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Small Claims Court (Ontario) Law
(01 October 2011)

Chapter 4 - Parties

  1. Overview
  2. Persons under a Disability
    (a) Overview and Terminology
    (b) Minors
    (c) Absentees
    (d) Mentally Incapable
    (e) Litigation Guardians - Plaintiff
    (f) Litigation Guardians - Defendant
    (g) Special Rules Where Party Under Disability
  3. Identifying and Naming Business Organizations
    (a) Overview
    (b) Sole Proprietorships
    (c) Partnerships
    . Overview
    . Naming and Collecting Against a Regular Partnership
    . Limited Partnerships
    . Limited Liability Partnerships
    . Obtaining Judgment Against Individual Partners As Well
    (d) Corporations
    . Overview
    . Names and Corporations
    . Non-Ontario Corporations
    (e) Practical Tips
    (f) Provincial Corporate and Business Name Registrations and Searches
    (g) Effect of Non-Compliance with Registration Duties
    (h) Contracting with Undisclosed Principals
  4. Joint Liability Amongst Parties
    (a) Overview
    (b) Partnerships
    (c) Negligence
  5. Governments
  6. Trustees
  7. Legal Representation
  8. Undischarged Bankrupts
________________________________________

1. Overview

This chapter deals with various types of "parties" or actors that can be involved in a lawsuit. Most of the time these will be individual people ("natural persons"), but they can include business partnerships, corporations and trustees or similar representatives as well.

There are also special provisions for protecting vulnerable persons who have diminished capacity to assert their own interests, known as "persons with a disability". These include minor children, persons mentally incapable, and missing persons ("absentees").

Generally, courts want all persons with a legal interest in the relevant transactions to be named as parties to the proceeding. Ch.11 on "Pre-trial Proceedings" discusses mechanisms for adding parties to a proceeding, known as "joinder", in detail.

Further, the court only has jurisdiction to make orders against parties who have been formally named as such in the litigation. In Elliott v Ritins International Inc (Ont Div Ct, 2008) the court overturned a judgment against a non-party individual - even though he was the principle of a defendant corporation which was properly named as a defendant in the action.

Some special parties have special status. There are uncommon cases where parties - because of their particular status - benefit from forms of complete or limited "immunity" from lawsuits. Examples of these you may be familiar with include Crown immunity, diplomatic immunity, immunity for judges and judicial officers, etc.

Some parties require special procedures. There are notice provisions or special limitation periods that sometimes attach to specific types of parties such as public authorities (commonly: police) and governments. Exploration of these immunities and special rules is beyond the scope of the present work, but you should be careful to check if they apply in your situation.

Finally, parties can be represented by lawyers or agents, and this can involve some special rules.

Examples of how to name the various parties in your proceeding properly, known as the "style of cause", are set out in Ch.8: "Pleadings".


2. Persons under a Disability

(a) Overview and Terminology

"Persons under a disability" is a legal term that includes more than just persons with medical problems. It includes minor children, "absentees", and those who have mental incapacities [R1.02(1)]. With some small exceptions, these parties can only participate in the lawsuit through a "litigation guardian" [R4.01(1), R4.02(1)](see below).

"Litigation guardians" people, usually friends or family of the party, who are responsible for attending to the interests of the "person under a disability" in the lawsuit process, "including the commencement and conduct of a defendant's claim" [R4.04(1)]. The court may remove or replace a litigation guardian at any time [R4.05]. A litigation guardian is a "fiduciary" and owes a duty of good faith and confidentiality to the party under disability, is required to serve their best interests, and should not have any interests that conflict with those of the party under disability.

Sometimes, usually where no other litigation guardian is available, responsibility for the property and affairs of "persons under disability" falls to the "Ontario Public Guardian and Trustee" (PG&T) [PG&TA, s.5,7]. The PG&T is a government-appointed office that acts as a sort of "default" trustee of last resort for those who need it.

As well, in this area of law there are frequent references to "guardians", (as opposed to "litigation guardians" and the "Public Guardian and Trustee"). "Guardians" may be appointed under various pieces of legislation - including the Substitute Decisions Act and the Children's Law Reform Act [s.47] - to look after the property or personal care of the person under disability. Where children are involved, the "Children's Lawyer", another government office, can also act in the same role.

Similarly, a reference to an "attorney" does not mean a person's lawyer. An "attorney" in this area of law means someone appointed under a "Power of Attorney" document - by a person who anticipates they may become incapable in future - to be responsible for the person's property and/or personal care at that time. The Substitute Decisions Act presently sets out and governs the law of Powers of Attorney.

