Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to drafting, reviewing, interpreting or resolving disputes concerning partnership and limited partnership agreements, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have Toronto, Ottawa, Hamilton, Mississauga, Brampton, and other Ontario business lawyers registered on the website who can answer your questions or help you with your partnership and limited partnership agreements. I should know – I’m one of them and you can contact me directly.

I thought I would blog about certain nuances when it comes to limited partnerships formed by extra-provincial persons.  These are often referred to as extra-provincial limited partnerships, but I don’t think this is always the case (as discussed below).  But before we get into this discussion, lets start off with the basics, shall we?

What is an Extra-Provincial Limited Partnership?
An Extra-Provincial Limited Partnership is a few things.  First, it is a general partnership that is already is in existence.  A general partnership is the relationship that exists between two or more parties doing business in common with a view to making profit.  So, just to recap, if two individuals living in Mexico or the U.S. wanted to form an Ontario limited partnership, they would first have to have a general partnership between themselves.  Remember: an Ontario limited partnership is simply a designation granted by the Ontario statute.  Now, after being organized as a general partnership, it becomes a limited partnership – just not in Ontario.  A general partnership in Ontario becomes a limited partnership by filing and being issued a Form 3 Declaration from the Ontario government.  So the idea is that Ontario is willing to recognize limited partnerships from other jurisdictions.  That recognition is done when the Limited Partnership files a Declaration Form 3.

Now it’s important to note that I’ve generally come across two situations that involve limited partnerships formed by foreign entities: (1) a limited partnership organized outside of Ontario wishes to do business in Ontario and (2) extra-provincial persons wish to create and use an Ontario limited partnership as a legal structure but do not wish to do business in Ontario.  For the purposes of this blog, I’ll be discussing the second scenario.

What’s so special about the second scenario?  Well, it’s interesting because it is not the case that a limited partnership is formed outside of Ontario and which simply needs to register as an extra-provincial limited partnership.  The reality is that the limited partnership is being formed in ONTARIO under the Limited Partnerships Act, but it is done so by persons who are not resident or doing business in Ontario.  This can get a big confusing: it’s not an extra-provincial limited partnership, it’s just a plain old regular Ontario limited partnership.  The only difference is who is forming it.  So, just to recap, I’m going to be talking about how foreign persons (i.e. an extra-provincial corporation, such as a U.S. or Mexican company) can form an Ontario limited partnership.

Extra-Provincial License for the Corporation
OK, so here’s the situation.  A corporation is set up to be the general partner.  Lets assume, for simplicity’s sake, that this corporation is not an Ontario or even Canadian corporation (if it is, then there would need to be compliance with Ontario or Canadian corporate, tax, and securities laws with respect to that corporation).  For their part, limited partners are ready to partner up with the general partner.  How does it all fit together such that they form an “Ontario Limited Partnership”?

Well, the Ontario government will only allow an extra-provincial corporation to be a general partner if it has obtained a license under the Extra-Provincial Corporations Act.   Even if it’s not doing business in Ontario, the government here wants to know who this extra-provincial corporation is.   So they’ll want to see (among other things) information about the corporate name, head office, jurisdiction which it is created and subject to, its proposed business in Ontario, etc. They will also need to see how is the Agent for Service in Ontario.  The idea is that someone over 18 years old who is resident in Ontario or a corporation with a head office in Ontario must act as the Agent for Service of the extra-provincial corporation for the purpose of receiving service of process, notices, or other proceedings (so that service on the Agent is deemed to be service on the extra provincial corporation).  In certain situations, the Ontario government will also want an ORIGINAL Certificate of Status issued under the seal of the incorporating jurisdiction, signed by the proper person, and showing:

1. The name of the corporation;
2. The date of incorporation;
3. The jurisdiction to which the corporation is subject; and
4. That the corporation is valid and existing.

Some jurisdictions (e.g. Netherlands) do not provide these kinds of certificates, but the Ontario government still allow corporations from these jurisdictions to be registered.  Finally, the Ontario government will want to see an original NUANS name search report to make sure that there is no conflicting or confusingly similar name of the corporation which is currently in existence.  It generally takes about 3 weeks for the paperwork to be processed once the Ontario government has received it.   There are also government fees (i.e. $330) which must be paid to obtain this extra-provincial corporate license.

