Law Final Notes

8/3/2019 Law Final Notes

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October 26th and 28th:

LEGAL AND CONVENTIONAL HYPOTHECS

A. Nature of Hypothecs2660 A hypothec is a real right on a movable or immovable

property made liable for the performance of an

right to followobligation. It confers on the creditor the

the property into whosever hands it may be, to take

possession of it or to take it in payment, or to sell it or

cause it to be sold and, in that case, to have a preference

upon the proceeds of the sale ranking as determined in

this Code.

- the

property remain the same

-The debts are carried onto that

property when it is sold and the

new owner must assume them.

-Object can be repossessed and

resold to obtain proceeds. -Other

rights must be payed out

according to the ranks of the

inscriptions

Example: financing of a car, inexchange for giving money you

have to oblige to pay them back.

o Real right

o

o Creditor and debtor is necessary

o One can take possession of a movable or an immovable

Can only take what is there once

Can sell it and take proceeds of the sale

2661 A hypothec is merely an accessory right, and subsistsonly as long as the obligation whose performance it

secures continues to exist

-If the debt is paid in full, then

your rights on the property no

longer exist

- If the debt does not exist

accessory to the debt


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2663 The hypothecary rights conferred by a hypothec may beset up against third persons only when the hypothec is

published in accordance with this Book or the Book on

Publication of Rights.

-Register for movables and

register of immovables: If you

property, then

Example: buy a GM car and

then the dude who sells his car

the car from the new owner.

RDPRM: personal property registry in Quebec

Land Registry: Shows you the history of a property; (previous owners and hypothecs) to find out who

owns the property.

B. Kinds of Hypothec2664 Hypothecation may take place only on the conditionsand according to the formalities authorized by law.

A hypothec may be conventional or legal.

Conventional hypothec: you

have to draft your own contract

Legal hypothec: provided by law

2665 A hypothec is movable or immovable depending onwhether the object charged is movable or immovable

property or a universality of movable or immovable

property.

A movable hypothec may be created with or withoutdelivery of the movable hypothecated. Where it is

created with delivery, it may also be called a pledge.

Examples: An elevator can be an

frame that makes it different. In

the case of the elevator, it

becomes and immovable andshould be registered (

installed?)

You have movable and immovable, And movable can be with or without delivery on a universality of

goods that you can register a hypothec

Universality of immovables:

Universality of goods: all the goods at once and not an element

right is on all the goods.

Example: shares in a company. You buy shares with a loan. Whoever loans money for the shares keeps

possession of them.

De-possession: taking the shares away

2671 A hypothec extends to everything united to the propertyby accession.

Def of accession:

-Increase by something added

-acquisition of additional


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property (as by growth or

increase of existing property)

Conventional Hypothecs

2861 A conventional hypothec may be granted only by aperson having the capacity to alienate the property

hypothecated.It may be granted by the debtor of the obligation secured

or by a third person.

Conventional hypothec: you

have to draft your own contract

The person selling the asset has

to own the asset.

2683 Except where he operates an enterprise and thehypothec is charged on the property of that enterprise, a

natural person may grant a movable hypothec without

delivery only on road vehicles or other movable property

determined by regulation and subject to the conditions

determined by regulation.

2687 A hypothec may be granted to secure any obligation

whatever.

-You can write a hypothec

contract on just about anything.- A hypothec can apply on any

tangible good

2693 An immovable hypothec is, on pain of absolute nullity,granted by notarial act en minute.

-To register an immovable

hyopthec, it has to be done by

notary to be valid.

-For a movable, it needs to be

put in writing.

En minute: a notary checks the owner of the house, the seller, the buyer, the bank etc. And writes it on

the document. The contents of the document are the minutes of the document.

Ranking: 2941-2945: whoever got there first gets paid first

2695 Hypothecs on the present and future rents produced byan immovable and hypothecs on the indemnities paid

under the insurance contracts covering the rents are

considered to be immovable hypothecs.

-Rent is considered an

immovable

-It is an investment

2696 A movable hypothec without delivery shall, on pain ofabsolute nullity, be granted in writing.

2702

2703

2702: A movable hypothec with delivery is granted by

physical delivery of the property or title to the creditor


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or, if the property is already in his hands, by his

continuing to physically hold it, with the grantor's

consent, to secure his claim.

2703:A movable hypothec with delivery is published by

the creditor's holding the property or title, and remains

so only as long as he continues to hold it.

2710

2711

2710: A movable hypothec on a claim held by the grantor

against a third person or on a universality of claims may

be granted with or without delivery.

2711: A hypothec on a universality of claims, even when

granted by the remittance of the title to the creditor,

shall be entered in the proper register.

2724 Only the following claims may give rise to a legalhypothec:

(1) claims of the State for sums due under fiscal laws,

and certain other claims of the State or of legal persons

established in the public interest, under specific

provision of law;

(2) claims of persons having taken part in the

construction or renovation of an immovable;

(3) the claim of a syndicate of co-owners for payment of

the common expenses and contributions to the

contingency fund;

(4) claims under a judgment

1) Claims with the state (taxes)

2) Construction hypothecs

3) COOPs (syndicate ofcoowners)

2725 The legal hypothecs of the State, including those forsums due under fiscal laws, and the hypothecs of legal

persons established in the public interest may be

charged on movable or immovable property.

Such hypothecs take effect only from their registration in

the proper register. Application for registration is made

by filing a notice indicating the legislation granting the

hypothec, the property of the debtor on which the

creditor intends to exercise it, and stating the cause and

the amount of the claim. The notice shall be served on

the debtor.

You have to register in the rightregister


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2726-2728: CONSTRUCTION HYPOTHEC (exam question!!)

2726 A legal hypothec in favour of the persons having takenpart in the construction or renovation of an immovable

may not charge any other immovable. It exists only in

favour of the architect, engineer, supplier of materials,workman and contractor or sub-contractor in

proportion to the work requested by the owner of the

immovable or to the materials or services supplied or

prepared by them for the work. It is not necessary to

publish a legal hypothec for it to exist.

o Always know who you are dealing with and when did you come into the project

o There is only one end to the project

o 30 days to register the hypothec on the immovable registry within the end of a project

o One would denounce the contract when dealing with a promoter on a property the

promoter does not own in order for the lean to be valido Lean gives presumption of a right by registering the document

o Good reflex is to place stipulation relating to interest on debt owed

o If project is never completed, one can only go on the value added

o Cannot place a lean on public property

Individuals in construction can get hypothecs. Architects, engineers and contractors automatically have a

property. You add value by doing your work. But only if the work has been started.

been added, then you have to sue them with a conventional st

recourses and it will take a lot longer.

