COVID-19: Business Action Items

COVID-19: Business Action Items

In the face of the current uncertain environment, threat of business disruption follows and there are significant uncertainties regarding the effect of the COVID-19 on supply, production, distribution, human capital management, and other aspects of operations, as well as customer demand. We have outlined certain action items that you as a business owner can take to mitigate and address these concerns as part of your business continuity plan.

Supply Chain and Commercial

If you or your company have entered into a contract (i.e. supply or commercial lease), typically you are required by law to perform the agreed obligations. However, recent events may have or could impede your ability to do so and this is where your contract provisions govern your next steps and potential losses.

  1. Force Majeure: Your contract may contain a force majeure provision. A force majeure clause is that no party to an agreement should be held to perform its obligations to the extent that performance is prevented by certain extreme circumstances outside that party’s control, such as war, labour strikes, acts of God (hurricanes, earthquakes or other natural disasters). The exact language used will be determinative when read in the entire context.
  2. Impossibility and Frustration: The common law recognizes in limited circumstances certain excuses for non-performance, impossibility and frustration.
  3. Impossibility means the performance becomes objectively impossible due to a supervening event beyond the party’s control. For example, impossibility could arise from the quarantine of an individual where the contract performance requires personal performance of the promisor, or where the contract requires continued existence of a specific thing which perishes or is otherwise unavailable.
  4. Frustration is a party’s principal purpose for entering the transaction is destroyed or obviated due to a supervening event beyond the party’s control.

For suppliers entering into contracts, you may wish to include an express force majeure clause, inclusive of COVID-19 and disruptions in upstream supply, together with related provisions to directly address COVID-19. Failure to include this in new contracts could be interpreted as an assumption of risk of the effect of the known outbreak on the supplier’s contractual performance.

Alternatively, suppliers could request the other party to sign a waiver and assumption of COVID-19 risk, which may include disclosure of reliance on third-party suppliers and manufacturers that could result in disruption, delay or demand for product.

Other contractual risk allocations tools can also be utilized, for example, limiting remedies for breach of contract, misrepresentation, or inaccuracy, and expressly excluding consequential damages or losses (from lost profits or opportunity costs), as just some examples.

For existing contracts, typically the parties to a contract do not want the arrangement to fall through. You may want to consider discussing an Amending Agreement with the other party to the contract to postpone performance or implement other contractual elements, such as alternative supply source, until such time as it is achievable or economically viable to do so. However, if both parties mutually agree that the contract cannot be completed a simple Mutual Termination Agreement can be entered.

Landlords and tenants should also take into account commercial leasing considerations and review the rights and obligations they have in the face of a health emergency. Both the landlord and tenant will need to consider how their respective business could be impacted. Considerations include the obligation to pay rent and the scope of any force majeure clause, any obligation to remain open (“abandonment” often being a default), landlord obligation to keep the building safe and clean, landlord right to access and inspection, landlord right to govern the control and operation of a building (including the control of access to a building and common areas), and loss of use of the leased premises or common areas and the right to abate rent or exercise other remedies.

We recommend obtaining legal advice before navigating force majeure notice provisions and related contractual interpretation.

Business Acquisitions and the Business Viability

COVID-19 may impact the operational and financial health of businesses. For contracts governing mergers and acquisitions transactions, business acquisitions and dispositions, and some contracts for the supply of goods and services, whether entered or proposed, certain contractual provisions should be considered, and where possible address the risks.

  1. Material Adverse Effect / Materially Adverse Change: These terms are often used to measure negative effects of certain events on the transaction or one of the parties. It is a common provision used to qualify the vendor’s representations and warranties in a purchase agreement or as a condition of closing, verifying that as of closing there is no material adverse change or effect to the business, results of operations, condition or assets, etc. A material adverse change should be disclosed and typically gives right to the purchaser to walk from the deal. It remains to be seen how the phenomenon of a pandemic will determine the interpretation of these provisions in Canadian law.
  2. Due Diligence Condition: It is important to know the business you are dealing with, particularly when looking to purchase the business. As an example, purchasers will want a condition of disclosure and due diligence review included in contracts for business acquisitions. For vendors, disclosure should include a COVID-19 risk factor; something that can be drafted in to the contract itself.