Registering the Limited Partnership
Now that you’ve got your extra-provincial corporate license in hand for the general partner, it’s time to register the Limited Partnership.  Now, as I said above, in the situation I’m describing, the limited partnership has not been formed elsewhere; there is no other organizing statute; so there is no extra-provincial limited partnership.  All that’s happening is the formation of a plain and simply limited partnership in Ontario by a general partner who is not a resident in Ontario (it’s a corporation formed outside of Ontario but with a license to conduct business here).  And, to simplify matters, I’m also assuming that the limited partnership is not doing business in Ontario.  So you fill out the Declaration Form 3 and pay the $220 government filing fee.  Once registered, you will need to file a renewal every 5 years.  Note: the Ontario government will not send notices out, so you better just keep your eye on the date when the limited partnership must be renewed!

Now, I’ve personally gotten into some debates with government staff as to how to go about filling out this declaration for the situation I’ve described.  I’ve spoken with managers in the government office because they seem to believe that the form should be filled out in a certain way.  I would strongly urge you to contact me to deal directly with government staff to prevent delays with respect to registering the LP.  They may not understand the intricacies of the Limited Partnerships Act and may simply demand documentation which is not needed.  It’s quite easy to make mistakes, given that the laws concerning limited partnerships are not always clear.

Carrying on the business of the partnership
Now that the limited partnership has been established, business can be conducted.  As I’ve previously blogged about, in Ontario, the limited partnership is not a legal entity capable of holding or dealing with limited partnership property.  Rather, it is the general partnership, which has been entrusted with managing the affairs of the limited partnership, which does so on its behalf.

Taxes!
So finally, we come to the issue of taxes.  In Canada, a Ontario limited partnership is not a separate legal entity (unlike a corporation) or a”person”.  I have previously blogged about this here.  As such, they are not considered to be taxpayers (i.e. who are, indeed, “persons”) under the Canada Income Tax Act.  Rather, partnership income, losses, assets, and liabilities are all attributable to the partners as per the limited partnership agreement. As per the Canada Income Tax Act, partnerships do not file separate tax returns. They file annual “information returns” setting out their income and details of the partners who are entitled to that income. It is the partners who are required to pay income tax. The limited partnership is simply a flow-through entity.

So to recap: the net income of the partners (for income tax purposes) of a limited partnership is determined by figuring out the net income of the limited partnership.  To figure out the net income of the limited partnership, the Act says that you look at it as if it were a separate legal person: s. 96(1)(a). So you include income and deduct allowable expenses and other credits. Then, the limited partnership’s income will be attributed to the partners (usually as per the limited partnership agreement). Each partner must report their income or losses from the partnership and pay taxes accordingly: s. 96(1)(f).

Now, if the partners (e.g. extra provincial general partner and the limited partners) of the limited partnership are resident of some country other than Canada, the issue comes up as to whether any tax is owing in Canada.  Generally, under the Income Tax Act, RESIDENTS of Canada at any time in the year are required to pay tax on their worldwide income: section 2(1).  Now, if an individual is a non-resident, then they may still have to pay Canadian income tax if they received certain kinds of income from Canadian sources – such as employment income, business income, or income derived from the sale of taxable Canadian property.  Now this stuff is somewhat complicated and long-winded, so I think I’ll dedicate another blog to the topic of taxation of partners of a limited partnership if they are resident or non-resident in Canada.

written by admin \\ tags: Civil Litigation, legal person, legal situations, limited partners, limited partnership agreement, limited partnership agreements, limited partnerships, ontario business, ontario limited, partner status, partnerships act, professional assistance, separate legal entity, tax purposes, taxation of limited partnerships ontario

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.   If you need legal advice because you are or believe you are a victim of real estate fraud, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to review your situation and advise accordingly.

As a homeowner, the thought of being a victim of real estate fraud is scary. While uncommon, identity fraud exists and should be guarded against. A fraudster, for example, can impersonate the registered owner of real property and transfer the property to him, herself or a third party. Moreover, a fraudster could acquire a mortgage fraudulently through false information or identification and then run away with the money. This could happen several times with the same property before the fraud is discovered.  If you are a victim of real estate fraud, you should consult with a lawyer immediately to discuss your legal options – some of which are discussed below.

Title Insurance
First, you might be able to make a claim to your title insurance company under your policy.  Have a lawyer review your policy to determine whether your claim would be eligible for coverage.  Claims should be in writing and include your policy number, contact information, and all relevant documents related to your claim. Claims should be submitted as soon as reasonably possible. If your claim is covered, then the title insurance company may (depending on the policy):

• pay your actual loss and out-of-pocket expenses;
• pay the amount required under the policy;
• prosecute or defend a legal proceeding related to the claim (and pay for doing so);
• negotiate a settlement of any claim; and
• if applicable, pay for rent until you can live on the property or the claim is settled.