If general contractor puts his/her

2727 A legal hypothec in favour of persons having taken partin the construction or renovation of an immovable

subsists, even if it has not been published, for 30 days

after the work has been completed.It is extinguished six months after the work is

completed, unless, to preserve the hypothec, the

creditor publishes an action against the owner of theimmovable or registers a prior notice of the exercise of

a hypothecary right.

Mechanics of the procedure:

n engineer is hired and is


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30 days after the end is the maximum delay, you can send your stuff before the end?

STEP 1: 2727: AFTER THE END OF THE PROJECT, YOU HAVE 30 DAYS TO CLAIM YOUR LEGAL HYPOTHEC

r.o.t= if the

Send a notice to the owner through a bailiff to secure your legal hypotheque

STEP 2: if nothing in 6 months at the end of the projectthen send second document to follow up (served

the same way)

You can sue or you can use the hypothecary right. Hypothecary right is much simpler and more effective

than a law suit.

2728 The hypothec secures the increase in value added to theimmovable by the work, materials or services supplied

or prepared for the work. However, where those in

favour of whom it exists did not themselves enter into a

contract with the owner, the hypothec is limited to thework, materials or services supplied after written

declaration of the contract to the owner. A workman is

not bound to declare his contract.

Example:icated in a part of the project and ys

automatically you have the right to a hypothecE

automatically have a right to get paid and the right to a hypothec. No need to resister. You have 30 days

until the END OF CONSTRCTION IN GENERAL to protect the legal hypothec the law gave you. You have

to send a notice if

Send 2 page Notice to the OWNER. ``W `

If you write the notice, then you d

The property is registered on the land registry. If there are complications, then the bank is alerted and

they can force the person to pay you by withholding funds.

the person you have a contract with who you ASSUME is the owner. If the

A

you s

2952(ranking)

Legal hypothecs in favour of persons having taken part

in the construction or renovation of an immovable are

ranked before any other published hypothec, for the

increase in value added to the immovable; such

hypothecs rank concurrently among themselves, in

proportion to the value of each claim.


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2729 The legal hypothec of a syndicate of co-owners chargesthe fraction of the co-owner who has defaulted for more

than 30 days on payment of his common expenses or his

contribution to the contingency fund, and has effect only

upon registration of a notice indicating the nature of the

claim, the amount exigible on the day the notice is

registered, and the expected amount of charges and

claims for the current financial year and the next two

years.

Co-op/condominium stuff: you

have to pay your dues every

month. There are rules. The dues

are pooled and used to make

renovations on the building

equation in the contract which

t

then the condo association can

put a legal hypothec on you. If

you are on default on payment

for 30 days, then they can

exercise the legal hypothec.

2730 Every creditor in whose favour a judgment awarding asum of money has been rendered by a court having

jurisdiction in Qubec may acquire a legal hypothec on

the movable or immovable property of his debtor.

He may acquire it by registering a notice describing the

property charged with the hypothec and specifying the

amount of the obligation, and, in the case of an annuity

or support, the amount of the instalments and, where

applicable, the annual Pension Index. The notice is filed

with a copy of the judgment; it must be served on the

debtor.

If the court awards you (1) a sum

of money and ,

then you can exercise a legal

hypothec (this was a question

one year)

2731Except in the case of the legal hypothec of the State or of

a legal person established in the public interest, the

court, on application of the owner of the property

charged with a legal hypothec, may determine which

property the hypothec may charge, reduce the number

of the properties or give leave to the applicant to

substitute other security for the hypothec sufficient to

secure payment; it may thereupon order the registration

of the legal hypothec to be cancelled.


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October 28th (November 16th in course outline):

INSURANCEFundamental principles

2389 A contract of insurance is a contract whereby the

insurer undertakes, for a premium or assessment, tomake a payment to the client or a third person if an

event covered by the insurance occurs.

Insurance is divided into marine insurance and non-

marine insurance.

-Something is described for a

premium-Evaluate the risk and fix the

premium in relation to the risk

-If the risk is greater, the

premium will be higher

-Risk is based on number of

accidents and past experiences

o When insurer sets your premium he looks at the risk pertaining to what is being insured

o The higher the deductible the lower the premium is

o If the risk materialises then the insurer has to compensate the individual

o If something is expected then it becomes un-insurable

o Only unexpected accidents/events can be covered

Definition of premium: the consideration paid for a contract of insurance

Deductible: The first percentage of the claim that you have to support yourself. If your deductible is

500$, then it me

of damage, then your insurance company will only give you 1500$ (2000$ minus your deductible of

500$)

Example: car accident you have to pay 1000$ to repair the car. Garage will ask for money from the

insurance. You will have to pay a portion of the repairs (deductible). If the deductible is greater than the

worth claiming because your future insurance premiums will be higher.

2464 The insurer is liable to compensate for injury resultingfrom superior force or the fault of the insured, unless an

exclusion is expressly and restrictively stipulated in the

policy. However, the insurer is never liable to

compensate for injury resulting from the insured's

intentional fault. Where there is more than one insured,

the obligation of coverage remains in respect of thoseinsured who have not committed an intentional fault.

Where the insurer is liable for injury caused by a person

for whose acts the insured is liable, the obligation of

coverage subsists regardless of the nature or gravity of

the fault committed by that person.

Intention to cause

damage/predjudice, is not

covered by insurance.

2414 Any clause in a non-marine insurance contract which -The insurance contract is null if


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grants the client, the insured, the participant, the

beneficiary or the policyholder fewer rights than are

granted by the provisions of this chapter is null.

Any stipulation which derogates from the rules on

insurable interest or, in liability insurance, from those

protecting the rights of injured third persons is also null.

any stipulations in the contract

remove rights which are granted

from the code.

-Insurance companies have a

duty to defend if you are sued.

Any restrictions on rights are not

valid.

Basic Divisions

2389-

2414

General Provisions

2391: Non-marine insurance is divided into insurance of persons and damage insurance.

2392: Insurance of persons deals with the life, physical integrity or health of the insured.

Insurance of persons is divided into individual insurance and group insurance.