Where a plaintiff is represented by a litigation guardian, their style of cause may be:

(name),
a person under disability, by their litigation
guardian, (name)

A defendant under disability (for whom no litigation guardian is yet appointed) may be styled:

(name), a person under disability

(b) Minors

A minor (also "child" or "infant") is anyone who has not yet reached their 18th birthday [Age of Majority and Accountability Act, s.1]. Then they are considered an "adult".

A minor child may sue as plaintiff for amounts of $500 and less without a litigation guardian [R4.01(2)]. Otherwise they must have a litigation guardian who shall be either (a) the parent or person with lawful custodian of the child, or if a parent or custodian is unavailable or unable to act, (b) the "Children's Lawyer". The court may remove or replace a litigation guardian at any time [R4.05].

Note that under R8.02(i) personal service on a minor includes service on any parent or custodian with whom the minor resides. While additional service on a parent or custodian is not required by all methods of service, it is a practice to be recommended as it will probably save all parties significant time and expense.

The Children's Lawyer does not need to file a Litigation Guardian's consent with the court [R4.04].

(c) Absentees

An "absentee" is "a person who, having had his or her usual place of residence or domicile in Ontario, has disappeared, whose whereabouts is unknown and as to whom there is no knowledge as to whether he or she is alive or dead." [Absentees Act, s.1]

On application to the Superior Court by an interested party, that court may declare a person to be an absentee and appoint a "committee" to look after the absentee's property [Absentees Act, s.2,4].

The litigation guardian for an absentee shall be, in the following order of priority (ie. acting only if the preceding choices are unavailable) [R4.03 1)]:
  • the "committee" of his or her estate appointed under the Absentees Act;

  • a "suitable person who has no interest contrary to that of the absentee",

    or

  • the Public Guardian and Trustee.
The court may remove or replace a litigation guardian at any time. [R4.05]

The Public Guardian and Trustee (PG&T) does not need to file a Litigation Guardian's consent with the court [R4.04].

(d) Mentally Incapable

"Mental incapacity" for purposes of Small Claims Court has the same meaning as in the Substitute Decisions Act (below), which is the general Ontario Statute addressing substitute decisions for personal care and property matters when a person is mentally incapable of making those decisions themselves.

These definitions are [Substitute Decisions Act, ss.6,45]:
Incapacity to manage property
s.6
A person is incapable of managing property if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.

Incapacity for personal care
s.45
A person is incapable of personal care if the person is not able to understand information that is relevant to making a decision concerning his or her own health care, nutrition, shelter, clothing, hygiene or safety, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.
Mental incapacity is not necessarily an overall condition, but can apply with respect to specific issues in the proceeding. Where the mental condition of a party is in question, the court may, on motion, order the party to undergo a psychological examination [CJA s.105(2)]. No such order shall be made on motion by another party unless "the allegation is relevant to a material issue in the proceeding and there is good reason to believe that there is substance to the allegation." [CJA s.105(3)]

With one noted exception, the litigation guardian for a person who is mentally incapable shall be, in the following order of priority (ie. acting only if the preceding choices are unattainable) [R4.03(1)]:
  • their guardian, if any and if they have authority to act as litigation guardian;

  • their "attorney" under a power of attorney, if any;

  • "a suitable person who has no interest contrary to that of the incapable person";

  • the Public Guardian and Trustee.
Note that there are persons who were deemed mentally incapable under some pre-1995 provisions of the Mental Health Act, and for whom the (then) Public Trustee was appointed guardian. For such people the (now) PG&T should act as litigation guardian.

The court may remove or replace a litigation guardian at any time. [R4.05]

The Public Guardian and Trustee (PG&T) does not need to file a Litigation Guardian's consent with the court [R4.04].

(e) Litigation Guardians - Plaintiff

The Rules require a litigation guardian for a plaintiff to 'commence or continue' [R4.01(1)] an action for the person under a disability. However for some reason there is no parallel provision for plaintiffs like R4.02(3), where the court may appoint a litigation guardian for a defendant "if it appears to the court that the defendant is a person under disability".

This of course still leaves open the status of an action commenced by a child, mental incapable person or absentee - perhaps this is just an oversight in the Rules which the court will correct with their general authority to ensure proper conduct of a proceeding.

Typically however, a plaintiff's litigation guardian essentially appoints themself (subject of course to removal under R4.05) by filing a "Litigation Guardian Consent" with the court [R4.01(3)]. The Consent includes the following:
  • states the nature of the disability;

  • in the case of a minor, states the minor's birth date;

  • sets out his or her relationship, if any, to the person under disability;

  • states that he or she has no interest in the proceeding contrary to that of person under disability;

  • acknowledges that he or she is aware of his or her liability to pay personally any costs awarded against him or her or against the person under disability; and

  • states whether he or she is represented by a lawyer or agent and, if so, gives that person's name and confirms that the person has written authority to act in the proceeding.
Form 4A: Litigation Guardian Consent

The Children's Lawyer or Public Guardian and Trustee do not have to file this consent.

