Judicial Assistance of Self-Represented Litigants

In January, I made an entry about a Small Claims Court decision which received some media coverage, where a self-represented plaintiff, Natasha Mitchell, pursued a claim against a moving company, a franchise of Two Small Men With Big Hearts.

In what I remarked is a rare occurrence for a self-represented litigant versus a represented party, Ms. Mitchell succeeded at trial.  TSM appealed, and Justice Gordon recently released his decision on the appeal.

The Facts

Ms. Mitchell is a single mother, and hired TSM when she was going to move.  In essence, she needed her property to be moved out of her old residence and stored for about a month before being moved into her new residence.  On the first moving day, she paid for that day's move and storage fees.

Prior to the second move, Mitchell discussed the cost with TSM.  Her evidence was that she was quoted a fixed price for $500.  TSM claimed that it never gives fixed prices, and only estimates, and bills based on a formula for moving time and personnel.  (The trial judge accepted Mitchell's evidence on the point.  At the time, Mitchell was an Ontario Works recipient, and TSM knew her financial situation.)

On moving day, however, as they were loading some of her belongings onto her new driveway from the truck, TSM presented her with an invoice for about $890, and insisted on cash.  She didn't have enough, and TSM wouldn't accept a cheque for the excess amount...

...so TSM loaded up her belongings back onto the truck and drove away.

That night, TSM told her that they would give her back her belongings if she paid about $1245.  The next day, TSM sent her OW caseworker a demand saying that they had "all of her stuff" and would return it if paid $1901.78 by the following day, failing which the price would go up to $2529.68.

The Deputy Judge's Findings

Deputy Judge Winny was not impressed by TSM's conduct.  At trial, it appears that there was no justification advanced for assertion of a security interest - i.e. for the defendant to be able to hold onto her property pending payment, and he characterized the escalating sums as "simply unilateral demands".

He referred to TSM's conduct as theft and extortion among other things, and said that it was fortunate for the defendants that "this is not a criminal court".  (Incidentally, I am advised that there are criminal proceedings underway at this time.)

He awarded judgment to Mitchell, accepted her list of the property which was retained, accepted that her estimated values for them were "fair and conservative", and also awarded her a modest sum representing her rental costs for basic household items for a short time - total damage award:  $22,419, plus costs.

The Appeal

TSM hired a new lawyer and appealed the decision and raised several issues on the appeal:

1. Whether or not $500 was a fixed price for the contract;
2. Whether or not TSM was entitled to insist on cash;
3. Whether or not TSM could hold the property until paid;
4. Whether or not the damage award was excessive; and
5. Whether the trial judge showed bias.

The challenge on such an appeal is that the trial judge's findings of fact are entitled to significant deference, and the nature of the contract entered into was a pure finding of fact.  In general, the trial judge believed Mitchell over TSM's witnesses, and that is something the trial judge is quite entitled to do, and with which appellate courts seldom intervene.

I have had the pleasure of appearing before Justice Gordon.  He is an experienced no-nonsense judge who I have found to be very practical and professional.  Whether or not there was a fixed price contract was a pure question of fact, entitled to deference, and Justice Gordon rejected TSM's arguments on that point:  "It was open to the trial judge to make a finding of fixed price contract.  The appellant simply disagrees.  There is no overriding and palpable error."

From that finding, the second and third grounds became moot.  Mitchell had enough cash to pay $500, but TSM would not accept that in full payment, and even if a lien could attach for unpaid invoices, Mitchell was offering payment in full.

As for TSM's damages argument, Justice Gordon reviewed the trial transcript and concluded that TSM's trial counsel hadn't made any real attacks on the amount of damages (except for a dispute as to how much property was retained, which the judge considered in detail).  As the argument was not made at trial, Justice Gordon did not permit it on appeal.

Bias

Bias was a more interesting issue:  TSM pointed to two alleged indicia of bias, firstly that the trial judge assisted Mitchell with the trial process, and secondly that the trial judge made 'disparaging remarks' about TSM.

The first argument is actually one with relatively far-reaching impact.  It's a discussion which has been going on for years at all levels - how do you balance the need for trial fairness for self-represented litigants who don't understand the process, against the right for procedural fairness and compliance of the other parties.

In this case, however, TSM was concerned about the asymmetry:  The trial judge guided Mitchell through the process of presenting her own case, including entering her exhibits.  He gave no such assistance to TSM. TSM, remember, was represented by a lawyer.

Accordingly, it is not a problem that the trial judge gave guidance to Mitchell, and there was no reciprocal obligation to help TSM's counsel.

Justice Gordon made a rather interesting observation:  "The appellant, in my view, is attempting to argue its counsel at trial was not competent.  Indeed, a review of the transcript is suggestive.  However, that is not a ground for appeal.  The appellant’s remedy, if available, lies elsewhere."

