful sale of a company.

The Lawyer’s Role in Assisting a Business Owner in a Sale Before dressing up the company for the centre stage spotlight, it is necessary to examine its best features,

July/August 2009

as well as its blemishes. All will become visible under the due diligence spotlight. As in the classic tale, The Emperor’s New Clothes, it doesn’t take a rocket scientist to see what the cloth is really made of. Buyers don’t like surprises, and neither do lawyers or other members of the professional team involved in the sale process. Problems uncovered late impugn your integrity and threaten the price – and the deal. The more issues brought to the table and worked out in advance, the better the chance of a smooth closing.

The role of the business owner is to be the source of information necessary to accurately assess the firm.

This information will be the foundation of the script that will tell the story to the audience – the marketplace of buyers. Addressing the following issues will help maximize the value of the business, provide transparency to prospective buyers, and minimize the amount of time consumed in the sale process.

• Why is the business on the market? This is important from the buyer’s prospective, and an owner

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• • •

• • • • • • • • • • • •

must have a sincere motivation to facilitate a smooth process.

Are accounting procedures in place and easy to follow?

Are profit and loss and balance sheets well prepared and clean?

Are the facilities and equipment in good working condition? “Curb Appeal” makes an impression.

When someone walks into a business establishment, they’re looking at everything. An orderly and organized facility gives a good feel for how the business is run.

Is intellectual property (if applicable) well documented and up-to-date?

Is there an appropriate lease in place and is it transferable?

Are customer contracts secure and transferable?

Are there employee contracts; are they well documented?

Are operating procedures documented and in use?

Are there outstanding legal or financial issues that may hinder the sale?

How is the business positioned in relation to the competition?

What distinguishes the business from others in the same field?

What services or products are offered that are unique?

What niche is served?

Are there areas for future growth?

What makes the company’s customer service superior?

The Story Once information gathering is complete and data is analyzed, a price range will be determined and a company profile will be formulated. This is the story about the business. It will be the marketing tool that articulates and presents the message about the company to the audience of buyers.

• Trends in accounts receivable and payables. When selling a business, the owner client will want to show that they have good customers who pay on time.

Owners need to be on the ball and contacting slowpaying clients. This shows better credit management, follow-up, and attention to detail. Seasonality of cash flow and concentration of the customer base are also underlying themes of the story.

• Make sure patents, trademarks, and other property rights are properly registered. Review contracts for third-party consents needed in order to facilitate a transfer. An example would be a construction subcontracting firm that has a contract with a homebuilder to provide doors and windows for a number of houses. That contract needs to be reviewed to see if it can be transferred or if it requires the consent of the homebuilder.

• Well-organized and updated collateral materials such as employee handbooks, policy manuals, mission statements, or an online Internet presence add value in the eyes of the purchaser. Other collateral such as brochures, press releases, advertisements, and marketing campaigns such as mail out or email programs add credence to the story.

• A list of furniture, fixtures, and equipment along with applicable service records shows the buyer that the company is well maintained. Remove excluded items prior to the sale, or list items excluded from the deal separately.

The Players The team that a business owner puts together to assist in the structuring of the business sale will play a key role in the transaction. Depending on the size and complexity of the business, the usual team may consist of the firm’s accountant, lawyer, and mergers & acquisitions adviser. In order to ensure a smooth process, all the team members must be experienced in business transfer transactions.

The Successful Performance The Script The script is made up of the following individual pieces that tell the story. They will be pieced together by the prospective buyer so that he or she can substantiate the story and justify the asking price. Being prepared for the questions the buyers will ask will facilitate a smooth process for all concerned.

• Financial statements. An accurate financial statement not only adds to a buyer’s comfort level, it more likely will result in a higher sales price. A potential buyer is typically looking for a predictable cash flow from the business. Three, four, or five years of professionally prepared financial statements and tax returns will show them that.

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Proper rehearsal and having the necessary props in place for presenting a business to the targeted audience is key to attaining the desired outcome. The successful sale of the business in a timely manner is the rewarding finish to a performance well done, and that’s the whole reason for the show!

Mark Borkowski is president of Toronto-based Mercantile Mergers & Acquisitions Corporation, a M&A brokerage firm that specializes in the sale of mid-market companies. mark@mercantilema.com

July/August 2009

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School's In

Dogged Determination Susan Galloway

To the Teachers Activities in this lesson are designed for students taking Law Studies in high schools. The activities are created to teach students about becoming entrepreneurs of small businesses, a venture they could pursue during the summer holidays.

Students will read the story about Kelly and the small business she wants to start during the summer holidays. They will then answer questions pertaining to the various legal requirements of starting a small business. Students will then use the website BizPal http://webproxy.edmonton.ca:20050/external/Bizpal/ default.aspx to create their own businesses in a town

or city in the province or territory of their choice, and learn about the various permits needed to run their businesses.

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To the Students The government has put in place a variety of controls that small businesses must follow before they are legally able to operate. They include things like licensing, name searches, insurance, occupational health and safety law, etc. It is important for each prospective small business owner to be aware of all these requirements before beginning their own business.

Goal: Your goal is to use the web to find the permits needed to run small businesses of various kinds in the provinces or territories of Canada. You will also have to analyze the various ways of organizing a small business to determine the best one for you. Then you can choose a place in Canada in which you’d like to create a small business to find out what permits are needed.

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Procedure Read the following story about Kelly and her adventures as a hot dog vendor in Edmonton, Alberta. Then, answer the follow up questions.

Kelly needed to earn money to buy a new snowboard for the ski trip the school was planning for the upcoming winter. She decided that rather than working for someone else, she wanted to start her own small business as a hot dog vendor for the summer. Because Kelly lived on a busy street in Edmonton, she knew there would be lots of traffic going by. If she put up a really big sign in her front yard and had her barbeque near the sidewalk, people would not only see the sign, they would smell the hot dogs and stop for sure. She would also need some lawn chairs or a blanket on the lawn, so people could sit down while they listened to music and enjoyed their hotdog. Her parents told her there were reguType of Job

Name of licence

Name of licence

Name of licence

Name of licence

Name of licence

lations for small businesses that sell food and she should check out what permits were needed before she got started.

Kelly did her research and found the website BizPal

at http://webproxy.edmonton.ca:20050/external/ Bizpal/default.aspx. She answered a series of questions to find out what permits and licences she needed. She put all the information on a chart so she could easily see exactly what she needed to do to run her hot dog business.

Go to the same website Kelly did and select Edmonton, Alberta as your location and hot dog vendor as your type of business. Then answer the questions online about being a hotdog vendor to find out what business licences you need.

Complete the following chart as you find out the answers.

Name of licence

Name of licence

Name of licence

Name of licence

Hot Dog Vendor

Cost

Renewal period

Inspections

Online or download application

Contact phone number

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Now answer the following questions 1. What would be the total cost of the permits required?

2. What original name would you call your business?

3. Which licences are you able to apply for online?

4. Go to the online application with regard to “home-based business� and scroll down to see the initial costs before you have been approved. What are they and what do they include? Be sure to add these costs to the permits required.

5. Which licences are needed for the municipal government, which for the provincial, and which for the federal government?

6. Do you think the hot dog vendor business would work better as a trade name or sole proprietorship; general partnership, or a limited partnership? Explain your answer in detail.

7. After learning about the kinds of permits and licences you would need to be hot dog vendor, what are the pros and cons of having this type of business as a summer job?

Pros of being a hot dog vendor

Cons of being a hot dog vendor

8. Now that you have learned the process and costs for starting a hot dog vendor business, what things, if any, might you change when filling out the questionnaire at the beginning on Bizpall to eliminate some costs and licences?

July/August 2009

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Permits and licences are needed at all levels of government and differ from town to city, and from province to territory. Go back to the BizPal website http://webproxy.edmonton.ca:20050/external/Bizpal/default.aspx and choose a different town or city in Alberta or another province or territory to start a small business. When choosing a business, pick one that is reasonable for a high school student to start independently. Complete a similar chart to Kelly and then answer the following questions.

1. What business did you investigate and in what town or city, and in which province or territory?

2. What would be the total cost of the permits required?

3. Which licences are needed for the municipal government, which for the provincial government, and which for the federal government?

4. Do you think your business would work better as a trade name or sole proprietorship; general partnership or a limited partnership? Explain your answer in detail.

Other sites to support small businesses www.ontario.ca/summercompany http://www.sbe.gov.on.ca/ontcan/sbe/en/youth_main_en.jsp http://www.janorthalberta.org/about.cfm?itemid=1253&smocid=311 http://www.cybf.ca/entrepreneurs/

Susan Galloway is a retired teacher and a Project Assistant with the Legal Resource Centre in Edmonton, Alberta.

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July/August July/August2009 2009

Special Report: Going Global

Joining Hands to Stop Domestic Violence in Africa

Kevin Smith

Domestic violence is one of the leading public health issues of our time.