(f) Litigation Guardians - Defendant

A defendant's litigation guardian establishes themselves in that role by filing a "Litigation Guardian Consent" with the court [R4.02(2)]. The Consent includes the following:
  • states the nature of the disability;

  • in the case of a minor, states the minor's birth date;

  • sets out his or her relationship, if any, to the person under disability;

  • states that he or she has no interest in the proceeding contrary to that of
    the person under disability;

  • states whether he or she is represented by a lawyer or agent and, if so, gives that person's name and confirms that the person has written authority to act in the proceeding.
Form 4A: Litigation Guardian Consent

The Children's Lawyer or Public Guardian and Trustee do not have to file this consent.

Where a judge feels that a defendant is a "person with a disability", and they do not have a litigation guardian, the court may, after notice to a proposed litigation guardian, appoint that person as litigation guardian if they have no conflict of interest in the matter [R4.02(3)]. The plaintiff, and especially the plaintiff's lawyer, have an ethical responsibility to ensure that any defendants under disability are properly represented by a litigation guardian. They may bring a motion to have one appointed.

(g) Special Rules Where Party Under Disability

Any noting of default, judgment (default or otherwise) or collection proceedings see Ch.9: "Default by Defendant" and Ch.16: "Collection") against a person under disability who is NOT defended by a litigation guardian may be set aside by the court, on such terms as are just [R4.06].

No settlement of a claim made by or against a person under disability is binding on the person without the approval of the court [R4.07]. This may be obtained by motion to the court (see Ch.12: "Motions and Procedural Changes").

Any money payable to a party under disability under an order or a settlement shall be paid into court, unless the court orders otherwise, and shall afterwards be paid out or otherwise disposed of as ordered by the court [R4.08].


3. Identifying and Naming Business Organizations

(a) Overview

Business organizations comes in three forms: sole proprietorships, partnerships and corporations.

While every business organization has a legal name when it starts (for proprietorships, the personal name of the owner; for partnerships, the "firm name"; for corporations, the name under which it was incorporated) they can also operate under "business names" different from their original name.

Determining what type of business organization you are dealing with, their legal name AND their business names (if any) can be confusing - but it is very important to ensure a successful lawsuit. While usually you will be allowed to sue a party just using their business name, it is much better for enforcement purposes to have a judgment which uses both their legal and their business names. Banks, garnishees and other third parties involved in the collection process will want as much assurance as possible that they are doing the right thing when they pay "someone else's money" to you or to the court.

Sometimes businesses are quite aware of the problems surrounding names and enforcement and play on them to effectively protect themselves from liability. Mail order, TV and internet sales are at high risk for this problem. In any event, don't expect a business to be happy to explain their organizational structure to you once they learn you want to sue them.

Also, don't confuse the legal name for a business organization with a "brand" name (more properly, a "trade name"), such as you would see on a product label. While they may be similar usually they are not.

Where a party uses a business name, the normal protocol for naming a party in court documents (called the "style of cause") is:
You v Acme Enterprises Inc. (cob Acme Auto Wreckers)

or

You v John Doe (cob Acme Auto Wreckers)
The names not in brackets are the legal names of the parties, and the ones in brackets are the business names. The initials "cob","coba" or "oba" mean "company operating business as".

To assist in determining who you are dealing with, the court has rules (discussed below) which allow a plaintiff to compel the defendant to clarify the business structuring so that the proper parties are named.

As well, the Ontario Business Names Act requires that all business organizations using a business name (which is different from their "legal" name), register this in a centralized publically-available Business Names Registry [BNA s.2(2)]. In addition, several types of business organizations (identified below) must register with the Business Names Registry in their "legal names". Of course, this does not mean that everyone is going to comply with their registration duties, so the Business Names Act also provides for useful consequences should the registrations not be made. More details about the Business Names Registry are covered below.

Of course you also need to know WHERE to serve them (an address for service). The Business Names Registry can be useful for this as well. For details on how to serve the various forms of business organization with a Claim, see Ch.6: Service of Documents".

(b) Sole Proprietorships

A single "natural" (ie. real) person conducting business simply as themselves is a "sole proprietor". If they decide to use a business name they must register it with the Business Names Registrar [BNA s.2(2)].

Many times it will be as simple as this: you have been dealing with a person, know their name, and are confident that they are not otherwise formally structured or named for business purposes.