Group insurance of persons, under a master policy, covers the participants in a specified

group and, in some cases, their families or dependants.

o Insurance of persons

2395: Damage insurance protects the insured from the consequences of an event that may

adversely affect his patrimony.

o Damage insurance

2396: Damage insurance includes property insurance, the object of which is to indemnify the

insured for material loss, and liability insurance, the object of which is to protect the insured

against the pecuniary consequences of the liability he may incur for damage to a third

person by reason of an injurious act.

o Property and liability insurance

2399: If there is a difference in the proposition and the policy, the proposition prevails

2405: if the insurer wants to reduce the coverage, he has to obtain your consent in writing

to do it. Where such a change is made upon renewal, the insurer shall indicate it in a

separate document

a breach of 2408 and there are consequences.

(esp if you die of lung cancer). You have to obligation to let the insurer determine your

appropriate risk.

ok. If

.

2410: exception of age or risk, if they discover a mistake there can be an annulation of the

policy.

If the risks were not disclosed, they can annul the policy. You get your money back but your


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increased premium, has no effect unless the

policyholder consents to the change in writing.

Where such a change is made upon renewal of the

contract, the insurer shall indicate it clearly to the

insured in a separate document from the rider which

stipulates it. The change is presumed to be accepted by

the insured 30 days after receipt of the document.

-If the insurer wants to reduce the coverage, he has to obtain your consent in writing to do it.

-Where such a change is made upon renewal, the insurer shall indicate it in a separate document

-Additions or modifications

-Riders modify the same policy and must be signed by both parties

-Riders are there to protect the insurer

2408 Obligations of the Insured

The client, and the insured if the insurer requires it, is

bound to represent all the facts known to him whichare likely to materially influence an insurer in the

setting of the premium, the appraisal of the risk or the

decision to cover it, but he is not bound to represent

facts known to the insurer or which from their notoriety

he is presumed to know, except in answer to inquiries.

The insurer will ask you a ton a

the truth, then there is a breach

of 2408 and there areconsequences.

Ex. If you

insurer can refuse to pay you

(esp if you die of lung cancer).

You have to obligation to let the

insurer determine your

appropriate risk.

2409 Limit of the obligation

The obligation respecting representations is deemed

properly met if the representations are such as a

normally provident (prudent) insured would make, if

they were made without material concealment and if

the facts are substantially as represented.

If the insured is in good faith and

huge deal

2410 Subject to the provisions on statement of age and risk,any misrepresentation or concealment of relevant facts

by either the client or the insured nullifies the contract

at the instance of the insurer, even in respect of losses

not connected with the risks so misrepresented or

concealed.

Exception of age or risk, if they

discover a mistake there can be

an annulation of the policy.

If the risks were not disclosed,

they can annul the policy. You

get your money back but your

claim will be invalid

2411 In damage insurance, unless the bad faith of the client isestablished or unless it is established that the insurer

would not have covered the risk if he had known the

true facts, the insurer remains liable towards the

Unless the insurer established

bad faith and he can

demonstrate the risk hidden

from him was important that he


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insured for such proportion of the indemnity as the

premium he collected bears to the premium he should

have collected.

would not have covered it, then

he has to pay.

Example, charge 50$ a month

and discovers something even

more risky, then they can still

give you protection, but the

claim made will be a proportion

of what they should have

charged you??? Wtf

Instead of cancelling the policy it

is adjusted

Damage Insurance

2463 Limits to coverage

In damage insurance, the insurer is obliged to

compensate for any injury suffered at the time of theloss but only up to the amount of the insurance.

2466 The insured shall promptly notify the insurer of anychange that increases the risks stipulated in the policy

and that results from events within his control if it is

likely to materially influence an insurer in setting the

rate of the premium, appraising the risk or deciding to

continue to insure it.

If the insured fails to discharge his obligation, the

provisions of article 2411 apply, adapted as required.

2470 Notice of Loss

The insured shall notify the insurer of any loss which

may give rise to an indemnity, as soon as he becomes

aware of it. Any interested person may give such notice.

An insurer who has not been so notified may, where he

sustains injury therefrom, set up against the insured any

clause of the policy providing for forfeiture of the right

to indemnity in such a case.

Duty to report any claims assoon as possible

-Must give notification as soon

as the individual is aware

-There are some restrictions

-Insurers will want you to give

them notice of anticipated

claims

2472 Deceitful representation

Any deceitful representation entails the loss of the right

of the person making it to any indemnity in respect of

the risk to which the representation relates.

However, if the occurrence of the event insured against

entails the loss of both movable and immovable

property or of both property for occupational use and

personal property, forfeiture is incurred only with

-Loss of coverage for risk

-Moveable vs. immovable

-Occupational vs. personal use

-Very broad article which goes

back the obligation of good faith.

If there was a false

representation, the insure who

can prove that there was false


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respect to the class of property to which the

representation relates.

representation can refuse to give

money

2481 A person has an insurable interest in a property wherethe loss or deterioration of the property may cause him

direct and immediate damage.

It is necessary that the insurable interest exist at the

time of the loss but not necessary that the same interest

have existed throughout the duration of the contract.

Insurable interests. You have to

have an interest in the property

insure some random dude on

your street, not permitted by law

for insurance money).

2503 Duty to defend

The insurer is bound to take up the interest of any

person entitled to the benefit of the insurance and

assume his defence in any action brought against him.

Costs and expenses resulting from actions against theinsured, including those of the defence, and interest on

the proceeds of the insurance are borne by the insurer

over and above the proceeds of the insurance.

The insurer has a duty to defend

you if you get sued.

Insurance of Persons Insurable interest:

o 2418:In individual insurance, a contract is null if at the time the contract is made the client has no insurable

interest in the life or health of the insured, unless the insured consents in writing.

Subject to the same reservation, the assignment of such a contract is null if the assignee does not have the

required interest at the time of the assignment.

o 2419: A person has an insurable interest in his own life and health and in the life and health of his spouse, of

his descendants and the descendants of his spouse, or of persons who contribute to his support or education.

He also has an interest in the life and health of his employees and staff or of persons in whose life and health

he has a pecuniary or moral interest.

Application governs:

o 2417: In accident and sickness insurance, the insurer may not, except in case of fraud, exclude or reduce the

coverage by reason of a disease or ailment disclosed in the application except under a clause referring by

name to the disease or ailment.

