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There can be a significant tax impact when a taxpayer dies, resulting in a deemed disposition of property at fair market value.[1] This can create onerous tax consequences, particularly for Canadians owning private company shares.
Capital property will generally “roll-over” to a Canadian resident spouse on death.[2] However, if private company shares are owned on a last-to-die basis, this can create a potential for double tax (and possibly triple tax) in the estate of the deceased.
First Layer of Tax – Capital Gains
The first layer of tax that will apply is capital gains tax on the value of the shares at death. Let’s say a taxpayer passes with corporate shares worth $2,000,000 with a cost base and paid-up capital of nil. This results in a total capital gain of $2,000,000 ($1,000,000 taxable capital gain at current inclusion rate[3]). Applying the highest combined Alberta marginal rate to the total capital gain, this could result in tax up to as high as 24%.[4]
Second Layer of Tax – Dividends
Let’s say the deceased’s personal representative decides to wind-up the company. This results in a deemed dividend of the fair market value of the shares less paid-up capital. In this example, this would result in a deemed dividend of $2,000,000 with tax up to approx. 42%.
If the corporation has assets to sell prior to wind-up, this could create a third level of tax (including taxable capital gain or recapture). If only the above two levels of tax are considered, this can result in an effective tax rate just over 66% on the total value of the private company shares.
There are a couple of solutions which can be employed by the estate of the deceased taxpayer to mitigate this potentially negative tax result.
Loss Carryback
If the shares are held by a graduated rate estate (GRE), the wind-up of the corporation within the first taxation year of the estate creates a capital loss (and deemed dividend), which can be carried back to the deceased’s final tax return to be claimed against the capital gain noted above.[5] Planning must be conducted to ensure the wind-up occurs within the one (1) year timeframe.[6]
The loss carryback results in the capital gains layer of taxation being eliminated and the estate being subject only to the dividend taxation rate.
Pipeline Planning
Alternatively, the estate could consider incorporating a new company (“NewCo”) and transferring the shares of the private corporation to NewCo in exchange for a promissory note. The retained earnings of the corporation could then be distributed to the estate via the note on a tax-free basis.[7]
The pipeline plan results in the dividend layer of taxation being eliminated and the estate being subject only to the capital gains taxation rate[8].
Bottom Line
In both cases, post-mortem (after death) planning is complex, and accounting and legal advisors should be consulted to take advantage of these strategies. Significant potential tax liability can be mitigated resulting in greater distribution to your estate and your beneficiaries.
For more information, please contact Eric Dalke at edalke@walshlaw.ca / 403-267-8454 or any member of our Walsh Tax & Estates team and we would be happy to answer your questions.
Note: This article is of a general nature only. Tax laws may change over time and should be interpreted only in the context of particular circumstances. These materials are not intended to be relied upon or taken as legal advice or opinion.
[1] Subsection 70(5), Income Tax Act, RSC 1985, c 1 (5th Supp) (“ITA”).
[6] Amendments have been proposed to extend the 164(6) timeline to three (3) years.
[7] Certain requirements must be met including the corporation being in existence (and maintaining its assets) for a period of time after death.
[8] “Bump” planning could also be considered whereby non-depreciable capital assets in the private corporation could be bumped to reflect capital gains tax already triggered on death.
Article | admin | February 3, 2025
Understanding Costs in Alberta’s Litigation Process (Part 1)
In Alberta, parties engaged in litigation are entitled to recover “costs.” Costs are awarded to partially compensate parties for expenses incurred during legal proceedings. The primary purpose of a cost award is to indemnify the successful party for litigation-related expenses. Secondary purposes include: encouraging settlements; discouraging frivolous, vexatious, or harassing lawsuits; and promoting efficient and economical litigation.
Key Terms and Framework
The Alberta Rules of Court (“ARC”) outline the rules governing who is entitled to costs, when they apply, and how much can be awarded. Key terms and concepts include:
Costs: Amount awarded by the Court to compensate the successful party for litigation expenses;
Fees: Charges for lawyers’ professional services;
Disbursements: Payments to third parties, such as court filing fees or courier services;
Bill of Costs: Itemized list of the costs, fees, and disbursements sought to be recovered in the litigation;
Schedule C: A tariff in the ARC setting out recoverable costs based on the litigation step and monetary amount at stake; and
Other Charges: Other expenses incurred in relation to non-legal services.