Regarding the disparaging remarks, Justice Gordon agreed that "strong language" had been used, but found that they were findings of credibility, and were attracted by the escalating demands, particularly in light of the fixed price contract.

Further Comments: Should Moving Companies Assert Liens?

The third ground of appeal, in my mind, is one which deserves some further discussion:  Whether or not it is open to a moving company to hold the goods pending payment is certainly not an obvious question.

There are old cases recognizing common law liens for commercial shipping scenarios:  So if I own a freighter and take a shipment of your coal across the Atlantic, I am entitled at common law to insist on payment prior to releasing the coal to you.  In all of these cases, it is also quite clear that, without clear contractual language to the contrary, the lien does not extend to storage charges - if I am incurring storage charges to maintain my secured interest, that's for my own benefit, not for yours, so I remain obligated to provide you with your coal on payment of the original shipping price, and can land myself in hot water for insisting on payment of storage prices before releasing your goods.

However, there's another line of cases, such as the 1920 decision of the British Columbia Court of Appeal in Welch v. Scott:  The defendant had been hired to move furniture, including a piano, from the plaintiff's former residence to her new residence.  After the move was completed, there was a dispute as to the contract price, so the movers went back in and took the piano back, claiming a possessory lien.  They argued that it was a "custom and usage" - i.e. a practice so common that everyone can be considered to know about it - that movers could claim a possessory lien for unpaid accounts.

There were four judges on the B.C.C.A., and all four rejected the notion:  Chief Justice MacDonald concluded that, even if one assumes that there is such a custom which might justify the possessory lien "which I should properly characterize as absurd if I were called upon to express an opinion of it", such a lien would have been lost when the movers parted possession with the piano.  The remaining three concluded that there was no lien, with one of them remarking that "absurd" would be a mild term.

And looking at that case, one can come to understand why domestic moving companies are very different from commercial shippers:  When I ship your coal across the Atlantic, and you're ready to take delivery in port, my work is substantially done.  I have completed my services and am therefore in a position to demand payment while still in possession.

However, when I hire a domestic mover, the actual transportation from Point A to Point B is a relatively small part of the services for which I am contracting:  What I'm actually paying for is the manual labour of moving the goods out of the old place and into the new, the heavy lifting, stairs, navigating large furniture around narrow corners.  So unless I've expressly agreed to provide payment in full prior to completion of the move, I would argue that the mover is not entitled to insist on full payment until it has relinquished possession (and by extension, any possessory lien it may hold).

This, of course, compounds the obvious policy concerns associated with an unregulated industry which is regularly entrusted with substantially all the earthly possessions of its customers - it creates a rather immense imbalance of bargaining power.

The Consumer Protection Act has a thing or two to say about some of these cases - there have been instances of charges laid under the CPA arising from movers trying to "renegotiate" the terms of the deal using their possession of consumer goods as leverage.  But that's only going to assist in certain cases - the burden of proof for a charge under the CPA is "beyond a reasonable doubt", and if there's some uncertainty about the terms of the contract to begin with, or a flexible pricing formula, then a conviction may be relatively difficult to obtain, not to mention being of limited assistance for the consumer.

What's striking is that, while the language in Welch v. Scott is so archaic as to be largely unrecognizable to non-lawyers, we're still having almost the exact same debate nearly a hundred years later.  By no means is this settled law.  And it makes sense that they would seldom be litigated.  Indeed, in Welch v. Scott the Chief Justice noted how 'scandalous' it is for such low-value cases ($14 in 1920 dollars - about $150 today) to be heard at that level.  Think about it:  Most people, faced with the option of paying an extra $400, or sleeping on the floor until they can replace their furniture, would just pay the extra $400...and it likely wouldn't be worth hiring a lawyer to fight about after the fact.  Those people who can't afford to do so, the Natasha Mitchells of the world, can't afford a lawyer to help them.

So there are compelling policy reasons to avoid finding that movers are entitled to a possessory lien.

The question, of course, becomes more complicated when we start dealing with written contractual terms which may give rise to possessory liens.  It is perfectly conceivable that a written contract could generate an entitlement to demand money at a particular time, and a right to assert a possessory lien failing payment.  For a fixed-price contract, that might actually be an acceptable and justifiable result.

However, for formulaic contracts, based on the actual time it takes to complete the move (such as what TSM claimed this contract was), it strikes me that a term requiring payment in full prior to completion of the move would be incoherent, because the final contract price would not yet be established until the move was complete.  (At which point, again, a possessory lien could not be asserted.)

Which leads me to propose a reasonable compromise solution:  A written contract should only (maybe) grant an entitlement to a lien for a moving company where the contract is for a fixed price - at a bare minimum, it should never be possible to hold a consumer's goods ransom in a case where the consumer did not know the ransom price at the time the contract was entered into.