Price structuring alternatives should be considered by purchasers to protect against overpaying for target businesses or assets that may lose value in the sign-to-close period as a result (direct or indirect) of the COVID-19 outbreak.

For those considering purchasing a business or entering into a merger and acquisition, it is prudent to include a due diligence condition and material adverse change provision.

Vendors should also be cautious of the risk of liability of certain contractual provisions for business dispositions that have not yet closed but for which a firm contract has been entered into.

In the case of contracts for the supply of goods and service, consider the addition of a provision to account for the risk that the company may incur expenses or delays relating to such events outside of its control, which could have a material adverse impact on its business, operating results and financial condition.

Other Action Items

It is recommended that in lieu of in person meetings you make use of the multitude of digital alternatives. Good news – the Electronic Transaction Act (Alberta) allows documents to be signed electronically in Alberta, with some exceptions.

While the scope of this article is not exhaustive, Walsh LLP offers online and telephone conferences to accommodate your business needs in a safe and efficient manner. We are dedicated to helping our local businesses navigate these uncertain times.

Please do not hesitate to contact the writer, Bethan Davies, a corporate commercial lawyer at Walsh LLP should you have any questions.

The Construction Of Constructive Dismissal

Introduction

Constructive dismissal occurs when an employee resigns or quits due to a fundamental or material change to the employment relationship.  These changes can include new job duties and responsibilities, a change to pay structure, a demotion, relocation, or the cultivation of a workplace that creates a hostile work environment. In these circumstances the courts have acknowledged that the employment relationship cannot continue and the resignation can be invalid and the employee may be owed severance.

How Is Constructive Dismissal Determined?

Constructive dismissal is a complicated area of employment law and has been the subject of judicial debate for decades. Although the debate will continue, the Supreme Court of Canada somewhat recently provided a two-step process to evaluate whether or not constructive dismissal has occurred.

Step #1: Did the employer unilaterally breach a term of the employment contract?

  • The contractual term can be express or implied. The breach must be serious and can be a single act or a series of acts that together breach an essential term of the employment contract. The breach is viewed from the perspective of a reasonable person.

Step #2: Was the employer’s breach of the employment contract justified?

  • If the court finds that an express or implied term of the contract was breached, the employer must show that there was a legitimate business reason for the breach and determine whether or not the employer acted in good faith.

What Does This Mean For Employers?

Employers need be cautious about making any changes to an employee’s contract, working conditions, remunerations or other significant employment terms.  Employers must also be cautious when suspending employees, particularly when a suspension may be seen as unjustified and must continuously strive to ensure a safe and healthy working environment.

What Does This Mean For Employees?

Any change to the employment relationship should be reviewed by legal counsel.  While some changes can be justified, other changes may be outside the scope of the employer’s authority or the parameters of the employment contract and may fundamentally alter the employment relationship. If you are of the view that a significant change has occurred, then you should consult with legal counsel in order to be advised of your potential options.

Walsh LLP Is Here To Help

These criteria are not meant to be an exhaustive list of all the factors an employer or an employee should consider in a potential constructive dismissal situation. Many more factors are relevant to minimize the risk of inadvertently creating a constructive dismissal situation where severance and other possible damages may be owed. That is, the employer may unintentionally incur even more liability to the former employee (including human rights complaints or other claims). These liabilities can be significant and harm your reputation and your bottom line.

For this reason, we strongly encourage employers to seek legal advice if they are considering making changes to the employment relationship, restructuring, or have other employment questions. Likewise, we encourage employees, to seek legal advice to ensure that their rights are being protected and they are receiving fair compensation from their employer in respect to proposed changes to the employment contract.