When Costs Apply
The Court retains broad discretion in awarding costs. Rule 10.29 of the ARC establishes the default rule that a successful party is entitled to costs unless a contrary ruling is made. Specific rules address unique scenarios, which may be the subject(s) of future articles.
Types of Costs
There are different types of compensation that may be awarded by a Court:
Party and Party Costs: Partial indemnity for legal expenses. Designed to cover part of the successful party’s legal expenses;
Solicitor-Client Costs: These provide partial indemnity to the successful party. These costs are higher than party and party costs and cover reasonable legal services;
Solicitor and Own Client Costs: These costs, also known as full indemnity costs, are awarded in exceptional circumstances and are meant to fully compensate a party for their legal expenses;
Enhanced Costs: These are higher than tariff costs but less than full indemnity costs. Enhanced costs are awarded in exceptional circumstances where the conduct of one litigant falls far short of what is expected from a responsible litigant;
Punitive Costs: Where the conduct of the party against whom they are sought is described as scandalous, outrageous, or reprehensible. They are intended to sanction/deter bad behaviour related to the litigation and are awarded in exceptional cases;
Costs Against Solicitor Personally: A lawyer may be ordered to pay costs, if they engage in serious misconduct that undermines the authority of the courts or interferes with the administration of justice. Awarded in exceptional circumstances; and
Costs Against the Crown: Although rare, costs may be awarded against the Crown in exceptional circumstances involving serious misconduct by its agents.
Court Considerations
When determining costs, Rule 10.33 of the ARC allows the court to assess factors like:
The result of the action and the degree of success of each party;
The amount claimed and the amount recovered;
The importance of the issues;
The complexity of the action;
The apportionment of liability;
The conduct of the parties that tended to shorten the action; and
Any other matter related to the question of reasonable and proper costs that the court considered appropriate.
In Practice
Cost awards in Alberta’s litigation system aim to mitigate financial burdens while promoting fair and efficient resolutions. Litigation costs are typically awarded on a partial indemnity basis, guided by Schedule C of the ARC. Adjustments may be made in specific circumstances, such as unaccepted settlement offers, including Formal Offers.
The Court retains ultimate discretion over costs, even when written agreements stipulate specific terms for cost recovery. This flexibility gives the Court to award costs that are fair, reasonable, and consistent with principles of fundamental justice.
Article | admin | January 10, 2025
Legislative Amendments and Judicial Consideration Provide Welcome Changes to the PPCLA
Despite being introduced in 2022, the Prompt Payment and Construction Lien Act (the “PPCLA”) has been the subject of little judicial consideration, especially in relation to the Adjudication process under Part 5. The lack of judicial consideration can be explained by both: the transitional provisions of the PPCLA, which allowed the former lien act to govern contracts entered into prior to August 29, 2022;[1] and the fact that the adjudication process has yet to become a mainstream forum for resolving construction disputes.[2]
While we expect that adjudications will become much more common in the years to come, further clarity from the Province and the Judiciary would be a welcome development. This article will summarize some issues with the current PPCLA, the Province’s proposed amendments in Bill 30, then address the little case law that has been released in relation to adjudications thus far.
The Prompt Payment and Construction Lien Act and Bill 30
On November 4, 2024, the Alberta Government tabled Bill 30, the Service Alberta Statutes Amendment Act, 2024 (“Bill 30”), which proposes amendments to the PPCLA.[3] Specifically, Bill 30 addresses when adjudications can be commenced, “clarifies” the definition of when a contract is “completed”, and allows an adjudicator’s determination to be binding even if it is under judicial review, arbitration, or litigation.[4] As of the date of this article, Bill 30 has now passed its third reading.
When Adjudication can be Commenced
Pursuant to section 33.4(3) of the PPCLA, where an adjudication was commenced on the same day that a statement of claim was filed, the adjudication would not proceed.[5] The practical result was that recipients of a notice of adjudication have attempted to “race to the courthouse” and file a statement of claim to avoid adjudication, attempting to frustrate the purpose of adjudication at its beginning.
Bill 30 amends section 33.4(3) so that where a statement of claim is filed the same day as the commencement of an adjudication,[6] both the adjudication and the court action may proceed unless or until a court directs a stay of either the court action or the adjudication.