But the law is so unsettled in this area that my thoughts are entirely speculative.  This appeal was decided on narrow factual grounds, and leaves us with a broader and unanswered question as to the state of the law for moving companies generally, in an area of commercial enterprise where there are countless transactions every day.  Whether from the Courts or the Legislature, we need bright-line rules regarding how moving companies can - and can't - protect their fees.  We need to lay down clear rules so that movers themselves know what lines they can't cross, and so that their customers can easily know their rights as well.

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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.

Late Night Retail Safety

There's a new trend in workplace health and safety regulation relating to late night retail services, such as 24-hour convenience stores and gas stations.  Saskatchewan has such a law coming into effect next month, prompted by the shooting death of a gas station attendant last year; British Columbia enacted a similar law in 2008.

The new Saskatchewan law deals with any place of employment open to the public between 11:00pm and 6:00am for the purpose of making retail sales to customers, requiring them to conduct workplace hazard assessments, to be updated and revised at least every three years and whenever there is a change of circumstances that might affect health and safety.

As well, such employers need to develop safe cash handling procedures to minimize the amount of cash readily accessible to workers, use video cameras to capture "key areas" of the workplace including cash registers and outdoor gas pumps, establish good visibility in the workplace, and place signs indicating the limited availability of cash and the use of video cameras.

For employees working alone, additional measures are needed:  Implementation of a check-in procedure for that worker, and provision of a personal emergency transmitter.

Prior to prorogation, an Ontario Liberal MPP introduced a private member's bill to compel gas stations to require payment prior to pumping.  (This may be practically necessary, sadly, but I'm not sure it should be legislated.  The real concern isn't theft - if that's a sufficient problem, then gas stations can be expected to implement the measure on their own, without the need for legislative intervention.  The real concern is that, every so often, a gas station attendant gets seriously injured or killed trying to stop such theft.  In my view, requiring policies and procedures clearly prohibiting attendants from trying to stop a gas-and-dash would be sufficient...and arguably, such policies and procedures are already required.)

Following Bill 168, Ontario already requires employers to implement violence policies and procedures and to carry out workplace violence hazard assessments, which would have significant overlap with the new Saskatchewan law.  Employers are further obligated to take every precaution reasonable in the circumstances for the protection of the worker.  The specifics of that obligation could be argued about (by contrast to the Saskatchewan requirements, which set out relatively specific obligations) - this is a double-edged sword.  Ontario's general 'reasonableness' approach creates uncertainty about the obligations of employers, yet Saskatchewan's more specific approach may have the impact of requiring some employers to carry out steps which are patently unnecessary and unproductive in the context of the workplace, or conversely of failing to require safety measures which seem obviously reasonable in certain contexts.

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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.

Legal Advice and Privilege in Contract Negotiations

There's a new and slightly disturbing decision from the Superior Court of Justice, Drash v. Mircom.

In many ways, this is a very typical wrongful dismissal action dealing with questions as to the enforceability of a termination clause.  Mr. Drash began employment with Mircom, apparently as VP Marketing, on October 31, 2011, and says that he was dismissed on February 6, 2012.

His contract included this language:  "...during your initial year of service, Mircom will provide you with the notice of termination of your employment or payment in lieu of notice which complies with the standard required by the various Provincial, State and Federal Employment Standard Act."

Unless there's something more not reproduced in the decision (which, to be fair, there may be), Mircom may have a problem.  There's a lot of case law arguing about whether or not a clause serves to displace the presumption that an employee is entitled to reasonable notice of termination, and...well, let's just say that there is authority supporting Drash's attack on the language as not doing so.

But there are contextual factors here which appear to set the case apart:  Namely, Drash may have understood what Mircom intended the language to do, and signed the contract nonetheless.  It appears that he obtained legal advice on the contract, and the lawyer may have advised him that the clause would not likely be enforced.

I observed in an entry a few months ago that I never recommend my clients sign anything on the expectation that it would not be enforced, in large part because the Courts would not be thrilled with such bad faith.  That's exactly what's going on in this case.

The Issue

Drash pleaded that he acted in reliance on his lawyer's advice that the clause was not likely to limit his entitlements.  Mircom then took the position that Drash had put his lawyer's advice in issue, waiving solicitor-client privilege, making his lawyer a witness and requiring the records pertaining to his lawyer's advice to be disclosed.  (His litigation lawyer is the same lawyer; being a witness would mean he has to get off the record.)

So Drash wanted to change his pleadings, and brought a motion about it, and Mircom brought its own motion seeking a declaration that solicitor-client privilege had been waived.

Mircom argued that the statement that he relied on his lawyer's advice was an admission against interest, and couldn't be changed without satisfying a fairly rigourous legal test:  Because of the initial pleading, Mircom is entitled to rely on his 'valuable concessions' that he signed the agreement because he believed the termination clause was ambiguous and could not be used against him.