Almost 80% of rural women in South Africa report being victims of ongoing violence within the home. In Ethiopia, 78% of Ethiopian women believe that disobeying a husband justifies domestic violence. These statistics paint a horrifying picture of the level to which domestic violence is entrenched in many African countries. South Africa and Ethiopia, however, have recently partnered with a British Columbian non-profit organization to strengthen the two countries’ justice systems in the area of domestic violence.

The South African National Prosecuting Authority (NPA) and the Ethiopian Women Lawyers Association (EWLA), together with the Law Courts Education Society of B.C. (LCES) and the B.C. Ministry of Solicitor General’s Victim Services and Crime Prevention Division, are participating in a project named “Joining Hands Against Domestic Violence”. The project has provided training materials and workshops for hundreds of justice system personnel in the two African countries.

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Uniting Forces In the early 1980s, British Columbia’s justice system lacked an integrated plan amongst police, prosecutors, and victim service workers that dealt with domestic violence. These stakeholders were united in 1985 by a training program created by the Victim Services and Crime Prevention Division. The program defined domestic violence, identified the stakeholders’ roles, and emphasized strong communication between those stakeholders.

Every Monday morning, lines of abused women snake through South African courthouse corridors. Domestic violence peaks on weekends; after another nightmarish two days and nights spent being abused by their husbands, these women have decided to stand up for themselves.

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Traditional leaders are being introduced to how domestic violence can be handled. They are also being trained in how to better respect the rights of women and children in traditional court cases.

Empowering Victims

Tsidi Kambula

Mahdere Paulos

Every Monday morning, lines of abused women snake through South African courthouse corridors.

Domestic violence peaks on weekends; after another nightmarish two days and nights spent being abused by their husbands, these women have decided to stand up for themselves.

Tsidi Kambula, a prosecutor for the South African NPA, knew a program was needed to defend these Monday morning heroines. Despite the fact that, in the past 13 years, her government had passed 50 pieces of legislation to protect women’s rights and promote gender equality, her agency was struggling to manage the towering number of domestic violence cases in the justice system.

Having heard of B.C.’s domestic violence training program, Kambula contacted the LCES with the idea of adapting the program for delivery in South Africa.

With input from the Victim Services and Crime Prevention Division and the NPA, and funding from the Canadian International Development Agency, the program was adapted for the country’s justice system, social context, and laws.

Named the “Integrated Domestic Violence Training Course” and launched in 2000, the program has trained over 1,200 prosecutors, judges, police officers, and social workers. The concept of an integrated training approach with these groups had never before been considered – let alone applied – in South Africa.

Outside of the political sphere, the program is also using restorative justice in communities to raise awareness of domestic violence. Traditional leaders are being introduced to how domestic violence can be handled. They are also being trained in how to

Traditionally, domestic violence was considered a crime only if it resulted in serious injury. Police did not feel compelled to get involved in these family issues, thus allowing the practice of a husband beating his wife to root itself in Ethiopian society.

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better respect the rights of women and children in traditional court cases. In the future, the traditional leaders will conduct workshops of their own, creating a community-level campaign to end domestic violence.

As word of the program’s success spread, it gained recognition from UNICEF as well as other African countries. Ethiopia, which had revised its penal code in 2005 to outlaw domestic violence, showed particular interest in the training program.

Building New Attitudes In one of Ethiopia’s nine safe houses (that serve a population of 37 million women), women fleeing domestic violence gather in a room to share their stories. Some of them were forced into marriage by family elders when they were just 15 years old – three years before the legal age of 18. Unable to rely on their relatives for support, and facing the prospect of becoming either prostitutes or domestic servants, some women have arrived at the house’s doorstep as a last resort. Many have already tried to commit suicide.

Ethiopia first established women’s rights in 1995.

Roughly a decade later, having prohibited domestic violence for the first time, Ethiopian authorities realized that police, prosecutors, and judges required education on domestic violence and the revised penal code. Mahdere Paulos, the EWLA’s executive director, set forth to find the resources necessary to deliver the training.

Under Paulos’ leadership, the EWLA teamed with the LCES to develop a training program that incorporated the best practices from both the Canadian and South African experiences.

The project would face many obstacles including an existing lack of trust in the justice system. In addition to early marriage, prevalent cultural practices included rape, abduction, and female genital mutilation. Traditionally, domestic violence was considered a crime only if it resulted in serious injury. Police did not feel compelled to get involved in these family issues, thus allowing the practice of a husband beating his wife to root itself in Ethiopian society.

“The real challenge lies in transforming entrenched cultural practices and internalized attitudes towards domestic violence,” said Paulos.

The program created a standard definition of domestic violence – a first in Ethiopia. Justice system personnel have been trained in the new laws, taught interview skills, and given the tools to establish support and safety planning for victims.

The training came out of a new partnership that was formed between municipal police in Addis Ababa (Ethiopia’s capital city), the federal Supreme Court,

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the Ministry of Justice, the EWLA, and the LCES. More than 250 police officers, prosecutors, judges, and other justice system professionals were trained in Ethiopia in 2007.

Now that the first Ethiopian training has been completed, the real work begins. The LCES has just been awarded funding over four years from the Canadian International Development Agency to take the work deeper in order to build the capacity of the Ethiopian justice system in cases of domestic violence. The goal of the program is two-fold: • to create a system that features integrated services including counselling and case filing, as well as coordinated communication between the sectors in order to accelerate the time it takes for a case to reach court; • to offer training in crime scene investigation and examination techniques with Ethiopian police and to improve prosecutors’ and judges’ oral trial skills.

Joining Hands, Building Awareness While working in South Africa and Ethiopia, the LCES produced a documentary titled It’s Time: African Women Join Hands Against Domestic Violence. Viewers are taken inside safe houses to hear personal stories from women and girls who have fled abuse. Kambula, Paulos, and other men and women leading the campaign to end domestic violence describe their progress, the obstacles they face, and the successes they have seen.

“Every woman and child has the right to feel safe at all times,” said Evelyn Neaman, LCES’ international projects manager. “Unfortunately, in countries such as South Africa and Ethiopia, that right is not always possible.”

It’s Timee has been nominated as the Best Canadian Short Documentary at the Okanagan International Film Festival as well as the Best Short Documentary at the 2009 Los Angeles Pan African Film & Arts Festival. Contact Neaman (evelyn.neaman@lawcourtsed. ca; 604-660-3259) for more information.

Engaging Canadians In 2008, Kambula and Paulos came to Canada to share their stories. The two were joined by Neaman on a cross-country tour that hosted 22 events in four cities. Each event featured a screening of It’s Timee as well as: • a panel of Canadian and African legal experts discussing domestic violence or women in the legal profession; • a breakfast lead-and-learn seminar with high-level government officials discussing strategies to prevent domestic violence; and • smaller, targeted meetings and round table dia-

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The dialogues across Canada inspired both Africans and Canadians to pursue justice for women and to work to end domestic violence.

logues with agencies to share information about the project and share challenges and innovations in both Canada and Africa.

There was also a series of site visits to shelters, information hotline services, and legal aid clinics serving domestic violence victims.

Kambula and Paulos returned to their home countries having collected many tools and resources from Canadian agencies working in the field of domestic violence including research, policies, and program materials. They were also able to share their knowledge and experience with Canadians working in the area of cross-cultural domestic violence. The dialogues across Canada inspired both Africans and Canadians to pursue justice for women and to work to end domestic violence.

Moving Forward With every conviction, the programs in South Africa and Ethiopia grow stronger. With every empowered and rehabilitated woman, Kambula and Paulos gain knowledge that can help other countries in Africa – and throughout the world – eliminate domestic violence. With every assault that is prevented or stopped, women, communities, and societies thrive under the cohesive strength created by better equality and greater respect for women.

About the Law Courts Education Society Since 1989, the Law Courts Education Society (LCES) has been dedicated to improving access to the legal system through hands-on, targeted, two-way education between the public and those working in the justice system. As a non-profit organization with ongoing public and private sector financial and volunteer support, the LCES is able to offer a unique and comprehensive collection of justice-related educational services and work effectively towards creating a justice system that is accessible to all.

Kevin Smith is the Communication and Event Coordinator with the Law Courts Education Society of B.C. For more information about the Joining Hands Against Domestic Violence Project, please contact Evelyn Neaman, International Projects Manager of the Law Courts Education Society at evelyn.neaman@lawcourtsed.ca or 604.660.3259.

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Special Report: Going Global

Access to Law = Access to Justice Connie L. Mah There are some innovative organizations that are implementing interesting projects around the world to improve access to law. Here are three such organizations.

International Development Research Centre (IDRC) The International Development Research Centre (IDRC) is a Canadian Crown corporation, which was created in 1970. The IDRC has an international Board of Governors, and receives funding from and reports to the Canadian Parliament.

