PSW Law

PSW Law
Toronto, ON
416.433.5531
www.pswlaw.ca

Hello and welcome!

My name is Pei-Shing Wang. I am a lawyer practicing in Toronto. I can be reached at 416-433-5531.

I offer services in the following areas:
- Business Law
- Integrated Small Business Solutions
- Contract Law
- Copyright Law
- Civil Litigation
- Family Law
- Administrative Law (ODSP/OW, Landlord and Tenant Board)

Please visit my website or call for more information about my services.

Business Law

Sole Proprietorship

Sole Proprietorship is the simplest way to conduct a business. The cost of starting up is low, and the owner and the business are seen as one entity in law.

Registration
In Ontario, there is no requirement to register your business name per se, especially if you are conducting your business under your own name, e.g., Pei-Shing Wang.
However, if you want to open a bank account in a business name that is different from your personal name, you will need to register your business name with the provincial government and obtain a master license for your business. The cost of registration is nominal, about $70 at the moment.
Although there is no mandatory requirement to register your business, there may be other considerations that encourage you to do so. For example, retailers are often required to register with the CRA (Canada Revenue Agency) and collect GST and PST.
In certain industries, you may be required to be licensed by the regulating body. The regulating body may require proof of your business. However, if you have a master license from the province, you simply comply with the regulations without further need to prove the existence of your business.

Liabilities
In law, there is no distinction between the owner and the business; the owner and the business are seen as one. Therefore, all net income from the business (revenues minus expenses) is treated as the owner’s income, and is taxed accordingly. If an owner owns several profitable businesses, the aggregated income from all businesses may push the owner into the highest tax bracket.

On the other hand, if the business is unprofitable, the owner is liable for the business debt. For example, if the owner borrows money on behalf of the business, and the business is unable to come up with the payment when it is due, the owner will be required to pay back the loan from his or her own pocket. If the owner does not have the money, the owner will be required to sell his or her own assets to satisfy the debt, or to declare bankruptcy.

Beyond the obligation to be responsible for the business debt, the owner is also personally liable for all civil and criminal liabilities incurred during the operation of the business. For example, if the business is being sued by a customer for a slip-and-fall accident, and is found liable, the owner will be held personally liable for the damages. The potential liability of a business owner operating under sole proprietorship in a lawsuit is unlimited.

When a business grows to a certain size, the potential risks of liabilities quickly outweigh the benefits of operating under a sole proprietorship. I generally advises my clients to seek other operation methods when the business has grown sufficiently large.

Partnership

Partnership is a more sophisticated form of sole-proprietorship. There is no distinction between the business and the owners, called partners. The partners are personally liable for the business’ liabilities in the most part. The partners act as each other’s agents, and are bound by the decisions made by the other partners

Registration
There is no mandatory requirement to register a partnership, especially if the partnership consists of the names of the partners. If you are operating under a name that is different than the partners’ names, you are then required to register the name with the provincial government.

Liabilities
Very much like the owner of a sole-proprietorship business, there is no distinction in law between the business and the partners of a partnership.
For tax purposes, the earnings of the partnership will be divided at year-end, and the partners pay income tax on their incomes accordingly. In profitable partnerships, the high incomes often push the partners into the highest taxation bracket under the Income Tax Act.

As with sole proprietorship, the partners are personally liable for any liabilities incurred during the operation of the business, including business debts and damages or penalties as a result of a lawsuit.

What is more, the partners are agents of one another; business decisions made by one partner is binding on the rest. Therefore, it is very risky to form a partnership with someone you do not know or trust.

Partnership Agreement
Partnership agreements set out the rights and obligations between the partners. They may also spell out how earnings are shared at the year end, and what authority or decision-making power one partner has in the business.

