There's a new decision in Kotecha v. Affinia, which takes an interesting look at summary judgment motions.
This decision came after the end of the reasonable notice period; the action wasn't commenced until January of this year, but Mr. Kotecha was given 8 weeks notice of dismissal in May 2011.
There was no issue that he was dismissed without cause, and no issue that he was owed reasonable notice. The issues were the length of notice, and the value of his compensation package over the notice period.
Mr. Kotecha was a machine operator in his late 60s, dismissed after about 20 years of service with Affinia. He made $18.23 per hour - over a 40 hour work week, this works out to just under $38 thousand annually. However, from 2008 to 2010, his average gross earnings were just under $44 thousand (consistently in the $42-$45 thousand range), due to overtime. There were also employer contributions to Kotecha's pension/RRSP, and benefits.
Affinia advanced the argument, on its own motion, that the defendant should be entitled to an examination for discovery prior to the hearing of the motion for summary judgment. It appears that Affinia put all its eggs in that basket, not making significant (any?) submissions on the plaintiff's arguments on the issues up for judgment, instead making the argument that a substantive response to the motion required an examination for discovery first.
The Test for Summary Judgment
Summary judgment is a process available for a party to seek a final adjudication of issues without needing to go through the whole litigation process. It used to be the case that there was little-to-no room for the weighing of evidence on such a motion: If there was a critical point of fact in dispute, a trial was necessary.
However, the process was changed recently, resulting in a change to the test: Now, a judge may give summary judgment if he or she can achieve a "full appreciation" of the evidence in the matter, and is entitled to engage in weighing evidence, evaluating credibility of a deponent, and drawing reasonable inferences from the evidence.
So, in this case, with the matters in dispute being the length of the notice period, the scale of damages (i.e. inclusion of overtime, RRSP contributions, benefits claims), and mitigation, summary judgment is available if the Court can achieve a full appreciation of the underlying facts for these issues.
The motions judge proceeded to hear the arguments on both motions before deciding either. And having heard the argument on the motion for summary judgment, without much contribution by Affinia, it's pretty natural that it's going to be fairly one-sided, and there isn't going to be much reason for the judge to want to drag out the process. The Court dismissed Affinia's motion, granted the plaintiff's motion, and granted the full relief sought by the plaintiff, being the equivalent of 22 months' pay in lieu of notice, less amounts already paid, after taking into account the 2 months of actual notice.
Why Did Affinia Want Examinations for Discovery?
Affinia's counsel argued four points on which it should be entitled to have an examination for discovery:
(1) Entitlement to overtime pay;
(2) Entitlement to medical benefits;
(3) Pension contributions;
(4) Mitigation.
The trouble with, in particular, the first and third, is this: Affinia would presumably be in the same position as the employee, if not a better position, to lead evidence pertaining to receipt of overtime pay and pension contributions. The employee's own evidence was based on T4s and pay stubs which were prepared by Affinia. That makes it difficult for an employer to say that it's somehow unfair to proceed without examining the employee. If Affinia has other documents or information which would add context to these documents, then it should be leading them into evidence.
The same is true, to a lesser extent, of the second issue: Kotecha claimed to have incurred a little over $700 in respect of medical benefits which would have been covered by his workplace health benefits. Whether or not these expenses would be covered would be within the employer's knowledge - it knew what coverage it provided. While one might reasonably argue that there should be an opportunity to test the strength of the evidence that these expenses were properly incurred...the truth is that, in the time period in question, and for an employee of Kotecha's age, $700 is pretty modest. (And consider that an examination for discovery entails hiring an official examiner, buying transcripts by the word, and paying at least two lawyers hundreds of dollars per hour to sit through the examination and review the documents afterward.)
In another case, I would find the fourth point to be compelling. Strictly speaking, the onus is upon the defendant to prove failure to mitigate, but knowledge of mitigation efforts would be known to the plaintiff. So if a plaintiff sat on the couch watching soap operas for a year, then sued in wrongful dismissal, the employer needs the opportunity to put the plaintiff under oath and ask "What have you been doing to try to find replacement employment?" There are a number of obligations throughout the litigation process which require a party to make disclosures, and if a summary judgment motion can sidestep these obligations, one might reasonably worry that a party could use summary judgment to avoid having to make disclosures which would be harmful to its case.
(In many cases, this is less concerning: For example, if a plaintiff can't articulate a basis upon which it could succeed in an action without disclosures from the defendant, then looking for an examination for discovery would be what we call a 'fishing expedition', which is frowned upon. So for the defendant to bring a motion to have the action dismissed without having to first make disclosures...that's probably a good thing. But on a point as specific and natural as mitigation, it's hardly a fishing expedition for a defendant to ask about it in examinations for discovery.)
However, in this case, the plaintiff did lead detailed evidence of his mitigation efforts, and the employer led no evidence on the point, so the judge was satisfied that it wasn't really a live issue.