IDRC has an international mandate to help developing countries develop long-term, sustainable solutions to socio-economic problems, thus achieving more equitable and prosperous societies, through the use of science and technology. IDRC focuses on three main goals: 1. upholding democracy, human rights and accountable government; 2. reducing vulnerability to disease and the degradation of natural resources; and 3. increasing equitable economic growth and social services.

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IDRC seeks to empower people in developing countries by generating knowledge through its support of multi-disciplinary, applied research projects. These are identified as important to the community by local researchers and institutions, who then conduct them.

IDRC’S Four Program Areas IDRC supports these research projects by providing funding and expert advice. IDRC promotes research in four broad program areas: Environment and Natural Resource Management; Information and Communication Technologies for Development; Innovation, Policy and Science; and Social and Economic Policy. The area of Social and Economic Policy is broad, and focuses on improving social equity through developing public policies, public accountability, political inclusion, and social justice. Within this program area, IDRC has identified Women’s Rights and Citizenship as one of its four key themes for the period from 2005 to 2010.

IDRC’s Six Regional Offices IDRC has established six regional offices around the world. This ensures local perspectives are included

July/August 2009

in developing IDRC’s programs. These offices are located in Kenya, Senegal, Egypt, India, Singapore, and Uruguay. Each regional office provides support for researchers, and coordinates IDRC programs for the geographical region. For instance, IDRC’s regional office for Southeast and East Asia is located in Singapore, and coordinates IDRC programs for 12 countries, including China, Japan, South Korea, North Korea, and Mongolia.

Women’s Rights and Citizenship (WRC) Program The Singapore/Southeast and East Asia office is involved in the Women’s Rights and Citizenship (WRC) program that was introduced on April 1, 2006.

Because citizenship conveys the ability to claim and exercise rights, it is key for advancing women’s rights in developing countries. Also key is developing an awareness of gender rights, as well as gender discrimination and the need to eliminate it, to ensure women’s equitable access to justice. In developing countries, applied research on women’s rights focuses on their ability to participate in the democratic process, and their economic, sexual, and reproductive rights.

The legal systems of developing countries are the foundation for improving women’s rights. Women’s rights must first be incorporated into the formal laws of the country; then the government institutions that interpret and enforce the laws must promote the just and equitable application of these laws; and thirdly, the legal system (lawyers, judges, and so forth) must support the fair and equitable access to women’s rights provided by the law. All three aspects must work in tandem in order to effectively advance women’s rights in developing countries. For instance, if the laws have been amended to support women’s rights, but the institutions do not enforce the laws, or the legal system does not promote such laws, then women do not effectively have the rights that are set out in the laws.

Consequently, IDRC supports applied research in developing countries to determine the status of the implementation of such commitments to women’s rights within domestic law; to measure the actual accessibility of such equitable rights and benefits by its citizens; and to determine proposed concrete solutions or changes to public policies, institutions or practices to improve women’s access to equitable laws and rights.

WRC research projects focuses on five specific aspects: • women’s citizenship and governance, which focuses on the accountability of governments to guarantee women’s rights, including examining public policies and programs, and determining factors that both promote and hinder women’s rights, including patriarchal power and male bias; • access to justice, which focuses on how women can assert their rights to achieve equitable justice;

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Because citizenship conveys the ability to claim and exercise rights, it is key for advancing women’s rights in developing countries. Also key is developing an awareness of gender rights, as well as gender discrimination and the need to eliminate it, to ensure women’s equitable access to justice.

• sexual and reproductive rights, which focuses on health, safe sex, power in sexual relationships, access to safe and legal abortions, and women’s rights in marriage; • economic rights, which focuses on women’s employment rights because women in these countries are usually poorly paid, unskilled, and in unregulated industries; and • migration rights, including issues of trafficking women for forced labour or sexual exploitation.

Legal Information Institutes (LIIs) Legal Information Institutes (LIIs) are another innovation to improve access to law. Prior to the mid1990s, computerized legal information systems were provided by government or private sector commercial legal publishers. These services generally were expensive, required extensive training to utilize them, and were mostly used by members of legal communities.

Legal Information Institute (LII (Cornell)) Then, with the development and widespread usage of the Internet, coupled with the vision of providing free access to computerized legal information, the first Legal Information Institute (LII(Cornell) was established in 1992 at Cornell University Law School in the United States. It provided free access to databases of U.S. federal law (including the U.S. Code and U.S. Supreme Court decisions).

Australasian Legal Information Institute (AustLII) In 1995, the Australasian Legal Information Institute (AustLII) was established as a joint project of two faculties of law in Australia (located at the University of Technology Sydney and the University of New South Wales). AustLII was developed from research on hypertext and text retrieval, and adopted the “LII” suffix used by LII(Cornell).

By 1999, AustLII developed a comprehensive national database for case law, legislation, and treaties for all nine Australian legal jurisdictions, thereby becoming the first free access legal information system to compete with commercial providers. AustLII began assisting organizations in other countries to establish their own LIIs, including: BAILII (British and Irish Legal Information Institute); PacLII (Pacific Islands Legal Information Institute); HKLII (Hong Kong Legal Information Institute); NZLII (New Zealand

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CanLII is a non-profit organization that provides legal information in a comprehensive national database through a bilingual (English-French) user interface. It is the largest provider of free access to legal information in Canada.

the Government of Ireland, and the Venice Commission provided grants towards SAFLII’s Supreme Court of Appeal Scanning Project. This project will scan, proof-read, and upload decisions of the Supreme Court of Appeal of South Africa from 1910 forward. The first stage of this project involved uploading about 3000 decisions from 1983 to 1998.

Canadian Lawyers Abroad (CLA) Legal Information Institute); and SAFLII (Southern African Legal Information Institute).

Canadian Legal Information Institute (CanLII) The Canadian Legal Information Institute (CanLII) was established in 2000 by the LexUM team at the University of Montreal, in Quebec. CanLII is a nonprofit organization that provides legal information in a comprehensive national database through a bilingual (English-French) user interface. It is the largest provider of free access to legal information in Canada.

From 2003 to 2007, LexUM also assisted other organizations to establish their own LIIs, including: Droit Francophone, Juri Burkina and Juri Niger.

Legal Information Institutes (LIIs) The common goal of LIIs is to provide free online access to legal information through the Internet. LIIs collaborate with other LIIs through the Free Access to Law Movement (FALM). Such collaboration usually involves data-sharing networks or portals and technical networks.

Free Access to Law Movement (FALM) FALM was established in 2002 at a Law via Internet conference in Montreal, Quebec, and represents an affiliation of LIIs. FALM is committed to providing mutual support to organizations already engaged in the provision of free access to legal information. It assists organizations in developing countries in creating their own LIIs by sharing software and technical expertise and by advising on privacy issues arising through the provision of online legal information services.

Southern African Legal Information Institute (SAFLII) The Southern African Legal Information Institute (SAFLII) started in 2006. SAFLII provides free on-line access to the legal information of 16 countries in Southern and Eastern Africa. These include Angola, Botswana, Kenya, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

SAFLII was established with various partners and funders, including AustLII. The Council of Europe,

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Canadian Lawyers Abroad (CLA), established in 2005, is another innovative organization assisting developing countries. CLA was co-founded by Catherine McKenna and Yasmin Shaker. They both hold Master’s degrees in International Relations from the London School of Economics and law degrees from McGill University in Montreal, Quebec.

CLA is involved in pro bono activities in Canada and abroad. Its mandate includes providing opportunities for Canadian lawyers and law students to take their legal skills and experience to developing countries, where they help to establish the rule of law, good governance, and human rights. CLA promotes hands-on, collaborative projects with non-government organizations (NGOs) involved in specific projects promoting one of these three main goals.

Its first pilot project involved Canadian lawyers and articling students from the law firm of Heenan Blaikie LLP, who worked with the Kosovo Law Centre to publish the country’s Supreme Court Reports. By improving the quality, consistency of language and citation, and timely publication of the courts’ written decisions, the project hoped to increase the transparency of the justice system, and public access to it.

CLA also administers an annual Student Summer Internship Program. It provides the opportunity for law students with a demonstrated interest in international human rights, good governance, and the rule of law, to work at NGOs in developing countries on projects related to the three main goals of CLA. These summer internships generally last six weeks to four months, and are funded by the law students themselves or through partnerships with law firms involved in such projects. Generally, students intern at the firm for about two months, followed by an overseas internship of two months.

Conclusion The Canada International Development Research Centre; the Legal Information Institutes associated with the Free Access to Law Movement; and Canadian Lawyers Abroad are all working diligently on initiatives to improve the access to law in developing countries.

Connie L. Mah is a lawyer practicing in Edmonton, Alberta.

July/August 2009

Special Report: Going Global

C Pro Bono Students Canada:

Canadian Law Students are Leading Change Noah Aiken-Klar It was not long ago that the cover of one of Canada’s most widely-read magazines brazenly proclaimed that “lawyers are rats.” The headline referred to a book portraying lawyers as “greedy, unprincipled enablers of the rich.” The story sent shockwaves through the legal profession and prompted many legal associations to issue responses. It also led some lawyers to reflect upon whether they had indeed strayed from the noble principles that had once drawn them to the study and practice of law.