It is important to note that, once your title insurance company assumes the claim, your rights are transferred and you will generally have no recourse against it for failing to pursue your rights or if amounts are not recovered.

Civil Action
Second, if coverage under your title insurance is not available, you may still be able to sue the fraudsters in civil court for, where applicable, deceit, conspiracy, and unjust enrichment among other things. To establish the tort of deceit, there must be proof of fraud as demonstrated by a false representation made knowingly, without belief in its truth, or recklessly and carelessly as to whether it is true or false.  The motive of the fraudster is immaterial.  If two or more fraudsters are involved, then the tort of conspiracy by unlawful means may be available.  Here, there must be an agreement or combination between two or more persons, a predominant intention to injure you (or unlawful conduct which the fraudsters knew would likely result in injury to you), and actual injury or damages suffered by you.  Finally, a claim for unjust enrichment may be available.  An unjust enrichment exists where there has been an enrichment or conferral of a benefit to the fraudsters, coupled with a corresponding deprivation to you, and no juristic reason for that enrichment.  If a court finds that wrongs have been committed it may, among other things, award damages and legal costs and rectify title to the rightful owner.

Criminal Action
Third, you may consider contacting the police to have them lay charges against the fraudsters and prosecute them in criminal court.  Where applicable, the police may charge the fraudsters with fraud, criminal theft, forgery, uttering forged documents, and possession of property obtained by crime.  These are all very serious charges, all of which carry maximum penalties of up to 10 years imprisonment (with the exception of fraud, which carries a prison term of up to 14 years in certain cases).

Legislative Offences
Fourth, real estate fraud offences committed under the Land Titles Act, R.S.O. 1990, c. L.5 or the Registry Act, R.S.O. 1990, c. R.20 carry fines of up to $50,000 for individuals ($250,000 for corporations) or imprisonment of up to 2 years, or both.  A court imposing such penalties may also order the fraudster to pay compensation or make restitution.

Land Titles Assurance Fund
Finally, the Ontario Land Titles Assurance Fund (“LTAF”) is a government fund designed to compensate people for certain financial losses due to real estate fraud. There are currently two procedural tracks that apply to claims made to the LTAF: (1) the traditional process for claims arising before October 19, 2006 and (2) a new earlier payment process for claims arising on or after October 19, 2006.  October 19, 2006 is the date that new amendments were introduced to the Land Titles Act which created the two-track system.

In cases of fraud that occurred before October 19, 2006, claimants must follow the traditional process.  In these situations, the LTAF can only be turned to as a fund of last resort. The LTAF can cover clear financial losses and reasonable legal fees where a judgment has already been made and/or rectification has been ordered. To be eligible to apply to the LTAF, you must commence your claim within 6 years of the date of the fraud. There are a number of rules concerning eligibility, such as the requirement that you must have tried other avenues (e.g. criminal, civil, title insurance, etc.) to rectify the fraud before applying to the LTAF. You will not be entitled to recover out of the LTAF if (among other things) your negligence caused or contributed to the loss or if you knowingly participated or colluded in the fraud. After a claim is made, it will be assigned to a hearings officer for investigation. You may be asked for additional info or documentation to help clarify the claim. If compensation is not paid out directly, hearings may be held by the Director of Titles to determine if you have met the requirements for compensation and how much you will be paid. You will be notified of the Tribunal’s decision in writing. That decision can be appealed to the Superior Court of Justice within 30 days after the date of mailing of the Tribunal’s decision; in the event of no appeal, no further action will be taken by the Tribunal pending the outcome of the court process.

For frauds that occurred on or after October 19, 2006, the new earlier payment process is available. This process is available to homeowners and individuals who are purchasers, in good faith and for valuable consideration of land used for residential purposes. Importantly, this new process makes the LTAF a fund of first resort for eligible fraud victims where the loss is not covered under a policy of title insurance. This means that applicants no longer need to pursue their loss through other means (e.g. civil, criminal, etc.) prior to being entitled to compensation from the LTAF. Straightforward cases can be resolved (and title rectified) within 90 days of being reported where there is no court action and all parties are cooperating.

