Wednesday, May 21, 2014

The Kotecha Appeal - A Surprising Analysis

Last year, I commented on the case of Kotecha v. Affinia, involving an elderly employee with 20 years of service, who was awarded twenty-two months' pay in lieu of notice, after bearing in mind two months' of working notice.

Affinia originally resisted the summary judgment motion primarily on the basis of procedural fairness issues, that it shouldn't be adjudicated prior to examinations for discovery.  However, this was not picked up on appeal.

The appeal centred on the length of the reasonable notice period.  The employer argued that the motions judge was bound by a previous unreported decision of the Superior Court (which is, simply, wrong) in Sharma v. Affinia, awarding 13 months of notice on "almost identical facts" (whereas in fact Sharma was significantly younger with shorter service).

There's no question that 24 months was high end - 24 months is, barring "exceptional circumstances", the ceiling for reasonable notice periods.  But it's clear on the case law that this employee was entitled to, as I put it before, a "very substantial notice period".  Ordinarily, the Court of Appeal been somewhat reluctant to interfere with assessments of reasonable notice periods - even where a notice period falls slightly outside the appropriate range, appellate intervention would amount to "unwarranted tinkering".

It's relatively unusual to see notice periods much higher than 20 months without exceptionally long lengths of service, so - with 'only' 20 years of service, one might naturally think that Mr. Kotecha shouldn't expect much more than 18-20 months...but his age puts him a little outside the ordinary analysis.  (It is clear on the original decision that the motion judge weighted his age heavily, which I think is reasonable under the circumstances, as well as the fact that Mr. Kotecha had in fact been searching for employment for two years without an interview.)  I might still think 24 months is a little ambitious, but not so far out of line as to warrant appellate intervention.

However, the awarded notice period effectively amounted to slightly more than 24 months (i.e. 24 months and 13 days) because, in fact, the working notice wasn't just 2 months; it was closer to 2.5 months.  So the Court of Appeal appears to have applied an "exceptional circumstances" analysis appropriate to awards over 24 months, and found that no exceptional circumstances existed.  So the Court of Appeal reduced the award to eighteen months (which I would consider to be at the very low end of the reasonable range in Mr. Kotecha's case), less the 11 weeks of working notice.

Ultimately, the appeal did, in fact, bring the overall amount of the judgment down below Mr. Kotecha's $50,000 offer to settle, but because of the motion judge's finding of unreasonable conduct by the defence, the Court of Appeal didn't interfere with the costs award at the motion level.  (They awarded Affinia $2500 in costs of the appeal, though.)

So, at the end of the day, the appeal was a fairly big win for Affinia, reducing its liabilities from over $90,000 to around $63,000 (without considering what it has to pay its own lawyers).  In the final analysis, though, Affinia still would have been significantly better off accepting Kotecha's offer to settle.


As one might glean from my above framing, I'm a little struck by the stark reduction from the very high end to the very low end.

But I'm more struck by the analysis that was applied.  It is very clear on the face of the motion judge's decision that the award was intended to be 24 months, and ended up going higher only as a function of rounding.  (In fact, the rounding was done by plaintiff's counsel, which is fine as an advocacy technique, and the judge accepted the result.)  At best, it's through an arithmetical error that the award ended up higher than 24 months, so it seems very odd to apply an "exceptional circumstances" analysis to determine whether or not an award of 24.5 months was appropriate.  It makes more sense to correct the rounding error, and then determine if the 24 month award - as decided by the motion judge - is sufficiently far off the mark to warrant appellate intervention.

Then the analysis the Court of Appeal applied to come up with 18 months was frankly rudimentary, looking only at the Sharma case and at the Di Tomaso case, neither one of which is particularly comparable on the facts.  While the Di Tomaso case dealt with a longer period of service, neither case involved employees quite as elderly as Mr. Kotecha.


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.

The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.

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