Nothing more clearly refutes the accusation that all lawyers are rats than the vast number of lawyers who have dedicated themselves to pro bono and public interest work. For as long as there have been lawyers, there have been those willing to contribute their time and legal expertise, with little or no financial incentive, to assisting communities and individuals unable

July/August 2009

to pay for legal services, and to serving the public interest. Their contributions have been critical to promoting access to justice for society’s disenfranchised.

However, because these incidences attracted little recognition, and because the lawyers generally engaged in this work on their own, after hours, or under the radar, r they were all too often overlooked by the media and society-at-large.

In 1996, the pro bono tradition began to make its way into Canadian law schools in a new way.

From the Classroom to the Community Pro Bono Students Canada (PBSC) was developed at the University of Toronto Faculty of Law in 1996 as a program for law students to get hands-on, outof-classroom experience serving the public interest and providing legal information to communities in

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For as long as there have been lawyers, there have been those willing to contribute their time and legal expertise, with little or no financial incentive, to assisting communities and individuals unable to pay for legal services, and to serving the public interest. Their contributions have been critical to promoting access to justice for society’s disenfranchised.

need. Today, every Canadian law school has a PBSC program often complementing opportunities available for students through courses, student legal clinics, or other programs. By adapting to each law school’s needs and culture, PBSC has become the only national pro bono service organization in Canada and the only national pro bono law student organization in the world.

Each year, through PBSC programs, 2,000 law students across the country contribute over 100,000 pro bono hours to the work of hundreds of public sector organizations, legal clinics, government agencies, courts and tribunals, and lawyers working pro bono.

PBSC students help individuals and communities that lack access to legal information and services by working with lawyers to research pending legislation and legal issues; draft policies and manuals; conduct public legal education; and much more. Even though law students cannot provide legal advice, nor can they remove the need for other services, they are a valued and much-needed support for the pro bono, clinic, and community lawyers who supervise their work. The experience enriches students’ legal education, and many go on to become pro bono lawyers and leaders in access to justice initiatives.

From Law Students to Community Leaders Since the inception of PBSC, the need for pro bono legal services, as well as legal aid, PLE (public legal education), and self-help initiatives for those lacking access to justice has continued to grow. But there has also been a growing recognition by members of the Canadian legal profession of its role in addressing those needs.

In recent years, numerous high-profile provincial pro bono organizations have sprung up across the country. These include: Pro Bono Law Ontario; Pro Bono Law of British Columbia; Pro Bono Law Alberta; Pro Bono Law Saskatchewan; and Pro Bono Quebec.

Most large national law firms have developed pro bono policies and have begun actively encouraging and promoting pro bono work by their lawyers. Almost all

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legal periodicals now have entire sections – if not entire issues – dedicated to pro bono work and initiatives. In addition, most legal associations regularly hand out awards and recognition for pro bono work.

Quite possibly, this increased awareness has been influenced by the more than 10,000 PBSC graduates who have entered the profession over the past 13 years already educated and experienced in pro bono work and philosophy. As PBSC students, they were integrated into a national public interest law network that enabled them to connect with and participate in projects, events, and pro bono initiatives across the country. As lawyers, they have added their voices to the growing chorus calling for more recognition of and opportunities for pro bono work.

From Canada to Korea The impact of the growing Canadian pro bono movement is being felt across the globe.

In 2008, South Korea began developing a new law school system. Previously, legal training there had been practice-based with few academic requirements and no official curriculum, let alone any courses on public interest or human rights law. Then, in July 2007, South Korea passed The Law School Act to implement a more formal, academic, and professional legal education system. GONG-GAM, a non-profit South Korean Public Interest Lawyers Group, began looking for public interest law program models for law students. In researching this project, it selected PBSC as the Canadian model for public interest law programming in the new South Korean law school system.

In May 2008, Pam Shime, PBSC’s National Director from 2000 to 2007, flew to South Korea to speak to and consult with public interest and human rights lawyers on the Canadian approach to making public interest law a centrepiece of legal education.

Shime reports that, “South Korean public interest lawyers and advocates are engaged in important work on issues including protections for migrants and refugees, lesbian and gay rights, and human trafficking. It is an honour for PBSC to have been selected as a model, as these lawyers take steps to involve law students in their work, and to infuse legal education with core values such as equal access to justice.”

From the Classroom to the Community and Back The story of how Canadian law students are transforming the pro bono culture of the legal profession in Canada and abroad is ongoing. Each year, a new cohort of students enters law school and joins PBSC. As their predecessors graduate and continue

July/August 2009

In 2008, South Korea began developing a new law school system. Previously, legal training there had been practice-based with few academic requirements and no official curriculum, let alone any courses on public interest or human rights law.

to shape the profession, new initiatives and opportunities emerge for both students and lawyers. Each year, as organizations and law schools from Australia to Indonesia contact PBSC to learn from our pro bono experiences, we too are learning from them.

PBSC’s story is also one of partnership. PBSC has grown through exciting partnerships with the law schools, provincial law foundations, and the legal profession. The University of Toronto Faculty of Law houses the PBSC National Office and provides the program with critical guidance. The Law Foundation of Ontario, PBSC’s primary funder, has supported PBSC since 1997 and has helped foster its growth. In 2004 the McCarthy Tétrault Foundation came on board as PBSC’s national firm partner to support the growth of new programs across the country, and McCarthy Tétrault LLP began offering its lawyers as supervisors and mentors to students.

Since 2001, Legal Aid Ontario has funded the creation of law student summer positions at family law courts where students provide support to in-court and advice counsel assisting unrepresented litigants. Each year, hundreds of public sector organizations across Canada host students on pro bono projects, supervising and coordinating their efforts and integrating them into their work.

This network has transformed law school culture, pro bono service, and the lives of those at the margins of society. It has enabled law students and lawyers to promote access to justice in new ways. The law students of PBSC join others in the legal profession and at the law schools who are changing the way that lawyers are perceived by the broader community.

Together, they are making headlines across Canada and around the world.

Noah Aiken-Klar is PBSC’s National Director. For more information about PBSC or how to join the national pro bono network, please contact the PBSC National Office at 416.978.4048 or natl.coordinator@probonostudents.ca, or visit www.probonostudents.ca.

July/August 2009

Columns 36 Not-for-Profit Law Fundraising Cost Ratios Peter Broder

38 Human Rights Law Recent Developments in the Interpretation of Charterr s. 15(1) Linda McKay-Panos

40 Employment Law What is an Employment Contract?

Peter Bowal

42 Online Law Resources for Small Businesses Marilyn Doyle

44 Aboriginal Law B.C.’s “New Relationship” with First Nations John Edmond

46 Follow-up on Famous Canadian Cases Aunt Laura's Promise Peter Bowal and Thomas D. Brierton

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Not-for-Profit Law Peter Broder

Fundraising Cost Ratios In early April, a column appeared in the Vancouver Sun lamenting, yet again, examples of exorbitant profits earned by forprofit fundraising companies contracted by charities to solicit donations on their behalf.

The figures cited are infuriating. For example, one charity reported proceeds of $1.45 million from fundraising with $1.22 million of that going to the fundraisers.

Such accounts doubtless have the effect of dissuading potential donors from giving to charities that strive to manage their fundraising programs carefully, as well as those that – whether deliberately, through neglect, or through incompetence – allow costs to mushroom out of all proportion to the amount collected for charitable work. Often, most upsetting for donors is not the costs themselves, but having been misled about the spending associated with the fundraising activity, or deceived about where the proceeds from the fundraising are going.

Jurisdiction over the fundraising activity of registered charities is shared by the federal and provincial governments. To qualify as a registered charity under the Income Tax Act, an organization must devote all of its resources to charitable work. This means that if its fundraising becomes an end in itself, rather than a means to an end, it risks losing its registration status. As well, the Canadian Constitution explicitly gives the provinces the authority to regulate the operation of charities and like groups.

The federal regulatory body, the Charities

Directorate of the Canada Revenue Agency (CRA), has recently published guidelines setting out acceptable and unacceptable fundraising practice for registered charities.

(Full disclosure: as part of an Interchange with CRA in 2007 and 2008, I worked on an earlier draft of those guidelines.)

The new CRA guidelines divides fundraising cost/revenue into several categories, but does not set out ratios that are always acceptable or always prohibited. Groups falling within a particular category may still be found to be offside or in compliance regardless of their cost ratio, depending on a variety of circumstances beyond their reported figures.

In addition, a number of provincial regulatory bodies, most prominently Alberta’s Charitable Fund-raising Business Licence Office (which administers the province’s Charitable Fund-raising Act), t and Ontario’s Office of the Public Guardian and Trustee (which administers that province’s Charities Accounting Act), t are directly or indirectly empowered to deal with fundraising or other aspects of charities’ operations. Even where provinces have not established a regulatory body for charities, the Attorneys General have parens patriaee jurisdiction to oversee them.