Remember: if you believe you are a victim of real estate fraud, contact a lawyer immediately to discuss your options.

written by admin \\ tags: Civil Litigation, criminal prosecution, fraud under land registration legislation, ltaf, mortgage fraud, ontario land titlkes assurance fund, ontario lawyers, real estate fraud, title insurance coverage

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.  If you need legal advice with respect to drafting, reviewing, interpreting or resolving disputes concerning partnership and limited partnership agreements, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Mississauga, Brampton, and other Ontario business lawyers registered on the website who can answer your questions or help you with your partnership and limited partnership agreements.  I should know – I’m one of them and you can contact me directly.

So following up on my previous blogs about limited partnerships (e.g. what they’re all about and how a limited partner can lose their limited partner status), I thought I would dedicate this blog to address the following question: is a limited partnership a separate legal entity from its partners?

The answer is “no”.

A limited partnership is a type of partnership governed by the Ontario Limited Partnerships Act, the Ontario Partnerships Act, and the limited partnership agreement that exists between the general and limited partners (if any).  There is nothing that confers on a limited partner the status of being a separate legal person.

With these things being said, there are a number of legal situations where a limited partnership appears to be a separate legal entity.  For example, a limited partnership:

• can sue and be sued;
• can file its own income taxes;
• can be petitioned into bankruptcy; and
• has its own property (for the purposes of dissolution and redistribution);

But don’t get confused: these instances are mere conveniences granted by statutes to a limited partnership to recognize it temporarily for various purposes (e.g. civil litigation, tax, bankruptcy, etc.).  Always remember that a limited partnership is simply a special kind of partnership that is not a separate entity from its partners.  Think of it like a marriage between persons…

written by admin \\ tags: business lawyers, Civil Litigation, legal person, legal situations, limited partners, limited partnership agreement, limited partnership agreements, limited partnerships, ontario business, ontario limited, partner status, partnerships act, professional assistance, separate legal entity, tax purposes

There are many avenues for average Torontonians to find not only a lawyer, but the right lawyer for their particular case.  Unfortunately, most of these avenues are inconvenient and sometimes very costly (e.g. an initial meeting with a lawyer could run you a few hundred bucks!).

More often than not, people find a lawyer through word of mouth referrals from family, friends, colleagues, or other professionals they do know (e.g. bankers, accountants, consultants, real estate agents, insurance agents, paralegals, other lawyers they know, etc.).  This, in fact, is how most lawyers find their clients.

Alternatively, people may turn to the Yellow Pages and simply pick an advertisement and make a phone call.  I’ve been told that people tend to pick the biggest advertisement because they somehow believe that the bigger the ad, the more successful the lawyer or law firm.

They may even turn to the Law Society of Upper Canada’s Lawyer Referral Service, which charges users $6 for a 30-minute conversation with one lawyer.

The point here is that finding the right lawyer for you is an important undertaking.  You don’t want to have the lawyer who drafted your will or acted on your house deal to represent you in a criminal case: they may not be up-to-date on court room procedure or have experience cross-examining adverse parties.

Torontonians generally only need a lawyer for a limited time and have a limited budget for such engagements. Yet it is hard for these people to distinguish lawyers and law firms from each other, especially given that many small and medium law firms have a general practice. It may also be intimidating for them to approach lawyers with their legal issues, given that doing so may cost money (e.g. $500 for the initial hour visit) and ultimately retaining a lawyer could be very expensive given the uncertainty of hourly billings.

These factors make ordinary Torontonians shy away from seeking or hiring lawyers. Those sophisticated Torontonians who surf the Web looking for a lawyer are hungry for more information than what is provided in the YellowPages or a newspaper advertisement. They are doing a Google or Yahoo search to seek out a particular type of attorney in a particular field in a particular area. They are also looking for testimonials and looking for the experience of a lawyer.

All in all, it makes perfect sense for users facing these challenges to turn to Dynamic Lawyers as a way of finding the right lawyer for the right price.  Making a post is free and anonymous, posts remain on the website for up to 45 days, and users have the opportunity to receive information and multiple quotes from local lawyers specializing in the area of law requested.  Comparing answers and then following up with the lawyer of your choice is just plain smart – particularly in a field where it is hard to compare one service provider from the next.  All in all, a very good deal…

So now that you have found the right avenue to find a lawyer in a convenient and cost-effective manner: what next?  Well, let’s talk about legal fees.  Many lawyers will charge you a fixed fee for the first consultation.  At this meeting, they’ll ask you questions about yourself and your situation.  The lawyer is trying to understand the legal issues so that he can offer you some type of recommendation on how to proceed.  If the meeting goes well, you may end up signing the lawyer’s retainer agreement, which stipulates the services that are going to be offered and the fees that are going to be charged.  The fees are typically hourly fees ranging from $200 to upwards of $1000 / hour, depending on the size of the law firm, where it’s located (and it’s physical appearance and amenities), and the particular lawyer’s expertise and reputation.

