Patty Farnham McCuaig Desrochers is pleased to welcome Daniela Perez Taylor to the firm for a temporary articling position for 3 months. Daniela has been a student with the Edmonton Community Legal Centre, and through our relationship with this great organization, we welcome her to the office to gain some added experience and to assist our clients over the spring and summer months.
As a result of Alberta’s The Red Tape Reduction Implementation Act (RTRIA), two significant changes came into force on March 26, 2021 (retroactive to August 15, 2020) that affect all Corporations created under the Alberta Business Corporations Act (ABCA): Corporations are no longer required to have 1/4 of directors be resident in Alberta, and Agents for Service must be appointed for each and every Corporation.
Removal of Director Residency Requirements
Before these changes came into effect, any Corporation incorporated under the ABCA required 1/4 of its directors be resident in Alberta (section 105(3) of the ABCA). This section was repealed by the RTRIA and eliminated this requirement. As a result, there are no residency requirements for directors of Alberta corporations. However, this does not change the obligation that Corporations have registered offices in Alberta (section 20(1) of the ABCA), or any rules with respect to non-resident Canadian shareholders in distributing corporations carrying on business in Alberta.
Introduction of the Agent for Service
With the removal of the Director Residency requirements, the ABCA was further amended by the RTRIA to require that an Agent for Service be appointed for each Alberta Corporation under the newly introduced section 20.1 of the ABCA. An Agent for Service must be a resident Albertan with an office address accessible to the public during normal business hours. An Agent for Service can be changed at any time, and an Agent for Service can resign with 60-days’ notice provided to the registered office of the Corporation.
Changes to rules for Service on a Corporation
These changes also impact the rules for service on a Corporation under section 256 of the ABCA. In addition to serving the Corporation with legal documents (such as a Statement of Claim or Civil Claim used to commence legal proceedings against a Corporation) at its registered office or on a director personally, a Corporation can alternatively be served by delivering documents to its Agent for Service or by sending documents via registered mail to the registered address of the Agent for Service. These changes do provide some flexibility for individuals who hope to start doing business in Alberta but also create new requirements for many new and existing Corporations in Alberta.
To find out if these changes apply to you and your business, or to learn about the advantages that McCuaig Desrochers LLP can provide to you and your business, please contact McCuaig Desrochers LLP’s Business Law Practice Group.
This article was prepared by Jeff Arsenault, a lawyer with McCuaig Desrochers LLP
©2021 McCuaig Desrochers LLP. All rights reserved. The content of this newsletter is intended to provide general information on McCuaig Desrochers LLP, our lawyers, and recent developments in the law and is not to be relied on as legal advice or opinion
The Canadian government has long recognized the importance of people immigrating to Canada as a way to keep our economy working effectively. In November 2020, the government set a target to approve 401,000 people as permanent residents in 2021 as part of its Immigration Levels Plan. This plan is even more imperative, since these immigrants to Canada would help to boost and support economic recovery after the COVID-19 pandemic. Unfortunately, due to the continuing impact of COVID-19, including ongoing border closures and difficulty of people outside of Canada being able to enter to work, study or become permanent residents, this target would be difficult to meet based on the existing pathways to permanent residence. One of the solutions would be to look to the foreign nationals already here, working temporarily in Canada and already contributing to our labour market.
As a result, on April 12, 2021, Canada’s Minister of Citizenship and Immigration, Marco Mendicino, announced 4 new temporary public policies, opening “pathways” for certain temporary workers in Canada to be able to apply for permanent residence (the “Temporary Pathways”). These pathways are temporary, and will only be open for applications from May 6 to November 5, 2021, or until the intake cap for each stream has been reached, whichever comes first. The 4 groups of people targeted for the Temporary Pathways are:
There are application caps in place for how many applications will be accepted. The French-speaking categories do not have application caps. For pathway 1 (essential occupations), the cap is 50,000 applications split between 2 distinct “streams” (20,000 for A and 30,000 for B). Stream A includes health-related occupations, and Stream B includes the other eligible occupations. People applying under Stream A cannot rely on work experience gained in an occupation in Stream B, but those applying under Stream B may combine their work experience with work done in a Stream A occupation if applicable. For pathway 3 (Canadian post-secondary graduates), the cap is 40,000 applications. Workers in Canada can also include their family members who may be in Canada or overseas as part of their applications. Workers in Canada must be working for a wage, and cannot be self-employed (unless it is a medical doctor in a fee-for-service arrangement). It is very important for people who think they may qualify under one of these pathways to review the policy on the IRCC website as there are numerous other requirements to qualify.
