Covid-19: Saskatchewan Court of Queen’s Bench Update

Thanks to the quick response and diligent efforts in Saskatchewan, our province’s management of COVID-19 has been quite remarkable. While we will still feel the effects for the foreseeable future, we must learn how to navigate ourselves to return to a new normal.

Yesterday, we saw the provincial government’s re-opening plan, which will allow the economy to re-open in phases. Yesterday, we also saw an updated directive from The Court of Queen’s Bench.

Chamber’s Hearings:

Effective June 1, 2020, the Court’s restrictions respecting hearing only urgent and emergency chamber’s applications will be lifted. These matters will proceed by telephone. Until June 1, 2020, the Court’s restrictions on hearing only urgent and emergency applications remain in place.

Pre-Trial Conferences:

Effective June 1, 2020 pre-trial conference will resume. These will proceed by telephone, or where appropriate and possible, in person. The Court has indicated they will be making efforts to hear substantially more pre-trial conferences over the summer months to assist with the backlog of cases. Further details about scheduling pre-trials will be provided shortly.

Moving Forward:

Robertson Stromberg continues to operate during this time.  We are committed to assisting you with all your needs while also practicing appropriate social distancing protocols. With the latest update from the Court, regular chambers hearings and pre-trial conferences are only five weeks away.

If you had a chamber’s hearing or pre-trial conference that was adjourned due to COVID-19, your lawyer will be contacting you once they receive information about its rescheduling.

If you have a current legal issue, please contact our office to discuss your options with one of our lawyers. We can advise if your matter may qualify to proceed on an urgent or emergency basis. If not, we can provide you with alternative options. Robertson Stromberg has lawyers trained in arbitration, collaborative law, and mediation. Lastly, if required, with the new directive from the Court, we can start to prepare your matter to be heard in June when the court resumes hearing all applications.

To view the full directive from the Court of Queen’s Bench, click the following link: https://sasklawcourts.ca/index.php/home/court-of-queen-s-bench/covid-19-update

For more information, please contact:

 

Andrew R. Gaucher

306.933.1336

Email: [email protected]

Commercial Leases and the Impact of COVID-19

The novel coronavirus (COVID-19) continues to affect the day-to-day lives of millions of Canadians. As a result, businesses continue to face issues regarding cash flow, which in turn forces those businesses into difficult decisions as to which obligations they will pay, and which obligations will need to be deferred.

One of the consequences of these difficult decisions is that commercial landlords are now faced with tenants who either cannot pay their rent, do not wish to pay rent or have abandoned or are contemplating the abandonment of leased property. While COVID-19 gives rise to new business considerations, as will be seen below, the rights of the commercial landlord remain relatively unchanged.

This article, originally posted to our website in May, 2020, was amended on June 15, 2020 to reflect the emergency order issued by the Government of Saskatchewan in relation to the eviction of commercial tenants. This moratorium was issued pursuant to the provisions of The Emergency Planning Act.

It should be noted that the moratorium issued only applies to landlord who were eligible, but declined to apply, for the Canada Emergency Commercial Rent Assistance program (“CECRA”). This moratorium was issued in large part to assist new businesses in reopening during COVID-19.

Your Tenant Cannot (or Will Not) Pay Rent

 

As was the case before COVID-19, where a tenant fails to pay rent in a timely fashion the landlord, who has applied under the CECRA, is able to demand the rent and as permitted under the lease, takes steps to distrain or evict the tenant and take possession of the property. The Saskatchewan Legislature has, at this time, not taken any steps to alter the rights and remedies of the commercial landlord.

Before concluding that the tenant is offside their obligations by way of non-payment of rent, consideration should be given to whether the lease has a force majeure clause and if so, what effect that clause may have on the tenant’s position. For more information on this subject, Marinko Jelovic has prepared an article, Force Majeure and the Doctrine of Frustration – COVID-19, which addresses this issue with more specificity. https://www.rslaw.com/2020/03/18/force-majeure-doctrine-of-frustration-covid-19/

Before deciding on a course of action, a landlord may wish to give consideration to their existing relationship with the tenant and the current economic climate. A tenant who has occupied the same property for an extended period of time or is in the midst of a long-term lease, and who has not voluntarily defaulted on payment may still be better than the alternative. When the time arises for the preventative restrictions imposed by the Government of Saskatchewan to be lifted, prospective new tenants may be a rare commodity. If you consider the business foundation for a long-term tenant to be sound you may prefer having your existing tenant when business resumes, rather looking for a new occupant. Short term pain may be balanced by long term gain.