I understand Affinia's approach, to an extent, focusing on the prior procedural matter to argue that it is unfair to proceed to a hearing. However, to really have a chance at success there, it did need to go a step further, to lead a basis for thinking that there would have been material facts revealed by an examination for discovery - otherwise, its own desire for an examination for discovery probably just amounted to a fishing expedition.
Why Didn't Affinia Cross-Examine on the Affidavit?
In the ordinary course, when you're making a motion, you need to support it with an affidavit - on most motions, all the facts before the Court are led by way of affidavit. And, ordinarily, the other party is entitled to cross-examine on the affidavit - an opportunity to test and challenge the evidence led by the other side on the motion.
However, there's a process called the "Simplified Procedure", which is often mandatory for claims worth $100,000 or less, which seriously limits the availability of out-of-court examinations, and blocks the entitlement to cross-examine on affidavits. This keeps litigation costs down.
But in the context of a motion for summary judgment, there's something a little disconcerting about it from a 'procedural fairness' point of view, about a person being able to get judgment against you without ever opening him- or herself up to an opportunity to be cross-examined.
And in effect, that was probably the intuitive unfairness that Affinia was seeking to address when arguing that it should be able to have its examinations for discovery. (It used to be the case, too, that there were no examinations for discovery in a simplified procedure case; that's no longer completely true.) Basically, Affinia wanted its examinations for discovery in lieu of an opportunity to cross-examine on affidavits.
However, the case law is relatively settled: The unavailability of cross-examinations informs the test for summary judgment in the Simplified Procedure.
Commentary on the Issues
There was a time, not so long ago, when a machine operator would likely have been limited to 12 months of notice. However, the Ontario Court of Appeal put that notion to rest fairly firmly in the Di Tomaso case in 2011 (my commentary here), upholding an award for a long-service machine operator of 22 months' pay in lieu of notice.
In light of the Di Tomaso decision, it should have been clear to all involved that the plaintiff in this case would obtain a very substantial notice period. And with a month's pay only being worth somewhere between $3166 and $3667, an agreement as to the appropriate range should have resulted in a settlement. With the kind of consistent overtime illustrated by his T4s, it really wasn't much of an issue, and at the end of the day was worth a little over $10,000. And the pension contributions also seemed relatively simple, being worth only $2420 in total. (It could have been more complicated had the plaintiff argued for a gross-up to account for differential tax treatment. But he didn't, and with the difference it would have made to the overall sum, that was probably a smart call.) Then benefits are a pretty academic entitlement, and with only $700 claimed, the employer should count itself lucky.
In other words, there are no issues that appear to be particularly difficult on the facts, and none of very substantial values. They all related to law which is relatively straightforward, and while the employer didn't lead any evidence itself (so maybe there's another side to the facts), the evidence that the employee did lead is the sort of evidence one would expect in such a case. It doesn't have the overall feel of having been decided on an incomplete record for lack of one party's participation.
This case should have settled. The plaintiff got everything he was seeking, and it is still not that far above what I would have considered to be a conservative estimate of his entitlements. It will be interesting to see if there's a reported costs decision, showing where the parties were sitting in their settlement positions.
Update: November 1, 2013
The costs decision came out last week. It also deals with interest, which is fairly unusual - especially at recent historical interest rates, the interest on a simplified rules judgement isn't worth fighting much over, even when there's a reasonable argument to be had.
I had commented earlier that it would be interesting to know where the parties' respective settlement positions were: Apparently, the plaintiff had served an offer to settle for $50,000, substantially less than the amount of the judgment (about $70,000). There was no offer filed by the defendant. This doesn't necessarily mean that the defendant didn't make an offer; however, as I said before, I would have considered the judgment to be not far above a conservative estimation of his entitlements.
In other words, it's hard to see how $50,000 could have not been a good deal for the employer, unless they had some basis to think there was a failure to mitigate (or actual mitigation).
However, the offers weren't the end of the costs discussion - conduct of the parties in the proceeding can also affect costs, and there were some allegations of unreasonable conduct going both ways. Kotecha's lawyer won that exchange handily: The employer's lawyer's conduct was criticized as "unreasonable", whereas the judge described the plaintiff's lawyer, Pamela Krauss, in some very favourable terms.
In my years of experience as a trial judge I have encountered some very experienced lawyers who have performed badly and some young lawyers who have done superb work. The performance of Ms. Krauss in this case is in the latter category.Then, after remarking about the number of hours she expressed that she spent on the file, said that "[t]he hours she spent are reflected in the quality of her work." It's always very gratifying for a lawyer to receive such recognition from the bench, and particularly so for that recognition to manifest in a favourable costs award for the client. Hard to imagine a better win for Ms. Krauss than what she achieved in this case.
Accordingly, the plaintiff appears to have been completely successful on costs, obtaining $21,000 in respect of costs. This appears to be a rare case where the successful party was not left significantly out-of-pocket for legal fees.
This also means that Affinia is now on the hook for somewhere north of $90,000, on a file they could have settled earlier for $50,000.
It appears that Affinia is appealing, however.
*****
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.
No comments:
Post a Comment