The Finding

The Master who heard the motion agreed with Mircom's position:  It was an admission against interest, and he can't simply change it now, and it does put into issue the legal advice he received, accordingly waiving privilege.

My Thoughts

I have a number of concerns with this decision:

Drash's Litigation History

The Master notes, and reiterates several times, and considers in some length, that this is Mr. Drash's seventh law suit for wrongful dismissal, at least three of which involved the same lawyer, and that multiple cases (including this one) involve him seeking notice periods exceeding the length of his actual service.  She calls him a "career litigant".

At the end of the decision, the Master awards costs against him, 'reminds' him that the action involved the "termination of employment with Mircom that lasted all of 3 months and 5 days", and encourages him "to approach this case on the basis of proportionality as our Rules require."  There is a definite sense, reading through the decision, that she thinks the law suit is a waste of the Court's resources.  (This is the same Master who, in March, refused to put Covelli v. Sears into case management because of an unavailability of Court resources.  Don't get me wrong:  I applaud Master Haberman's efforts to improve the effectiveness and efficiency of our judicial system, as it is certainly needed, and I absolutely agree with her concerns about proportionality, but I worry when concerns about appropriate use of Court resources appear to inform decisions on matters of substantive law.)

One might reasonably argue that his litigation history is not a relevant factor in general, and particularly irrelevant to the matters at issue on the motion, and that the Master's focus on the short length of service is especially out of place.

Length of service is one factor in determining the appropriate notice period; however, there are other factors, and the notice period is notoriously hard to predict for short-service employees.  For a senior-level employee, entitlements can still be relatively significant, and it is not unheard of for very short-service employees to have notice periods longer than the period of employment.

From the fact alone that he made 6 prior claims against different employers, the Master appears to draw an adverse inference about the validity of his claims.  To my mind, frankly, that's inappropriate.

Having an unusual number of wrongful dismissal claims can say any one of several things:  Suing frequently can be an indication that you are overly litigious, yes, but it could just as easily mean that you put yourself into poor situations.  Getting routinely fired without just cause can suggest that you're picking your employers badly, or you're a poor employee, or that you don't fit well into certain types of workplaces.  Or some combination of factors.  But without looking at the merits of the particular claims, implying that a person is in the wrong by virtue of the fact that they are frequently involved in litigation...is unwarranted.

What is, perhaps, most worrying about this adverse inference the Master seems to draw is that, on the face of the claim as described, there does not appear to be anything particular tenuous about it.  I have seen challenges to contractual language far more tenuous than this...and many of them even succeed.

His litigation record might be relevant if it were a question of unconscionability, or whether or not he actually understood the terms of the contract...but he had legal advice, and that much isn't being challenged, so...not so much.

Drash is "sucking and blowing"

This is a passage from the decision:

He expressly pleads that is [sic] was an express or implied term of his contract that he could only be terminated upon provision of reasonable notice, or pay in lieu thereof, or for just cause. [Emphasis in Master's decision]

There is, in fact, an express term in the contract that deals with termination.  Having relied on it, however, Drash then claims that the clause is invalid as it is ambiguous....  This is a classic case of "sucking and blowing".  Why would a party seek to undermine the validity of a clause he seeks to rely on?  As the statement of claim is not consistent with itself, it is not at all clear what it is that Drash means to say in this pleading.

My read of this passage - and I would invite alternative interpretations (perhaps he relied on the termination clause in some other way?) - is that the Master believes that the claim's description of "an express or implied term..." refers to the written termination clause in the contract.  Which, as reproduced above, does not provide 'reasonable notice', and clearly isn't what he's referring to in this passage.

I'll grant that the bolded segment isn't the vision of pleading precision, but it's pretty boilerplate.  Take out some of the disjunctions, and what you get is this:  an implied term of his contract that he could only be terminated upon provision of reasonable notice, or for just cause.  That's at the core of nearly every wrongful dismissal action - the common law presumption of an entitlement to reasonable notice.  Which can be displaced by an express contractual term, which is why a plaintiff would plead that the express contractual term contained within the contract does not displace his common law entitlements.

Frankly, there's a bit of a "The Lady doth protest too much" element to the pleading (to the limited extent to which I know its contents) - if I'm arguing that the contractual term doesn't displace my entitlement to reasonable notice because it's ambiguous, then if I talk about it at all in the Statement of Claim, I will describe it in terms of what my position is as to its meaning.  However, I don't fault Drash's lawyer for this, because it was clear where a fight was going to be, so setting up the real issues for dispute probably made some sense.

Relevance of the Legal Advice, and Privilege

This is where there are more substantive issues with the decision itself.  It is relevant *that* he obtained legal advice.  Maybe.

But what the legal advice is?  I don't see any basis for that to be relevant.  Because he obtained legal advice, it strengthens the presumption that he signed the agreement with full knowledge of the legal consequences of its terms.