In this case your style of cause might simply be:
You v Samuel Smith
If there is a business name being used, for example on invoices or stationary, and if you are not so sure about the relationship between the person and the business name, you may sue in the business name alone [R5.06]. However as explained above, suing in both the personal name and the business name are preferrable.

If you have to sue in the business name alone, there is a procedure for bringing a suspected sole proprietor owner into the proceeding as a party. It is good to do this whenever you have uncertainty about their role, as you will want a judgment enforceable against assets held in their personal name as well.

In such a case the Rules provide that the Notice to Alleged Partner procedure (explained below) applies "with necessary modifications" to situations involving sole proprietorships [R5.06]. In any event, the modified rules would be as follows:
  • a proprietorship may be sued in its business name, and if this is done it must be defended in that name, and not separately by the individual constituting the proprietorship;

  • a plaintiff wanting to enforce any judgment against the named proprietorship against the individual behind it in their personal name must serve them with a "Notice to Alleged Proprietor";

    Note that no form for a "Notice of Alleged Sole Proprietor" has been issued in the Regulations, but they would be almost identical in content to the "Notice to Alleged Partner" (next section). Linked here is a form that might serve this purpose - though I have not tested it in practice:

    Form X2: Notice of Alleged Sole Proprietor

  • if, after being served with the Notice of Alleged Sole Proprietor, the person does not deny their role in the proprietorship and defend the action separately, then they shall be deemed to have admitted their role in the proprietorship;

  • a party also may serve on the proprietorship a "Notice to Proprietor to Disclose Principal" to "immediately" compel disclosure of the personal name of the person behind it. A reasonable, and specific, time should be given for compliance (perhaps a month if practical). Failing disclosure the proprietorship's claim may be dismissed, its defence struck out, or the proceeding stayed (suspended)[R5.04];
Note again, no form for a Notice to Proprietor to Disclose Principal has been issued in the Regulations. The following style might be adequate - though I have not tested it in practice:

Form X1: Notice to Proprietor to Disclose Principal

Alternatively, after an order has been issued against a sole proprietor in their business name, a plaintiff may later make a motion to the court to add to the order the name of the natural person behind the proprietorship [R5.05(3)].

(c) Partnerships

. Overview

Partnerships are private business organizations comprised of a combination of two or more natural persons and/or corporations, or as the Partnerships Act puts it:
Partnership is the relation that subsists between persons carrying on a business in common with a view to profit,
... [PA s.2]
For example, a partnership could be two or more people. Another example would be two corporations and a person, and so on. The relationship between the persons involved within a corporation is not that of a partnership.

Partnerships can be established informally by practice and behaviour, or by express written agreement. A general partnership, unlike a corporation, does not protect the participants with limited liability - although there are types of partnerships that do: Limited Partnerships (LPs) and Limited Liability Partnerships (LLPs). These are discussed below.

. Naming and Collecting Against a Regular Partnership

Setting aside LPs and LLPs, if you sue a typical partnership then you can collect the judgment against the assets of the partnership, and - IF you follow the right procedures - against the assets of any and all the partners [R5.05]. This is called "joint liability" [Partnerships Act, s.10(1)].

For example, if you have a judgment for $5,000 and if the partnership has only $1000 in the bank (that you seize by garnishment), you can continue to pursue the individual partner or partners for the $4000 remaining - whoever you can "catch", and for however much they have - until your judgment is satisfied. You - as creditor - have no duty to collect equally from amongst these joint judgment debtors - that's their problem.

Partnerships have a legal name referred to as a "firm name". All the partners in a partnership must register the firm name [BNA s.2(3)], unless the firm name is composed of the names of the partners [BNA s.2(4)] (eg. "Smith Jones and Carberry"). Of course, if a partnership wants to use a business name all the partners must register it in the Business Names Registry [BNA s.2(3.1)].

Failure to comply with these registration duties may have restrictive effects on the partnership's ability to sue [discussed below: section 3(g) "Effect of Non-Compliance with Registration Duties"] [BNA s.7(1)].

. Limited Partnerships (LPs)

Firstly, it is important to distinguish a "limited partnership" (LP) from a "limited liability partnership" (LLP) (discussed below).

A "limited partnership" has "general" partners and "limited" partners. Limited partners usually only have liability to the extent of their investments in the limited partnership [LPA, s.9], and may not contribute services to the limited partnerships (primarily, they may take no active managerial role) in the limited partnership [LPA s.7(1)].

"Limited partnerships" are formed by filing a declaration in the proper form with the Registrar of Business Names [Limited Partnerships Act s.3].