On the other hand, if the tenant is in default and the history of the landlord-tenant relationship is not happy one, this may be an opportunity to end the relationship, with a view to attracting a more desirable tenant.

Much will turn on the landlord’s view of the value of its relationship with the tenant.

To the contrary, where a landlord has failed or otherwise declined to take part on the CECRA program, the landlord is now prevented from re-entering the property, terminating the lease or exercising the right of distraint. The Government of Saskatchewan has, at this time, limited the remedies available to a commercial landlord who has elected not to participate in CECRA.

Your Tenant Abandons Their Lease

 

In Saskatchewan the legislature has declined to, at this time, amend or enact new legislation that would affect a commercial landlord’s rights. As such, the provisions of The Landlord and Tenant Act continue to apply, as do the provisions of the lease itself.

Under The Landlord and Tenant Act, if the tenant abandons their lease leaving rent unpaid a landlord may exercise its right of distress. In doing so, the landlord is permitted to retain and sell personal property left on the premises by the tenant. However, given the current economic climate a landlord may wish to consider whether or not exercising their right of distress makes financial sense.

While The Landlord and Tenant Act permits the landlord to recover the costs of the seizure and sale of abandoned or seized property, the practical reality is that the property may not be worth the cost and effort of sale. Much will turn on the nature of the tenant’s business and the type of property present in the leased space. As businesses continue to attempt to cut down and reduce overhead costs, depending on the nature of the tenant’s business there may be a reduced, or non-existent, resale market for the goods due to COVID-19. Attempting to seize and sell the property may result in substantial costs being incurred, with little net recovery, if any, toward the unpaid rent.

However, if the decision is to move to terminate, or to accept abandonment, the landlord can proceed in the usual way. The landlord’s rights are largely governed by the lease. Most provide that the landlord may bring action to recover unpaid rent, as well as rent for the remainder of the term of the lease, should a tenant abandon its lease (subject of course to the duty to mitigate and find a new tenant as soon as reasonably possible, though depending on the short and mid-term commercial leasing market it may be of little moment). For more information on the subject, please see the following article on enforcing the landlord’s rights: https://www.rslaw.com/wp-content/uploads/2011/12/1226000394Enforcement-of-Commercial-Leases-A-Practical-Guide.pdf

It should be noted that nothing in the in the June 5 moratorium impacts the landlords rights in the event the tenant has abandon their lease. Similarly, the landlords right remain unaffected if the lease expired on or before June 4, 2020.

Where the lease expires after June 4, 2020, and the landlord has elected not to sign up for or participated in the CECRA

Conclusion

 

As the consequences of COVID-19 continue to be felt in the business community, and with no timeline as to when the government imposed restrictions will be softened or lifted, landlords will continue to face business decisions on how to deal with tenants who do not pay their rent. Consideration must be given to the risk of evicting a tenant and attempting to recover unpaid rent versus the cost and time spent attracting a new tenant. Landlords will know that when the Government of Saskatchewan lifts social distancing restrictions, it may still be several months before new tenants can be found, as the economy slowly recovers from the economic downturn. As such, maintaining strong business relationships during this pandemic may best serve to provide a practical benefit down the road. Where the relationship is not so strong, different considerations may apply, and ending the landlord-tenant relationship may be the best outcome.

For more information, please contact:

 

M Kim Anderson, Q.C.

306.933.1344

Email: [email protected]

 

Travis K. Kusch

306.933.1373

Email: [email protected]

Covid-19 Employment Law Update

Following Candice Grant’s March 13, 2020, article, “COVID-19: Information for Employers”, published on our firm website, the Government of Saskatchewan introduced new legislation to address public health emergency leave and temporary layoffs due to COVID-19. This article is intended to provide an update on this new legislation and how it will impact employers and employees.  This information, which is current as of the date of publication (April 13, 2020), is not legal advice and we recommend consulting with your legal advisors for advice specific to your circumstances.

Public Health Emergency Leave

This leave was enacted through Bill No. 207, an Act to amend The Saskatchewan Employment Act, to provide protection to employees who have been directed to isolate themselves and certain other employees impacted by COVID-19.  The changes have retroactive effect to March 6, 2020.

Public health emergency leave is only available during periods in which the Chief Medical Health Officer has declared a public health emergency.  It is available to employees who have been ordered to isolate by one of the following:

  • their employer;
  • the government;
  • their doctor; or
  • the Chief Medical Health Officer for Saskatchewan.

In these situations, the employee would not be allowed to attend work.  The rationalization is presumably that people should not be risking their own health and the health of others in order to work, which is why the introduction of a protected category of leave was necessary.  The length of the leave depends on the length of time the employee has been ordered to isolate.