Simply, it doesn't appear that the plaintiff's understanding of the meaning of the termination clause is in issue.  The real question is the actual meaning of the termination clause.  If the meaning of the clause is unambiguous, then that's that - there's one meaning only, and the Court must use that meaning without considering extrinsic evidence.  If it is ambiguous, then the Court has to interpret it.  And for that, the contra proferentum rule is likely to govern:  An ambiguous term will be interpreted against the interests of the one who drafted it.

To date, in wrongful dismissal actions, this has been a fairly bright-line rule:  If the termination language doesn't expressly and unambiguously displace the entitlement to reasonable notice...it doesn't have that effect.

One can envision an argument going another way:  That the parties understood and agreed that the termination clause of the contract would displace the implied term requiring reasonable notice of termination, and therefore that in the face of the ambiguity of the provision the Court should look to external "parol evidence" and give effect to the mutual intention of the parties.  (NB:  I'm not endorsing the argument, nor suggesting that it has any particular chance of success on these facts or on any other fact pattern.)

However, to set up the facts for argument, the lawyer's advice remains quite irrelevant.  The question of what Drash understood Mircom to intend is not informed by an examination of the lawyer.  The lawyer did not deal directly with Mircom, and would have no firsthand knowledge of their intentions.  To make this argument, they would need to lead evidence of what Drash intended the provision to mean.

If the contents of the lawyer's advice are irrelevant, the amendment to the pleading should have been permitted, which renders the question of privilege moot.  If they are relevant, then it's a trickier issue.

The reason that this decision is concerning is that privilege is an important part of our legal system, and cannot be lightly disregarded.  A leading authority on the principle, in a comparable context, is the Manitoba Court of Appeal's decision in Simcoff v. Simcoff, from 2009, which summed up several decisions on the issue from across the country, and the rule appears to be this:  Simply referring to receipt of legal advice is not enough to waive privilege, but "where a litigant relies on legal advice as an element of his claim or defence, the privilege which would otherwise attach to that advice is lost."

So the fact that Drash pleaded that he relied on the advice can open up the door.  But I think we may be talking about a different type of reliance from what's present in the case law.  For example, in a case in the 70's where a civil defendant had pleaded guilty to a related criminal charge, then defended the civil claim on the basis that he only pled guilty because his lawyer told him to, the Ontario Court of Appeal concluded that he had waived privilege.

In 1981 case in British Columbia, where a lawyer sued his partnership for expelling him for "conducting himself in a manner likely to adversely affect the interests of the firm" because he unduly delayed making a particular embarrassing (but legally required) disclosure, he tried to explain the delay based on legal advice he obtained:  The Court concluded that fairness required the waiver of privilege.

In other words, these cases involve situations where acts or omissions which are potentially compromising to a party's position are explained away on the basis of reliance on legal advice.  To apply the same principles to the Drash case, one would need to first conclude that signing the contract with the termination clause compromised his position - i.e. that the termination clause was sufficient to displace his entitlement to reasonable notice of termination.  Then, if he could make an argument that he shouldn't be held to it because he never intended to be bound by it - an argument which seems, at a glance, extremely tenuous - then his legal advice might be relevant.  If that's what's going on this case - it doesn't look like it to me, but I'm not familiar with the facts beyond the decision itself - then maybe there's a logic to the decision.

But to bring in privileged behind-the-scenes discussions from a contract negotiation just because a party pleads a particular interpretation of a contractual term on the basis of legal advice received...that has the potential to compromise privilege on a fairly significant scale:  The reason you hire a lawyer in contract negotiations is to inform your interpretation of the meaning of the contractual terms (or to draft terms), and if an ambiguity can require a party to justify his intended interpretation of the meaning, then that could open up privileged discussions in a wide class of cases.

Additional Thoughts

From a ten thousand foot view, I think that these procedural battles are indeed not prudent on a case that presumably falls within the Simplified Rules, and that the fight here should be a lot simpler.

Much of contemporary employment law is premised on the notion that the employer is both in a stronger bargaining position and is more sophisticated than the employee, and so the law has evolved in such a way that protects employees.  The higher Courts have increasingly taken the position that the employer should be the one burdened with ensuring statutory compliance of contracts, and that the contract protects their own interests adequately, and that if the employer doesn't do so, the employer loses.

Of course, the power imbalance is not universal - there are employees with better bargaining power, and it is not at all uncommon to find that an employee is just as sophisticated as the employer, or even moreso.  When the employee has received legal advice, one can presume that he isn't having the wool pulled over his eyes.  He knows what he is signing.