However, scarce enforcement resources and the overlapping jurisdictions tend to lead regulators, whether federal or provincial, to be cautious about asserting their authority and to take on only the most egregious cases.

This leaves many situations, ranging from

To qualify as a registered charity under the Income Tax Act, an organization must devote all of its resources to charitable work. This means that if its fundraising becomes an end in itself, rather than a means to an end, it risks losing its registration status.

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the merely dubious to the highly abusive, unaddressed. The huge number of fundraising activities and transactions of charities mean that regulators are, at best, able to respond to a fraction of the issues brought to their attention.

Compounding other enforcement difficulties is the lack of any definitive research on fundraising costs, or benchmarks for unacceptable (or acceptable) cost ratios in either legislation or case law. Courts have ruled that fundraising activity carried on in support of a charitable purpose is charitable.

They have also held that a charity’s contract with a fundraising company can be voidable as contrary to the public interest if the contract leads to misrepresentation to the public as to the amount of money raised actually going to the charitable purpose.

However, they have not pronounced on when fundraising costs are so high as to constitute a collateral purpose tainting the charity’s exclusively charitable purposes, nor what percentage of fundraising proceeds a for-profit company can take before there is misrepresentation to the public.

As fundraising costs are highly variable and influenced by factors ranging from the size of the organization to the popularity of the cause to the method fundraising used, it is not surprising that a hard and fast standard has not been established.

Given these limitations, perhaps regulation is not the best option here. One recent development suggests an alternative.

CRA has been moving aggressively against a number of donation tax shelter schemes in recent months. These schemes typically involve gifting trust arrangements, leveraged cash donations, or buy-low/donate-high arrangements. They purport to allow the donor to receive a charitable tax credit far exceeding the cash outlay to make the donation. CRA has acted to shut down charities involved with schemes it considers illegal and has systematically re-assessed taxpayers claiming tax credits in connection with the schemes.

After CRA moved against the charity involved in one of these schemes and began re-assessing taxpayers who participated in the arrangement, a class action was launched by the donors against the scheme’s promoters, the charity involved, and the professional advisers who gave a legal opinion on the arrangement. The action claimed breach

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… a charity’s contract with a fundraising company can be voidable as contrary to the public interest if the contract leads to misrepresentation to the public as to the amount of money raised actually going to the charitable purpose.

of contract and negligence on the part of the parties that established and touted the arrangement.

Class action statutes typically allow for actions for negligent misrepresentation. This allows a potential remedy for donors taken in by an arrangement where proceeds from fundraising accrue to a for-profit fundraiser rather than to the ostensible beneficiaries of the donation. Such a self-help remedy would remove the need for donors having to rely on regulators to act on their behalf where they have been duped by a fundraising solicitation, and the charity’s beneficiaries have been deprived of the use of the charitable resources. (Whether such an action should be framed to recoup the diverted assets for the use of the beneficiaries or merely to allow the donors to recover their donations – subject to their claim for a tax credit being adjusted – is an open question).

Far more than current regulatory requirements, the availability of this type of action would compel charities, and those fundraising on their behalf, to be honest and forthright about the fundraising cost ratios. In addition, unlike the usual regulatory action, this approach would allow recovery of the diverted assets from the fundraising companies rather than just imposing an after-the-fact penalty on the charity – which does nothing to redress the loss suffered by the beneficiaries.

Lastly, it would generate a body of case law on what constitutes a reasonable cost/ revenue ratio in fundraising and what constitutes due diligence on the part of a charity or someone fundraising on its behalf in disclosing fundraising costs to potential donors.

Peter Broder is Policy Analyst and General Counsel at The Muttart Foundation in Edmonton, Alberta. The views expressed do not necessarily reflect those of the Foundation.

July/August 2009

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Human Rights Linda McKay-Panos

Recent Developments in the Interpretation of Charter s. 15(1) Canadian Charter of Rights and Freedoms (Charter) r s. 15(1) cases started appearing before the courts, its interpretation has challenged the courts and sometimes divided them. “Discrimination” and “equality” are not defined in the Charter. Thus, when interpreting Charter s. 15(1), we must look to the courts for guidance. Charter s. 15(1) reads: “Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.”

The Supreme Court of Canada (SCC) first ruled on s. 15(1) in the 1989 case of Andrews v. Law Society of British Columbia.

The SCC stated that: “discrimination may be described as a distinction, whether intentional or not but based on grounds relating to personal characteristics of the individual or group, which has the effect of imposing burdens, obligations or disadvantages on such individual or group not imposed upon others, or which withholds or limits access to opportunities, benefits and advan-

tages available to other members of society.

Distinctions based on personal characteristics attributed to an individual solely on the basis of association with a group will rarely escape the charge of discrimination, while those based on an individual’s merits and capacities will rarely be so classed.”

Andrews determined that a finding of an infringement of s. 15(1) required: • inequality, or a distinction based on personal characteristics with respect to treatment and/or impact in the formulation or impact of the law; and • discrimination, evidenced by an effect of prejudice to a disadvantaged individual or group, as determined by the enumerated grounds and/or those nonenumerated grounds analogous to them.

The next significant decision was the 1989 case of R. v. Turpin in which the SCC built on the test in Andrewss and said that in determining whether s. 15(1) is violated it is important to look “not only at the impugned legislation which has created a distinction that violates the right to equality but also to the larger social, political and legal context.” The SCC also confirmed that deciding whether a group is

"… in determining whether the claimant’s s. 15(1) rights have been infringed, the Court must consider whether the personal characteristic in question falls within the grounds enumerated in the section or within an analogous ground, so as to ensure the claim fits within the overall purpose of s. 15; namely, to remedy or prevent discrimination against groups subject to stereotyping, historical disadvantage and political and social prejudice in Canadian society.”

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“analogous” requires an examination of the group’s place in society. One tool for this purpose involves an evaluation of whether the group constitutes a “distinct and insular minority.” Finally, deciding whether a group is protected by s. 15(1) involves a “search for indicia of discrimination, such as stereotyping, historical disadvantage or vulnerability to political or social prejudice.” In Turpin, the fact that an accused person charged with murder could not request a trial by judge alone in Ontario, yet he could do so in Alberta, was found not to violate Charter s. 15(1). While the distinction created by the Criminal Code resulted in a violation of appellants’ rights to equality before the law, such distinction was not discriminatory in its purpose or effect and, therefore, did not violate s. 15(1) of the Charter. r Next, in the 1991 case of R. v. Swain, the SCC summarized the approach to s. 15(1) as developed in Andrews and Turpin, “The court must first determine whether the claimant has shown that one of the four basic equality rights has been denied …

This inquiry will focus largely on whether the law has drawn a distinction (intentionally or otherwise) between the claimant and others, based on personal characteristics. Next, the court must determine whether the denial can be said to result in “discrimination.” This second inquiry will focus largely on whether the differential treatment has the effect of imposing a burden, obligation or disadvantage not imposed upon others or of withholding or limiting access to opportunities, benefits and advantages available to others.

Furthermore, in determining whether the claimant’s s. 15(1) rights have been infringed, the Court must consider whether the personal characteristic in question falls within the grounds enumerated in the section or within an analogous ground, so as to ensure the claim fits within the overall purpose of s. 15; namely, to remedy or prevent discrimination against groups subject to stereotyping, historical disadvantage and political and social prejudice in Canadian society.”

In 1995, a trilogy of SCC cases (Miron v. Trudel, Thibaudeau v. Canada, and Egan v. Canada) indicated that there was a threeway division among members of the SCC

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regarding the approach to Charterr s. 15(1).

For example, in Miron, the majority of the Court commented that the factors set out in Turpin for determining whether a group was analogous to those listed in s. 15(1) need not necessarily be present to make such a finding. The majority noted that analogous grounds should not be restricted to historically disadvantaged groups if the Charterr is to retain future relevance. This three-way division in approaching Charter s. 15(1) created uncertainty about how it would be applied in subsequent cases.

The unanimous ruling of the SCC in the 1999 case of Law v. Canada (Minister of Employment and Immigration) appeared to try to reconcile the earlier split of the Court and to set out a standard for the interpretation of a s. 15(1) claim. Justice Iacobucci wrote: “The approach adopted and regularly applied by the Court to the interpretation of s. 15(1) focuses upon three central issues: a) whether a law imposes differential treatment between the claimant and others, in purpose or effect; b) whether one or more enumerated or analogous grounds of discrimination are the basis for the differential treatment; and c) whether the law in question has a purpose or effect that is discriminatory within the meaning of the equality guarantee.”

