Frequently Asked Questions About Legal Services

Author: Paul Chadwick | | Categories: Business Law , Employment Law , Real Estate Transactions , Wills And Estate Planning

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When it comes to legal matters, a lack of clarity could cost you big. We value every client and believe that each client should be armed with necessary information before any attorney begins to unravel their legal matter. To equip you with the most accurate and precise information, we’ve answered some of the most frequently asked questions about legal services.

1. What is all this going to cost me?

It is a question often asked, and rightfully so, but there is no satisfying answer. Lawyers most often charge an hourly rate for time spent, however, since a law is essentially an adversarial system, the ultimate cost will be determined once we know what position the other party's lawyer is going to take.

The exception to hourly rates is fixed flat rates, which would apply, subject to unforeseen complications, in real estate transactions, incorporations, wills, etc.

2. If I live common law with a partner for three years, is it true that the law then considers us as spouses with all of the rights and entitlements of a legal marriage?

This is a huge misunderstanding of the applicable law. The Family Law Act provides that after the third year of cohabitation, in the event that one of the spouses has been supported by the other for this period of time, the party who has been supported will be considered a spouse, after three years. However, only with respect to claiming support- living common law affords neither of the parties any automatic property rights which would require an equalization of property ownership between the parties.

In other words, after a 20+ year common law relationship, if one party has none of the assets in his/her name, then that party would not have rights to divide the assets as if married. Now there are always exceptions to the rule, and the spouse with no assets in his/her name may be able to make out a case that due to financial contributions throughout the period by him/her, the party having legal title to those assets may be deemed to be holding fifty percent of these assets in trust for the party having no legal title. It is an uphill legal battle but courts are not inclined to rule against the party claiming the trust, and especially after the cohabitation has been for a significant period of time.

3. Is it true that if I don't have a valid will, that the government will take all of my assets upon my death?

This is just another misconception. If one dies without a will (an “intestacy”), then since you have no directions as to what is to happen to your estate, the Succession Law Reform Act provides for a list of beneficiaries which goes from the closest relative - i.e. spouse first up to $200,000.00, then the spouse and children would share the funds thereafter. The only time that the government is able to seize all of the assets of the deceased, is when he/she dies not only without a will but with no blood relatives in the world.

4. If I was to incorporate a company for my business activities, is it true that I am shielded from any and all liability to the world at large?

This is only partially true. While one of the main purposes of incorporation is to limit the liabilities of the shareholders in their personal capacities. However, there are many circumstances which would allow the courts to ‘pierce the corporate veil’ in order to attach liability to the Directors or sometimes the Officers of the Corporation.

Examples of this are:

- The Directors of the Corporation are personally liable for up to six months of unpaid salary/remuneration to its employees.

- The Directors and possibly the Officers can be found personally liable if they have been the "directing minds" which have caused the corporation to commit fraud or other illegal activities.

- Certain creditors of the Corporation - i.e. the Corporation's bank, its landlord, and even certain trade creditors may demand a personal guarantee from the Shareholders, therefore rendering them personally liable for the Corporation's creditors who have been given personal guarantees.

5. Is it true that if I sell my house, and the purchaser does want to assume (take over) my unmatured mortgage which is registered against the house, that I will no longer have any liability to the lender in question?

Firstly, unlike historically, banks generally no longer allow assumptions of the mortgage debt by a purchaser. However even if the lender was to consent to the purchaser assuming the mortgage debt, you the vendor would remain liable under the mortgage pursuant to your covenant (promise) to pay the mortgage debt, when you first arranged it. Even if the lender consents to the assumption by the purchaser, the lender has not released you from your obligation to pay, and in the event that the purchaser was to default under the mortgage, the lender would immediately look to you to remedy the default, and to continue to make these mortgage payments, until the mortgage is discharged.

6. Why does it seem that when you ask a lawyer for an opinion with respect to a certain situation, that their answers are always a qualified “could be this, might be that - can't say for sure.”

Meaning no disrespect, most people do not understand the job of a lawyer - lawyers advise a client of his/her options, and then it is up to the client to instruct the lawyer.

The law is never black and white - there is a lot of greys and quite often conflicting court decisions with respect to the issue being litigated. Accordingly, the reply from the lawyer is often “if this, then this may be the consequence, but if that, then this may be the consequence.”

It is not that the lawyer is afraid to commit hundred percent to the choice of actions to be taken; it is simply that given the complexity of the law, one cannot absolutely guarantee a specific outcome. There are just too many variables along the way to do that, not the least of which is the degree of adversity from the other party's lawyer.

Remember, virtually everything in law is adversarial and your lawyer cannot begin to predict what position the other side will take; attempt to resolve/settle, or in the event of a refusal or inability to do so, litigation may be the only route possible in order to have a judge rule on the matter. However, there is a saying that if that matter ends up in court, then both involved lawyers have failed in serving their clients' best interests. I don't necessarily agree with this since depending on the attitude of the other party, one may have no opportunity to settle on a reasonable basis, and litigating becomes the only option. By the way, there is another saying to the effect that a good settlement is one in which neither party is happy with, as neither party won, and in effect, given legal costs, etc. one could argue that both parties have lost!

If you have any more questions, reach out to Paul Chadwick Law. I have been providing representation to a variety of individual and business clients for more than thirty-five years. I rely on commitment, compassion, personal attention, and professionalism to get the best outcome for each client. To learn more about how I can help you with you please click here or contact me by clicking here.