To date, no distinction has been recognized in the law treating sophisticated employees differently from unsophisticated employees.  There may be room to argue for one, and this may (or may not) be an appropriate case to do so.  If so, however, the facts Mircom needs to establish to that end are relatively straightforward:  That Drash had an understanding of the legal framework involved, and was aware that Mircom intended the contract to displace his entitlement to reasonable notice.  With those facts, one can have a cogent argument as to whether or not the contract should be interpreted in the ordinarily strict fashion.

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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.

Will Interpretation

This entry is a little off-topic for an employment law blog, but it's an issue not foreign to me, and I find it interesting.

Mary Hoedl passed away in June 2011.  She made a will in July 2006 at a Tillsonburg firm, which directed that the residue of her estate "be divided among my nephew, MIKE WEBBER, my dear friend, KLARA OYLER, and the surviving children of my spouse's sister, STEPHANIE SCHLAUCH...in equal shares for their sole use and benefit absolutely."

There's also a stirpital distribution clause in case "any of the said beneficiaries shall have predeceased me and any issue of such beneficiary shall be living at my death" - if Oyler had predeceased, for example, her kids (if any) would have gotten her share.

The executor of the estate is the lawyer who drafted the will, and he wrote to all the beneficiaries, that Webber would get a third of the estate; Oyler would get a third of the estate; and Schlauch's four children would split the remaining third, each taking 1/12 of the estate.

The lawyer reviewed his notes later, and realized that he had made an error in the correspondence:  The six residuary beneficiaries were supposed to get equal shares, and he told the beneficiaries that.  That was what Ms. Hoedl's intention had been, and he had drafted the will accordingly.

Oyler brought an application claiming that the original interpretation - that Oyler gets 1/3, not 1/6 - was correct, and moved to exclude the lawyer's notes from when he drafted the will, which was decided here.

This is why will-drafting is a careful exercise:  What Ms. Hoedl intended is not particularly relevant to the interpretation of the will:  The will gets interpreted based on what it says.  If it was drafted incorrectly, that can't be remedied by saying "Oops, it should have said something different."  However, if the will, on its face, isn't clear and unambiguous, then it may be possible to admit extrinsic evidence to assist in its interpretation.

With provisions of this nature, I've sometimes felt like a blacksmith, trying to hammer out all the imperfections, letting it cool, then coming back to it again.  Fine differences in language can have very significant differences in interpretation, and lawyers have to account for different scenarios in terms of who might be alive at the time of the testator's death.

Consider this will language, for example, and imagine a scenario where one of Schlauch's children had predeceased, but left children surviving him or her.  Do the children get a cut?  Despite the stirpital distribution language, I'd be inclined to say "no", because of the inclusion of the word "surviving" in the gift to Schlauch's children in the first place.  If one of them passed away, they aren't a nominal beneficiary anymore, so their kids don't get anything.  That may or may not have been intentional.

The judge points out that it may have been *clearer* had each child been specifically named.  Which is true, but that would have also changed the impact I describe of the stirpital distribution language, unless other (rather complex) language was inserted to deal with it.

Typically, to achieve a distribution like the one Oyler sought, you would use language first dividing the estate into x equal shares, and then give 1 share to Oyler, 1 share to Webber, and 1 share to be divided equally among Schlauch's children.

The motions judge is of the view that the language of the will clearly refutes Oyler's position, but the motion really only dealt with whether or not the lawyer's notes were admissible; the judge noted that, if Oyler's position was a possible interpretation of the will, it meant that the will was ambiguous, so the notes would be admissible to resolve the ambiguity.

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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.

Proper Pleadings in Wrongful Dismissal

A recent decision from the Superior Court of Justice, in Phillips v. Ontario Racquet Club, is a rare and helpful guide to drafting a wrongful dismissal statement of claim.

The case involves a tennis coach suing in wrongful dismissal, defamation, and other causes of action, and the defendants brought a motion trying to strike out extensive parts of the Statement of Claim.  The claim wasn't perfect, but the defects were largely technical and the motion was largely unsuccessful.

Advocacy teachers will tell you that the pleadings are among the most important parts of legal proceedings.  The pleadings are often the first thing that a judge or other decision-maker will see of the case, and so framing the issues in a way that is favourable to your side is centrally important.

At the same time, pleadings serve an important technical role, defining the issues in dispute, and there are technical requirements in the Rules of Civil Procedure.  So there's a dual-role in pleadings - technical, and a tool of persuasion - and sometimes there is a tension between the two roles.

The Case

From the decision, I've inferred that Phillips' allegations are that he was dismissed, and that the employer (and specific individuals involved with the employer) later set out to destroy his reputation, making allegations of sexual harassment, and inciting people to make complaints against him.  The claim included an allegation that an email was sent by one of the defendants to tennis directors, club owners, tennis association heads, etc., across the country, making the allegations of sexual harassment and sexual assault, and calling for Tennis Canada to end its relationship with Mr. Phillips.