For the essential occupations, the IRCC announcement (which is available on the IRCC website) contains an appendix of approved occupations that would qualify. Some of these occupations include groups where people may have previously not had many options to apply for permanent residence. Some notable examples include many healthcare occupations, sales support occupations (such as cashiers and clerks), construction, industry and electrical trades (and helpers/labourers), transport and heavy equipment operation related occupations, agriculture and fishing, trapping and hunting occupations, and machine operators in food and beverage processing. Workers will also have to meet a minimum benchmark (level 4) for either English or French language skills, as determined by their approved language test results (either IELTS or CELPIP).
For recent graduates of Canadian post-secondary institutions, the person must have completed either a degree (program of at least 8 months), diploma, certificate or attestation (program of at least 8 months), including those for skilled trades. They must be currently working in Canada (either pursuant to a study permit if continuing their education), or on a work permit or other authorization to work. Work must be for paid wages. Full-time work is not required, nor is a certain amount of work experience before applying. Applicants must have a minimum language benchmark of 5, calculated as described above. This pathway is an incredible opportunity that should allow many people to apply for permanent residence based on work experience that would not otherwise qualify for other economic options currently available.
The Temporary Pathways are a great opportunity for many people here in Canada to be able to hopefully remain here permanently. It recognizes the incredible work done by many workers in essential occupations, as discovered throughout the past year during the pandemic. It also recognizes the great benefit that international graduates can also bring to Canada. People interested in applying for permanent residence under these pathways are encouraged to review the current Public Policy wording for each subcategory, and keep your eyes out on the IRCC website for complete instruction guides which should be released May 5, 2021. Our Edmonton immigration group would be happy to assist and provide more advice about whether someone may qualify to apply under these Temporary Pathways. If you would like legal assistance, please contact one of our Edmonton immigration team members and we would be happy to assist you.
This article was prepared by Megan Dawson, a partner with McCuaig Desrochers LLP
©2021 McCuaig Desrochers LLP. All rights reserved. The content of this newsletter is intended to provide general information on McCuaig Desrochers LLP, our lawyers, and recent developments in the law and is not to be relied on as legal advice or opinion
Working with business partners has its benefits, but it also has its challenges. It’s not unusual for small disagreements to bubble up with a business partner when dealing with the usual day-to-day stresses of running a business. But what happens if there is a more serious break-down in communication? What if your business partner wants to take the business in a direction you disagree with? What if your business partners try to squeeze you out of the business? In this article, we discuss some of the remedies available to small business owners who find themselves in a dispute with their business partners in an Alberta based business.
Shareholders, Officers, and Directors
“Business Owner” and “Business Partner” can mean different things to different people. Shareholders are the “owners” of the business, they are often entitled to be paid dividends from the corporation (a portion of the business’s profit) and, in some circumstances, entitled to vote for the board of directors. Generally speaking, Directors make the major decisions for the corporation, such as where the business will operate, and report to the shareholders. Officers take care of the day-to-day decisions of the business. In Alberta, it’s possible to hold one, two, or all three of these roles all at the same, and each of these roles have their own unique approach to the remedies discussed below.
We note that sometimes, over and above being a Shareholder, Officer, or Director, an owner may also be an employee of the corporation. Special considerations apply to the employment relationship, about which we do not comment in this article. Should you wish to explore this further, we invite you to contact a member of our Employment Law Group at McCuaig Desrochers LLP.