As indicated above, this leave provides employers an opportunity to order an employee to stay home if they are showing symptoms consistent with COVID-19.  However, if an employer’s direction to self-isolate conflicts with the opinion of a qualified medical practitioner, the opinion of the medical practitioner will prevail.

If an employee is eligible for public health emergency leave, there is no requirement that the employee have worked for any minimum period of time prior to taking leave.

Employees who must care for their children or an adult family member affected by the public health emergency are also eligible for this leave.  For example, in the case of children, this leave applies to parents who must remain home in order to care for their children, which is a common situation as a result of the closure of elementary and secondary schools.  In the case of adult family members, it could be that an employee’s spouse is infected with COVID-19 and the employee must take time off of work to care for their spouse.

It is possible for an employer to designate certain employees as necessary to provide critical public health and safety services, in which case the employee’s ability to access this leave may be limited.

It is important to note that the leave is unpaid.  The employee is only entitled to be paid and receive their benefits if their employer has authorized them to work from home during their period of isolation.  This, of course, depends on the nature of the business.  If working from home is not an option, or the employer does not authorize it, then the employee is not entitled to be paid, although the employee may have access to other provincial and federal financial benefits.  In addition, employees who have entitlement to sick leave under a workplace policy, collective agreement, or other employment contract may be able to invoke that leave rather than take the unpaid public health emergency leave.

We recommend that employers seek out legal advice before making any decisions to order an employee to isolate or any other long term decisions respecting their employees.

Temporary Layoff Provisions

Amendments were also made to The Employment Standards Regulations to provide for temporary layoffs by employers during public health emergencies.  These layoff provisions are only in effect during periods of public emergency.

Normally, under The Saskatchewan Employment Act, employers have to provide notice to employees before laying them off, or pay in lieu of notice.  Under the emergency layoff provisions, employers do not need to provide notice to employees before laying them off, or pay in lieu of notice, for all layoffs that will have a duration of a maximum of 12 weeks in a 16-week period.

Employees who are laid off pursuant to this provision are still considered employees for the purposes of notice or pay in lieu of notice if they are not recalled in time; more on this below.  The upside for employees is that they are able to immediately access supports provided through provincial and federal programs specifically aimed at helping employees laid off during the COVID-19 pandemic.

If the layoff exceeds 12 weeks within a 16-week period and the employee has not been reinstated, the employee’s employment has been considered terminated and they are owed pay instead of notice.  The amount which would have to be paid pursuant to The Saskatchewan Employment Act is based on the employee’s wage and length of service and ranges from one to eight weeks of wages, as follows:

 

Length of Time Employee has been Employed Number of Weeks of Wages Employee must be Paid
More than 13 consecutive weeks to one year of employment One week of wages
Greater than one year of employment but equal to or lesser than three years Two weeks of wages
Greater than three years of employment but equal to or lesser than five years Four weeks of wages
Greater than five years of employment but equal to or less than 10 years Six weeks of wages
Greater than 10 years of employment Eight weeks of wages

Employers and employees should bear in mind that these are minimum standards which could be superseded by employment contracts or collective agreements.  In many cases, an employee will also have additional entitlements at common law which significantly exceed the statutory amounts set out above.  However, any agreement must provide, at minimum, the protection to the employee offered under these new provisions.

We recommend that employers seek out legal advice before making any decisions to lay off employees pursuant to this new provision.

For more information, please contact:

Candice D. Grant

Direct: 306.933.1304

Email: [email protected]

Curtis P. Clavelle

Direct: 306.933.1341

Email: [email protected]

Virtual court operations in Saskatchewan

Despite the availability of virtual technology, it remains impossible in many Canadian courts to file court documents online, or hold video hearings. This article argues that Canadian court systems face two options during the COVID-19 pandemic:

  1. First, resign themselves to pause the vast majority of civil matters indefinitely, risking the loss of public confidence, and lack of justice, which could result;
  2. Alternatively, use this time to make swift investments in e-filing systems, and video technology, to allow virtual operations to continue as normal.

The rule of law is not something that society can suspend indefinitely. In an era in which many people conduct their lives online, the legal profession should embrace virtual court processes to maintain public access to court services.

For more information, please contact:

 

James D. Steele

306.933.1365

Email: [email protected]

Insurance Coverage Considerations on Covid-19

As of March 30, 2020 the Saskatchewan government signed an order pursuant to the provincial State of Emergency directing that all orders of the government and Chief Medical Health Officer must be followed and that law enforcement agencies in Saskatchewan have the full authority to enforce those orders. As a result, gatherings of more than 10 people in one room are prohibited; and nightclubs, bars, lounges and similar facilities are closed.  As other businesses respond to COVID-19 their bottom lines are facing significant impact.