Except in the case of fraud, an insurer may not, by a general clause, exclude or limit the coverage by reason

of a disease or ailment not disclosed in the application unless the disease or ailment appears within the first

two years of the insurance.

Payment of Premiums:

o 2427: In life insurance, the policyholder is entitled to 30 days for the payment of each premium, except the

initial premium; the insurance remains in force during the 30 days, but failure to pay the premium within

that period terminates the insurance.

The period runs concurrently with any other period granted by the insurer, but it may not be reduced by

agreement.30 days

o 2431: The insurer is bound to reinstate individual life insurance that has been cancelled for non-payment of

the premium if the policyholder applies to him therefor within two years from the date of the cancellation

and establishes that the insured still meets the conditions required to be insured under the cancelled

contract. The policyholder is bound in that case to pay the overdue premiums and repay the advances he has

obtained on the policy, with interest at a rate not exceeding the rate f ixed by the regulations made to that

effect by the Government.

The insurer is not bound by the first paragraph if the surrender value has been paid or if the policyholder has

elected for a reduction or extension of coverage.


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Reinstatement

o 2434: Upon the reinstatement of a contract of insurance, the two year period during which the insurer may

bring an action for the annulment of the contract or reduction of coverage by reason of misrepresentation or

concealment relating to the risk, or by reason of the application of a clause of exclusion of coverage in case

of the suicide of the insured, runs again.

Payment:

o 2435: The holder of an accident and sickness policy or the beneficiary or insured shall give written notice ofloss to the insurer within 30 days of acquiring knowledge of it. He shall also, within 90 days, transmit all the

information to the insurer that he may reasonably expect as to the circumstances and extent of the loss.

The person entitled to the payment is not prevented from receiving it if he proves that it was impossible for

him to act within the prescribed time, provided the notice is sent to the insurer within one year of the loss.


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November 4th and 9th 2010: Business Association and taxation

The various forms by which you will carry out your profession

Not based on the code. Based on what is said in class. TAKE GOOD NOTES.

Four different forms

o Employment

o Self-employed (sole proprietorship)

o Partnership

o The company, incorporation

Tax based on income

o Employment

o Business

o Investment

o Capital gains

Employee VS Independent Contractor

o If you are an employee, there is an employer

o You can be an employee of a sole proprietor

o You can also be an employee of a partnership or an incorporationo Sole proprietor, you own the business, the business is you

o If you call a plumber, is the plumber your employer while working for you?

NO.

The plumber may be an employee of a sole proprietor

o University professor? An employee.

o If you are subject of supervision and control, no loss from the business.

o Employee

No liability

Responsible only to the employer (only within the scope of contractor)

Income Tax

o Employees pay on all income, no deductions unless specifically mentioned in income taxact.

o If your employer makes you buy a uniform, you can deduct that

o Certain travel expenses as well

o Deducted At Source (DAS)

Employer is obliged to take the money right away and give it to the government

o Self Employed Taxation

Pay tax on all income

Can deduct any expense in course of work, except if prohibited by income tax

act

Not deducted right away, make tax instalments

Quarterly, send in tax that you owe

15th March, June, September, December

Can either install of your last bill OR install of what you think your

income is (would only do that if you thought you were going to make

less)

If you do

You may pay less often, but still pay same amount

o April 30th


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o Accrual basis

Engineer, finish a job, send an invoice, amount is automatically added to your

income EVEN THOUGH THE

the previous year

o Tax evasion

o Can impose penalties up to 200% of tax

o When they catch up to you, and you can

Imprisonment in a federal institution

o Minimize burden = tax PLANNING

Calendar year VS Fiscal Year

o Fiscal year period over which you assess you income. Same length as calendar year.

2010 tax year

o In corporations or parntership, you can have a non-calendar fiscal year

EX. March 1, 2010 - Feb 28, 2011. [2011 Tax Year]

Another possibility for deferral

Registered business: because you can adopt a name. But it doe

different entity than you.

2186 partnership a contract by which the parties, in a spirit of cooperation agree to carry

on...

o Share pecuniary profits

o Two parties

o Share losses

o Presumed to share equally

Oral contract, hard to prove, WRITE IT DOWN Litigation

o Expensive, time consuming, aggravating

Partnership

o 50, 30, 20 %

o WRITE THAT DOWN

o Can own stuff, partnership assets

Partnership assets do not belong to the partners

Computers, desks, work in progress

o Forms

General - 2189 must file a declaration 2219 partners bind the partnership. If you sign something on behalf of the

partnership, its legal.

2216 - Voting do

contract

2221 solidarily liable-- Creditor goes after partnership assets first, then

personal assets of partners

2226 cease to be a partner


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Die, bankrupt or want to withdraw

If you are a

Can sell it back to partners, or a third party

Have to have the consent of other parties to sell to a third party

If you want out, you can get out, it WILL happen (this is different thancorporations)

When you die, interest goes to family, not actual role in partnership

Limited liability partnership (LLP)

involved

Taxation

tax, partners do

Partner should have made instalments

Partnership year end??????????????????????????

o Partner year end April 30th

o In June, partnership has year end

o

Nov 9 Taxation Part II

Progressive tax rates are attached to an individual

o The more you make, pay proportional amount more

o Highest rate in Quebec 48.22% (at an income around $70 000)

o In Canada, get up to top marginal rates quite quickly

o If you are a corporate partner, very different situation

Corporation = company

o Two different types

Private and publico Public corporation whose shares are traded on an exchange (TSX, NASDAQ)

Anyone can become a shareholder

o Private any company that is not public

Shares are not traded

Most companies are private

Tend to be owned by small groups of people

Companies are distinct legal entities

o Sole proprietorship IS you, whereas a company is distinct

o Corp., Inc., Ltd.