The cost of a partnership agreement is high. This is because the partnership agreement must be tailor-made to each partnership’s concerns. After the partnership agreement has been drafted by the lawyer for the firm, the partners are nonetheless generally encouraged to seek their own independent legal advice. These factors push the cost up.
However, many small partnerships operate without a partnership agreement. In this case, the partnerships will be governed by the default rule under the Partnership Act.

Corporation

The corporation is a modern legal creation. A corporation is treated as a separate entity from its owner(s), and may acquire properties, rights and obligations of its own.

Terminology
The owners of a corporation are called shareholders.

The shareholders hire a board of directors to run the company. The directors make all the business decisions, and are the mind and soul of a corporation.

The board of directors, may at their discretion, hire high-level managers to run the company on a day-to-day basis. These managers are called officers.

The directors generally delegated certain decision-making powers to the officers. The powers generally include: hiring and dismissing of lower-level employees, purchasing and selling inventories and assets, conducting business transactions, and so on.

In small corporations, it is not unusual that one person is the sole shareholder, director, and officer of the corporation at once. This is perfectly legal and does not affect the corporation’s separate existence from its owner.

Registration
Registration is required for corporations operating in the Province of Ontario.

Liabilities
In contrast to the liabilities of sole proprietorships and partnerships, the shareholders are only liable to the extent of their investment in the corporation. If a corporation is found liable for damages and is unable to pay, its shareholders will not have to worry about losing their homes to satisfy the liabilities (unless they mortgaged their homes to buy the shares in question).

Directors and officers of a corporation, on the other hand, may from time to time be held personally liable for the wrong-doings of the corporation.

Tax Considerations
Because the corporation and its owners are separate and distinct in law, the corporation must pay tax on its earnings. The after-tax earnings may be retained by the corporation, or paid out to its shareholders as dividends. The dividends are seen as the shareholders’ income from their investments, and thus they are taxable at the individual shareholder’s tax rates.

To avoid double taxation (which occurs when the shareholder is also paying tax on the corporation’s already-taxed earnings), the shareholders are given a tax credit for the dividends they receive. Governed by the Income Tax Act, the tax credits are supposed to neutralize the burden of double-taxation.

Integrated Small Business Solutions

Starting a Small Business in Ontario
After you decide on the legal form of your business, I will:
- Inquire into the nature of your business and any applicable industry standards
- Advise you on whether additional licensing or registration is required for your business
- Evaluate the potential liabilities in law
- Direct you on tax and duty collection obligations, ensuring that you are in compliance with the law
- Guide you through the registration process
- Facilitate start-up capitals through major financial institutions by providing independent advice
- Draft shareholder or partnership agreements.

Operating a Small Business in Ontario
To assist you in operating your small business, I can:
- Ensure your statute and regulation compliance
- Provide independent legal advice to your commercial transactions
- Help you adopt a standard commercial contract
- Minimize your exposure to legal liabilities
- Protect your interests against competitors, government agencies, and former employees
- Negotiate commercial transactions on your behalf
- Provide legal services in a cost-effective manner

Debt Collection and Commercial Dispute Resolution
Offer your small business a stream-lined process for debt collection and commercial dispute resolution. I can:
- Draft and send out collection letters on your behalf
- Negotiate payment terms and conditions before the matter reaches the court
- Facilitate mediation and explore other dispute resolution methods
- Evaluate your case and advise you of the costs and chances of success
- Prepare your claims and court documents for your case
- Represent you in settlement conferences and the trial

Civil Litigation Services

Civil Litigation
Asking a lawyer to explain the process of civil litigation is like asking a doctor to explain how the human body works: it can be as short as a paragraph, or it can be as long as a book. I will try to briefly explain the process and what you can expect during litigation.
Starting a lawsuit The civil litigation process starts with a “claim.” The person making the claim is called a “plaintiff.” The claim contains three parts: the facts (also known as the “particulars”), the grounds in law (also known as “style of cause”), and the order you would like the court to make (also known as “prayer of relief”). Some people try to cram as much in a claim as possible, perhaps hoping to impress the judge. However, the truth is that the claim is not evidence. It is more like a blue print for the judge to follow, rather than a detailed essay on why you should win the case.