The firm name of a limited partnership should not include the name of a corporate limited partner, and if it does then that corporate limited partner may in some circumstances lose their limited liability [LPA s.6]. Otherwise limited partnerships and non-Ontario limited partnerships are subject to the same naming and registration rules as general partnerships (discussed above).

Failure to comply with these registration duties may have restrictive effects on the partnership's ability to sue [discussed below: section 3(g) "Effect of Non-Compliance with Registration Duties"] [LPA s.20,28].

. Limited Liability Partnerships (LLPs)

This is another form of partnership available only to lawyers, accountants and some other professions governed by statute [PA s.44.2]. It is formed by the written agreement of the parties to be bound in law as a limited liability partnership [PA s.44.1(1)].

Note that the liability provisions explained below only apply to Ontario LLPs. Non-Ontario LLPs operating in Ontario are subject to the same naming and registration requirements as Ontario LLPs (discussed below) but their liability structure is determined by the jurisdiction of their formation [PA s.10(5), 44.4(4)].

Recall that in a general partnerships all partners are jointly liable for debts and obligations of the partnership. In contrast, while a "limited liability partnership" has only general partners, there is no joint liability amongst them for "negligent acts or omissions that another partner or an employee, agent or representative of the partnership commits in the course of the partnership business" [PA s.10(2)]. It still preserves joint liability for other obligations, the bulk of which would be contract disputes. Of course a negligent partner would still be liable for their own negligence, or that of persons acting under their supervision and control [PA s.10(3)].

Thus, if you want to sue a "limited liability partnership" (discussed below) for negligence, non-negligent partners should not be named as parties personally as they are exempt from joint liability in such cases [PA s.10(4)].

Practically as well, most LLPs - being comprised of regulated professionals - can be expected to have professional liability insurance, so you will almost certainly be dealing with an insurance company handling the case for any such defendants.

The firm name of a limited liability partnership shall contain one of the following as the last words or letter of its name: "limited liability partnership", "societe responsabilite limitee", "LLP", "L.L.P." or "s.r.l.". [Partnerships Act, s.44.3].

No limited liability partnerships may carry on business unless they have registered their firm name [Partnerships Act, s.44.3(1), 44.4(1)], and they may not carry on business under any name other than their registered firm name [Partnerships Act, s.44.3(4), 44.4(3)].

Failure to comply with these registration duties may have restrictive effects on the partnership's ability to sue [discussed below: section 3(g) "Effect of Non-Compliance with Registration Duties"] [BNA s.7(1)].

. Obtaining Judgment Against Individual Partners As Well

While the Rules (explained here) - if followed - allow a plaintiff to collect against individual partner members when they have a judgment against a partnership (joint liability), they are also designed to ensure that the partnership as a whole defends the proceeding - not the individual partners by themselves.

A partnership may be sued in its firm name [R5.01], and shall be defended by the partnership collectively in one Defence, unless the court gives leave for an individual partner to defend alone [R5.02]. Typically a lawsuit against a partnership would identify the members partners only in the body of the Statement of Claim (not in the heading or "style of cause") - unless a partner is being sued personally for their "non-partnership" acts as well.

If a plaintiff wants an eventual judgment against a partnership to be enforceable against individual partner/s as well (ie. usually a good practice for a plaintiff), then the plaintiff must serve the individual (alleged) partners both with the statement of claim and a "Notice to Alleged Partner", which alleges that they are a partner of the partnership. If the person so served does not deny their partnership status in a separate statement of defence filed in their own name, then they will be deemed to be a partner and can participate in the proceeding only through the partnership [R5.03][R5.05]. Failure to follow this procedure by a plaintiff may hinder collection efforts.

Form 5A: Notice to Alleged Partner

Again, note that partners in a "limited liability partnership" (explained above) are not jointly liable for negligence. Therefore non-negligent partners should not be named as parties in such a lawsuit [PA s.10(4)], unless there is an independent claim against them.

Another way in which the identity of the individual partners (when suing a named partnership) can be ascertained is by service to the partnership of a:
... notice requiring the partnership to disclose immediately in writing the names and addresses of all partners constituting the partnership at a time specified in the notice; if a partner's present address is unknown, the partnership shall disclose the last known address" [R5.04(1)].
Such a "Notice to Partnership to Disclose Partners" should provide a reasonable, and specific, time for compliance (perhaps a month if practical). Failing disclosure the proprietorship's claim may be dismissed, its defence struck out, or the proceeding stayed (suspended) [R5.04].

Note again, no form for a "Notice to Partnership to Disclose Principal" has been issued in the Regulations. The following might be adequate - though I have not tested it in practice:

Form X3: Notice to Partnership to Disclose Partners

Failure of the partnership to comply with this notice may result in their claim being dismissed, its defence being struck out, or the proceeding being stayed (suspended) [R5.04(2)].