Phillips also made allegations that the ORC had a high turnover, that other Tennis Directors had been forced out, and that the workplace was generally poor but that he had made significant strides to improve it.

The defendants argued that significant parts of the pleadings were improper.  They succeeded in a couple of ways, most importantly regarding turnover.  (Note that this isn't universally improper in wrongful dismissal:  see Covelli v. Sears.)  However, they did not convince the Master that much of the plaintiff's narrative background was irrelevant, nor the allegations regarding his improvement to the workplace.  His background was relevant to his reputation (and therefore to the defamation), and his job performance was relevant to the wrongful dismissal allegation.  Many of the finer points on which the defendants won will be easily corrected in an amended statement of claim.

Ultimately, the defendants did not succeed in having any substantive allegations struck, and their success in having damaging allegations struck was limited to the allegations of turnover.

For lawyers, the case is useful, because it gives some guidance as to the kinds of issues to which they should be alive when drafting pleadings.  Many of the actual defects in the statement of claim are actually quite common, but seldom are they really challenged, because there's nothing to be gained.

For example, the plaintiff claimed $2,000,000 for defamation, breach of contract, and wrongful dismissal.  Strictly speaking, a claim should break down what is being claimed in respect of each cause of action.  In practice, these amounts are usually generously estimated.  If I claim a million dollars, and the Court finds that I'm entitled to $150,000, it will award me $150,000.  In general, I lose nothing by putting too high a number in the claim itself.  By contrast, if I only put the number $125,000 in the claim, and the Court finds that I'm entitled to $150,000, I only get the number in the claim.  (In theory, putting a number too high could be relevant to costs, and in some cases the choice of venue may have been wrong, but generally speaking, the number in the claim is only a ceiling, and a high one at that.)  In this case, the Court essentially told the plaintiff to fix it.  Which his lawyer will be able to do easily enough.  It's an empty win for the defendants.

My Thoughts

There are a lot of different minor issues in the case, and I'm not going into detail on all of them, but I wanted to touch on the question of the relevance of his job performance.

The Master is correct, without a doubt, that job performance is essentially always pleaded in wrongful dismissal cases.  The employee will almost always claim to have done an exemplary job, and the employer will deny that allegation...but ultimately, it doesn't really matter in most wrongful dismissal cases.

There are a small number of judicial decisions implying that the fact that an employee did a good job may affect the notice period, but that proposition isn't beyond question, and it's trite law that poor performance doesn't shorten the notice period.  If there's just cause, the employee gets nothing.  If there's misconduct falling short of just cause, the employee is still entitled to full "reasonable notice".

Where just cause is alleged on the basis of poor job performance, it's obviously relevant.  Where performance-related bonuses are claimed, performance may be relevant.

Of course, at the stage of issuing the statement of claim, a plaintiff isn't necessarily 100% certain that performance isn't going to be in issue, and it simply makes sense for a plaintiff to contend that he/she performed his/her obligations under the employment contract, but pleading it more particularly than that to show that the employee was a really good employee...well, I think there might be room to question that practice.

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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.

Pate v. Galway-Cavendish and Harvey: The Next Chapter

This is a case I've followed for a time, making this entry in May 2011, and this one in March 2012.

The case involved Mr. Pate, who was fired from the Township of Galway-Cavendish and Harvey in 1999 on allegations of serious criminal misconduct (i.e. that there were missing permit application fees on a number of transactions), and charged criminally, with the Township withholding exculpatory evidence from the police.  Mr. Pate has since passed away, but the saga continues.

He beat the criminal charges, and sued his employer in wrongful dismissal and malicious prosecution, seeking punitive damages.  He succeeded on the wrongful dismissal action, but the trial judge dismissed the malicious prosecution claim, and also awarded $25,000 in punitive damages, finding that he was limited by principles of proportionality.

The Court of Appeal, in April 2011, allowed the plaintiff's appeal on punitive damages and malicious prosecution, sending it back to the trial judge for new decisions on both.

In November 2011, the Court increased the punitive damage award to $550,000.  I've seen some reports suggesting that this is being appealed, this time by the employer, which wouldn't surprise me.

Those who read my March 2012 entry will know that I noted parenthetically that the judge made no mention of malicious prosecution.  The judge recently released a new decision on malicious prosecution, finding that the malicious prosecution test was satisfied, and awarding damages of $1, plus $20,000 in costs.

The Malicious Prosecution Test

The test for malicious prosecution is well-established as having four elements:

1. The criminal proceedings must have been initiated by the defendant;
2. The proceedings must have terminated in favour of the plaintiff;
3. The proceedings must have been commenced without reasonable and probable cause; and
4. The underlying purpose for the prosecution must have been malice, or something other than carrying the law into effect.

Initiated by the Defendant

This isn't simple in an action of this nature.  Establishing that the proceedings were at the instance of the employer can be tricky.  But in this case...