For assistance or additional information on terminations and severance and legal considerations specific to your circumstances, whether as an employer or an employee, please contact Walsh LLP’s Employment Lawyers.

How Is Severance Calculated: Without-Cause Termination Of Employment

Introduction

Alberta Employers, it’s true: our laws recognize your right to manage your workforce. This includes the ability to hire and fire employees. Although this article focuses on without-cause terminations, for more information on the distinctions between just-cause and without-cause termination, please see our article titled: Back to Basics.

Without Cause

Reasons for without-cause terminations can be broad, because the power to terminate is discretionary. Examples of without-cause terminations include an employer’s need to cut costs, to restructure, to downsize, or because the employee is no longer a good fit, or for other reasons. Although an employer is not legally required to provide a reason to the employee to dismiss them without cause, an employer is required to provide reasonable working notice, or else pay severance.

Determining Severance

So, how does an employer determine what to provide for severance? This is not an easy question and legal advice should be obtained. Severance assessment focuses on the specific facts of the termination of employment, and considers at least the following factors:

  • Any valid and applicable policy manual; and,
  • The employment contract.

Caution: Just because a termination provision is contained in an employment contract or policy manual, does not mean that it is legally binding or enforceable. Before relying on such termination wording, we recommend you obtain legal advice on the specific details.

If a policy manual or employment contract does not contain enforceable termination clauses, then the following tools assist in determining what amount of severance is required:

  • Applicable employment standards legislation; and,
  • The common law.

Employment legislation prescribes strict minimum standards, whereas the common determines severance on a case-by-case basis and the case-law has set some criteria to determine severance entitlements:

  1. the character and nature of the employment;
  2. the length of service;
  3. the age of employee; and,
  4. the availability of alternative employment.

Walsh LLP is here to help

These criteria are not an exhaustive list. Many more factors need to be considered in effort to minimize and employer’s risk to owing additional damages that go beyond severance. That is, the employer may unintentionally incur even more to the former employee (including human rights complaints or other claims). These liabilities can be significant and harm your reputation and your bottom line.

For this reason, we strongly encourage you to reach out to us for some legal advice if you are considering a termination, restructuring, or other employment questions. Likewise, we encourage employees, to seek legal advice to ensure that their rights are being protected and they are receiving fair compensation from their employer.

For assistance or additional information on terminations and severance and legal considerations specific to your circumstances, whether as an employer or an employee, please contact Walsh LLP’s Employment Lawyers.

Back To Basics: The Difference Between Just-Cause And Without-Cause Termination

Introduction

A business’ greatest asset is its employees.  This is why terminating an employee is never easy.  Terminations must always be handled with sensitivity and care.  The decision is a fine balance between treating the employee fairly, while balancing the relevant legal principles, and considering the company’s best interest.

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Walsh LLP’s knowledgeable employments lawyers are experienced in guiding employers on the current legal landscape, to avoid the legal pitfalls associated with terminations, and we assist employees to ensure their legal rights have been fully recognized in their time of need.

What is Just-Cause or Without-Cause? When do they apply?

Alberta employers may terminate an employee’s employment for just-cause or without-cause. Each process is legally distinct.  All too often employers use the wrong form of termination, which exposes the company to liabilities including claims for wrongful dismissal, for insufficient working notice, for severance or reinstatement, or lost wages, human rights claims and other claims.

Basic but fundamental examples of some differences between just-cause and without-cause terminations include the following:

A). JUST CAUSE: Just-cause terminations require a high legal burden of proof. The employer must demonstrate that the decision was a reasonable and proportionate response to the alleged wrongdoing.  This decision must also take into consideration the surrounding circumstances.  Just cause terminations can occur as a result of a single incident or a series of small incidents, such as:

  • Undermining, offending or repudiating fundamental terms of an employment agreement;
  • Misconduct that breaches the essential and inherent trust that is implied in all employment relationships, in a way that trust cannot be repaired;
  • Serious misconduct that is incompatible with the employee’s duties and prejudicial to the employer’s business and reputation;
  • Acts of dishonesty, insubordination and abandonment;
  • A single incident that is criminal or quasi-criminal in nature; and
  • A series of small incidents like habitual neglect of duty, incompetence, poor performance, absenteeism and lateness.