o Even if you are the sole owner of the company, and the company has money in a bank,

the money is NOT yourso Companies can sue and be sued

o Have limited liability

Shareholders are NOT liable for the debts of the company, actions of the

company

EXCEPT sometimes (rarely) a law exists that makes a shareholder liable


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If the companies pays a dividend, and as a result becomes insolvent, a

judge can order the shareholder to return the money so the company

can pay its bills

If you guarantee the debts of the company

Income= revenue-expenses

o

Also called profit A corporation is a tax payer, have special tax returns

o File a T2

o

o CBCA federal statute to have a federally recognized company

o A Quebec company VS a Federal Company

o Company has articles of corporation, which you file with the government, constitution

of the company

Name or number

Corporate powers

A minute book, charter of the company, bylaws of the company, charters

passed by board of directors

o Shares are a bundle of rights

When companies are born, issue shares

Write a cheque to the company, they give you shares

Capitalizing the company

Types of shares

Common and preferred

Common share as no fixed value, goes up and down with the value of

the company

Preferred shares have a fixed value, usually have an entitlement to

receive a dividend

Voting and nonvoting shares at meetingso Cast:

o Shareholders

Voting, nonvoting, can buy votes

Have a right to vote at the annual meeting

Elect directors (and fire them)

Approve financial statements

Limited day to day rights, not involved in the administration

Don

o Charter restricts the transferability of the shares in private companies, need consent of

board of directorso Directors

Elected by shareholders (until next annual meeting)

Given the authority to run the business

The power to declare dividends

Powers outlined in statutes

Appoint officers

Signing things


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Also not really in day to day stuff either

o Officers

Chairman, CEO (outranks president), treasurer

Run the business day to day

Appointed by the board of directors

Employees

Board can fire them

Company is set up by three people

o Incorporate, come up with a name, file articles under corporation act

o Go into business, need capital

o Put in a limited amount of capital

Retained earnings = book value of the company

o They can fire you though

HAVE A SHAREHOLDERS AGREEMENT how to get rid of shareholders

o When someone dies

Taxation

Private companies more complicated than public

Depends of the type of income

o Not true for employees, sole proprietors

Three different income

o Personal service company (beyond this course)

o Investment rent , royalties, interest, capital gains

o Everything else active business income

Corporations have flat tax not progressive

First $500 000 taxed at 19%

Excess is taxed 30%

Huge tax savings by having company earnings

In Ontario, its 16% Salary drives down profit

Companies able to accumulate money much faster

company

Majority of wealth in Canada is in companies

Very different in the states they tax accumulated surplus

Company can give out dividends to get rid of some of its income, but taxed on a personal level

at a different rate

Ways to take out money:

o Salary

o Dividends

o Embezzlement not a good ideao Borrow not a good idea they made a law against it

you leave the money in the company

Capital gains the money you make when you sell a capital assest. An assest that you intend to

make money off of. NOT inventory. If you buy land with the idea of subdividing and building

houses, that is inventory. Taxed as an individual. If you buy land to be a landlord, that building is


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now a capital assest. When you sell it, it is a capital gain. Only get taxed on HALF of a capital

gain. Investment income if made by a company.


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November 11th 2010: Remedies and Prescription

REMEDIES AND PERSCRIPTION

2875 Prescription is a means of acquiring or of beingreleased by the lapse of time and according to the

conditions fixed by law: prescription is calledacquisitive in the first case and extinctive in the

second.

Acquisitive prescription (not to

be talked about because it

almost never happens)Extinctive prescription

Prescriptiona right extinguishes after a certain period of time

Period of time is 10 years but there a ton of exceptions to the rule

2880 The day on which the right of action arises fixes thebeginning of the period ofextinctive prescription.

-Damages cause the right of

action to arise

-In many cases the day of the

beginning of the period of

extinctive prescription

Exception to the 10 years occurs 90% of the time. Most of the time it`s 3 years

When can you claim the right? The day on which you can make your claim. If you have an accident, you

can claim the day of the accident. And then you would have 3 years from that date to formally file a

lawsuit

2883 Prescription may not be renounced in advance, butprescription which has been acquired or any benefit of

time elapsed by which prescription has begun may be

renounced.

Cannot renounce prescription in

advance

2884 No prescriptive period other than that provided by lawmay be agreed upon.

For a criminal offense there is no

prescription

2889 Prescription may be interrupted naturally or civilly. -Interruption and suspension ofprescription: ex the bank has

has been exercised

-If you are in an impossibility to act

(ex coma) then there is a

suspension of prescription

2892 The filing of a judicial demand before the expiry of theprescriptive period constitutes a civil interruption,

-Defendant can be served within

60 days of the expiry date of the


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provided the demand is served on the person to be

prevented from prescribing not later than 60 days

following the expiry of the prescriptive period.

prescriptive period

-The filling of the claim however

must be made within the 3 year

prescriptive period

2898Acknowledgement of a right, as well as renunciation of

the benefit of a period of time which has elapsed,

interrupts prescription.

-Interruptions stops prescriptions

whereas suspension suspends

prescription for a period time

-Stop upon date of impossibility

and re-begins when impossibility is

removed

2904 Prescription does not run against persons if it isimpossible in fact for them to act by themselves or to

be represented by others.

2906 Married or civil union spouses do not prescribe againsteach other during cohabitation.

2921 Extinctive prescription is a means of extinguishing aright which has not been used or of pleading the non-

admissibility of an action.

How the period of prescription is

established

2922 The period for extinctive prescription is 10 years,except as otherwise fixed by law.

2925 An action to enforce a personal right or movable realright is prescribed by three years, if the prescriptive

period is not otherwise established.

Any claim for contractual or extra-

contractual damages (basically

suing someone) has a prescriptiveperiod of 3 years

2926 Where the right ofaction arises from moral, corporalor material damage appearing progressively or tardily,

the period runs from the day the damage appears for

the first time.

The period runs from the day the

damage appears for the first time.

2929 An action for defamation is prescribed by one year fromthe day on which the defamed person learned of the

defamation.

-1 year

-Must sue cities within 6 months

and give them a notice within 15

days (ex: you fall because of a holein the sidewalk)

2931 In the case of a contract of successive performance,prescription runs in respect of payments due, even

though the parties continue to perform one or another

of their obligations under the contract.


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Class Action 999 and following

Use Code of Civil Procedure

When many people have the same small claim against large legal entity than an individual, on the

behalf of an entire class of individuals, can sue

o Must first file a motion of authorisation

1. Must prove that the claims from the class are similar

2. Prove that the facts one raises justify the conclusions one seeks

3. Prove it would not be practical for all the class mates to sue separately or

make a suit with multiple claims

o Any settlement

o Will be a notice before settlement or fees are finalized

o Opt-out process, one can renounce their inclusion within the class but there is no need

to opt-in

o en to the government to fund class actionsuits

1003

C.C.P.