The person you are claiming against is called the “defendant.” There can be more than one defendant in a case. Once the claim is properly issued and served on the defendant, the defendant gets the chance to tell his or her side of the story in a document called “defence.” The defendant can also make his or her own claims against the plaintiff and other involved persons.

Midway through the lawsuit
Once both sides have had a chance tell their stories, the parties will have to disclose all documents relevant to the case to the other side. This is called “discovery.”

Many people are under the impression that it is best to keep things secret and surprise the other side at trial, as in some movies. Unfortunately, this is not true in Ontario.
The parties are required to give all evidence available to the other side, whether good and bad. If you do not disclose the documents, you will not be allowed to use them at trial.

When it comes to evidence damaging to your case, you are nonetheless required to disclose it. If you are caught withholding evidence, the court may award costs against you, or even set the ruling aside. Thus, it is important to disclose everything you have so both sides can have an opportunity to evaluate the case fairly.

After the discovery, you can ask the other party questions about the documents they have just disclosed. This is called “examination.” You can ask the questions in writing or in person. The examinations are done out of court, but they are conducted under oath. A court reporter will also be present.

Mediation and settlement conferences
In certain cases, the parties are also obliged to undergo a mandatory mediation within 90 days after the first defence is filed. You can ask for an extension if you feel that you will a better chance to settle after the discovery and examination.

If the mandatory mediation fails to produce a settlement, before the case is set for trial, the court will require a meeting of all parties to see if the matters can be resolved before the trial. This meeting is called a “pre-trial conference.” Sometimes it is also called a “settlement conference.” The pre-trial conference is held in front of a judge or a junior judicial officer called a “master.” The parties will explain their positions and the judge or master will tell them what is likely to happen. What the judge or the master says during the conference is not binding, but most people tend to go with it and settle the case. The lawyers will also evaluate the conference and advise the parties accordingly.

Many people are surprised that over 95% of cases are settled privately. This is because the rules governing the civil litigation process are designed to facilitate settlement.
I always encourage clients to make an offer that they can live with, because if the offer is rejected and the eventual outcome is less favorable than the offer, (meaning: you should have taken the offer!), there will be cost consequences on the parties. If the outcome is better than the offer that was not accepted, there is no penalty for making that offer. In the end, you have nothing to lose in making a reasonable offer.

At the end of the lawsuit
If all settlement attempts fail, then the case is set on trial. As rare as civil trials are in Ontario, they do happen.

Most civil trials are tried by a judge alone without a jury. A jury trial is allowed upon the parties’ request and if the matter is not too complex for a jury. Jury trials are a lot more time-consuming and much more expensive than trials by judge alone. Unlike criminal jury trials, many lawyers agree that there are few benefits in asking for a jury trial in a civil matter, even if the rules allow it.

After the trial, the judge will make an order as to the outcome of the trial. If the plaintiff wins the case, the defendant will have to pay the plaintiff according to the order; if the defendant wins, the case is dismissed, and the defendant owes the plaintiff nothing.

In Ontario, the winning party is entitled to recover their costs for the action (meaning: you should have settled!). The cost awarded is generally around 60% of the actual costs paid by the winning party. This serves as another incentive for the parties to settle their cases privately.

Copyright-Related Services

What Is Copyright?
In plain English, copyright protects the author’s work from being copied without the author’s OK.

When the first copyright law was passed in the UK in the 1700s, the printing press was becoming more and more accessible to the public. The law was designed to prevent books from being printed without the author’s consent.

The rationale behind copyright laws is that if a book couldbe re-printed freely, and sold at a cheaper price, then soon the pirated copies would flood the market and ruin the author’s incentive to invest the time and effort to create further work.