Where a "Notice of Alleged Partner" is not served with the Claim, the plaintiff may - AFTER an order has been made against the partnership alone (in the firm name) - make a motion to the court for "leave" (permission) to enforce the order against individuals whom they now name as partner/s. The court may grant this permission if the motion is not disputed, or after a disputed motion is heard - if the court finds that the person was liable as a partner [R5.05(3)].

(d) Corporations

. Overview

A corporation (either business, non-profit or co-operative) is formed by filing papers with the appropriate provincial or federal department - or of course similarly in foreign jurisdictions. A corporation is constituted by directors, officers and shareholders (business corporations) or director, officers and members (non-profit corporations).

The essential point to remember for purposes of lawsuit proceedings is that corporations have both "legal personality" (ie. legally, they are equivalent to people for most civil law purposes) and they normally have "limited liability". "Limited liability" means that - unless unusual circumstances exist (eg. fraud) and unless the corporate officers are named personally in the lawsuit - then liability for corporate acts is limited to the available assets held by the corporation. Assets of the officers, director and shareholder/members are immune from collection for such acts (again, unless such persons are independently liable for non-corporate acts).

Getting past limited liability to the assets of the officers and others associated with the corporation is known as "piercing the corporate veil". Corporate directors and officers may be identified by doing Corporate Searches (see below). Suing directors and officers personally for corporate-related behaviour is a complicated and specialized body of law which is beyond the scope of the present work.

. Names and Corporations

Corporations must specify a legal name in order to be incorporated. If the name is to be anything other than a government-generated number (ie. a "numbered company") the name must be unique and distinct so as not to create confusion with other operating businesses (Note: this is NOT the case with Business Name registration, discussed elsewhere in this chapter). The government will require a corporate (NUANS) name search to confirm this before they will allow the name to be used.

Where a corporation carries on business in its legal name it does not need to register with the Business Names Registry, however no corporation may carry on business in a name other than its corporate name unless it registers the business name [BNA s.2(1)]. A corporation may be exempt from registration if it has already registered through its involvement with a partnership [BNA s.2(3.2)].

. Non-Ontario Corporations

Non-Ontario corporations may not carry on business in Ontario unless they have registered their corporate name, and they may not carry on business under any name other than the registered company name (ie. no other business names) [BNA s.2.1].

(e) Practical Tips

Any business entity (sole proprietor, partnership, corporate) is required to set out both their "real" (ie. personal, firm or corporate) name and their registered business name in "all contracts, invoices, negotiable instruments and orders involving goods or services issued or made by" them [BNA s.2(6)].

This does not guarantee that everyone out there is doing this, but - nonetheless - a good first thing to do is to marshall your information about the defendant by gathering together receipts, contracts, phone numbers, etc. Talk to anyone else you know who has deal with the business and see what they can tell you. Sometimes outdoor business signs or the sides of trucks have useful information, as do unsympathetic business competitors, ex-spouses, ripped-off customers, etc - use your imagination! If you have ever paid them with a cheque, examine the returned cheque carefully for business identification - and keep a record of where they bank (branch, acct number) for potential collection down the road.

Of course, record the main name/s you have found, but also review all the documents you have for small print like: "A Division of Acme Trading Inc." or "cob Acme Trading".

(f) Provincial Corporate and Business Name Registrations and Searches

To aid in the process of determining the status and name of the party you want to sue, Ontario's Ministry of Government Services maintains Registries of business names, partnerships and corporation information. These can be very useful in determining who exactly to sue, what their legal and business names are, and where they can be served (eg. a "head office" or "place of business").

Duties of the various business organizations to register business names are described above. Generally, all business organizations must register themselves and all their names in the Business Names Registry except:
  • a sole proprietor carrying on business in his personal name;
  • an Ontario partnership carrying on business in a name comprised of the names of the partners (the law does not specify the last names, but this is traditional) [BNA s.2(4)];
  • an Ontario corporation carrying on business in its incorporated name.
Most other business organizations and name usages should be registered, including of course any situation where a business is carrying on business using a business name other than their legal name. Do not confuse a Business Name registration with a trade-mark registration - registering a Business Name is NOT a substitute for proper trade-mark protection, and the government will allow similar or identical Business Names to be registered (of course, YOU still have to be worried about trademark infringement).

The Registrar under the Business Names Act maintains a publically-available registry of all the registrations made under the Business Names Act and any other required legislation [BNA s.3(3)(4)]. Certified copies of registrations - or certificates that a name is NOT registered - are publically available from the Registrar, for a fee [BNA s.8]. Any changes to the information in a registration must be made in the Business Names registry within 15 days [BNA s.4(4)].