Unanimous Shareholders Agreement
Often, the best way to deal with potential disagreements is to prepare for them before they arise. In Alberta, if all the shareholders in a Corporation agree, the shareholders can enter into an agreement that provides for a number of different mechanisms to resolve disputes, including provisions that may compel shares to be bought or sold in certain circumstances. These agreements can offer shareholders some certainty and predictability about the parameters of their investment and how the corporation will run.
Whether you are thinking of starting a business, or whether you’ve been working with a business partner for most of your life, it’s never too late to consider a Unanimous Shareholders Agreement. Contact one of our lawyers in the Business Law Practice Group at McCuaig Desrochers LLP if you’re considering a shareholder’s agreement.
Oppression
In some circumstances, whether you are a director, a shareholder, or an officer, you can ask a judge to resolve an issue between you, the other shareholders, officers, or directors, or even between you and the Company as a whole. This is typically called an “Oppression Action” which means that you are asking the Court to intervene because the action, inaction, or other conduct by the directors or officers of the corporation has occurred in a manner that is oppressive, unfairly prejudicial, or unfairly disregards your professional or business interests.
A major barrier to Oppression Actions is the “Business Judgment Rule”. The Business Judgement Rule means that the Court is unlikely to interfere with a decision if the actions of a director, officer, or the Corporation seem to be reasonable and motivated by the best interests of the Corporation. However, the Business Judgment Rule does not mean that the Court won’t remedy a dispute in some manner, as the Court has a number of different ways to craft a remedy to business disputes – such as ordering greater disclosure in the decision-making process. But the Business Judgment Rule does mean that the Court will generally respect that different people may make different decisions when running a business and that’s not something that needs to be interfered with.
Derivative Actions
Sometimes the Corporation isn’t doing what you want it to do. For example, maybe a supplier breached a contract, which in turn causes the Corporation to suffer losses, but the Directors refuse to take legal action against the supplier.
In these circumstances, you can ask the Court for permission to start a legal action on behalf of the Corporation. This is called a “Derivative Action”. The Court may grant you this permission if you prove that: you have a valid interest in the Corporation (such as being a shareholder); you have notified the Directors of your intentions; you are not acting maliciously; and that it appears to be in the best interests of the Corporation to bring the Derivative Action.
Derivative Actions can be started for just about any legal claim that a Corporation may be entitled to commence, even something as straightforward as a breach of contract. However, the Court is generally cautious about granting this remedy, as it is a substantial intervention in the business and operation of the Corporation.
We note that other options may also be available, in addition to Derivative Actions, including but not limited to Court ordered inspections, dissolutions, and other remedies.
If you have questions or concerns about your rights or obligations as a shareholder, director, or officer in a Corporation, please contact McCuaig Desrochers LLP’s Business Law Practice Group for guidance and assistance.
This article was written by Jeff Arsenault, a lawyer at McCuaig Desrochers LLP
©2021 McCuaig Desrochers LLP. All rights reserved. The content of this newsletter is intended to provide general information on McCuaig Desrochers LLP, our lawyers, and recent developments in the law and is not to be relied on as legal advice or opinion.
On March 1, 2021 our offices moved to the 18th Floor of TD Tower
and our new mailing address is now 1801, 10088-102 Avenue NW Edmonton, AB T5J 2Z1
In May 2020, the Court of Queen’s Bench implemented a Family Docket Court (“FDC”) in Edmonton and Calgary. All family matters, with a few of limited exceptions, must now attend FDC before any other Court process can be scheduled. The purpose of FDC is to assess each family’s needs and direct them to the most appropriate services and court processes. Consequently, the Judge sitting in FDC can grant Consent Orders (Orders both parties agree on) but cannot adjudicate contested applications.
Aside from a couple exceptions, parties will have to attend FDC if they are making an application relating to any of the following issues:
Prior to making an application to attend FDC, the Court recommends that parties first attempt alternative dispute resolution to resolve their matter. However, the Court recognizes that alternative dispute resolution may not be appropriate or possible in certain circumstances, in particular where family violence is involved.