At the first meeting with the lawyer, you should ask some basic questions related to:

1. What services will the lawyer specifically provide;
2. Billing, costs and budget;
3. Time line;
4. Communication (e.g. by phone, e-mail, etc. and how regularly);
5. Past Experience in a particular field;
6. Strategy;
7. Style (e.g. aggressive trial lawyer or alternative dispute resolution lawyer); and
8. Terminating the retainer (e.g. failure to pay, failure to act, breakdown in the relationship, loss of confidence, etc.).

written by admin \\ tags: breach of contract, charity status, Civil Litigation, commercial agreements, company intellectual property, criminal case, criminal offence, divisional court, employment agreement, family friends, finding the right lawyer, government action, government need, human rights and freedoms, landlord and tenant, law firms, law firms toronto law office toronto, law society of upper canada, lawyer referral service, lawyers, lawyers in Toronto, legal claim, legal toronto, notarize, referrals, small claims court, support government, toronto law firms, toronto lawyer, toronto legal services, Wills and Estates

Toronto law firms can help answer your legal questions, facilitate your transaction (e.g. business, real estate, wills and estates, family, etc.) or even represent you in court.  To find a Toronto lawyer or law firm, go to Dynamic Lawyers and make a post.  It’s free and anonymous and Toronto lawyers and law firms will respond to you with information and quotes for you to compare.

Here are some of the different types of legal services that Toronto law firms can offer:

• Accidents and Injuries: Involved in an accident where you suffered personal injury?
• Business: Need corporate or commercial agreements? Need to have a lawyer help you do a transaction?
• Charities and Not-For-Profit: Need to establish a Not-For-Profit corporation or obtain charity status?
• Civil Litigation – Higher Court: Have a serious legal claim that needs to be litigated in the Superior Court, Divisional Court, etc.?
• Civil Litigation – Small Claims Court: Have a legal claim (e.g. breach of contract, negligence, etc.) for less than $10,000?
• Constitutional / Human Rights and Freedoms: Challenging a law or government action / inaction?
  Criminal: Charged with a criminal offence? Appealing a conviction?
• Employment and Labour: Need an employment agreement? Unjustly terminated? Need to know your rights?
• Family: Going through a separation or divorce? Fighting to get custody or access? Dealing with spousal and child support?
• Government: Need to lobby the government? Need to resolve a dispute with a government agency?
• Highway Traffic Tickets: Charged with speeding or DUI? Need to fight traffic tickets?
• Immigration: Need to immigrate to Canada? Fighting against deportation?
• Insurance: Having difficulties with your Insurance company?.
• Intellectual Property: Need to register a copyright or trademark? Need help with a patent?
• Landlord and Tenant: Need a resolve a dispute? Need to know your rights?.
• Notary Public / Commissioner: Need to notarize or commission your documents?
• Real Estate: Need someone to facilitate your residential or commercial purchase, sale, or lease?
• Tax: Need help structuring your tax affairs? Need help resolving tax disputes with the Canada Revenue Agency?
• Wills, Estates and Trusts: Need a will? Need to update your will? Find out why having an up-to-date will is a must.

Try to consult with a couple of Toronto law firms and Toronto attorneys until you’re comfortable with whom you’re speaking with.  Toronto law firms differ in size, location, expertise, and reputation.  Go to Dynamic Lawyers and save time and money finding the right Toronto law firms and Toronto attorneys who specialize in the legal area you require!

written by admin \\ tags: breach of contract, charity status, Civil Litigation, commercial agreements, company intellectual property, criminal offence, divisional court, employment agreement, government action, government need, human rights and freedoms, landlord and tenant, law firms toronto law office toronto, lawyers in Toronto, legal claim, legal toronto, notarize, small claims court, support government, toronto law firms, toronto lawyer, toronto legal services, Wills and Estates

Toronto law firms can help answer your legal questions, facilitate your transaction (e.g. business, real estate, wills and estates, family, etc.) or even represent you in court.  To find a Toronto lawyer or law firm, go to Dynamic Lawyers and make a post.  It’s free and anonymous and Toronto lawyers and law firms will respond to you with information and quotes for you to compare.