When a Contract is “Completed”
Under section 33.4(2) of the PPCLA, “An adjudication may not be commenced if the notice of adjudication is given after the date the contract or subcontract is completed, unless the parties to the adjudication agree otherwise.”[7] The usage of the term “completed” resulted in parties experiencing significant confusion as to when exactly a contract is “completed”, as completion was not definitively defined. Was a contract completed upon issuance of a certificate of substantial completion? Was completion only attained when all contract work was completed? Did contract work include deficiencies and extras? Or, most generously, when both of the Parties obligations under the contract were completed, including all payment obligations? Parties to adjudication have become bogged down in this pre-adjudication issue, depriving certain parties of the benefit of a prompt resolution, and leading jurisdictional challenges.
Bill 30 amends section 33.4(2) to allow adjudication to begin 30 days after “Final Payment” under the contract;[8] and defines “Final Payment” as the earlier of either:
(a) the date on which complete payment of the amount set out in the contract or subcontract, as applicable, is made, and
(b) the date on which complete payment of the amount set out in the contract or subcontract, as applicable, is required to be made under section 32.2, 32.3 or 32.5, as the case may be.[9]
Judicial Review, Arbitration, and Litigation
Under the current PPCLA, section 33.6(5) provides that the determination of a matter by adjudication is binding, except where a party applies for judicial review of the determination, where the parties have entered a written agreement to appoint an arbitrator regarding the dispute, or where a court has made a court order regarding the determination.[10] As a result, any determination made by an adjudicator becomes non-binding by arbitration, judicial review, or court order.
Bill 30 amends 33.6(5) of the PPCLA to make a determination binding, except where a court directs otherwise, where an arbitrator has been appointment and makes an award, or where the parties have entered into a written agreement that resolves the matter.[11] The amendments of Bill 30 to section 33.6(5) significantly strengthen adjudicator’s determinations, as compared to the current PPCLA.
A note for Public Works
Bill 30 also amends the PPCLA to expand the application of adjudication to apply to public works, signaling a continuing shift in Alberta’s construction legislation to embrace adjudication.[12]
Welcome Homes Construction Inc. v. Atlas Granite Inc.
Bill 30 provides much-needed clarity in relation to the foregoing issues and significantly strengthens the determinations of adjudicators; however, with the passage of time, we can also expect additional clarity from the Courts. As of the date of this article, the Alberta Court of King’s Bench’s decision of Welcome Homes Construction Inc. v. Atlas Granite Inc., 2024 ABKB 301, stands alone in its consideration of the adjudication process in Alberta.[13] We summarize the decision below:
Background
A dispute was born out of a contract between Welcome Homes Construction Inc. (“Welcome Homes”) and Atlas Granite Inc. (“Atlas Granite”) for the supply and install of marble countertops for a residential project. Disputes arose over the quality of work, leading Welcome Homes to stop payments and eventually terminate the contract. Atlas Granite responded by filing a lien against the project. Both parties then turned to adjudication under the PPCLA, resulting in a decision favoring Atlas Granite. Following the adjudicator’s decision, a notice to prove lien was served on Atlas, prompting the parties to seek advice and direction from the Court.
Key Findings
The Court made two crucial findings that affect how the adjudication process operates under the PPCLA:
Scope of Adjudication – Contractual Rights/Relationships
The Court clarified that adjudication under the PPCLA focuses exclusively on settling disputes related to contracts, and not on issues related to lien rights. This means adjudication is only available between parties who have a direct contractual relationship. Adjudication does not apply to disputes solely based on lien rights between subcontractors and project owners.
Finality of Decisions – Differences in Interpretation
Unlike Ontario’s interpretation, where adjudication decisions are viewed as interim until further legal action, in Alberta, the Court held that adjudicator’s decisions are “final and binding,” unless challenged or varied through Court orders, judicial review, arbitration, or by mutual agreement of the parties.