Today, in the twenty-first century, the rationale still holds true. As the law develops, the copyright now protects four categories of original work: literary, dramatic, musical and artistic work. The categories are interpreted broadly; perhaps the most noteworthy aspects that computer programs are now protected as literary work.

As the law stands in Canada, if you have created (and not just copied) any original work that can be said to be literary, dramatic, musical, or artistic, you are entitled to protection under the copyright law. Of course, some exceptions to this rule will apply, but for our purposes, we will say that the author is the copyright owner.

Remember that copyright only protects the work from being copied. Unlike other intellectual protections, such as patent, copyright cannot help you if someone independently produces a piece of work that is similar to yours.

Of course, you can try to enforce your right against this piece of similar work, but if the work was created genuinely in an independent fashion, the court will not step in and stop the similar work from being published. In other words, copyright law can only protect your work from being copied; if someone were to create with his or her own similar work without copying yours, then there would be no infringement.

Do I Need to Register My Work?
As it turns out, copyright in Canada does not require any kind of formal registration. Your copyright arises automatically when you finish your work, without your having to file or register the work with a governmental agency.

Although there is a Copyright Office in Canada that accepts registration of copyright-protected works, the registration only provides an assumption in law that recognizes you as the copyright holder. This assumption is not absolute.

If the opposing party can rebut this assumption, then the claiming party would still have to prove to a court, on the balance of probabilities, that the claiming party is indeed the copyright holder. If you see a dispute on the horizon regarding the copyright of your work, it may be worthwhile to register it.

Licensing and Assignment
Consider this:
You have just written a short poem that has become a bestseller on the national list. As the author, you have the right to assign, or to give away, your rights. You can decide for how long and for how much money you want to give away the rights. This is called “assignment.” Once you have given away your copyright, or have assigned it, you no longer have the copyright. In fact, during the assignment period, the person to whom the copyright is assigned can stop you from reprinting/reproducing your poem.

On the contrary, if you don’t want to give away your rights in the poem, you can choose to allow individuals to reproduce or reprint your poem with your permission. This is called “licensing.” Again, you can decide for how long and at what price you will allow someone to reproduce the poem with your permission. However, you will still have the right to reprint/reproduce the poem, and to allow other people to reproduce/reprint the poem. The people who were already allowed to reproduce/reprint the poem would not be able to stop you from further licensing your poem.

An interesting fact, assigning your right completely does not necessarily mean that you no longer have any say in how the work is used. The author will still retain a right to have the work presented in a good light; this is called a “moral right.”

One famous example is Michael Snow’s geese sculpture on display in the Toronto Eaton Centre. One year during the Christmas season, the Eaton Centre management decided to put ribbons on the necks of the geese. Mr. Snow sued and was successful in removing the ribbons. Therefore, even after you have assigned your rights to the poem completely, you can still have a say in preventing your poem from being gravely distorted.

What Happens After Copyright Expires?
After the copyright has expired (generally 50 years beyond the author’s lifetime), the work in question becomes public knowledge. Anyone will be allowed to reproduce the work.

For example, if you go to the library and find an old manuscript of a play from the 1800s, you can safely say that the copyright for the work has expired (as the author is likely to have been dead for over 50 years), and you are free to copy it and use it however you want.

Similarly, your neighbour can go to the library and get a copy of the manuscript. Both of you will have exactly the same copy of the manuscript, and neither of you would have infringed any copyright.

Of course, there are exceptions in the law as to when certain unauthorized use of material does or does not constitute copyright infringement. You should consult a lawyer before you use any unauthorized material, even if you are relying on a statutory exception.
I urge readers to be cautious when copying an original work, be it an article in the local paper, a manuscript from the library, or a movie on a DVD.

Family Law

A Guide to Divorce in Ontario
As recently as the early 1980s, it was very difficult for a couple to get a divorce in Canada if they were simply not getting along; there had to be some “fault” on the part of one spouse.*

However, in 1985 the Divorce Act was revamped, and what is now known as “no-fault” divorce was introduced for the first time. While controversial at the time, no-fault divorces are now largely accepted by the public.