Under the Corporations Information Act, Ontario and non-Ontario corporations are required to file initial and annual returns with the province, and notices of change in information as required [CIA s.2-4]. Information in these filings is to be compiled and made publically available [CIA s.8-10]. Certificates are available and admissible in evidence [CIA s.19].

Business name and Corporate Information searches may be conducted in person at a Ministry of Government Service office, by mail, at an "Ontario Business Connects" terminal located in various government offices, and over the internet through a registered service provider (commercial services).

This government website gives directions on where and how searches may be done:

Business Name Registry Searching

(g) Effect of Non-Compliance with Registration Duties

Any business entity carrying on business while under a duty to register under the Business Names, and which has not done so [BNA s.7]:
  • "is not capable of maintaining a proceeding in a court in Ontario in connection with that business except with leave of the court";

  • the Court shall grant leave if satisfied that:

    . the failure to register was inadvertent;

    . there is no evidence that the public has been deceived or misled; and

    . at the time of the application to the court, the person is not in contravention of this Act or the regulations.
Note that the above appears to set conditions when a court "shall" (ie. "must") grant leave. It would likely still be open to a court to grant leave on its own discretion, assuming no party is prejudiced by the non-registration. As well, if non-registration is going to be used by any party against another, it should be so stated in the party's pleadings or else the court might disregard the issue.

Where a limited partnership fails to maintain proper registrations with the Registrar this can have similar implications on their ability to sue [Limited Partnerships Act, s.20,28].

Failure of a corporation to maintain proper compliance with its filing requirements also has similar consequences for the corporation's ability to sue [Corporations Information Act, s.18].

(h) Contracting with Undisclosed Principals

Very occasionally in business dealings, issues may arise around what are called "undisclosed principals".

The law of "agency" (ie. persons acting for others) - though much criticized for it - allows an agent to contract with others on behalf of "undisclosed principals", so you may find yourself with a contract with someone who you've never even met or heard of.

This situation is unusual - but possible - and its creates further complexities in knowing who (and what) party to name in your litigation. Unfortunately, these cases involve complex and obscure law which are beyond the scope of this program.


4. Joint Liability Amongst Parties

(a) Overview

Aside from partnerships as discussed above, there are occasions where defendants can be held to be "jointly and severally" liable to a plaintiff. This means, just like the case with general partners, that the judgment against them may be collected against one or all of them - regardless of the degree of fault they individually bear. For example, if you obtain judgment against A for $2000 and B for $3000 - all stemming from related transactions or events - if they are jointly and severally liable you may collect any part or all of the entire $5000 from A - individually, or B for that matter. The problem of balancing out between A and B is then their problem.

The court will want all potential jointly-liable defendants to be named as parties an action. The issue of properly adding parties to a case is known as "joinder" (see Ch.:11 "Pre-trial Proceedings").

(b) Partnerships

The discussion of partnerships covers this issue as it relates to general, limited partnerships, and limited liability partnerships (see above).

(c) Negligence

"Negligence" is a general term covering non-contractual causes of action. It is used where the defendant/s' behaviour or neglect is alleged to fall below acceptable legal standards, and has caused damage to the plaintiff. Examples are motor vehicle accidents, slip & fall cases, negligent misrepresentation and a range of others.

Joint and several liability can occur in proceedings for damages based in negligence, where the fault of two or more defendants is alleged to have contributed to the damages. In such a case the court will consider the relative degree of liability amongst the wrongdoers and assign a percentage degree of fault to each of them. If the plaintiff cannot collect the apportioned amount from one defendant as set by the court, they are free to commence collection proceedings against any other jointly-liable party until the full amount of the judgment against all of the them together is satisfied [Negligence Act, s.1]. The plaintiff does not have to worry about being 'fair' between the jointly-liable defendants.

If one jointly-liable defendant ends up paying more than their "share" (subject to any contract between them to the contrary), they can sue the other jointly-liable defendant/s for compensation. Similarly, if one jointly-liable defendant settles a case (on reasonable terms) they may sue other/s for compensation, regardless of whether they were sued or not in the first case.

This principle can also cut against a plaintiff in what is called "contributory negligence". Sometimes a defendant will argue in Defence that the plaintiff was themself partly (or even entirely) at fault. In such a case the court may assign a percentage degree of fault against the plaintiff, and reduce the award to them accordingly. For example: if A sues B in negligence, and A (the plaintiff) is found to be 40% liable on damages of $10,000, then A will only be awarded 60% or $6000 [Negligence Act, s.3].


5. Governments

Being sued by a government or government entity is much like being sued by a private party - however suing a government or a government entity is quite different from suing a private entity.

