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McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
c. If a judgment debtor is bankrupt, a claimant who is entitled to claim that assets of the
bankrupt’s estate are held in trust for the claimant may be able to fully enforce a judgment
against those assets, and the other creditors may be left to receive a dividend from the
remaining estate of something less than full payment of the debts owed to them by the
bankrupt.
d. Each law society has an assurance fund in order to provide a source of compensation for
claimants who are unable to fully enforce their judgments against bankrupt judgment
debtors.
e. Nominal damages are awarded if a case involves several plaintiffs and the court must
decide, or nominate, which plaintiff is entitled to enforce a remedy.
33) Marisa successfully sued Ivan, a stockbroker who works for Blue Sky Investments, for
breach of contract. The court held that Ivan’s breach caused Marisa to suffer a financial loss
of $50 000. The court also held that Ivan is personally liable to pay that amount to Marisa.
Which of the following statements is TRUE?
a. Because Ivan acted wrongfully, the damages are properly classified as punitive damages.
b. An award of damages for breach of contract is the same as an order for specific
performance.
c. Once judgment has been decided in her favour, Marisa became a judgment debtor.
d. If necessary, Marisa is entitled to have all of Ivan’s assets seized and sold in order to pay
for the judgment.
e. Marisa may garnish the non-exempt portion of Ivan’s income if he does not otherwise
pay his debt.
34) Kaelen works as a sales representative for a large book publisher. She was recently held
liable in tort and ordered to pay $35 000 to Antony. Which of the following statements is
TRUE?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
a. If Kaelen wants to appeal the trial judge’s decision, she normally must do so within one
year of that decision.
b. The garnishee process will allow Antony to seize and sell some of Kaelen’s assets in
order to satisfy judgment.
c. Antony may be able to directly receive some of the money that Kaelen normally would
receive as income from her employer, by garnisheeing the wages of Kaelen.
d. The court’s award can be classified as nominal damages because Antony is entitled to
receive damages of a certain denomination in money.
e. If Kaelen does not have enough money to fully pay her debt to Antony, Antony will be
entitled to collect the remainder either from Kaelen’s lawyer or, if Kaelen’s lawyer does not
have sufficient funds, from the law society’s assurance fund.
35) Josie lost a breach of contract case against Charles. She has now launched an appeal of
the trial judge’s decision. Which of the following statements is TRUE with respect to that
appeal?
a. Although the appellate court is always entitled to apply its own view of the law, the trial
judge’s finding of facts can be overruled only if the members of the appellate court are
unanimously agreed that the trial judge made a mistake.
b. The appellate court may accept or reject the trial judge’s decision, but it cannot vary the
terms of the trial judge’s final order.
c. If Josie loses her first appeal, she has a right to appeal to the Supreme Court of Canada as
long as her claim is worth at least $100 000.
d. Josie’s first appeal will likely be heard by three judges of the appellate court.
e. Although an appellate court is entitled to award damages, it cannot order specific
performance of a contract.
36) Which of the following statements is TRUE with respect to small claims courts?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
a. Small claims courts are a type of superior court with the inherent jurisdiction of the
common law courts and the courts of equity.
b. In order to minimize costs and delays, small claims court judgments cannot be appealed.
c. Cases heard in small claims courts are decided by magistrates, rather than judges.
d. In general the procedure in small claims court is simplified, accessible to most
laypersons, and lawyer’s fees are not usually recoverable as costs.
e. A plaintiff has the right to have a claim heard in the small claims court that is closest to
their home.
37) Which of the following statements is TRUE with respect to small claims courts?
a. Although small claims courts often hear contractual cases, they may also resolve some
types of personal injury claims.
b. Assuming that the amount in dispute is under $10 000, a taxpayer has the right to recover
an improperly collected tax in the federal small claims court.
c. A small claims court may hear any type of claim, and has jurisdiction to grant all the
same remedies, including injunctions, as could be granted by a superior court of common
law and equity.
d. If a claim exceeds the monetary limit of a small claims court, the plaintiff is entitled to
use the small claims court for part of the claim and another court for the remainder of the
claim.
e. Because small claims courts often hear contractual disputes, they have the ability to order
specific performance.