In this uncertain climate, businesses are attempting to manage this crisis and limit their continuing financial losses. One potential avenue for relief is insurance. All businesses should be seeking guidance as to whether their existing insurance coverage can respond to COVID-19 related financial losses.

This article outlines some key insurance coverage considerations to determine whether initiating an insurance claim may be a viable relief option for your business.

COMMERCIAL PROPERTY POLICIES

 

Most businesses’ first party property insurance policies include coverage not only for property damage but also for lost profits resulting from that damage.  The coverage for lost income often covers loss resulting from:

  1. Damage to the policyholder’s own property (business interruption);
  2. Damage to the property of a customer or supplier or a supplier’s supplier (contingent business interruption); or
  3. Government action (order of civil authority)

The event that triggers any of these coverages is property damage — without which there will be no coverage for lost profits under a first party property policy.

When purchasing your property policy for your business, it may have been referred to as “All Risk.” All risk doesn’t necessarily mean that you are entitled to coverage for all risks. These policies can sometimes exclude coverage for virus, contagious disease or bacteria. In that case, any COVID-19-related claims will likely be denied.

Business Interruption

With respect to your commercial property policy, the definition of physical damage found within the policy becomes crucial to determining whether coverage applies.

Contingent Business Interruption

Contingent business interruption is a coverage that allows a claim for lost income resulting from a covered loss to an insured’s customer or supplier (Indirect Loss). This type if coverage is typically triggered as a result of a physical damage to the customer or supplier listed as a reliant party, critical to the insured’s operations.

Government action/civil authority

Some property policies will responds to Interruption by Civil Authority, which is often defined as “actual loss as insured hereunder during the period of time, not exceeding two to four weeks, while access to the “premises” is prohibited by order of civil authority”

Given that the definition of this coverage may vary by policy, there is a possibility that if operations of a business are restricted due to an Order prohibiting access, then coverage may apply. The opposite would be true if the policy wording specifies the requirement for Physical Damage. Once again, the applicability of this coverage and length would be case specific.

NEXT STEPS

 

A determination of whether your business is entitled to coverage is wholly depends on your policy wording. Businesses should be evaluating their policies including any extensions and exclusions, with their insurance brokers and legal counsel to better understand terms and conditions. To get started request a complete copy of your insurance policy and review to determine whether coverage might apply to your business.

For more information, please contact:

 

Jennifer D. Pereira, QC

306.933.1320

Email: [email protected]

Importance of the Press

On March 26, 2020, the Government of Saskatchewan further limited the businesses that can continue to operate in the province as a result of COVID-19.  Among the “critical services” that are to be maintained are local and national media.

Journalists across our province are continuing to provide up-to-date and important information to citizens. They continue to attend press conferences, ask our leaders important questions, try to digest and disseminate important health-related information and disabuse individuals of potentially dangerous misinformation.

Having reliable and professional information broadcast to a wide audience (through newspapers, television and social media) is incredibly important for our public officials to provide updates on this crisis. Dr. Theresa Tam, Canada’s Chief Public Health Officer, and Dr. Saqib Shahab, Saskatchewan’s Chief Medical Health Officer, have, through the media, imparted daily updates on the medical risks and transmission of the virus. Our political leaders have warned residents through daily press briefings on the importance of social distancing to attempt to flatten the curve.

In addition to providing important health information, the media has provided messages of hope and resilience. Media organizations have covered:

  1. The outpouring of support for marginalized youth in Saskatoon: https://thestarphoenix.com/news/local-news/the-helpers-in-saskatoon-an-outpouring-of-support-for-youth/
  2. Families working out together at home while practicing social distancing: https://saskatoon.ctvnews.ca/more-saskatoon-families-working-out-together-at-home-during-isolation-physical-distancing-1.4870362 and
  3. Veterinarians assisting pets from outside of their clinics: https://www.cbc.ca/news/canada/saskatchewan/sask-curbside-veterinary-medicine-animal-health-covid-19-1.5511951.

In recent years, the media has been vilified in some corners.  However, it is at times like these, that the importance of the press is highlighted.  We see journalists, every day, digesting quickly changing information, trying to weed out “fake news” and doing so at potential personal peril as they attend briefings and track down stories.  The media has proven itself to be a “critical service” to the public.

For more information, please contact:

 

Sean M. Sinclair

306.933.1367

Email: s.sinclair

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