Monthly Archives: January 2009

T.Y.P.E.A. Mentorship Program Launch a Success

Posted in: "All, Business Development by Admin | No Comments Saturday, January 31, 2009

Yesterday I had the honour to be invited to serve as a mentor for the inaugural mentorship program at the Taiwan Young Professional and Entrepreneur Association (T.Y.P.E.A.).

Two V.I.P. guest speakers, the head of the Taiwan Economic and Culture Office (the official representative of Taiwan in Canada, T.E.C.O.), Mr. K.R. Wang, as well as the president of Taiwan Entrepreneur Society Taipei/Toronto (T.E.S.T.T.), Ms. Cindy Fan, attended the program launch to wish us luck.

While I was expecting only a handful of people, about 10 mentors and over 30 mentees attended the launch.

The mentors came from diverse backgrounds, including accounting, IT, real estate, financial services, engineering, and marketing, all with substantial experience in their respective fields. From the start I felt very inadequate.

Thankfully, I was able to overcome my insecurity and introduced myself without a shaky voice. The senior mentors seemed impressed with the launch of PSWLaw last year.

Later on, I spoke with several students about being a lawyer, beating the LSAT, and getting into a law school.

Although yesterday was only the beginning, I’m confident about the success of the program. I’d like to thank the staff at T.Y.P.E.A. for making this program possible.

photographs © Keri Liu, 2009, all rights reserved.

For more information about Taiwan, please visit the following sites:

T.E.S.T.T.

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New Contents Added: Support Payment Tax Consequences, Foreign Divorces in Ontario

Posted in: "All, Family Law by Admin | No Comments Friday, January 30, 2009

I am pleased to announce that new contents on support payment tax consequences and foreign divorces have been added under the Family Law section of the website.

Click on the links below to visit the pages.

Support Payments and the Tax Consequences

Remarriage & Foreign Divorce in Ontario

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Support Payments vs. Income Tax

Posted in: "All, Family Law by Admin | No Comments Friday, January 30, 2009

When are support payments tax-deductible? It turns out the rules are quite complicated.

Prior to 1997 spousal and child support were generally deductible in computing the payer’s income for the year, and so they were included in computing the income of the recipient spouse. This is called the “deduction-inclusion” system.

In 1997 the federal government introduced a set of detailed guidelines reversing the “deduction-inclusion” system, mandating that support payments must qualify under the Income Tax Act to be considered deductible.

In general, child support payments made pursuant to an agreement or a court order after May 1997 are not deductible on the part of the payer and are not included on the part of the recipient. The amount paid is considered after-tax spending, just like money each parent would have spent had the separation not occurred.

For spousal support payments, the rules become slightly more complicated.

Periodic (for example, weekly or monthly) spousal support payments made pursuant to an agreement or a court order after May 1997 are subject to the “deduction-inclusion” rule. This means that the amount paid is deductible on the part of the payer and must be included on the part of the recipient.

Lump-sum spousal support payments made pursuant to an agreement or a court order after May 1997, on the other hand, do not qualify for the “deduction-inclusion.” Therefore they are not deductible on the part of the payer and are not included as income on the part of the recipient.

*While I try to provide a comprehensive overview on the rules, readers must consult with a lawyer before relying on any information provided above. This blog does not constitute legal advice.

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Bias

Posted in: "All, Administrative Law, Legalese Dictionary by Admin | No Comments Thursday, January 29, 2009

In common law countries, the constitutional tradition dictates that all disputes must be heard before an impartial third party, free of bias.

Legally speaking, what constitutes “bias”?

In R. v. S.(R.D.), [1997] 3 S.C.R. 484, the Supreme Court of Canada indicated whether any particular set of circumstances will disqualify the decision-maker on the ground of reasonable apprehension of bias depends on the following test:

“[W]hat would an informed person, viewing the matter realistically and practically — and having thought the matter through– conclude?”

In one recently reported case,+ the Ontario Racing Commission held a review hearing concerning a representative’s conduct at a prior hearing.

At the end of the representative’s submission, the panel adjourned for 8 minutes, and returned with their decision. The reading of the decision took 25 minutes. The reasons were pre-typed, 15 pages long, and identical to the written reasons issued on the following day.

The Superior Court of Justice, upon an application of a judicial review of the hearing in question, concluded that the hearing panel prejudged the matter. The court found that it would have been “impossible for the panel to have deliberated and drafted the reasons during the eight-minute adjournment.”