The court authorizes the bringing of the class action and

ascribes the status of representative to the member it

designates if of opinion that:

(a) the recourses of the members raise identical,

similar or related questions of law or fact;

(b) the facts alleged seem to justify the conclusions

sought;

(c) the composition of the group makes the application

of article 59 or 67 difficult or impracticable; and

(d) the member to whom the court intends to ascribe

the status of representative is in a position to represent

the members adequately.

A. You have to show that the

claims of the members are similar

B. Facts that are stated in the

motion need to make sense. Show

that it`s not a frivolous claim

C. It has to be impractical for the

class representative to ask people

to be co-plaintiffs.. lots of people

need to be involved in the class

D. The class representative has to

show interest in the class

Quebec is the only place in the world where

aux recours

A settlement has to be approved by the court. They do that so that the lawyers don`t take all the moneylement value)


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Injunctions Force someone to stop doing or start doing something

Code of Civil Procedure: 751-761

Interlocutory injunction (2 types/stages) or permanent injunction (3 total)

o Interlocutory injunction is immediate (30-40 days)

o Provisional interlocutory injunction is super immediate (NOW) Is only valid for ten days

o Permanent injunction does need to made immediately

Not urgent will last for longer

Injunctionng or to

stop someone from doing something

Contempt of court is the only civil action that can lead to jail. (when you ignore an injunction)

Example of injunction: I live in a calm area and neighbour decides to start boat repair business which is

noisy. You can get the court to order him to stop

If someone withholds records that you have a right to have access to, then you could get an injunction

3 types of injunctions

Normal type is a permanent injunction that goes through the regular court process (takes a long time)

Interlockatory Injunction: you cant afford to wait 2 years to file your injunction. The judge gets an idea

from the evidence and makes a quick decision to order the injunction. The balance of hardship needs to

be proven. Might not be permanent.

Provisional injunctionwhen something is super urgent: same criteria but it`s only valid for 10 days.

Seizure

773 (CCP): The plaintiff may, with the authorization of a judge, seize before judgment the property of the

defendant, when there is reason to fear that without this remedy the recovery of his debt may be put in

jeopardy.

o One can effect seizure before judgement if they may be attempting to render

themselves judgement proof

Seizure before judgement: when there is an ongoing claim but the person is trying to get rid of his assets

so that you can`t get money from him.

You need to show that you have a reasonable claim, and that they are trying to make themselves un-suable


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Law notes- November 16th 2010

Charter of Rights and Freedom--

Case Law

lawyers and judges to interpret these cases.

Theoretical definitions need clarification through case law

Doctorine: intellectuals who analyse case law and summarize the prinicples

Actus Reus: act of doing (ex me punching)

Mens Rea: intentions while you were doing Actus Reus (state of mind of the person accused or even

prior (when referring to conspiracy))

You need to prove: (1) the act of doing and (2) the mental state

Some offenses require a different type of mental state: general intent and specific intent

Some cases require proof of general intent, others: specific intent

General intent: intent to do the act

Specific intent: you have the intent of ACT and CONSEQUENCE of act

a

person, but you wanted to hurt them)

Crimes:

Murder: one means to cause death or bodily harm that is known will cause death

1st degree: planned and deliberate

2nd degree: not planned but deliberate

Manslaughter: illegal act that is so dangerous that it is objectively known to kill. Kill someone withoutthe intent to kill.

Criminal negligence: reckless disregard to the life and safety of others

Criminals offences vs penal offences


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Speeding is a penal offence: you remove the mens reayou get conviced without mens rea. But you

If you are arrested by the police, what are the different scenarios in terms of procedure?

Police have 2 choices: keep you in custody OR they give you a promise to appear once they take you to

the station (you may have restricted conditions that you HAVE to respect. Not respecting conditions is

an offense in itself)

Person needs to appear within court in 24 hours

You may need to schedule a bail hearing. Is the arrested and accused person a danger to society? Should

he/she remain in custody?

Detained or on bail

Person has a choice to the ways he can be tried: either by simply a judge or judge and jury.

Few offences can only be tried by judge and jury (murder always)

Few offences can only be tried by judge (less serious like drug possession)

Everything else can be chosen

Advantages of jury: lots more subjectivity (appeal to emotions)

Preliminary enquiry: pre-send

the case to trial

Trial3 players: judge or judge+jury, prosecution, defense or defense+council

Judge: asses the facts, the one to issue the final decision by applying the law to the facts

Judge+Jury: judge assesses the facts and gives legal guidelines to the jury, jury decides

Procecution: prove that the accused is guilty. Burden of proof: prove what an objective person would

say is reasonable. PROVE BEYOND A REASONABLE DOUBT

2 types of evidence: direct and circumstantial

Direct: girl saw dude hit other person

Circumstantial: no one saw, but evidence was left behind (DNA, cell phone examination)

How does the trial work?

Defense lawyer cross-examines.. you are allowed to be suggestive!


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Prosecutor examines. Can ask suggestive questions.

Pleadings: pleading to the judge either than one side or the other is wrong

In a civil case: burden of proof needs to prove BALANCE OF PROBABILITY 51%

Presumption of innocence: innocent until proven guilty

Credibility: what you say sounds more truthful than not. Judges determine the credibility of witnesses,

evidence

You can only prevent evidence that is RELEVANT to the trial. The value of the evidence has to outweigh

the prejudice

Hearsay: you SEE, you HEAR

Exemption: words uttered by the accused

SECTION on FUNDAMENTAL RIGHTS

Canadian Charter sets out rights that protect against governmental/police abuse

There must be reasonable and probably grounds to proceed to arrest.

Detention: (keeping you in place for investigative purposes) (if you FEEL detained, even psychologically)

police need to have reasonable suspicion.