38) Rejean is a world class athlete, who was recently suspended by the Canadian Athletics
Association. If that suspension remains in place, Rejean will not be allowed to compete in
the upcoming world championships. Rejean therefore hopes to quickly and conclusively
have the suspension overturned. The contract that Rejean had signed with the Canadian
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
Athletics Association gives him the right to choose any form of dispute resolution. Which
of the following alternatives is likely his best option?
a. litigation
b. mediation
c. negotiation
d. arbitration
e. small claims court
39) Which of the following statements regarding the Supreme Court of Canada is TRUE?
a. The court consists of the chief justice and eight filial justices.
b. Each member of the court was appointed by the premier of the judge’s home province.
c. In addition to appeals, the court occasionally hears references for the purpose of
providing advisory opinions to the governments on the constitutionality of laws.
d. Unless a member voluntarily retires, they are entitled to hold office for life during good
behaviour.
e. No court is ever required to hear an appeal unless it has granted leave.
40) Which of the following statements is TRUE with respect to alternative dispute
resolution?
a. Arbitration is often preferred to mediation when the parties want to receive a binding
decision from a third party.
b. Arbitration cannot be used unless the parties previously created a contract that required
all disputes to be resolved solely by arbitration.
c. Negotiation is often considered a binding process when used by large corporations.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
d. Because they work outside of the regular court system, small claims courts are
considered a form of binding arbitration.
e. While negotiation and mediation are confidential procedures, arbitration is not
confidential because arbitrators’ decisions are always reported in public documents.
41) Lin believes that the new soft drink, Kaff Kola, has stolen her patented method for
carbonating pop. She decides to sue. Which of the following is true about her lawsuit?
a. She can’t sue because of the traditional rule that “the King can do no wrong.”
b. She can sue because, although not a legal person, a corporation is liable for their
products.
c. She can sue because she is a mentally competent adult and the corporation is a legal
person.
d. She can’t sue because Kaff Kola would be considered a club, which is an unincorporated
entity.
e. She can sue, but only in a class-action lawsuit.
42) Jeff is considering filing a lawsuit as a plaintiff in the province of Alberta, but he
honestly doesn’t think he should win. Jeff has no money and, in order to make sure he
doesn’t have to pay anything if he loses, he wants to self-represent. Jeff should
a. not continue with the lawsuit because the judge may award the defendant party and party
costs to provide partial indemnity.
b. not continue with the lawsuit because the judge may award the defendant party and party
costs to provide substantial indemnity.
c. not continue with the lawsuit because the examination for discovery will prove Jeff has
no case.
d. not sue because in Canada you can’t represent yourself unless the lawsuit is brought in
Ontario.
e. continue with the lawsuit if he can rely on a sympathetic jury.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
43) Joaquim just lost his case against Susan in his province’s Supreme Court, Trial
Division. He believes the verdict was wrong. Joaquim should
a. appeal to the Supreme Court of Alberta, because he is in Alberta.
b. counter-sue under civil law because that is his only option in Quebec.
c. bring the case to the Supreme Court of Canada.
d. bring the case to the Court of Appeal.
e. accept the judgment. There is no way to counter.
44) Kyle and Jack live in BC and are being sued by their landlord, Saurabh, for failing to
pay their rent. Which of the following is false regarding the lawsuit?
a. As this could be a small claims matter, Saurabh should make sure he sues in the same
region as the place of the infraction.
b. Because this could be a small claims matter, Saurabh cannot ask for specific
performance.
c. Kyle and Jack can avoid any liability for the lawsuit by moving to a different province
d. Saurabh should only sue in small claims court if he is owed less than $25,000.
e. If he wants equitable relief, Saurabh should sue in the Superior Court.