The SCC provided an evaluative framework to assist the courts in assessing the merits of s. 15(1) claims. The basic elements underscored a heightened focus on human dignity. The SCC noted that the list of contextual factors that must be raised by a s. 15(1) claimant to show that a law is demeaning to dignity is not closed, but noteworthy contextual considerations include “(1) pre-existing disadvantage, if any, of the claimant group; (2) degree of correspondence between the differential treatment and the claimant group’s reality; (3) whether the law or program has an ameliorative purpose or effect; and (4) the nature of the interest affected.”

While most commentators and courts seemed to be pleased that the SCC provided standardized guidance, there were some criticisms of the Law w approach. In

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The SCC provided an evaluative framework to assist the courts in assessing the merits of s. 15(1) claims. The basic elements underscored a heightened focus on human dignity.

particular, some questioned the overarching requirement that, in order to amount to discrimination, a law must demean a person’s dignity both subjectively (from the perspective of the claimant) and objectively (from the perspective of the reasonable person in similar circumstances to the claimant).

Commentators were also critical of what seemed to be problems with the formal comparator group analysis which focused on treating like people alike.

Subsequently, in the 2008 case of R. v.

Kapp, a case largely about the role off Charter s. 15(2) (the constitutionally entrenched affirmative action provision), the SCC indicated that the leading case on s. 15(1) is Andrews. Its decision in Law was relegated to a supporting one. The SCC indicated that Andrewss “set the template for this Court’s commitment to substantive equality.” The SCC also noted that the three-step test in Law w was essentially the same in substance as the two-part test set out in Andrews.

The SCC also acknowledged the difficulties created in Law w by the “attempt in Law to employ human dignity as a legal test” (emphasis in original). Human dignity, while still an “essential value” underlying section 15(1), is “an abstract and subjective notion” that is “confusing and difficult to apply” and “an additional burden” on equality claimants.Thus, although dignity had a large role in Law, its role after Kapp in s. 15(1) jurisprudence was left unsettled.

In the 71/2 months between the Kapp and the Ermineskin cases (discussed below), all of the Court decisions relied on the twopart test set out in Andrews, and most used the four contextual factors noted in Law w in the second step (see: J. Koshan and J. Watson-Hamilton, “The End of Law: A New Framework for Analyzing Section 15(1) Charter Challenges” ABlawg, online: http:// ablawg.ca).

The SCC, in the 2009 case off Ermineskin

Indian Band and Nation v. Canada, relied on the test of discrimination provided in Andrewss and in Turpin. The Court concluded that there was no discrimination against “Indians” under the Indian Actt in the manner that trust property is held and managed by the Crown.

Ermineskin provides that the “broader context of a distinction” is to be examined when determining whether the distinction creates a disadvantage by perpetuating prejudice or stereotyping. Koshan and Watson-Hamilton criticize this approach in its focus on prejudice or stereotyping, because it fails to recognize the broader range of additional harms that can flow from discrimination, such as “vulnerability, powerlessness, oppression, stigmatization, marginalization, devaluation and disadvantage more broadly.” Additionally, they note that there is no real guidance regarding the first part of the Andrewss test – whether the law creates a distinction based on an enumerated or analogous ground. Koshan and Watson-Hamilton state that this lack of direction, given the criticism of comparator groups in Kapp, is disappointing.

As noted by Koshan and Watson-Hamilton, “the phrase ‘human dignity’ is never mentioned in Ermineskin.” Further, none of the four contextual factors from Law w are used. Thus, they conclude that there is still confusion about what factors must be considered when undertaking the substantive equality analysis required under Charterr s.

15(1).

This brief historical overview illustrates how difficult it is for the courts to provide clear guidance on the interpretation of Charter s. 15(1) and how its legal interpretation is likely to continue to evolve.

Linda McKay-Panos, BEd, LLB, LLM is the Executive Director of the Alberta Civil Liberties Research Centre in Calgary, Alberta.

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es Employe only!

Employment Law Peter Bowal

What is an Employment Contract?

This article describes the sources and terms of employment contracts in Canada where there is no written formal agreement in place for an individual employee. The employment contract finds its content in the same sources as the contract for a cup of coffee.

Looking for Terms of the Employment Contract Oddments of Writing

“Work is one of the most fundamental aspects in a person’s life, providing the individual with a means of financial support and, as importantly, a contributory role in society. A person’s employment is an essential component of his or her sense of identity, self-worth and emotional well-being.”

– Supreme Court of Canada, in Re: Public Service Employee Relations Act (1987) You commit yourself daily to work for your employer but do you know the geography of rights and obligations that constitute your employment?

It is fashionable in the marketing departments of some cell phone or cable companies to boast that there is “no contract” required in purchasing services from them. When they assert this, they presumably are taking advantage of consumer aversion for complex written formalities.

Contracts are perceived to be impenetrable to human understanding and to lock the consumer into a set of terms that favour the retailer. Hence we are attracted to these modern “no contract” contracts. By the way, if you think there really is no contract, try to stop paying that phone bill. The basis for collecting the debt from you will be – you guessed it – contractual!

Now, we sometimes hear workers also claiming that they have no contract with their employer. This, too, is more impression than reality. If employees do not see or sign official, legalistic papers, they mistakenly believe they are not employed under a contract.

Unlike in the United States, where employment is foremost a special legal “relationship” which can with further negotiation rise to the status of a contract, in

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Canada all employees are in a contract. This is true whether or not they sign anything.

In fact, most employees accept the job and sign very little, if any, paper. The contract starts as the agreement they have with their employers about the job. If there was no agreement, they would not be going to work and the employer would not be permitting them access to the property.

A prospective, willing employer and employee can take the time and effort to negotiate a detailed, legal, written employment contract to serve as the road map to govern their relationship. However, this is feasible only for the few senior employees who can afford legal representation and command that kind of attention from the employer. This is akin to trying to exhaustively negotiate a complete written contract for a cup of coffee. It can be done, but probably only the likes of the café’s landlord will carry the clout to hammer out the complex lease. There is still a contract when the customer buys the cup of coffee, but its terms are unwritten, oral, and implied by conduct and by law.

Approximately 30% of Canadian workers are unionized and their employment contracts are Collective Agreements. These documents are a comprehensive code governing both employers and employees. They even contain details for raising and dealing with disputes.

Even in the most informal transactions, there is often some writing that pertains to the agreement. The café likely has posted on its wall a price list for the coffee and issues a small, machine-generated record called a receipt with each purchase.

In employment, there will be similar written fragments flowing between employer and employee. These include the advertisement, job description, application letter and résumé, and usually, an eventual offer letter. That letter may go no further than to specify job title, starting date and salary, hours of work, and to whom you report. You may sign your consent to it and return it. There may be emails or faxes confirming job duties and benefits.

These all combine to supply content to the employment contract.

An employee handbook and Human Resources policy manual in use in the workplace are “incorporated by reference” into the employment contract. These can be very detailed and provide a significant source of employment rights and obligations that a court will recognize.

Oral Representations In the interview and at the offer stage, the employer’s promises and representations, despite being merely oral, form part of the contract. The difficulty is to objectively prove that the employer unmistakably promised “a 15% increase in salary after

There is still a contract when the customer buys the cup of coffee, but its terms are unwritten, oral, and implied by conduct and by law.

July/August 2009

the first year” or “one paid sick day per month.” As with proving all oral promises, if the issue goes to court one can only tell the judge what oral promises were made and relied upon. These are called express terms because they were actually expressed.

Terms Implied by Conduct and Context Employment is dynamic over time and rights and obligations may be implied by conduct and practice between the parties.

If, for example, employees are transferred to other locations, such mobility may become an implied term of the contract. If an employer has helped a foreign worker obtain permission to work in Canada, a term may be implied for the employer to continue to use best efforts to renew such authorization.

Terms are implied by necessity to give business efficacy to the parties’ intentions. Every conceivable item of agreement cannot be expressed orally or in writing.

The courts will say what the parties must have agreed to, even if the parties themselves did not address the issue. Rarely, when discussing salary, for example, will the parties actually stipulate that the salary for local employment will be paid in Canadian dollars. Absent evidence to the contrary, a court will consider the context and respond “Oh, of course, they would have meant local currency.” It would imply the term that salary for work in Canada is to be paid in Canadian dollars.

Terms Implied by Law Some of the statutory protections, such as those in minimum employment standards legislation, are implied by law and form part of every individual employment contract.

The intentions of the parties are irrelevant.

Even if one wanted to, one cannot negotiate or sign away those rights. Most statutes prohibit waiver of them, with language like: “An agreement that this Act or a provision of it does not apply, or that the remedies provided by it are not to be available for an employee is against public policy and void.” These statutory terms are justified by a widely-held perception that workers occupy a generally – and often significantly – weaker position when negotiating with employers. Employment standards, human rights, privacy, and occupational health and safety protection legislation all provide a

July/August 2009

When you walk up to a counter to buy a cup of coffee to go, you likely engage in a very informal interaction. You probably do not use any legal words, do not talk about offer, acceptance, or consideration, do not sign any paper – and yet you have made a contract for that coffee.

floor or minimum basket of rights for all workers to enjoy on the job.