Police are not allowed to act on a hunch

Search and seizure: if you have been arrested they can do a security search. If you are stopped in a car

because of alcohol and they smell MJ then they have the right to search the car for substances

SENTENCING: individualize process, except for certain offences which have minimums

Example: loaded firearm is minimum is 3 years\

Mitigating factors (things that make you look good)

Imprisonment: incarceration or imprisonment in the community

conditional release


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November 18th: Civil liability for architects and engineers

Compare to the average engineer or architect in the same set of circumstances

o The same in certain circumstances can be or not be a fault

o Expert witnesses give their opinion to the court as to the conduct of the architect or

engineer Each looking for an expert to validate their stance

Each expert is relying on a different set of facts

Were a bridge about to collapse and an engineer is called

o Then he says we must do this for it not to collapse

o It is done but it collapses anyway

Is he at fault

Most likely not, it would be the engineers fault who originally designed

the structure

There are many rules that apply to the work of architects of engineers

o Most important is to know the different rules applicable to each of the subcontractors

one works with

Owners will sue everyone when a problem presents itself because they do not know whose fault

it really is

o Chances are many will offer settlements to simply avoid large legal fees associated court

proceeding (deep pocket theory)

Fault reproached to you related to the surveillance of the work of others

o Work with companies you know and trust and have references for

o Community based projects where individuals are working for less are bound to be

disasters

o In government projects the architect/engineer must select the lowest qualifying bidder

o Must have individual with proper knowledge verifying and working on each of the

specific parts of the construction

o Must know plans, specs and codes for the various specialitieso Must work out conditions of supervision

Amount of days on the construction site

Fault relating to the management of the project

o Liaison between the owner and the contractors for all progress payments

Usually there is a withholding of 10% till the project is complete

o Assure the quality of construction by withholding and making progress payments

Architect must make sure that the sub contractors are paid so that there are no hypotheques on

the building

o Use of joint cheques to remove force work to be properly completed and remove

hypotheques from the building

Minutes of construction meeting are key to avoiding legal actiono Stating ones concern regarding a certain situation

Faulty design

o Fine line between faulty design and faulty construction

o Rarely should one work on a project where he will not supervise the work

o Use very detailed specifications to limit ambiguities

If the plans one draws for bidders are inaccurate one risks the possibility of getting sued


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Either contractual or extracontractual

o Hired by a client to make plans and supervise. Something goes wrong, client sues you

Contractual

o You have many errors in your plans, contractor looses a lot of money because of it and

sues you

o Have to renew your membership even after you retire

Fault, damage and causation

o What is the loss?

o Causation prove the fault is what caused the damages

o How do you prove an arch. Eng. Commited a fault

o Obligation of means obligation to do what needs to be done in the best way possible,

Doctor performing heart surgery, patient dies, not necessarily the fault of the

doctor

Compare to the conduct of a reasonable architect/eng

Reasons arch/eng can be stuck in lawsuits

o Often you did nothing wrong, but someone on the project dido

o If there is a loss of immovable work within 5 years, solidarly liable unless you can prove

otherwise

Try to work with people you know, worked well in the past, have good recommendations

Set qualifications for experience, equipment

Fault that relates to surveillance of work

o Person you were supposed to be supervising makes a mistake

Plans compared to codes/bylaws

Pay only when the work is done

Faulty design of plans and specs

Delay in completion Fault in choosing a winning bidder

o Sometimes bid have to be submitted through an association, relating to plumbing,

electricity, over $10,000. Ass says lowest bidder must be given the contract.

o Client receives six bids, hire you to check them. Second lowest bidder says lowest bidder

ient sues you.

For public tender and BSDQ


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November 23rd 2010: Charter Rights and Recourses

Charter of Rights and Recourses

Canadian Charter of Rights and Freedoms:

o Real charter enacted in 1982 and applies only between individual and state

Quebec Charter of Human Rights and Freedom:o Not a charter but a law

o Can be used individual vs. individual or individual vs. state

Quebec Charter of Human of Rights and Freedom:

10: Every person has a right to full and equal recognition and exercise of his human rights and

freedoms, without distinction, exclusion or preference based on race, colour, sex, pregnancy,

sexual orientation, civil status, age except as provided by law, religion, political convictions,

language, ethnic or national origin, social condition, a handicap or the use of any means to

palliate a handicap.

Discrimination defined.

Discrimination exists where such a distinction, exclusion or preference has the effect of nullifying

or impairing such right.

10.1: No one may harass a person on the basis of any ground mentioned in section 10.

11: No one may distribute, publish or publicly exhibit a notice, symbol or sign involving

discrimination, or authorize anyone to do so.

16: No one may practise discrimination in respect of the hiring, apprenticeship, duration of the

probationary period, vocational training, promotion, transfer, displacement, laying-off,

suspension, dismissal or conditions of employment of a person or in the establishment of

categories or classes of employment. Civil status is not something that is to be discussed during an interview

18.1: No one may, in an employment application form or employment interview, require a

person to give information regarding any ground mentioned in section 10 unless the information

is useful for the application of section 20 or the implementation of an affirmative action program

in existence at the time of the application.

18.2: No one may dismiss, refuse to hire or otherwise penalize a person in his employment owing

to the mere fact that he was convicted of a penal or criminal offence, if the offence was in no

way connected with the employment or if the person has obtained a pardon for the offence.

19: Every employer must, without discrimination, grant equal salary or wages to the members of

his personnel who perform equivalent work at the same place.

Difference based on experience, non-discriminatory.A difference in salary or wages based on experience, seniority, years of service, merit,

productivity or overtime is not considered discriminatory if such criteria are common to all

members of the personnel.

Non-discrimination.

Adjustments in compensation and a pay equity plan are deemed not to discriminate on the basis

of gender if they are established in accordance with the Pay Equity Act (chapter E-12.001).


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20: A distinction, exclusion or preference based on the aptitudes or qualifications required for an

employment, or justified by the charitable, philanthropic, religious, political or educational

nature of a non-profit institution or of an institution devoted exclusively to the well-being of an

ethnic group, is deemed non-discriminatory.

1: Every human being has a right to life, and to personal security, inviolability and freedom.

Right to die

Inviolability relates to abuse search and seizure

2: Every human being whose life is in peril has a right to assistance.

Aiding person whose life is in peril.

Every person must come to the aid of anyone whose life is in peril, either personally or calling for

aid, by giving him the necessary and immediate physical assistance, unless it involves danger to

himself or a third person, or he has another valid reason.

3: Every person is the possessor of the fundamental freedoms, including freedom of conscience,

freedom of religion, freedom of opinion, freedom of expression, freedom of peaceful assembly

and freedom of association.

4: Every person has a right to the safeguard of his dignity, honour and reputation.

5: Every person has a right to respect for his private life.

6: Every person has a right to the peaceful enjoyment and free disposition of his property, except

to the extent provided by law.

7: A person's home is inviolable.

9: Every person has a right to non-disclosure of confidential information.

Disclosure of confidential information.