To proceed with a family matter in FDC, one party must file and serve a Notice to Attend Family Docket Court on the other, via email. Due to the COVID-19 pandemic, all parties must attend FDC virtually via videoconferencing. In FDC, the Court will first explore whether there is a possibility of resolving the matter without further litigation.. Second, if no dispute resolution has been attempted the Court may, where appropriate, refer the parties to a dispute resolution process, such as mediation, rather than allowing the litigation to advance., Only if the Court considers it appropriate will it allow the matter to proceed to litigation.
Certain family law applications may be brought before the Court without having to attend FDC. This includes urgent applications for a protection order and simple desk applications.
If you are presently dealing with a family law matter, our Family Law Practice Group is available to provide you with legal advice and can assist you with understanding your circumstances and navigating the court process.
This article was written by Sarah McFadyen, a student-at-law at McCuaig Desrochers LLP
©2021 McCuaig Desrochers LLP. All rights reserved. The content of this newsletter is intended to provide general information on McCuaig Desrochers LLP, our lawyers, and recent developments in the law and is not to be relied on as legal advice or opinion.
Lockdowns, restrictions, and other public health measures have been essential in preventing the spread of COVID-19 and in protecting our most vulnerable citizens. While collective efforts keep us and others safe from COVID-19, it creates an isolating and unsafe situation for individuals living with an abusive partner or family member. The restrictions can ultimately isolate vulnerable individuals and can limit opportunities for them to safely leave a dangerous situation.
Both the EPS and RCMP have seen increased calls relating to domestic violence during the pandemic, which generally occurs following a public health crisis or economic downturn, both of which we are currently experiencing. Despite the increased calls to law enforcement, there has been a decrease in calls and use of many Alberta emergency shelters. The decrease in use of emergency shelters does not reflect a decrease in domestic violence, rather a decrease in victims feeling safe or comfortable reaching out. This can likely be attributed to the fear of contracting COVID-19, constant messaging to stay home, and increased isolation and/or increased surveillance by abusive partners or family members. Despite the decrease in calls to and use of emergency shelters in Alberta, they remain open with COVID-19 precautions.
In addition to shelters, an option available to victims of family violence is an Emergency Protection Order, or “EPO”, which is a civil order under the Protection Against Family Violence Act (Alberta). EPOs are court orders that prevent a family member from contacting the victim and can prevent a family member from attending a victim’s school, work, or other places. EPOs allow victims of family violence to obtain an order on an ex-parte basis, which means without giving notice to the abusive family member. EPOs are granted when there has been family violence and the victim has reason to believe that the respondent will continue or resume carrying out the violence, and due to the seriousness or urgency, the order should be granted to provide immediate protection to the victim and other family members who reside with the victim. In some instances, EPOs can grant the victim exclusive occupation of the home for a specified period of time.
EPOs are police enforceable and must be reviewed by the Court of Queen’s Bench within nine days of the order being granted. Upon review, the court can direct that the EPO be revoked, the EPO be confirmed, or the EPO be revoked and replaced with a Queen’s Bench Protection Order. Alternatively, the court may require that an oral hearing be held.
Alberta Courts have updated the process by which individuals can seek EPOs in order to make them more accessible during the pandemic. Notably, the requirement under the Protection Against Family Violence Act that EPOs be made in person has been suspended and applications can now be made over the phone. Moreover, EPOs can now be made by phone through the Provincial Hearing Office when there is no Provincial Court Judge available.
Further information regarding the EPO COVID-19 procedures can be found here.
Anyone in immediate danger should call 911. The Alberta Council of Women’s Shelters confidential hotline is 1-866-331-3933. Further supports can be found here. If you require legal advice, we recommend you contact our Family Law Practice Group via phone or email.
This article was written by Sarah McFayden, a student-at-law at McCuaig Desrochers LLP.
©2021 McCuaig Desrochers LLP. All rights reserved. The content of this newsletter is intended to provide general information on McCuaig Desrochers LLP, our lawyers, and recent developments in the law and is not to be relied on as legal advice or opinion.
The case of Aubin v Petrone, 2020 ABCA 13 (Leave to appeal to the Supreme Court of Canada denied.) is an important decision at the intersection of family law and corporate law that clearly demonstrates the application of fundamental corporate law principles in the context of family law. In this case, the Alberta Court of Appeal, the highest court in Alberta “pierced the corporate veil” and granted a spouse a security interest directly against the property of her spouse’s corporation to secure her equalization payment owing from her husband following their divorce.