Under the Divorce Act, there is only one ground for divorce, which is “breakdown of a marriage.” Breakdown of a marriage can be established on the following bases:
- The spouses have lived separately and apart for at least one year immediately before and at the start of the divorce proceeding; or
- The other spouse has committed adultery or cruelty against the one who applied for a divorce.

As a family law lawyer, occasionally I have clients come to me complaining about the (alleged) adultery or cruelty of their spouses. However, I generally tell them that to obtain a divorce on these grounds may cause unnecessary pain and emotional turmoil, as well as an increase in cost.

I generally advise my clients that their priority should be obtaining a proper separation agreement to secure their rights, rather than a divorce as means of revenge. After the signing of a separation agreement, the spouses can go their separate ways; in one year the divorce order will come through and they’ll be free to remarry. For more information on separation and divorce agreements, click here.

*Kristen Douglas, “Divorce Law in Canada,” online: Library of Parliament, Parliamentary Information and Research Services (http://www.parl.gc.ca/information/library/PRBpubs/963-e.html#history)

Divorce and Separation
The terms “divorce” and “separation” have specific meanings under the law of marriage and divorce in Ontario and Canada.

For cohabiting couples, or couples in a common-law marriage, when the spouses stop living together and there is no reasonable prospect for them to start living together again, the cohabitation unit is dissolved. Both parties are then technically free to marry or cohabit with another person immediately.

For married couples, although the spouses are free to start living with someone else immediately after separation, they cannot enter into another marriage before a decree of divorce is granted by the Superior Court.

What about support payments?
Because of Canada’s unique constitutional division of power, separation and divorce are governed under different laws. In Ontario couples not seeking a divorce are governed under the Family Law Act; for couples seeking divorce, the Divorce Act applies.

Regardless of whether a divorce is granted, support obligations nonetheless exist under both statutes. Therefore, one spouse can commence a proceeding against the other for child support or spousal support payments, or both, immediately after they stop living together, whether he or she is seeking a divorce or not.

Typically, I recommend that clients start negotiating a mutually acceptable separation agreement or commence a proceeding under the Family Law Act in a provincial court immediately after they have stopped living together. This will help expedite the matter and reduce the cost.

If the parties are able to resolve all outstanding issues at the beginning of the separation, they may qualify to commence a joint divorce application in the Superior Court after they have been living separate and apart for one year.

The joint divorce application is relatively simple and expedient. After the court is satisfied that the couple has met the requirements under the Divorce Act, the court may direct the registrar to issue a decree of divorce without requiring the parties to appear before the court.

Custody and Access
Legally, children under 18 generally cannot make important decisions on their own, such as education, residency, and medical care. Instead, major decisions are made by their custodian(s). In the absence of a court order, the custodians of a child will be the parents.

Obviously, children cannot be divided like properties upon divorce or separation. The children must live with one parent or the other, and major decisions have to be made on behalf of the children from time to time. In many cases, the court will award “custody” to one parent, making that parent responsible for making decisions on behalf of the children.

Most parents are emotionally attached to their children; in a bitterly contested divorce, both spouses are afraid that the other will take the children away and never be seen again, or that the spouse who has custody will intentionally make bad decisions for the children.
In my experience, 8 out of 10 clients who come to me for family law cases are contemplating the scenario above and insist that they must have sole custody of the children.

However, the scenario they have been contemplating is (fortunately) usually far from reality. In most cases, the non-custodial parent will have “access” to the children and is entitled to be informed of the children’s well-being. The non-custodial parent, although not legally entitled to make the decisions for the children, generally has input into major decisions regarding the children’s education, residency, and religious upbringing.