Prior to terminating an employee for just cause, legal guidance should always be obtained.

B). WITHOUT CAUSE: Employment contracts are not perpetual agreements and employment is not a guarantee for life. Therefore, without-cause terminations are a tool that allows an employer to manage its workforce. Examples of without cause terminations include:

  • The employer no longer requires the employee’s services, for whatever reason;
  • The employer has decided to restructure its operations;
  • The employer is forced to respond to economic hardships or a downturn in the economy;
  • An employee exhibits unsatisfactory job performance that falls short of just cause; and,
  • The employee is no longer a good fit for the organization.

The above examples are not an exhaustive list.

To limit an employer’s liability for additional claims, without-cause terminations must not offend the applicable human rights or employment laws or other laws. Further, the manner of termination must be conducted carefully and reasonable severance must be provided. Determining what constitutes ‘reasonable severance’ can be complex.  For more information on determining reasonable severance, please see my article titled: How Is Severance Calculated?

Walsh LLP is here to help

In both just-cause and without-cause terminations, the courts review each matter on a case-by-case basis.  To reduce your risks and to avoid the legal pitfalls, we recommend you obtain legal advice.  Walsh LLP’s experienced team of employment lawyers can provide the legal advice you require and advice that is tailored to your specific needs and unique circumstances.

For assistance or additional information on terminations, calculating reasonable severance and legal considerations specific to your circumstances, whether as an employer or an employee, please contact Walsh LLP’s Employment Lawyers.

Appeals Board Takes Sober Second Look At Brownfield Development In Alberta

Walsh LLP working with a team of lawyers from Alberta and British Columbia successfully appealed multiple Environmental Orders that were issued by the Director of Alberta Environment and Parks.  The appeal of these Orders was heard by Alberta’s Environmental Appeal Board over the course of a twelve day hearing, which is now the longest ever in the history of the Board.

The Orders issued by the Director required, among other things, the immediate removal and disposal of contaminated soil that has been at depth for well over three decades.  The clean-up cost of removing all of the material as suggested by the Director in these Orders was estimated to be approximately $52,000,000.00.  While the Director cited that the removal of this material was an “emergency,” the Appeals Board disagreed with that characterization and actually found in their decision that the removal of these soils as contemplated by the Orders would pose a greater risk to the health of nearby residents.  The Appeals Board further found that the Orders were issued without proper technical or scientific foundation, and recommended that the Minister of Alberta Environment and Parks reverse the Orders. The Minister subsequently accepted that recommendation.

While the details in dispute in this hearing were incredibly complex, there are clear implications from this decision in respect to the future of brownfield development in Alberta. With thousands of contaminated sites throughout the Province, it is important that our legislative framework allows for development of these sites in a manner that reduces risk to human health, and encourages productive use of contaminated land.

One of the largest roadblocks in facilitating brownfield development is the risk of liability, which was certainly a risk that was front and centre to these proceedings.  Had the Director been successful in enforcing these Orders, which were repeatedly referred to as “incorrect and unreasonable” in the Appeal Board’s decision, it would have arguably set a precedent that would destroy the commercial viability of brownfield development in Alberta.  There is and always has been a liability risk associated with brownfield development, however, the risk must be informed by a proper scientific and technical understanding of the site.

It is likely that challenges associated with brownfield development will continue into the future, as environmental legislation will continue to evolve along with our scientific understanding of these sites.  However, ideally this decision gives some comfort to those looking to invest in brownfield development that the risk of liability will not include liability associated with “incorrect and unreasonable” clean-up demands that are lacking in proper technical and scientific foundation.