No person bound to professional secrecy by law and no priest or other minister of religion may,

even in judicial proceedings, disclose confidential information revealed to him by reason of his

position or profession, unless he is authorized to do so by the person who confided such

information to him or by an express provision of law.

Duty of tribunal.The tribunal must, ex officio, ensure that professional secrecy is respected.

49: Any unlawful interference with any right or freedom recognized by this Charter entitles the

victim to obtain the cessation of such interference and compensation for the moral or material

prejudice resulting therefrom.

Punitive damages. (Punitive damages are for intentional and ill founded conduct)

In case of unlawful and intentional interference, the tribunal may, in addition, condemn the

person guilty of it to punitive damages.

Rights:

o Defence

o Council

o Presumed not guilty

o Tried in the language of choice

o Right to information of charges

o Right to an interpreter


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30: Every person arrested or detained must be brought promptly before the competent tribunal

or released.

33.1: No accused person may be compelled to testify against himself at his trial.

37: No accused person may be held guilty on account of any act or omission which, at the time

when it was committed, did not constitute a violation of the law.

37.1: No person may be tried again for an offence of which he has been acquitted or of which hehas been found guilty by a judgment that has acquired status as res judicata.

Legal Rights of the Canadian Charter:

7: Everyone has the right to life, liberty and security of the person and the right not to be

deprived thereof except in accordance with the principles of fundamental justice.

Know your rights, bring out the best in individual rights Quebec under two charters

o Quebec Charter of Human Rights and Freedoms

o Canadian Charter of Rights and Freedoms

Differences:

o Canadian charter protects the individual against the state

Discrimination based on sexual of orientation, definition of spouse in pension

law, preventing an individual from benefitting from a right

You contesting/invalidating a law

o Quebec Charter individual VS province. AND individual VS individual

Reputational, discrimination, against another individual or company

Minority language education Right to strike

Police power

Right to life

Right to abortion

Constitutional law if it passes certain tests, it supercedes all laws

o

Quebec charter quasi-constitutional law, can freeze other laws, except if the law has

notwithstanding clause

o Bill 101

Drafted in a general way so it can be interpreted by the courts

If If it does infringe a charter right is the law a reasonably limit to be imposed in a free and

democratic society

o Is the law well balanced with existing social values

OAKES test

o Questions to see/weigh the balance of individuals VS society

Kirpan knife thing was overthrown by Quebec charter

Freedom of press


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o Injuctions, remedies???

o If rights to freedom or press/freedom of information outweigh people being attacked

2B. Freedom of thought, expression, other media of communication

o Irwin toys Qubec made a law to prevent publicity addressed to kids, Irwin protested

right to advertize, 2B. Lost case. Deemed important to protect kids, most vulnerable

o

o

Can have a whole group of people, company, or individual sue government to change the law

Mobility rights Canadian citizen has the right to remain in, move around, leave

Sue Louis-

o Challenging 24b. Of criminal code for assisted suicide

Abortion

Theraputic abortion clinics

Robert latimer mercy killing

Section 10 your rights when you get arrested

o Informed promptly of the reasons

o Attain counsel

Section 11d innocent until proven guilty

Section 12 cruel and unusual punishment

Section 15 (CC) 10 (QC) READ AND COMPARE equality rights, race, colour, religion, sex.or., age

Section 20 distinction based on aptitudes

o Apply to be a firefighter when you are 75, declined, sue for age desc, ACTAULLY section

Remedies

o What happens if one of your rights in infringed upon under CC

o Section 24

o Can freeze a law (while being looked into, fixed), blow up the law, reading down of the

law (cut out a piece that causes problems), read into a law


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Nov 25 Public Private Partnership

Government enter into partnership with private partner

o Company often created for that project

o Special Purpose Vehicle (SPV)

o Concessionaire

Partnership agreement

o Maintenance, rehabilitation, construction

Private partner enters into separate contract with Design/build contractor, Operation and

Maintenance contractor (after)

o

o Flow down obligations to contractors

o Just provides interface, money

Lender usually banks

o Can step in if private partner defaults

Independent engineer

o Unusual role

o Both public and private pay

o Checks at milestones


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Nov 30 - ?

Punitive damages

Construction bonds

o

Have to know how to council your clientso Delays cost money

o Clients want risk out of the way, how to eliminate

o Construction bond written agreement whereby a surety bonding company guarantees

that the principle general contractor will fulfill his obligations for the obligee.

o Insurance company some companies specialize in bonds/surety

o Ask general contractor to go see one of these companies. Company will take care of

o Performance bond is a type of construction bond. WHAT IS A PERFORMANCE

COMPANY?

list

For a bond to be valid: The company that issues the bond gives it to the GC and the GC has to sign it.

And the client has to have a copy. If the contract is not delivered to the obligee, then the bond is not

valid.

insurance pays.

Bonding: 3 people GC, client and insurance/bonding company. But with the bond, the insurance

company will come back to you to reclaim the money from the GC.

o

4 TYPES OF BONDS

o Bid bonds

o Performance bonds

o Labour and material payment bonds

o Construction lien bonds

o For a bond to be valid:

The company that issues the bond gives it to the general contractor, has to sign

Bid bonds avoid frivolous bids

Selection based on price

General contractors cut price, then try to raise it based on lack of clarity

Sign on price, surety will pay the difference between lowest and next lowest bid

o Validity of bonds usually 30-60 days

Have to sign it


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Performance bonds--

then this company will take care of getting the job done.

-If the GC goes bankrupt, if you have a bond, then you can pull that bond. The insurance company that

has that bond will pay for the completion of the work.

Wording usually very different

Pull one of the bonds, always do it in writing

o Labour and Materials

I will pay you when I am paid, if thats in there, cannot pull on bonds

Changing scope of project can invalidate bonds

Lien bonds hypothecs,

Labor and Mateiral Payment Bond: General contractor fails to pay suppliers. Generally public work.

Lien Bonds: You can get liens off your property. Once the property is constructed, there are no

encumbrances. The GC has an obligation to ensure that the project is free of all encumbrances and liens.

Example: Health Care facility got a lien placed on it. The lien can be taken off the property if a lien bond

was signed. Free the property from liens which would otherwise compromise the property. Prevents

sub-contractors and GC from holding the property hostage.

How do you get the GC to get the bonds? Put it in the tenure documents.

Law Final Notes

Documents

Transcript of Law Final Notes