Key Takeaways
From the Court’s decision in Welcome Homes v. Atlas Granite, three important lessons emerge:
Efficiency in Alberta: For those eligible in Alberta, adjudication offers a faster and more cost-effective path to resolve disputes compared to traditional court proceedings;
Limits of Adjudication: The ruling limits the use of adjudication to disputes between parties with direct contracts. This means, parties who hold liens but lack direct contractual claims, such as subcontractors relying solely on lien rights, may find adjudication less applicable, needing to seek resolution through the courts; and
Future Developments: Ongoing legal interpretations and legislative amendments will continue to shape how adjudication operates under PPCLA, impacting construction industry practices in Alberta
Conclusion
The Welcome Homes v. Atlas Granite decision provides foundational clarity on how construction disputes are managed under Alberta’s PPCLA. It underscores the importance of understanding the specific scope and limitations of adjudication for stakeholders in the construction sector.
For those navigating construction disputes in Alberta, staying informed about legal developments and decisions, like Bill 30 and Welcome Homes, is crucial to ensure you are appraised of the changing construction litigation landscape and how you, or other parties, can pursue claims.
For further details or specific inquiries please contact:
Greenfire Resources Ltd. (Greenfire) recently announced a key legal development involving its shareholder rights plan, or “poison pill,” and the resignation of two directors. The Alberta Securities Commission (ASC) has scheduled a hearing on November 5, 2024, after Waterous Energy Fund (WEF) and related selling shareholders applied to stop Greenfire’s rights plan. This case will illustrate how regulators balance fairness in contested takeovers and the use of poison pills in corporate governance.
Poison Pills: A Takeover Defense
Rights plans, used interchangeably with “poison pills,” are a mechanism used by companies to protect against hostile takeovers by making it more difficult or costly for an acquirer to gain control without board approval. Greenfire adopted its plan after WEF agreed to acquire 43.3% of the company’s shares.
The primary goal of a poison pill is to give the company’s board more time and leverage. It allows management to negotiate better terms, explore alternative bids, or even block a hostile takeover entirely.
Though poison pills are effective, they are often controversial. Critics argue that they can entrench management and block legitimate takeover attempts that might benefit shareholders. As a result, they are subject to legal scrutiny by securities regulators and courts, which assess whether they are being used appropriately or simply to protect the board from losing control.
The Role of the ASC and Fair Treatment of Shareholders
The ASC will scrutinize the purpose and impact of Greenfire’s rights plan to ensure it does not unfairly prejudice shareholders or unduly entrench the board of directors. While the board of Greenfire may argue that the rights plan is necessary to protect shareholder interests, WEF and the selling shareholders are challenging the plan’s validity, likely asserting that it hinders their ability to proceed with a legitimate acquisition.
The ASC’s task in this situation will be to balance two key interests: allowing shareholders to benefit from any value-enhancing transactions while ensuring that corporate governance tools like poison pills are not misused to entrench management or block otherwise beneficial acquisitions. The recent resignation of two directors introduces additional complexity, which may be taken into account by the ASC as part of its broader assessment of governance and fairness in the context of the rights plan.
Navigating Corporate Control and Fairness
The November hearing will be pivotal in determining whether Greenfire’s rights plan is a legitimate tool to protect shareholders or an undue obstacle to WEF’s acquisition. For corporate lawyers and business experts, the Greenfire ASC hearing serves as a reminder of the importance of ensuring that defensive measures align with both legal standards and shareholder fairness. Poison pills can level the playing field for companies facing aggressive bids, giving boards the breathing room needed to consider alternatives and secure better deals for shareholders. However, as with any strong medicine, poison pills must be carefully administered to avoid negative side effects, such as stifling legitimate opportunities for growth.
The Corporate Group at Walsh specializes in corporate governance and mergers and acquisitions. Whether you need support in protecting shareholder interests or negotiating favorable terms, here at Walsh we are equipped to ensure your company’s defensive measures align with legal standards while maintaining shareholder fairness.
Article | Usama Rashid | September 19, 2024
Condominium Bylaws vs. Condominium Rules and Regulations in Alberta
Condominiums in Alberta are subject to a variety of bylaws, rules and regulations. Although each contributes to the operation of a condominium, they have separate functions and distinct legal ramifications. It is essential for both condominium owners and board members to be aware of the distinctions between rules and regulations and also condominium bylaws.
Bylaws are created pursuant to the Condominium Property Act (Alberta) (the “CPA”) and its Regulation. Bylaws are formal, legally binding documents of a condominium corporation that provide a breakdown of its governance and operations. They address a wide range of topics, including unit owners’ responsibilities, common area maintenance, and the duties of the board of directors. Bylaws must also be registered with the Alberta Land Titles Office to be enforceable. Any changes made to the bylaws require a special resolution, meaning the change must be approved by a large majority of the unit owners, usually requiring at least 75 percent of the owners’ approval.
