Friday, May 25, 2012

Summary Judgment on a Simple Wrongful Dismissal

The Court recently decided the case of Pegus v. Ecorite Distributors Ltd..  It's an odd case in a couple of ways, but has some interesting issues, and what's truly interesting is the relatively summary manner in which the case is decided, which likely has a great deal to do with limited damages at issue.

The facts aren't complicated.  The plaintiff was allegedly induced by the defendant to leave his previous employer (where he had been for a number of months), was employed for about two months in marketing, making $4000 per month, and then fired on April 18, 2008.  It took 9 months for him to find a new job.

In early 2009, the plaintiff hired a lawyer, who wrote to the employer seeking pay in lieu of notice.  A statement of defence was prepared by a non-lawyer, Brij Kapur, who appears to be the directing mind of the employer.  This is a problem:  Individuals are able to represent themselves, but corporations generally need to be represented by lawyers.  In June 2009 the defendant was ordered to retain counsel, but did not do so, despite reminders from the plaintiff's lawyer, until November 2011.  In the mean time, in January 2011 the plaintiff served a "Request to Admit" on the defendant.

The purpose of a Request to Admit is to try to reach certain common grounds, agreed-upon facts and documents, as between the parties.  If the parties have agreed on a material fact, then there's no need to lead evidence on the point - the Court can just presume that the fact or document in question is true, because the parties have agreed to admit it.  This saves time and money, and there are cost consequences built into the Rules of Civil Procedure of unreasonable refusals to admit facts or documents.

By operation of the Rules, non-response to a Request to Admit within a certain time results in the deemed admission of all facts therein.  In this case, the employer never responded to the Request to Admit.  So in January 2012, the plaintiff brought a motion for summary judgment based on the facts per the employer's deemed admissions.

The Court permitted the defendant to withdraw its admissions.  Kapur swore an affidavit that as a non-lawyer he hadn't appreciated the requirement to respond to the Request nor the consequences of failing to do so, and the Court accordingly accepted that the non-response was inadvertent.

This isn't a surprising result, all things considered, but I'm sympathetic to the plaintiff for trying to argue the point:  The defendant was ordered in June 2009 to retain counsel, and nonetheless the employer played the "self-represented litigant" card in respect of a process it botched in 2011.  It's tough to justify, really, and the judge's determination of 'inadvertence' is pretty generous.  The Form for a Request to Admit, on its face, says "You are requested to admit..." (which would seem to call for a response), and then goes on to set out the actual consequences of non-response.  And nonetheless, the employer ignored it completely.

It's hard to imagine a much clearer case for holding a party to the deemed admissions from a failure to respond.

Despite relieving against the deemed admissions, though, Justice Gray was not going to let this case go on any longer.  She found that, even without the admissions, there was no serious issue to be tried, and proceeded to award summary judgment.

This is tricky, because without the admissions there were significant factual disputes.  While the defendant raised a lot of chaff as supposedly "triable issues", such as whether or not there was a wrongful dismissal, etc. (though they did not appear to deny that they dismissed the employee, did not allege just cause, acknowledged that no notice was provided, and appears not to have alleged a contractual entitlement such as a probationary period), the judge gleaned three factual issues in dispute:  Was the employee induced away from his old employer?  What were the nature of the employee's duties?  What should the impact be of his 9 months of unemployment?

But Justice Gray's decision appears to amount to a conclusion that none of these issues are significant enough to warrant a trial of them.  In all the circumstances, it was clear enough that a very short notice period was called for.  The inducements wouldn't have much impact, because of his short service with the prior employer, and the length of the job hunt might extent the notice period slightly.  The employee was awarded $12,000 - 3 months' notice.

My Thoughts

I see the merits of this approach.  The plaintiff's claim, while clearly meritorious, was unlikely to be for a significant amount of money, yet on the flip side the litigation is already 3 years old and hasn't actually gotten anywhere.  To require the case to proceed to trial, to get a conclusion on issues that might push the ultimate damage award a little bit either way, would be disproportionate to the amounts in issue.

Really, the parties should have settled the case long before this.  They didn't, so Justice Gray imposed an expedient solution.

Yet I question the disposition of the inducement issue.  I've had occasions to research inducement, and the effect of an inducement is not exactly settled law.  While there are exceptions, it has not tended to be a matter of adding up the cumulative length of service, and substituting that figure for length of service in the notice period assessment.

It seems to me that, if this fellow could establish that he had secure employment in his old job, that he hadn't been interested in leaving the old employer, and that he was induced away with promises of job security, the measure of the effect of the inducement would not be tied to his notice entitlements from the old job, and might not have necessarily been tied to his short length of service even there.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

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