For the full decision of the Environmental Appeals Board, click here.

Have Environmental or Commercial Litigation questions? Walsh LLP’s Commercial Litigation group is here to help.

BILL 5: A Welcome Amendment For Estate Planning With AISH Recipients

What is Bill 5?

On June 11, 2018, Bill 5 (An Act to Strengthen Financial Security for Persons with Disabilities, SA 2018 c12) was passed in the Alberta Legislature.

Bill 5 amended the Assured Income for the Severely Handicapped Act, adding a category of assets that would be exempt from eligibility calculations under the Alberta’s Assured Income for the Severely Handicapped (“AISH”) program.

What is the significance of Bill 5?

While estate planning for family members and dependants is not new in Alberta, estate plans with AISH recipients has, in the past, undoubtedly required special attention and strategic planning to determine how much, and in what format, gifts and inheritances should be transferred.

Under the old rules, assets held in trust for a recipient of AISH benefits were included in that individual’s asset calculations (this also included assets held in trust for a recipient’s spouse). This meant that being named as a beneficiary of a family trust or a testamentary trust could affect that individual’s AISH benefits eligibility, regardless of whether funds or assets were actually ever transferred to the individual. Henson trusts (a type of discretionary trust used commonly used for individuals who receive government disability benefits) were recognized as being excluded from asset calculation in a majority of provinces in Canada, except for Alberta.

Bill 5 amends the AISH legislation so that a dependant’s interest (or their spouse’s interest) in a trust as a beneficiary is excluded from the calculation of assets for determining AISH benefit eligibility. This is a welcome change for parents and family members who want to leave a gift or an inheritance to dependants without having to prematurely direct how and in what quantity the gift or inheritance is to take. While trust income that is actually paid to the individual is still counted towards their benefit eligibility, this change means that parents and family members can better incorporate and utilize Henson trusts in their estate plan for beneficiaries who are entitled to AISH benefits.

Does Bill 5 change my Estate Plan?

Ultimately, Bill 5 and the amended AISH legislation gives parents and family members more freedom to structure their estate plan in a way that allows the beneficiary to receive both AISH entitlements and an inheritance.

Whether Bill 5 affects your current plan will depend on what you currently have in place. As with all estate planning, it is a good idea to have a review at regular intervals, to ensure that the documents and structures still reflect your wishes, and to determine whether any changes in legislation or common-law otherwise affect your plan. If you have any questions about how the new legislation or common-law may change what you have in place, or know that your plan requires changes, our Wills & Estates department is happy to help.

Taking Care of Business – What Are “Dower” Rights And How Do Spousal Interests Affect Your Business And Real Property Rights

What are Dower Rights?

You may have heard of the term “dower rights.” But, what is it? Well, in simple terms, it is a married person’s right in the homestead and property of their wife or husband. It is legislated in the Dower Act, which protects the rights of a spouse and prevents the other spouse from selling, mortgaging, or transferring or gifting the property out from under them.

Dower rights, as well as spousal property claims, can have costly impacts on you, if you don’t address them with proper legal steps.

What this means when you sell or refinance your house, or make your Will

If you own a home that you or your spouse lived in and the title to the property is only in one of your names, the spouse without title in their name must sign a properly-prepared dower consent before you can legally transfer, mortgage, or gift the property.

When making you Will, remember that dower and other spousal rights belong to the surviving spouse, so you cannot give what you don’t own (by Will or otherwise), and dower or spousal rights may still attach to your assets and what you thought you gave in your Will may not in fact go to your beneficiaries. At least not without dealing with any applicable spousal claims.

Divorce and your business

Spousal rights are often overlooked when you start a new company. Upon break-up of the marriage, your spouse’s rights in the company can change your plans significantly. This can be especially so if your spouse is a co-founder of your business or if you bring a new spousal partner into the business.