Bylaws typically address the following areas:
Board of Directors: election, duties, and powers of the board of directors;
Meetings: procedures for calling and conducting meetings;
Financial: reserve funds and financial reporting requirements;
Maintenance and Repairs: responsibilities for maintaining and repairing common property and individual condominium units;
Use of Units: permitted and non permitted use of units; and
Enforcement: methods for enforcing compliance.
On the other hand, condominium rules and regulations are more flexible guidelines established by the condominium board to manage the day-to-day living conditions and the use of the common property. Condominium rules and regulations complement the bylaws by addressing specific issues that arise in the daily management of the condominium.
Rules and regulations are created and amended by the condominium board, rather than pursuant to the CPA like bylaws. Unlike bylaws, condominium rules are not required to be registered with the Alberta Land Titles Office and can be amended by a simple majority vote of the condominium board members.
Rules and regulations often cover practical and specific matters, such as:
Common Areas: guidelines for using amenities like the gym, pool, etc.;
Noise: providing time frame for quiet hours;.
Pets: policies on pets (types and sizes of pets permitted); and
Security: methods to ensure the safety and security of residents, such as key access to common areas.
It is important to know that bylaws are formal and legally binding documents that require registration and a special resolution to amend, while rules and regulations are less formal and can be amended by the board at any time. Whether you are purchasing a condominium or joining your building’s board of directors, you should remember that bylaws cover governance issues, fundamental responsibilities, financials, etc., and that rules and regulations address day-to-day use and enjoyment of the property. Further, bylaws can be enforced through fines and legal action, while violations of rules and regulations are enforced through warnings and smaller fines, but do not carry the same weight as bylaws.
Usama Rashid is available to discuss the importance of understanding your condominium bylaws, rules or regulations. Whether you already are or are going to be a condominium owner or board member, please contact Usama Rashid at urashid@walshlaw.ca to have our office review your condominium documentation.
Article | Carmelle Hunka | June 26, 2024
Did You Know – Carefully Drafted Documentation and Policies Can Protect Your Company from Costly Claims Arising from Involuntary Terminations
Exiting or laying off employees is never an easy decision or process for an employer. However, once the decision is made, the manner in which the termination occurs and the accompanying paperwork can protect the employer from claims by the employees.
The first step is to review the employment agreements, company policies and practices, legislative requirements and common law obligations. This review will identify what the employer’s obligation is on involuntary termination or layoff to the employees.
Many employers are uncomfortable including language in employment agreements, offer letters or annual compensation statements that address outcomes when an employee leaves the organization involuntarily. Employers prefer to present the positives in hiring documents. But leaving these matters out can result in higher payments and be more costly in employee departures.
The courts have increasingly provided for inclusion of either short-term bonus or long-term incentives in termination payments, even where there is language in plan documents or agreements requiring the employee to be actively employed on the payment date of these incentives. However, there are strategies to limit exposure to higher payouts through careful drafting.
Once the employer has determined its obligations to the employees on the termination or layoff, a well drafted termination or layoff letter and release sets the stage for a properly executed exit process.
Making sure employees are treated well on their departure and the severance or layoff offer is fair protects the employer from claims in the future.
If you haven’t recently reviewed your employment agreements, plan documents and termination documents, our employment lawyers can assist you. As experienced legal counsel, we can help you draft clear and unambiguous language in these documents to protect your company when an involuntary termination or layoff is required.
After 25 years advising large companies as in-house legal counsel, Carmelle Hunka has joined Walsh to bring her business and employment law experience and practical approach to our clients. Carmelle has extensive experience in all areas of employment law including policies and plan documents, employment agreements, executive compensation including public disclosure, incentive plans, terminations, human rights matters, ethics and business conduct matters including investigations and anti-corruption and anti-bribery matters and advising companies regarding employment law matters in merger and acquisition activity.
The Competition Act (Canada) was amended to criminalize wage-fixing as well as non-solicitation and no-hire agreements (“no-poaching agreements) between employers. This means that it is a criminal offence for employers to enter into agreements to fix salaries, wages or terms and conditions of employment, or to refrain from soliciting or hiring another company’s employees.