To contextualize this application of the law, we must first go back in time over 100 years to the UK case of Salomon v Salomon (1896 UKHL). This case defined our modern view of corporations as distinct legal entities from their shareholders—that a shareholder cannot be held liable for money owed by a corporation. Since then, countless legal cases have reinforced this relationship between corporation and shareholders, that there is “veil” between the two which is not to be “pierced” except in very limited circumstances.
This Corporate Veil is not only the law in the UK but in Canada, too. As the Supreme Court of Canada ruled 1987 in the case of Kosmopoulos v Constitution Insurance Co., the general rule is that a corporation is a distinct legal entity from its shareholders but the Corporate Veil may be pierced when failing to do so “would yield a result too flagrantly opposed to justice”. It is against this backdrop of corporate law that Aubin v Petrone was decided.
Ms. Aubin, like many spouses, helped her spouse, Mr. Petrone, get his business off the ground during their marriage—a corporation in which he remains the majority shareholder today. She contributed in some direct ways, such as working for the corporation in various roles, but also in other indirect ways, such as caring for their children at home and allowing Mr. Petrone to pursue various business opportunities. Through their marriage and their combined efforts, the corporation became successful and valuable. When the spouses split up, most of the family wealth was tied up in the very valuable shares (which the Court valued in the millions of dollars) with relatively few liquid assets.
At trial, the judge awarded Ms. Aubin an “equalization payment,” an order that in exchange for keeping some or all of the property of a marriage, one spouse, in this case the husband, must pay the other spouse money to “equalize” the other spouses’ interest in the property. In other words, because Mr. Petrone kept all of his shares, he was obligated to pay Ms. Aubin for the portion of the shares to which she was otherwise entitled.
As a result of this equalization payment and the significant value of Mr. Petrone’s interest in the corporation as a majority shareholder, when the trial judge made her ruling, Mr. Petrone did not have the liquid assets to pay Ms. Aubin. When the two parties weren’t able to reach a solution to this problem, the trial judge intervened and ordered that to ensure Ms. Aubin eventually received her equalization payment, she could secure her judgment directly against some of the property of owned by the corporation—specifically, a building it owned that was roughly the same value as her equalization payment. If Mr. Petrone still couldn’t pay on certain other conditions, Ms. Aubin could return to court to force the corporation to use or sell this property to pay her judgment.
This decision put corporation law on a collision course with family law; never before in Canada had a corporation’s property been used to secure the debt of its majority shareholder for a spouse’s equalization payment. While we take for granted now that upon divorce spouses are each entitled to share in the property of the marriage, Court of Appeal Justice Antonio observes in the Aubin v Petrone case:
The question arising…is whether or how the corporate veil interacts with principles of matrimonial property division—a concept that did not exist when the law of corporations and corporate separateness developed. For most of common law history, married women could not own property, and divorce was literally or practically unavailable. (Aubin v Petrone, 2020 ABCA 13 at para. 27)
Fundamental issues of law, corporate and family, had crossed. While it was clear in Canadian law that the corporate veil may be pierced if the result would otherwise be flagrantly opposed to justice, rarely had that issue come before the Court in the context of family law.
However, the Court in Alberta wasn’t the first court to grapple with this intersection of family law and corporate law. The Courts in Ontario had grappled with piercing the corporate veil in the payment of spousal support. In Aubin v Petrone,the Court of Appeal summarized that when looking to pierce the corporate veil in order to satisfy a claim by a spouse for spousal support, one must consider (Aubin v Petrone, 2020 ABCA 13 at para. 24):
The court ultimately found that these same principles applied to property as much as to spousal support. Based on this test, the Court ruled it was justified to “pierce the corporate veil” to secure Ms. Aubin’s judgment, not based on a specific act by Mr. Petrone, but rather a pattern of acts and omissions wherein he used his majority shareholder power in a manner that ultimately lead to an injustice in this case that caused Ms. Aubin’s loss (see 2020 ABCA 13 at paras. 71-74).