The court ruled that “once a hearing is tainted by the appearance of bias the integrity of the process requires that the decision of the hearing be quashed.” Accordingly, the decision of the Ontario Racing Commission was rescinded.

+Sternberg v. Ontario Racing Commission (2008), 92 O.R. (3d) 257.

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Dog Owners’ Liabilities

Posted in: "All, Animal Welfare by Admin | No Comments Wednesday, January 28, 2009

In my previous blog “Ontario’s Enhanced Anti-Cruelty Law” (posted January 18, 2009), I mentioned several new prohibitions under the new law, including causing animals distress and owning an animal fighting structure or equipment. Today I’d like to talk about liabilities specific to dog owners.

Under the Dog Owners Liability Act, R.S.O. 1990 c. D16, dog owners are liable “for damages resulting from a bite or attack by the dog on another person or domestic animal.”

Unlike other civil liabilities, the dog owner’s liabilities are not dependent on his or her negligence. Rather, the owner is liable regardless of the offending dog’s history and propensity to aggression.+

Although the offending dog’s owner is prima facie (meaning, at first sight) liable for injuries caused by the dog, in determining damages the court “shall reduce the damages awarded in proportion to the degree,
if any, to which the fault or negligence of the plaintiff caused or
contributed to the damages.”*

For example, if someone provoked your dog into biting him or her, you would be liable for the damages or injuries done to the victim, even if the victim was literally poking your dog in the eye with a stick. At the same time, if the court finds that the victim-plaintiff is partially or wholly at fault, the compensation award will be reduced accordingly.

Some may ponder, “What about guard dogs?” If a guard dog bites a burglar who is trespassing, is the owner liable?

The short answer is no.

Section 3(2) of the Act states, “Where a person is on premises with the intention of committing, or in
the commission of, a criminal act on the premises and incurs damage caused by being bitten or attacked by a dog, the owner is not liable … unless the keeping of the dog on the premises was unreasonable for the purpose of the protection of persons or property.”

+s. 2(1)

*s. 2(3)

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恭賀新禧 Happy Lunar New Year!

Posted in: "All by Admin | No Comments Saturday, January 24, 2009

January 26, 2009 is the Lunar New Year!

Many cultures around the globe celebrate this occasion, particularly East Asian ones.

Regardless of where you come from, I wish you happy lunar new year.

Pei-Shing

Toronto 2009

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McGill Law Journal’s Canadian Guide to Uniform Legal Citation

Posted in: "All, Legalese Dictionary by Admin | No Comments Friday, January 23, 2009

A few readers have asked me why some of my citations contain square brackets “[ ]” while others contain parentheses “( )”?

This is because I follow the uniform citation of the McGill Law Journal, Canadian Guide to Uniform Legal Citation, 6th ed. (Toronto: Carswell, 2006).

In summary, let me explain how the citation works.

For case laws, the format is as follows:

style of cause (year of decision), [year of reporter] volume reporter (series) page (jurisdiction)

An example would be:

R. v. Latimer, [2001] 1 S.C.R. 3

meaning

The case R. v. Latimer, which was reported in the first volume of the Supreme Court Report in 2001 starting on page 3. The jurisdiction is omitted because the Supreme Court Report informs the readers that the case was decided by the Supreme Court of Canada.

While

Griffiths v. Zambosco (2001), 54 O.R. (3d) 397 (C.A.)

means

The case Griffiths v. Zambosco, which was decided in 2001 by the Court of Appeal, reported in the Ontario Report, 3rd series, volume 54, starting on page 397.

For legislation, the format is as follows:

Title, Statute volume jurisdiction year (session or supplement), chapter

An example would be

Residential Tenancies Act, S.O. 2006, c. 17

which means

The Residential Tenancies Act is of the Statute of Ontario, which was passed in 2006 in chapter 17.

If you see an “R” preceding “S.O.,” it denotes “revised.”

Now you know!

The Law vs. Justice

Posted in: "All by Admin | No Comments Thursday, January 22, 2009

“If you have 1,000 regulations, you destroy all respect of law,” said Winston Churchill once.

In today’s America, the reality eerily echoes what Mr. Churchill said half a century ago.

The Economist recently published the story, “Law v Common Sense,”+ suggesting that America is being micro-managed by laws and regulations as lawmakers try to come up with rules to cope with every conceivable outcome of life. At the same time, individual judgment is being stifled.