It is important to note that this amendment applies to communications between employers, whether competitors or in unrelated businesses. Employers are advised to consider how they participate in industry benchmarking discussions relating to wages and terms of employment. Companies are also advised to consider the extent to which they may have any commercial agreements that contain any wage-fixing or no-poach provisions.
There are some limited exceptions to the application of this amendment including sharing of information between affiliated entities or situations where the companies can establish that the agreement is ancillary to a broader or separate legitimate agreement between the parties and the wage-fixing or no-poach provision is related to and reasonably necessary to give effect to the legitimate agreement. The Competition Bureau has provided guidance that no-poach provisions in merger and acquisition (M&A) agreements reasonably necessary to the purchase and sale agreement may not be covered by the amendment, but there has been no definitive decision in this regard. As a result, M&A agreements should be reviewed carefully to consider this risk.
This amendment does not apply to non-solicitation or non-competition clauses between an employer and an employee (or former employee). That said, in Ontario, the Employment Standards Act (Ontario) has prohibited non-compete restrictions and some non-solicitation restrictions that have the effect of restricting worker mobility (with some narrow exceptions for sale of business arrangements and C-Suite employees).
Our employment lawyers are available to discuss this amendment with you and determine any risks to your business as a result.
After 25 years advising large companies as in-house legal counsel, Carmelle Hunka has joined Walsh to bring her business and employment law experience and practical approach to our clients. Carmelle has extensive experience in all areas of employment law including policies and plan documents, employment agreements, executive compensation including public disclosure, incentive plans, terminations, human rights matters, ethics and business conduct matters including investigations and anti-corruption and anti-bribery matters and advising companies regarding employment law matters in merger and acquisition activity.
Are you a Canadian-based company that engages in any of the following activities:
Produces, sells or distributes goods in Canada or elsewhere;
Imports into Canada goods produced outside Canada; or
Controls an entity engaged in either of the two abovenoted activities.
Additionally, is your company listed on a stock exchange in Canada, or does your company have a place of business in Canada, do business in Canada or have assets in Canada, and meet two of the following three criteria for at least one of its two most recent financial years:
$20 million or more in assets
$40 million or more in revenue
250 or more employees
If so, did you know that your company has new reporting obligations as of January 1, 2024?
The Fighting Against Forced Labour and Child Labour in Supply Chains Act (Canada) came into effect on January 1, 2024 and imposes an annual reporting obligation on companies engaged in these activities.
Companies are required to file an annual report by May 31 of each year on the steps taken during the previous financial year to prevent and reduce the risk that forced labour or child labour is used by them or in their supply chains. Reporting will include the following:
the company’s structure, activities and supply chains,
its policies and due diligence processes in relation to forced labour and child labour,
steps taken to assess and manage the risk of forced labour or child labour being used,
the measures taken to remediate any forced labour or child labour,
the measures taken to remediate the loss of income to the most vulnerable affected families due to measures taken to eliminate the use of forced or child labour,
the training provided to employees on forced labour and child labour, and
how the company assesses its effectiveness in ensuring that forced labour and child labour are not being used in its business and supply chains.
The report must be approved by the “governing body” of the company, which is defined as the body or group of members of the entity with primary responsibility for the governance of the entity. Reports will be submitted to the Minster of Public Safety and must be made available to the public, including by publishing the reports in a prominent place on the company’s website. In the case of entities incorporated under the Canada Business Corporations Act, or under any other Act of Parliament, the report must also be distributed to each shareholder, along with its financial statements.
If your company does not meet the threshold to report but supplies goods to companies that do meet the threshold, you may be subject to inquiry from them regarding your labour practices as a part of their compliance program.
The lawyers at Walsh LLP can help you and your supply chain and procurement teams navigate this new reporting requirement and assist you in preparation of your reports for May 31.
After 25 years advising large companies as inhouse legal counsel, Carmelle Hunka has joined Walsh to bring her business and employment law experience and practical approach to our clients. Carmelle has extensive experience in all areas of employment law including policies and plan documents, employment agreements, executive compensation including public disclosure, incentive plans, terminations, human rights matters, ethics and business conduct matters including investigations and anti-corruption and anti-bribery matters, and advising companies regarding employment law matters in merger and acquisition activity.