The common law decisions of judges over the years have also settled terms implied by law. Employees’ implied duties include that they: • are qualified as they represent; • will work in mutual co-operation; • will serve in good faith; • will exercise loyalty and fidelity (such as respecting confidentiality and avoiding competition with the employer); • will take care of the employer’s property; • will indemnify the employer for wrongful acts on the job; and • will give reasonable notice of resignation.

Likewise, the common law implies that employers have a duty to provide: • safe working conditions; • fiduciary duties in specified circumstances, • adequate supervision and training; • regular work; • indemnification for reasonable authorized expenses incurred in the scope of employment; • good faith and fair dealing; and • reasonable notice of dismissal in the absence of cause.

The employment contract today is more than a simple agreement to work for money. If the employer and employee do not catalogue their mutual obligations in the employment relationship, the courts have been willing to do so. In the last few decades, Canadian judges have recognized the social (as well as economic) importance of work to the dignity and self-esteem of workers, and other special policy considerations in the employment relationship. Employment has more terms implied by legislatures and judges than any other contract.

Conclusion There were promises made across the desk!

You mustn’t tell me you’ve got people to see – I put thirty-four years into this firm … and now I can’t pay my insurance! You can’t eat the orange and throw the peel away – a man is not a piece of fruit.

– Arthur Miller, Death of a Salesman, Act III, p. 69 (1949) When you walk up to a counter to buy a cup of coffee to go, you likely engage in a very informal interaction. You probably do not use any legal words, do not talk about offer, acceptance, or consideration, do not sign any paper – and yet you have made a contract for that coffee. Terms will be implied by your conduct in that scenario and the law will imply the obligations of the café that you are getting real coffee, and that it is safe and fit to drink.

The same approach applies to employment. The law looks to many sources – written, oral, and implied – to define the terms of the contract where it is not in paper form.

Working is like buying a cup of coffee.

You do not need a lawyer to make the contract. You do not need to sign anything.

There is substance to that contract. And the law has got you covered.

Peter Bowal is a Professor of Law with the Haskayne School of Business at the University of Calgary. Thomas Brierton is an Associate Professor with the Eberhardt School of Business at the University of the Pacific in Stockton, California.

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Online Law Marilyn Doyle

Resources for Small Businesses As evidenced by the feature articles in this issue of LawNow, small businesses have a huge range of information needs from start up to ongoing operations to wrap up. Happily, a plethora of resources is available on the Internet, from articles and research, to specific tools, to consultation and support. Let’s look at eight of these resources. All except one are also available in French by clicking on the relevant menu button near the top of the page.

For a wide range of information on entrepreneurship and independent business, the following two sites are invaluable.

The Business Development Bank of Canada (BDC) is a financial institution wholly owned by the Government of Canada. BDC plays a leadership role in delivering financial and consulting services to Canadian small business with a particular focus on technology and exporting.

The home page presents information in an inviting format beginning with the phrase “I want to…” including such options as Develop my market, Plan and manage, Improve efficiency, Start a business, Sell

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a business, and Innovate. Specific sections focus on Aboriginal entrepreneurs, female entrepreneurs, and young entrepreneurs.

The Tools section provides a business plan template, entrepreneurial self-assessment, e-business diagnostic, ratio calculators, and more. (www.bdc.ca/en/home.htm ) The Canadian Federation of Independent Business (CFIB) has been a big voice for small business for over 35 years with 105,000 members nationwide in every sector. As well as providing a variety of services to members such as online courses and business resources, there is a wealth of information freely available on the site.

The Publications Section includes research reports, legislative publications, a business barometer, and survey results. Articles and news items are accessible directly from the home page. (www.cfib.ca/en/) One key issue for small business is dealing with the range of government documents, licences, and regulations. Two sites are helpful in this regard.

BizPaL is an online service that simplifies the business permit, licence, and other

compliance regulation processes for entrepreneurs, governments, and third party business service providers. This service’s primary goals are to slash document research time and help entrepreneurs start up faster. BizPaL is currently being run as a project by Industry Canada in partnership with several provincial, territorial, and local governments. (www.bizpal.ca/index_e. shtml ) The Canada Business Service Centres (CBSCs) are a gateway to government information for business. The CBSCs provide a wide range of information on government services, programs, and regulations. They answer questions about starting a new business or improving an existing one. Their current featured topic is “Protect your Inventions” which provides information on intellectual property. (www. canadabusiness.ca/gol/cbec/site.nsf/en/ index.html )

Naturally, a major concern for businesses is taxes. The Canada Revenue Agency provides a section of their site specific to small business in which it asks: “Are you starting a new small business in Canada? Are you operating one already? Then this section of our website is for you. It will introduce you to the Canada Revenue Agency (CRA) programs you need to know about, and give an overview of your obligations and entitlements under the laws that we administer. This section will also explain the different kinds of business structures, GST/ HST, excise taxes and excise duties and products export charge, payroll deductions, income tax reporting and payment, how

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One key issue for small business is dealing with the range of government documents, licences, and regulations.

Two sites are helpful in this regard.

to prepare for and handle an audit, objections and appeals and electronic services.” (www. cra-arc.gc.ca/tx/bsnss/sm/menu-eng.html ) In the current environment, privacy law has become a relevant topic for small business. Two useful resources are available. First, the Government of Canada has prepared the “PIPEDA Information Kit for Businesses”.

It begins: “Since January 1, 2004, businesses have been subject to the Personal Information Protection and Electronic Documents Act (PIPEDA). The Office of the Privacy Commissioner of Canada offers the following useful information to help businesses learn how they can comply with the Act.” (www. privcom.gc.ca/ekit/ekit_e.asp ) Secondly, the Canadian Institute of Chartered Accountants has prepared a 15-page downloadable booklet titled “20 Questions a Small Business Should Ask about Privacy” available at www.cica.ca/ download.cfm?ci_id=39462&la_id=1&re_id=0

(English only).

Increasingly, businesses both large and small are interested in their place within the social fabric. Since 1992, Business for Social Responsibility (BSR) has helped companies of all sizes and sectors to achieve success in ways that demonstrate respect for ethical values, people, communities, and the environment. (www.bsr.org/index.cfm) An American website, Entrepreneurship.org, enthusiastically announces that entrepreneurs will once again lead the economic recovery.

This may be true in Canada as well. In part, their success will be supported by the vast amount of assistance and information available online!

Marilyn Doyle is a library technician with the Legal Resource Centre in Edmonton, Alberta.

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Aboriginal Law John Edmond

B.C.’s “New Relationship” with First Nations The Government of British Columbia is promising to put some teeth into its 2005 pledge of a New Relationship with B.C.’s First Nations. How they will bite remains to be seen.

In its 2004 Haida Nation and Taku River Tlingitt decisions, the Supreme Court of Canada told governments the honour of the Crown requires direct First Nation consultation before granting exploration or development authority where Aboriginal title is asserted. Assertion suffices; proof is not required (see LawNow 32:2, November/December 2007). Otherwise, the claim’s resources could be eroded before “the distant goal of proof is finally reached.”

In light of these decisions, Premier Campbell saw the futility of continuing to deny Aboriginal title. He announced a new vision to reflect legal reality. In 2005, the province and First Nations Leadership Council entered into “a New Relationship based on respect, recognition and accommodation of aboriginal rights and title; respect for each others respective laws and responsibilities; and for the reconciliation of Aboriginal and Crown titles and jurisdictions.” A legislative package was to be enacted, to include, “regulations, template shared decision-making and revenue and

benefit sharing agreements and the issuance of a Proclamation.”

There are seven “Recognition Principles.” Two are central. Of practical effect to First Nations is shared authority over use of lands and resources, and the sharing of revenue. More perplexing is: “That Aboriginal rights and title exist in British Columbia throughout the territory of each Indigenous Nation that is the proper title and rights holder. The Crown recognizes and affirms this without requirement of proof or strength of claim.” Undeniably, where there is a proper holder of Aboriginal title or rights, those rights or that title exist.

But how do we know who is the “proper holder” without any proof ? Or, if recognition is to be truly “without requirement of proof,” will self-declaration suffice? What about conflicting claims? Since determining the geographic extent of Aboriginal title remains a subject of debate, what does “throughout the territory” mean? Is “Indigenous” intended to somehow require a closer anchor of the group to the territory than would “Aboriginal,” the accepted legal term in Canada since 1982?

Another principle recognizes that Nations, peoples, and their laws, structures, territories and rights “pre-existed and continue to exist today.” Other princi-

The February 2009 Speech from the Throne revived the “New Relationship”. A Recognition and Reconciliation Act will recognize “constitutionally established rights and title,” and provide for shared decision-making and revenues.

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ples are less contentious. Existing private interests are not to be affected. Relevant constitutional and common law, including remedies, are unaffected; no new constitutional rights are created.