The newspaper gave an illuminating example: a judge sued his dry cleaner for $54 million for allegedly losing his trousers. While the suit was tossed out by the court (after two years of battle), the business owners were saddled with a $100,000 legal bill. They closed the shop and considered moving back to South Korea.

So much for their American Dream. An over-legalistic society is squeezing the joys out of life, the story  concluded, and something must be done.

Fortunately, I believe Canadians are in a better position than their American counterparts.

In Canada, we have the “cost-shifting” system, where the losing party is responsible for part of the winning party’s cost. Hence, if the “pants suit” were in Canada, the defendants would end up with a legal bill for “only” $30,000 if they were awarded with substantial indemnity in cost, $60,000 with partial indemnity in cost.

As a practising lawyer, I’ve utilized the cost-shifting system to fend off vexatious claims, or at least obtained reasonable settlements for my clients several times. I’ve also refused to take on frivolous cases from potential clients on several occasions.

May justice prevail.

+”Law v Common Sense” The Economist 390:8614 (January 15, 2008) 38, online: economist.com <http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=12932224>

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Trust Money & Interest

Posted in: "All, Legal Aid Ontario by Admin | No Comments Wednesday, January 21, 2009

Lawyers generally ask for retainer money before they start working on their clients’ cases. The retainer money, by law, is placed into a trust account and can only be withdrawn upon the delivery of the accounts.

Occasionally, I encounter clients half-jokingly saying, “Look at the interests you make off my deposits!” Alas, it isn’t so.

Under the Law Society Act, when opening a trust account, the lawyer must direct the financial institution (usually a bank, but it can be a credit union or a provincial saving office) that all interests earned on the trust account be paid to the Law Foundation of Ontario.+ (75% of the Law Foundation’s revenue funds Legal Aid Ontario.)

Lawyers are required to file an annual report on the interests earned from the trust account and certify that the interest has been paid to the Law Foundation.

Beyond the traditional retainer-trust money, lawyers are sometimes asked to hold various properties in trust in client-specific trust accounts, or safety-deposit boxes. The properties being held may include trust funds, stocks, shares, jewellriy, art, or real estates. Any appreciation in value of the property accrued in this case belongs to the client, not the lawyer.

Next time you’re asked to pay retainer money in trust, perhaps you can find solace in knowing that you’re making a contribution to the Law Foundation and Legal Aid Ontario.

+For more information about the Law Foundation, please visit their website: www.lawfoundation.on.ca

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Till Tax Do Us Part: A Brief Note on Meal and Entertainment Expenses

Posted in: "All, "Brief Note" Series, Administrative Law, Business Development by Admin | No Comments Tuesday, January 20, 2009

Generally speaking, all expenses incurred for the purpose of generating income are deductible, subject to several limitations.

For example, if you spend $5 to buy flour to make cookies, and you sell the cookies to a local bakery for $10, you shouldn’t pay tax on the $10 you make. Rather, you are entitled to deduct the $5 you spent on the flour as the cost of goods sold from the proceeds of $10 and only pay tax on the difference.

Therefore, if you can prove that the money you spent is for the purpose of making money, (you gotta spend money to make money, right?) you usually can deduct the expenses from your revenue as the cost of doing business.

However, this rule is subject to several limitations. One of the most contentious limitations is meal and entertainment expenses.

For many small businesses that sell services rather than goods, client retention is important. Therefore, many business owners and executives are required to wine and dine their clients. While this sort of expense seems a legitimate deduction claim from taxable income, it has been subject to great abuse.

For example, rather than taking a client out for lunch, the business owner may decide to treat his or her spouse to a fancy meal then try to claim the cost as a business expense. Or, rather than staying at home for dinner, the business owner may decide to go out every day and deduct the expense from his or her taxable income.

Therefore, a special rule on meal and entertainment expenses was put in place: only 50% of the amount spent on meals and entertainment for the purpose of generating income is deductible.

While this rule may seem straight forward, it has been the constant subject of fierce litigation between the taxpayers and the CRA because it catches a wide range of expenses, from office coffee to lobster dinner. The 50% rule applies regardless of whether the taxpayer enjoys the benefit of the meal or entertainment. For example, a real estate agent who gives out baseball game tickets can only claim 50% of the ticket price as an expense.

Moreover, expenses not incurred for the purpose of generating income are not eligible. Hence, you go out to lunch by yourself, it’s not deductible. You should bring a client instead.

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