A company held by one of both may, in some situations, be marital property to be divided under the Matrimonial Property Act. If property is divided, there may be a risk that the former spouse may be deemed a shareholder.

What you can do about it

Whether you simply want to simplify handling your property, your business, or your estate plan, there are a number of steps you can take to protect your interests. These include:

1. Getting a Release of Spousal Rights (including Dower) for Property: Your spouse could sign a release of their rights, dealing with the specific lands or other property or business assets.

2. Shareholder Agreement: Shareholder Agreements govern the relationship between the shareholders of the company and its purpose is to protect all of their interests and kept the business running if there are ever problems in the future. Our lawyers can draft an agreement that will ensure that a former spouse of a shareholder cannot become a shareholder through divorce. This protects the value of your business, because it may ensure that no shareholder has their ownership or disclosure rights restricted or hijacked by a spousal claimant.

If both spousal owners have shares in a company, the Shareholder Agreement could plan ahead for a situation where maybe they cannot work together anymore. We can help you create the remedy for this problem, in advance, to create mandatory buying-and-selling rights, in the event of an irreconcilable dispute; you can even pre-determine the buy-out price!

3. Pre-nuptial Agreement: Well before you get married, you should consider making a pre-nuptial agreement to deal with property owned jointly or by either spouse (amongst other issues these agreements can avoid!).

Conclusion

To manage potential risks of a new relationship, we encourage you to start right now, with good planning. It sure can protect you later down the road! To discuss this, please contact one of our Business Law or Wills and Estate or Family Law lawyers today.

Estate Law Update: Is A lost Will A Fatal Event? And, Is A Detailed Intention To Make A Will Enough To Make A Will?

The Alberta Court of Appeal has answered both of these interesting questions, on the same day!

Lost and Found – If a Will is lost, how can it be “found” again?

Although the Court doesn’t address the more philosophical question here, it does answer the more practical question of what the executors and beneficiaries can do when the original document itself is nowhere to be found, when the testator dies.

On January 30, 2019, the Court of Appeal decided in the Neufeld v. Neufeld case (2019 ABCA 33), that an unsigned copy of a 1988 Will can be given a grant of probate.

Although this is not new law, the Court of Appeal has given it fresh effect. In the Cordell case we discussed in 2016, the lower court (Queen’s Bench judge) found that Will was proven solely by oral testimony of its contents (where the document was entirely missing upon the testator’s death).

The lower court in Cordell applied a more detailed standard than the new Neufeld decision. In the Goold case we discussed in 2016, the court looked at an analogous situation where the Will was a photocopy of the signed holographic Will, but not the original ink version. Both the Cordell and Goold decisions granted probate of the Wills.

The new Neufeld decision is the highest and newest case on “lost Wills,” in Alberta. The Court of Appeal dismissed the allegation by the appellant that the lower court had no authority to do so, and upheld the lower court’s grant of probate of a copy of a lost Will. The high court in Neufeld confirms that the courts do have authority to consider your application to save a lost Will, if you can show:

1. The lost Will was “duly executed.” This means that the testator signed it in the presence of two subscribing witnesses and all 3 signed the Will together, for a formal Will; or that it is entirely in the testator’s own handwriting and signed by the testator, for a holographic Will; and,

2. The copy reflects the contents of the lost original Will. This requires proof that the testator “knew and approved” the original Will’s effects, in a legal sense; and,

3. The presumption that the testator destroyed the Will, if the original is not found at death, is rebutted or inapplicable. If the testator was the last one holding the Will before they died, but it is missing at death, there is initially a weak presumption that the testator destroyed the Will and it is accordingly voided. However, that presumption can be rebutted. Doing so requires proof of chain of possession and that the Will continued to exist up to the moment of death: in other words, that the Will was always in the testator’s possession before death and beyond, up to the date it was lost.