An Indigenous Nation Commission will be established to identify political structures and mandates. B.C.’s Constitution Actt is to be amended to provide for a Council of Indigenous Nations, consisting of leaders of Nations, with a mandate that is unspecified so far. A Proclamation, “eloquent and poetic,” will speak to reconciliation.

In 2008, an Indigenous Nations Recognition Actt was to be the centrepiece, but things fell apart. The bill was withdrawn; First Nations leaders complained of lack of progress; there were blockades. The B.C. Treaty Process continued glacially. With about a billion dollars spent in 35 years at 45 negotiating tables, only three agreements are final and four more are in final negotiation.

The February 2009 Speech from the Throne revived the “New Relationship”.

A Recognition and Reconciliation Actt will recognize “constitutionally established rights and title,” and provide for shared decisionmaking and revenues. It will create “process certainty for third parties and Indigenous Nations” for economic development. It will enable establishment of governmentto-government political structures. As to the dysfunctional treaty process, despite a promised two-track approach, it risks collapse in the face of the New Relationship.

As a good-will gesture, given preliminary endorsement of the plan by the Union of B.C. Indian Chiefs, the province last March dropped its opposition to a fishing claim of the Nuu-chah-nulth being heard in the B.C. Supreme Court.

July/August 2009

ince would admit by statute the existence of Aboriginal title over possibly almost all of British Columbia has raised alarm in certain quarters. The degree to which resource-based industries will be affected remains unclear until drafting is done. Yet these are the same industries that have been hamstrung for decades by uncertainty.

Business is pragmatic enough to understand they cannot have it both ways; if clarity, even at some cost, is the result, it will be welcomed. In general, the field will be level among competitors, though First Nation businesses may well be advantaged.

It is not obvious how the consultation and accommodation obligation can be met more efficiently. However, if a climate of reconciliation reduces delay in obtaining exploration and development authorities, that, again, will be a welcome result for business and employment, especially now.

Others, though, will see this as moving B.C.’s First Nations too far toward separateness on the sovereignty-integration spectrum.

A constitutional question: The Act will be a law in relation to “Indians, and Lands reserved for the Indians,” s. 91(24), Constitution Act, 1867, 7 which is an area of exclusive federal jurisdiction. Is it vulnerable, as a provincial statute, to attack by an affected objector, Aboriginal or non-? As an ameliorative rather than a coercive statute, probably not, but the opening exists.

The challenges, both political and legal, are enormous. This is written in advance of the May 12 election; by publication we will know whether the New Relationship will be pursued by a re-elected Premier Campbell, or whether a New Democratic government will take a different approach. If the former, it is encouraging that implementation is led by the capable and personable Geoffrey Plant, Q.C., Attorney General in the first Campbell government, now with Heenan Blaikie LLP. As the Honourable Steven Point, the Stó:lo Lieutenant Governor, said in the Throne Speech, “If we get it right, it will be a significant provincial accomplishment for our times.” That is an understatement introduced by a big “if.”

John Edmond is an Ottawa lawyer with an interest in public and constitutional law.

July/August 2009

Not surprisingly, the notion that the province would admit by statute the existence of Aboriginal title over possibly almost all of British Columbia has raised alarm in certain quarters.

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Follow-Up on Famous Canadian Cases Peter Bowal and Thomas D. Brierton

Aunt Laura’s Promise This new “whatever happened to . . . ?” feature profiles a famous Canadian case from the past that holds considerable public and human interest and explains what became of the parties and why it matters today.

Generous Aunt and Helpful Nephew Most contracts do nott have to be in writing. One of the few contracts that must be in writing to be enforced in court is the sale of land. Yet, there is a chance that a sale of land that is unwritten can still be enforced if the parties’ actions clearly and unambiguously point to the existence of the sale. The leading Canadian case on this equitable principle called part performance is Deglman v.

Guaranty Trust Co. of Canada and Constantineau, [1954] S.C.R. 725.

This story is about a generous aunt, Laura Constantineau Brunet, who orally promised one of her Ottawa houses to her 20-yearold nephew George Constantineau in return for him agreeing to do some errands for her. George readily agreed to that bargain.

So, while attending a technical school for 6 months in 1934-35, he lived with Aunt Laura at 550 Besserer Street in Ottawa, who owned both that house and the adjoining 548. They agreed that if George was good to her and if he did some chores for her, she would leave him the land with house next door, at 548.

What chores you ask? All we know is that George took Aunt Laura on trips to Montreal and on pleasure drives. He did odd jobs around the two houses and minor services for her personal needs. Most likely these were not burdensome, nor numerous, tasks.

We do not know the living arrangements in greater detail, whether he was paying market rent or enjoying a sweet deal on room and board. Many nephews do errands for their aunts without getting a house in return.

After living with her and helping her out for the six months, he moved away. She died about 18 years later and, because she did not write her promise down and had made no will, George (now a police officer) reemerged to sue for his house. This did not please his other family members.

Part Performance Applied to this Case The part performance doctrine permits enforcement of the promise if there was strong evidence in the way of actions that Aunt Laura and George had indeed made this deal. In most of the previous cases, someone such as a caregiver or hired hand, worked decades for little salary on the strength of a promise to receive the land on which she or he lived when the owner died.

For George to win, he would have to show that doing those errands clearly referred to the sale of the house next door. But young

We were aware that some homes, even in Ottawa, sold for $3000 in 1954. The question we had was whether the quantum meruit remedy actually conferred the house on George, even as the Court maintained that he was not entitled to the specific house. We set about to see what these properties were worth today and whether

nephews do errands for aunts who they are residing with for six months for several reasons. The errands could be payment for room and board while he was at school. George might be a kind nephew merely helping out his aunt. An objective bystander, knowing nothing of the promises, would not likely conclude that the only explanation for George helping Aunt Laura was that George was getting the other house. His errands were not clearly, nor of their own nature, referable to any dealing with 548 Besserer Street.

However, George did not leave the courthouse empty-handed. Although he could not plainly demonstrate he had a deal for the house, the Supreme Court of Canada thought he should be paid for the errands he performed at the aunt’s request, an equitable remedy known as quantum meruit. The Supreme Court said Aunt Laura would have been unjustly enriched

by George if she did not pay something for those errands. She would have had to pay for his services if she hired anyone else to perform them. Supreme Court fixed these few errands as worth an extraordinarily high $500 per month (a total of $3,000) in 1954. Aunt Laura’s estate was also ordered to pay all of George’s legal bills.

We were aware that some homes, even in Ottawa, sold for $3000 in 1954. The question we had was whether the quantum meruitt remedy actually conferred the house on George, even as the Court maintained that he was not entitled to the specific house. We set about to see what these properties were worth today and whether George really did, in effect, “get the house”.

George really did, in effect, "get the house".

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July/August 2009

A Photo Tour Down Besserer Street

What We Learn From This Case

Besserer Street is close to downtown in Ottawa. This residential street is in a quiet, leafy, and affluent neighbourhood. A lot and house here today would be very attractive, and expensive!

This is 548 Besserer Street in Ottawa, where George lived comfortably with Aunt Laura for 6 months in 1934-35 while he was attending a technical school at the age of 20. It was during this time, and from this house, that he performed several errands for her on the strength of her promise that she would give him the house next door.

It is likely that 548 Besserer Street was the site of a large expensive traditional brick house that was worth at least the $3000 George was awarded by the Supreme Court of Canada. So, George fared well in his case, coming close to getting the monetary value for “his house”. Even when he lost in the Supreme Court, he won big!

From this famous case we learn to put promises of land in writing, whether in a contract or a will. The equitable doctrine of part performance bears a very high standard of evidentiary proof for good reason.

A promise will not be enforced unless the actions attending it clearly refer to the existence of the oral contract for sale of the land.

We also see that the courts sometimes are willing to use estate assets to benefit individuals who make a sympathetic claim, including tapping the estate to pay for the legal costs of mounting such a claim. One is advised to make several alternative claims when claiming against an estate. Loss on one ground does not mean that you cannot win almost as much on another ground.

Peter Bowal is a Professor of Law with the Haskayne School of Business at the University of Calgary in Calgary, Alberta. Thomas Brierton is an Associate Professor with the Eberhardt School of Business at the University of the Pacific in Stockton, California.

This is the promised land. As one can see, the promised house at 548 Besserer Street, which was behind the hedge, has been demolished since the litigation occurred.

A locked gate now marks the entrance to 548 Now a picnic table remains as silent witness to the

Besserer Street, a fitting symbol of this lawsuit. We

family battle over this property that started with

do not know what kind of house stood on this land

errands 75 years ago and competing claims to it 18

in 1954 because it has been demolished, much like

years later, after Aunt Laura’s death. The dispute

the family relationship. However, if that house was

remains the leading case on when conduct

anything like its neighbours, it would have been

between the parties alone can enforce a land sale

grand. The land alone, now awaiting redevelop-

when there is no written record.

ment, is very valuable.

July/August 2009

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