The Chief Building Official was the one who made the allegations of wrongdoing, following his own investigation.  He was a former police officer himself.  He seized Mr. Pate's journal, which included his notes on the questioned transactions, and didn't provide it to police.  There was other exculpatory evidence, which was withheld.  And much of the 'incriminating' evidence was in the absence of records of issued permits for which Pate had collected permit fees...whereas it was well-known that large numbers of such records had been lost in an office move.  Ultimately, the CBO provided police with only the information that supported the inference that Mr. Pate had engaged in criminal wrongdoing, and this led to the laying of charges.  This, the trial judge determined, led to a conclusion that the municipality had in fact initiated the criminal proceedings.

Terminated in favour of the plaintiff

Many malicious prosecution actions fall apart because of this requirement - whether brought too early, or following a guilty plea, etc. - but this case was simply academic:  Pate was acquitted.

No Reasonable and Probable Cause

As it happens, the Municipality had previously investigated some of the irregularities in question.  The charging officer gave evidence that, had he known of the various exculpatory factors in issue, all of which the Municipality was aware, he never would have laid charges.  This made the charge objectively unreasonable, and satisfied this part of the test.

Malice

The employer buried itself here by using criminal proceedings as leverage against civil liabilities:  They told him to resign, and go away quietly, or else they would fire him and press charges.  When he refused, they called the police and made their selective disclosures to try to convince the officer to lay charges.

On the judge's findings, it's pretty clear that they were chasing criminal charges pretty intently, because they saw their own interests at stake.  This met the 'malice' standard.

Damages

This appears to have been the subject of an agreement between the parties:  $1 for damages, $20,000 for costs.  The nominal damages were a reflection of the fact that a wide spectrum of compensatory and punitive damages had already been awarded, and awarding significant damages for the malicious prosecution would probably have resulted in double-recovery.

So why proceed to deal with an issue for which there is no remedy?  I can only speculate:  The costs may have been the key issue here, as this was an issue fought about at the original trial, so the question of who was right can reasonably lead to meaningful differences in the cost treatment, but in the scale of this litigation, even that's a relatively modest sum.  As it stands, Pate has won over $800,000 in compensatory damages, Wallace damages, punitive damages, interest, and costs.

My suspicion is that the scattered reports I've seen of an appeal pending (can anybody confirm this?) may be accurate, and that Pate's estate wanted to get this issue dealt with to strengthen its position on appeal.  An award of $550,000 in punitive damages is absolutely enormous, and the question is going to be whether or not the employer's conduct rose to such a level that warrants punishment on that scale:  A finding of tort liability for malicious prosecution would be very helpful for such an argument.

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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.

Does the MCIA need change?

I posted last week about Justice Hackland's decision which may result in Ford being removed from office.  It's a little outside of my usual material, but in light of my commentary, and the news coverage about calls for the Municipal Conflict of Interest Act to be changed, I think it's worth weighing in again.

Let me begin by saying that I do believe that the MCIA needs to be reformed, but I think I would probably disagree with most people as to how it needs to be changed.

What Doesn't Need to be Changed:  Automatic Removal From Office

The main criticisms are landing on the mandatory minimum penalty, removing the person from office unless certain narrow and specific criteria are met.  I am not generally a fan of mandatory minimums, and I'm knowledgeable enough on that topic that I could argue that point at length, but that's not the issue here.  In fact, in this case, I'm not prepared to disagree with the mandatory minimum penalty.

The truth is that judicial discretion, while something that I generally appreciate, has its limits, as it should.  Removing elected officials from office is not something which I think should be subject to judicial discretion:  We need fixed statutory guidelines as to when it's appropriate, so that, in effect, it is the legislature - not the judiciary - which determines when a municipal officeholder must be removed.

And I'm not prepared to say that the current test is wrong, either, or that something should be put in to relieve against circumstances such as Ford's.  The truth is that a well-meaning politician who takes his conflict of interest obligations seriously will not run into trouble with these provisions of the MCIA.  The bar is not set too high, and Ford made his own bed here.

What Does Need to be Changed:  Code of Conduct Issues

I have a hard time criticizing Ford for speaking in his own defence prior to the vote in February.  Technically, it is a violation of the MCIA, but when Ford was personally accused of wrongdoing, and his penalty was at issue, principles of natural justice require that he be permitted to speak in his own defence.  Voting, of course, is another matter - procedural fairness doesn't require that one sit on one's own jury.

The MCIA does need to be amended to provide a different and specific process for votes which so directly affect members of council as to trigger procedural fairness concerns, such as the one in this case.  Done properly, this would give more direction and more clarity as to a council member's specific rights and obligations in such cases, and would make it even harder for a reasonably diligent politician to accidentally end up on the business end of the "sledgehammer" of the mandatory removal from office.

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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.