The new Streamlined Trial Process is an alternative method litigants may use to advance their claims in a more timely, efficient, and potentially more cost-effective way than a traditional trial.
Following review of the little used summary trial procedures, the Alberta Court of King’s Bench issued a Notice to the Profession and Public of a change to the Alberta Rules of Court in December of 2023.1 This notice states that effective January 1, 2024, the Summary Trial Process will be replaced with the “Streamlined Trial Process”.2
The Summary Trial Process had been scarcely used as it allowed for either party to unilaterally end the process at any time before the summary trial, resulting in uncertainty and inefficiency.3 Further, a Judge could decline to resolve a matter after a Summary Trial, undermining the utility of the process.4
Application for the Streamlined Trial Process
To apply for the Streamlined Trial Process, litigants are to file an application requesting a Streamlined Trial Process, and obtain an order permitting the parties to use the process.5 The Streamlined Trial Process is available to litigants where “an Action can be fairly and justly resolved by the streamlined process, and that process is proportionate to the importance and complexity of the issues, the amounts involved, and the resources that can reasonably be allocated to resolving the dispute.”6
An application for the Streamlined Trial Process can be completed by submitting a written request to the Court with or without consent from all the parties.7 The Streamlined Trial Process may also be initiated through a case management process or by the Court, at its own discretion and on its own motion.8
The Court has suggested that the following types of actions may be suitable for summary trials:
Actions for the recovery of a liquidated sum;
Actions for the recovery of real or personal property;
Actions that depend primarily on the interpretation of documents;
Actions for damages for personal injury where the damage award would likely be under $100,000; and
A Streamlined Trial is considered a full trial on the merits of the action and the decision the Judge renders is final, but still subject to normal rights of appeal.10
The primary difference between a traditional trial process and the Streamlined Trial Process is the form of evidence given to the Court. In a Streamlined Trial Process, evidence is proffered primarily by written affidavits, and affidavit evidence is tested by way of questioning on that affidavit.11 While the Court in a streamlined trial can direct or permit oral (viva voce) evidence, the presumption is that the vast majority of the evidence will be submitted by affidavit.12 By relying on written evidence, streamlined trials reduce trial hearing time required for hearing direct oral evidence and cross examination, leading to lower costs for litigants, and greater access to justice.13
The Streamlined Trial Process also places an obligation on both parties to meet specific deadlines in preparing the evidentiary record to minimize oral evidence and prevent delay.14
Implications
The Court’s implementation of the Streamlined Trial Process increases a litigant’s options to have their claims fairly and justly resolved in a timely and cost-effective way.15 While this process is new and how Courts will apply these rules in practice is still uncertain, the amendments are a welcome replacement to the little used summary trial procedures.
Walsh LLP would be pleased to provide further information on how Alberta’s new Streamlined Trial Process may impact your current or future disputes, please reach out to our Litigation Group for more further information.
1Notice to the Profession and Public: Streamlined Trial Process – Civil (Non-Family) Actions, Alberta Court of King’s Bench, December 22, 2023 [Notice to the Profession, December 22, 2023].
Employees may be entitled to have bonus compensation included in their termination payments.
Regardless of whether a bonus program is characterized as discretionary, if annual bonus payments are the norm, regardless of performance, the bonus may be considered an integral part of the employee’s compensation and therefore should be included in a termination payment. Employers have sought to address this concern by adding wording in bonus plans and employment agreements requiring the employee to be actively employed on the date the bonus payment is made to be eligible. The courts have addressed this issue. If the notice period extends to or beyond the payment date, the bonus should be included in a termination payment.
Employers can add clear and unambiguous language to their bonus plans to limit or remove the employee’s common law right of payment of bonus in a termination payment.
Express language indicating the employee waives their right to any claim to a bonus, or a portion of it, if their employment is terminated before the payment date of the bonus, even the day immediately before the payment date, may be sufficient to remove this employee right.
Our employment lawyers can review your bonus plan and employment agreements. As experienced legal counsel, we can help you draft clear and unambiguous terms in these documents to protect your company
Carmelle has extensive experience in all areas of employment law including policies and plan documents, employment agreements, executive compensation including public disclosure, incentive plans, terminations, human rights matters, ethics and business conduct matters including investigations and anti-corruption and anti-bribery matters, and advising companies regarding employment law matters in merger and acquisition activity.