The law dictates that the best interests of the children must prevail when awarding custody. It is now well-recognized that in the absence of compelling reasons, the children should have as much contact with both parents as possible. Only in exceptional circumstances would the non-custodial parent’s right to access be terminated.

I generally advise my clients that meaningful, regular access to the children can be more important than custody. Rather than spending tens of thousands of dollars on a custody battle, the parties may be better off to work out a schedule allowing maximum contact between the children and both parents - and spend the cash somewhere else.

Domestic Agreements
Until modern times, the common law did not recognize most domestic (marriage and divorce/separation) agreements as contracts because certain elements required by law are missing, e.g. consideration. However, domestic contracts are now recognized in Ontario by legislation.

Marriage Agreement/ Cohabitation Agreement
By law, married or cohabiting couples can enter into an agreement on their rights and obligations under the marriage/cohabiting period, as well as their rights upon separation or the dissolution of the union. These rights and obligations can include:
- ownership of property (certain limitations apply),
- support obligations,
- the children’s education,
- custody and access.

In reality, for different reasons, most people do not have marriage agreements. Perhaps most people think their marriage or cohabitation will work out. Another reason may be that it is difficult or impossible to foresee what properties will accumulate during the period of the union, or how many children that the couple will produce.

Marriage Contracts and Prenuptial Agreements: Factors and Considerations

In Ontario the legal term for an agreement contemplating a marriage and the possible breakdown thereof is “marriage contract.” As marriage contracts are often referred to as “prenuptial agreements“, the term more commonly used in the U.S., I will use the two terms interchangeably here.

The present governing provision on marriage contracts is section 52 of the Family Law Act, which is reproduced below:

52. (1) Two persons who are married to each other or intend to marry may enter into an agreement in which they agree on their respective rights and obligations under the marriage or on separation, on the annulment or dissolution of the marriage or on death, including,

(a) ownership in or division of property;

(b) support obligations;

(c) the right to direct the education and moral training of their children, but not the right to custody of or access to their children; and

(d) any other matter in the settlement of their affairs.

The authors of Domestic Contracts^ provided the following non-exhaustive list of factors that should be considered when drafting a marriage contract:

BACKGROUND
1. Name of each after marriage.
2. Disclosure of all significant income, assets and liabilities.
3. Description of marital status, current children.
4. Reasons for contract.
5. Special considerations.
6. Whether children contemplated.
7. Value of “Net Family Property” on marriage.

PROPERTY
8. What property will be exclusively owned?
9. What property will have shared ownership?
10. How will ownership be established?
11. How will shared property be divided on termination of marriage?
12. Will business interests be treated specially?
13. Will one spouse have the right to make any claim against the property of the other?
14. How will expenses be shared for it?
15. Who will own it?
16. Can one “buy into” it if other owns it?
17. What happens to home on termination of marriage?
18. Will there be buy out provisions on termination?
19. If it is solely owned do you wish the right of the non-owner to be diminished or eliminated?

DEBTS
20. Which debts are to be mutual?
21. Which debts are to be sole?
22. Special provisions for guarantees.
23. How are debts divided on termination of the marriage?

CHILDREN (IF ANY)
24. Are there to be clauses about their upbringing?
25. What name on birth?
26. Is there to be the right to change child’s name?
27. Obligations to support during cohabitation.
28. Formula for support on separation.
29. Restrictions on permanent removal from place of residence if separation occurs.

SPOUSAL SUPPORT
30. Are there any circumstances when there shall be none?
31. Are there any circumstances in which there will be support payable
32. If support is to be payable, are there terms to limit duration and amount?
33. Will support automatically vary with the cost of living?

Of course, the factors above are not meant to be “one size fits all.” When you’re contemplating entering into a marriage contract, it’s important to consult a lawyer so that your interests are adequately protected.

Please Note: This article is provided for information and educational purposes and is protected by copyright. It does not constitute legal advice and should not be regarded as such. Regulation referred to may have been amended or repealed since the publication of the article.