45) Katrina is a judge in the Manitoba Court of Appeal. She is currently deciding a case
regarding the rights of mothers to their unborn children. Which of the following is true in
regards to Katrina’s decision?
a. The rule of law states that Katrina must use both laws and her personal opinions to
decide the case.
b. Katrina should consider decisions of the Supreme Court of the United States to be
binding.
c. Katrina must not contradict her own court if a similar case has been decided in the Court
of Appeal.
d. The doctrine of precedent states that Katrina must decide the case as it has been decided
in the past.
e. The doctrine of precedent states that Katrina is only bound by decisions from the
Supreme Court of Canada.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
46) Ren, after an interview, feels that he didn’t get the job because he is a part of the
Lakeside Yacht Club, a club considered far less prestigious that the Oceanview Yacht Club
on the other side of town. You suggest Ren should
a. sue the company he applied to for a violation of section 15 – equality rights of the
Charter.
b. sue the person conducting the interview for a violation of section 15 – equality rights of
the Charter.
c. sue the Lakeside Yacht Club for a violation of section 15 – equality rights of the Charter.
d. bring an action forward to the human rights tribunal in the province in which he lives.
e. sue the company, the person conducting the interview, and the yacht club for a violation
of section 15 – equality rights of the Charter.
47) Natasha is unhappy after the employment equity tribunal determined that she was paid
differently than Roman because of ability rather than gender. You agree, feeling that the
tribunal made the wrong decision. You tell Natasha that
a. she should appeal to the Supreme Court of Canada.
b. the only way the decision can be reversed is if a judicial review says the tribunal’s
decision was invalid.
c. she’s fine as long as a privative clause allows an appeal.
d. tribunals with privative clauses are usually ultra vires of the Constitution, so they never
apply.
e. a judicial review only considers whether a decision is correct and doesn’t consider how
reasonable it is.
48) Heidi is drafting a contract with Sheldon to export her Canadian-made goods to the UK.
Sheldon and Heidi have been having disagreements over the price Sheldon will pay. Heidi
is convinced that even if an agreement is made, Sheldon won’t pay the agreed amount. In
order to mitigate her risk, Heidi should
a. hope that Sheldon doesn’t pay so she can sue him in court.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
b. continue negotiating until a deal is made, no matter how long it takes.
c. immediately scrap the contract.
d. try to negotiate a fair price, but include an arbitration clause in order to cheaply resolve
any issues that arise.
e. allow Sheldon to bring in his lawyer as a mediator.
Essay Questions
1) Briefly explain the rules that determine the circumstances under which the following
types of parties can sue or be sued: (i) children, (ii) adults suffering from a mental
incapacity, (iii) corporations, and (iv) unincorporated associations.
2) In the context of the ability to sue or be sued, what is the meaning and effect of the
doctrine that “the King can do no wrong”?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
3) Chad purchased an economics textbook online from Shady Press Inc for $40. While the
information contained in the book appears to be correct and current, the book itself began to
fall apart almost immediately. After he complained about the situation in an electronic chat
room that had been set up by his course instructor, Chad discovered that a large number of
other students had suffered through the same experience. Chad then emailed Shady Press to
register his complaint and to ask for a rebate on at least part of the price. The company
responded by saying that, as a matter of policy, it would not provide any sort of financial
relief unless ordered to do so by a court. Although he is now even more annoyed at Shady
Press than before, he assumes that he is, practically speaking, powerless to do anything. He
has heard that litigation is expensive and he is unwilling to spend a lot of money in the
hope of getting a refund on a book that cost only $40. Assuming that the company will not
pay unless compelled by a judge to do so, what advice can you offer to Chad? Suggest, and
briefly describe, several strategies that might overcome Chad’s concerns about costs. (You
need not go into great detail on each strategy.)
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
4) Until recently, Enya did all of her banking at the Bank of the Prairies (BOP). She
transferred her business to a different bank when she discovered that BOP had been
systematically overcharging for a number of services. Enya was, for instance, charged
excessive amounts every time that she wrote a cheque or withdrew money at an ATM. She
knows that friends and relatives were similarly overcharged when, for example, they paid
bills by telephone or received payment by way of direct deposit. Enya suspects that she
personally was overcharged about $750. While that represents a substantial amount for her,
she also realizes that litigation against BOP might involve a great deal of time and expense.
She consequently wonders if her case might be a suitable candidate for a class action. She
would like to participate in a class action alongside all (or many) of the other people who
have been overcharged by BOP. What requirements must be satisfied before a court will
grant certification to a class action?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 2: Litigation and Alternative Dispute Resolution
5) List and briefly describe the options that are available in terms of legal representation.
6) There is no guarantee that things will go well merely because you hire a lawyer. There
are, however, certain conditions that are required of lawyers, which provide some assurance