Unlike the cases in Ontario, a complicating factor here was that in the years since its incorporation, the corporation had grown beyond just Mr. Petrone and Ms. Aubin, and now had other shareholders. However, the Court found that by limiting the security to a specific piece of property (the building) sufficiently balanced the needs and obligations of all parties: Ms. Aubin, Mr. Petrone, and all of the other shareholders (see 2020 ABCA 13 at paras 61-62).
The Corporate Veil has been a pillar of corporate law for a reason: it is important to distinguish between the rights and obligations of corporations from those of its shareholders. But, as has long been established, the Veil cannot be a sham; it exists for a proper purpose, but not to allow flagrant injustice. Aubin v Petrone clearly demonstrates these foundational principles of corporate law apply in family law just as they would in any other legal arena.
We know that going through a separation is a challenging time. If you have questions or concerns about your rights or obligations, please contact our Family Law Practice Group for guidance and assistance.
This article was written by Jeff Arsenault, a lawyer at McCuaig Desrochers LLP who worked on the Aubin v. Petrone matter.
©2020 McCuaig Desrochers LLP. All rights reserved. The content of this newsletter is intended to provide general information on McCuaig Desrochers LLP, our lawyers, and recent developments in the law and is not to be relied on as legal advice or opinion.
The Assured Income for the Several Handicapped (“AISH”) program is a critical support for many disabled Albertans. Often parents or other family members will want to ensure that their disabled loved ones are left with the greatest resources possible when estate planning, while also ensuring that the support received through AISH is not jeopardized in the process.
In order to ensure this is accomplished, an estate plan should be specifically designed with the provisions of the Assured Income for the Severely Handicapped Act and the Assured Income for the Severely Handicapped General Regulation (collectively, the “AISH Legislation”) in mind.
Currently the AISH Legislation allows an AISH recipient to hold assets with a value of $100,000.00 and remain eligible to receive regular benefits. There is also a list of exempt assets that can benefit the recipient and are not included in the calculation of the value of the recipient’s assets. These exemptions include assets held in a trust for the AISH recipient, a principal residence, an automobile, and certain types of long-term investment accounts among other types of assets.
There are also maximum income requirements the AISH recipient can have and continue to receive benefits.
The numerical amounts in the AISH Legislation both for income levels and value of assets that may be held by the AISH recipient may change over time, and so it is important for estate plans to be designed with flexibility to accommodate possible future changes to the legislation.
Generally, this is best accomplished through the use of a trust, wherein the testator (person making a will) names an individual or individuals to be the trustees of estate funds and hold and investment them for the benefit of the AISH recipient. These trusts can be designed with certain conditions and powers of discretion to ensure that the distributions made from the trust comply with the AISH Legislation. These trusts can be designed with the flexibility to accommodate future legislative changes, as well as the changing needs of the AISH recipient.
If you have a family member who receives AISH and you would like more information regarding how you can best plan your estate to provide for them while also ensuring they are able to maintain their AISH benefits, please contact one of our Edmonton wills and estates lawyers for further details.
This article was written by Ben Seigel.
©2020 McCuaig Desrochers LLP. All rights reserved. The content of this newsletter is intended to provide general information on McCuaig Desrochers LLP, our lawyers, and recent developments in the law and is not to be relied on as legal advice or opinion.
McCuaig Desrochers LLP is pleased to welcome Sarah McFadyen as an articling student. Throughout her articling year, Sarah will gain experience in a variety of areas of law.
Sarah McFadyen joined McCuaig Desrochers in September 2020.
Sarah obtained her Juris Doctor from the University of Alberta Faculty of Law in 2020. During law school, Sarah volunteered extensively with pro bono legal clinics, including the Edmonton Community Legal Centre, Pro Bono Students Canada, and she served as the Executive Coordinator for Student Legal Services in 2019.
Prior to attending law school, Sarah received her Bachelor of Commerce with Distinction from The King’s University while playing on the women’s varsity volleyball team.
In her free time, Sarah enjoys hiking, skiing, and reading non-fiction.
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