There are two main Ontario laws dealing with suing the province, municipalities and government agencies. There are special rules regarding SHORTENED limitation periods, pre-proceeding Notices, and several other things. When suing a government party under the Charter of Rights and Freedoms more special rules apply (see more in Ch.3: "Jurisdiction").

Failure to comply with these special rules may be fatal to your case. Naming the police and other government agencies in a lawsuit can be complicated and require special study or assistance.

While these rules are are beyond the scope of this program, you will need to understand them before suing a government or government agency.

That said, the following are examples of the "style of cause" formats are used when suing the main levels of government:
  • Municipalities:

    Their full and proper municipal name (inquire of the municipal clerk's office, or check it on-line):

    "The Regional Municipality of X"
    "The City of Y"
    "The Town of Z"

  • Ontario:

    "Her Majesty the Queen in Right of Ontario"

    (* you do not need to specify which Ministry is involved in the style of cause, but can do in brackets afterwards if you wish)

  • Canada:

    "Attorney-General of Canada"
Note that some proceedings against the federal government must be conducted in Federal Court [Crown Liability and Proceedings Act (Cda), s.21]. This law can be complex and is not within the scope of the present program.


6. Trustees

Trustees are those charged with trust duties such as will executors, those responsible for "inter vivos" trusts (trusts for live people), and charity trustees. They sometimes find themselves in litigation to protect or advance the interests of their "trust".

Charitable trusts are less common, and the "beneficiary" is not a person so much as a specific stated public interest, such as "education" or "relief of poverty". There is no actual living, breathing beneficiary to a charitable trust - except occasionally for animals.

The more common type of trust is a private trust, where the title to money or property is held by the trustee, with the beneficiary (a person or corporation) having a "beneficial interest" in the property. Trusts (eg. "income trusts") are commonly used in business for their tax advantages. For a trustee to violate their trust responsibilities would be a serious - and perhaps criminal - matter.

Litigation involving trusts will typically name the trustee in their personal name but note their trust capacity, for example as follows: "John Doe, in his capacity as trustee of the Lincoln Smith Trust Fund".

Trusts are usually governed by written documents ("deeds") which typically address the authority (or the limitation of authority) of trustees to advance or defend lawsuits. Typically they will authorize the trustee to retain a lawyer to deal with the matter.

Much litigation involving private trusts involves disputes between the beneficiaries and the trustees.

Trust law is a broad and complex field beyond the scope of the present program.


7. Legal Representation

(a) "Self-Representation"

This really means no representation, for the person acts without an intermediary between them and the court. Subject to the requirements for litigation guardians for "persons under disability" (discussed above), any natural person may act for themselves in Small Claims Court.

This is also the case for "sole proprietors" (discussed below), who are really just natural persons conducting business by themselves. As well, in Small Claims Court partners and corporate officers will normally be allowed to act for their legal entity without a lawyer. Partners and corporate officers acting for their legal entity must be careful to avoid any conflict of interest, as might arise where the agent is named as a co-defendant as well.

(b) Lawyers

Of course, a lawyer may represent a party in a Small Claims Court proceeding and would normally indicate this on the original Statement of Claim or Defence, as the case may be. If they are "going on record" later in the proceeding they would normally signify this by filing their authorization, signed by the client, with the court.

A Small Claims court judge does not have the authority to exclude a lawyer from representing a party [CJA s.26].

(c) Paralegals

As of 01 May 2007, the Law Society of Upper Canada took over regulation of the burgeoning paralegal profession. Now paralegals are licensed (as are lawyers), and - unless they are exempt [see (d) below] - may not "practice law ... or provide legal services in Ontario" [Law Society Act s.26.1(1)].

A Small Claims court judge does not have the authority to exclude a licensed paralegal from representing a party [CJA s.26].

(d) Others

That said, some persons are exempt from this prohbition [LS/A s.26.1(5)], as is explained in this Law Society website page:

Exemptions to the Paralegal/Lawyer Monopoly in the Practice of Law

Such persons can represent parties in the Small Claims court, subject to the court authority (rarely used) to exclude them "from a hearing" (presumably not otherwise)if they are viewed as incompetent or "do[] not understand and comply at the hearing with the duties and responsibilities of an advocate" [CJA s.26].


8. Undischarged Bankrupts

Undischarged bankrupts are unable in law to maintain a lawsuit as their property has vested with the bankruptcy trustee. Such actions are maintainable by the bankruptcy trustee, but should otherwise be be stayed: Cotton v Cotton [2004] OJ #733 (QL)(Small Claims Court); Bankruptcy and Insolvency Act s.71(2).
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