As in all estate litigation, the evidence presented must be corroborated by more than just one witness attesting to the key facts, as required by the Alberta Evidence Act. Such proof can be by multiple witnesses, or a combination of witnesses and records or declarations that, together, corroborate the statements to convince the court.

So, as of 2019 the law in Alberta is that you can indeed find a Will again. All is not lost.

Is a Detailed Intention to make a Will, a “Will”?

It seems perhaps obvious that one can no more wish a wild horse into being by picking its name, than they can wish a Will to spring forth from merely naming names or drawing out broad strokes in the abstract sense.

In this new court case, it appears that the latter logic was an honest but mistaken view of section 39 of the Wills and Succession Act.

In some situations, section 39 the may indeed save a “slip,” from killing an otherwise valid Will.

On January 30, 2019, the Court of Appeal in the Re Hood Estate case (2019 ABCA 34) found that if there is “clear and convincing evidence” that the testator “intended to sign the document (Will) but omitted to do so by pure mistake or inadvertence,” and that the document was the testator’s final, binding intention for their property (i.e. their “last Will”) then the courts indeed can correct the oversight of failing to sign it by deeming the Will signed and valid.

However, in the Hood Estate case, the argument advanced by the disappointed beneficiary (the testator’s nephew), is that his aunt intended to change her Will, hired a paralegal to prepare the drafts, but failed to sign it before she died, and so her death itself was the “inadvertence” that prevented her from actually signing it, to satisfy s. 39 of the Act and deem it signed.

The apparent gap in this argument that both the lower court and the Court of Appeal found, is that mere death itself comes to each of us, and cannot be an “inadvertence” that gets in the way of the signature. In the Hood case, the aunt had also had a lengthy period of time, albeit while in the hospital (a not-uncommon scenario in actual practice), to review the detailed draft Will that the nephew apparently shuttled between the paralegal and his aunt. The appellant (nephew) presented no convincing evidence as to why it wasn’t equally logical that his aunt simply either never reached a “final, fixed intention,” to make that Will valid, or that she had even intended to sign it.

This decision confirmed that under Alberta’s legislation, the courts do not have the ability to imagine into being the missing evidence of that final intention to sign the document. And, the testator’s death itself while a draft is “out there” on the high seas, does not allow an inference that they intended to put into port to sign that draft document.

So, in short: even a detailed draft wish is not a final wish, without being either a firm and final swish of the pen or a mere a slip twixt swish and swatch. To learn more or to begin a discussion regarding your unique situation, please contact one of our Wills and Estate lawyers today.

Oil and Gas: Supreme Court of Canada Rules That Environmental Liability Follows The Company

And in this case, the borrower/trustee in bankruptcy. Provincial regulations govern, so the company’s liability to remediate well sites continues beyond even insolvency.

The Supreme Court overturned Alberta Court of Appeal’s earlier finding that liabilities didn’t follow the company under bankruptcy law (that’s no longer the law of Canada/Alberta). The policy at play here is that environmental liability is not a form of money debt per se, so the bankruptcy laws don’t wipe it out.

See full case report for Orphan Well Association v. Grant Thornton LLP.

If you have any questions, please call our Business and Corporate Law group, today. We will be happy to help you with your needs. If you want more information about our business law services, there are more articles here.

Walsh LLP Announces John Jung’s Addition To The Partnership

We are pleased to announce that John Jung has joined the partnership of Walsh LLP, effective January 1, 2019.

John’s real estate practice encompasses commercial transactions, financings and real estate developments, including:

  • Acting for developers and builders in the planning, development and conveyance of real estate, purchase, sale and lease transactions dealing with commercial and residential real estate.
  • Creation and advice on commercial and residential condominiums.
  • Construction financing and mortgaging.

John successfully combines his real estate experience with his commercial and corporate law practice. He has served clients through complex commercial financings, asset acquisitions and dispositions, and share transactions. He handles development issues arising at the planning stage and construction stage.

Visit John’s profile to learn more.