Law Times

Law Times • august 10, 2015 Page 9 www.lawtimesnews.com legal panel aims to update ontario's business laws By JenniFer Brown Law Times n an effort to make Ontario a more competitive business jurisdiction, a panel of legal ex- perts has made recommenda- tions to review outdated business legislation in the province. On July 9, the province released a report prepared by a panel of in- house and law firm lawyers as well as law professors appointed by the minister of government and con- sumer services to consider reform of Ontario's corporate and com- mercial legislation. Panel member Carol Hansell of Hansell LLP would like to see a complete revamp of the Ontario Business Corporations Act. "I think the important thing, too, is to make sure there is a pro- cess to have all the statutes, but especially the [Ontario Business Corporations Act], updated regu- larly," she says. Hansell would also like to see changes to the Limited Partner- ships Act to make Ontario more attractive for business by reducing the risk of unlimited liability faced by limited partners in Ontario. "Typically, when we're struc- turing something and we want to use a limited partnership, people go to Manitoba or B.C. and we end up having to hire an agent to do that because their act is better. There isn't any reason why our statute can't be updat- ed," says Hansell. A review of the Personal Property Security Act is a key issue and one Ken Fredeen, gen- eral counsel at Deloitte LLP, says needs serious attention. The report recommends a review of the act that would in- volve "taking account of legisla- tive and case law developments in Canada, the United States, and elsewhere, and identifying opportunities for harmoniza- tion with the other provinces." Fredeen recommended a number of general counsel be part of the panel as they have ex- perience working with Ontario's business laws. "If all you're getting is exter- nal lawyers, you're going to get one side of the fence. General counsel deal with this stuff all the time and they will bring a different perspective," he says. The report also recommends updating the Arthur Wishart Act that deals with franchise dis- closure to create more disclosure certainty for users. The govern- ment hasn't updated the act since it came into force 15 years ago. "It would create greater cer- tainty between the franchisor and franchisee. In a world where increasingly that's how business is done, I think it's an impera- tive," says Fredeen. The panel heard from a num- ber of business law experts who provided input, including An- draya Frith, chairwoman of Osler Hoskin & Harcourt LLP's na- tional franchise and distribution practice group, who says there needs to be greater certainty in the Arthur Wishart Act. Frith says it's becoming in- creasingly challenging to comply with the franchise legislation in Ontario and have confidence a franchise disclosure document is compliant. "Ontario is one of the only franchise statutes in the world that has that very open- ended and highly subjective stan- dard of having to disclose all other material facts," says Frith. That means the days of pro- viding a generic disclosure docu- ment to a candidate and updating it annually or when there is a ma- terial development are over. "Where the courts are saying the franchisees need site-specif- ic information about their par- ticular franchise, there is some compounding effect of the need to have a highly customized dis- closure document that increases the cost significantly for any franchisor for each site and each candidate," she says. "There's also no guidance in the legisla- tion as to what that information ought to include." Hansell says she's part of some American Bar Association committees that update Ameri- can law regularly. "We need some kind of a process like that. It's very ad hoc right now, but the corporate and commercial law is so important to business, it needs to be more responsive," she says. The minister of government and consumer services is seek- ing public input on the report until Oct. 16, 2015. "This is encouraging, from my perspective, as we don't have a process right now at all and this is the beginning of a more formal process. It's a very posi- tive thing for the business com- munity," says Hansell. 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