Here are some of the different types of law that Toronto law firms can assist you in:

• Accidents and Injuries: Involved in an accident where you suffered personal injury?
• Business: Need corporate or commercial agreements? Need to have a lawyer help you do a transaction?
• Charities and Not-For-Profit: Need to establish a Not-For-Profit corporation or obtain charity status?
• Civil Litigation – Higher Court: Have a serious legal claim that needs to be litigated in the Superior Court, Divisional Court, etc.?
• Civil Litigation – Small Claims Court: Have a legal claim (e.g. breach of contract, negligence, etc.) for less than $10,000?
• Constitutional / Human Rights and Freedoms: Challenging a law or government action / inaction?
  Criminal: Charged with a criminal offence? Appealing a conviction?
• Employment and Labour: Need an employment agreement? Unjustly terminated? Need to know your rights?
• Family: Going through a separation or divorce? Fighting to get custody or access? Dealing with spousal and child support?
• Government: Need to lobby the government? Need to resolve a dispute with a government agency?
• Highway Traffic Tickets: Charged with speeding or DUI? Need to fight traffic tickets?
• Immigration: Need to immigrate to Canada? Fighting against deportation?
• Insurance: Having difficulties with your Insurance company?.
• Intellectual Property: Need to register a copyright or trademark? Need help with a patent?
• Landlord and Tenant: Need a resolve a dispute? Need to know your rights?.
• Notary Public / Commissioner: Need to notarize or commission your documents?
• Real Estate: Need someone to facilitate your residential or commercial purchase, sale, or lease?
• Tax: Need help structuring your tax affairs? Need help resolving tax disputes with the Canada Revenue Agency?
• Wills, Estates and Trusts: Need a will? Need to update your will? Find out why having an up-to-date will is a must.

Try to consult with a couple of Toronto law firms and Toronto attorneys until you’re comfortable with whom you’re speaking with.  Toronto law firms differ in size, location, expertise, and reputation.  Go to Dynamic Lawyers and save time and money finding the right Toronto law firms and Toronto attorneys who specialize in the legal area you require!

written by admin \\ tags: accident, accidents, agreement, attorneys, breach, breach of contract, charity status, Civil Litigation, commercial agreements, commissioners, company intellectual property, contracts, conviction, corpor, corporation, court, criminal, criminal offence, custody, different, different types of law, divisional court, family, firms, government need, human rights and freedoms, injuries, injury, insurance, landlord and tenant, law, lawyer, lawyers, legal claim, litigants, litigation, money, negligence, notarize, notary, offence, publicity, purchaser, quotes, separation, small claims court, support government, toronto, toronto law firms, toronto lawyer, toronto lawyers, traffic, types of law, Wills and Estates

Note: this is not legal advice. You are always cautioned to turn to a lawyer if you feel you need to (e.g. by making a post on Dynamic Lawyers).  I am only providing this information for educational purposes only.

The consequences for failing to comply with a costs order include having an action stayed, having pleadings struck, or the court making “such order as is just”: rules 57.03(2) and 60.12 of the Rules of Civil Procedure.  Rule 60.12 deals with interlocutory cost awards (e.g. arising out of interlocutory motions). The party seeking these results would need to bring a motion in order to ask for them. The exact consequence will be determined on a case by case basis.

At the present time, the leading case on the jurisprudence concerning rules 57.03(2) and 60.12 is Burrell v. Peel (Regional Municipality) Police Services Board.

In that motion, Master Dash held that, in deciding whether to stay the action or strike the pleadings, the courts must try to strike a balance “between on the one hand the rights of an indigent litigant to have his or her day in court without concern that access thereto will be denied because of unpaid interlocutory costs orders and on the other hand the rights of other litigants not to be faced with litigants who, using impecuniosity as a shield against the costs consequences of their actions, are free to ignore the rules and orders of the court”.

While courts are somewhat reluctant to deprive a worthy but impecunious litigant of the opportunity to have his or her claim adjudicated when it is not plainly devoid of merit, litigants are not free to ignore or flout orders of the court awarding costs against them. Finally, among the factors the court should consider in determining what result is just on a motion to dismiss an action against an impecunious litigant for failure to pay a costs award are the consequences that led up to the award of costs (e.g. were costs awarded to deter bad behavior or simply against a losing party to a motion brought or resisted in good faith and on reasonable grounds?).

written by admin \\ tags: Civil Litigation, consequences, court, Dynamic Lawyers, failing to pay costs, lawyer, lawyers, litigants, litigation, merits, s in Toronto, toronto lawyer