Tuesday, January 6, 2015

Pilling v. Lowerys Limited - Motion to Correct

Back in September, I made an entry about the costs decision in Pilling v. Lowerys.  Plaintiff's counsel, Sean Bawden, kindly provided the link to the decision on the merits.  (Incidentally, congratulations to Sean for winning a 2014 Clawbie for Best Employment Law Blog for his Labour Pains blog.)  In the comments, I expressed some surprise about the decision on mitigation...

Background - The Decision on the Merits

You see, the Deputy Judge, when summarizing the facts, indicated that the plaintiff had confirmed having received consulting income of $7,458.17 from the date he was dismissed from employment (in August 2013) to December 2013.  Presumably, the plaintiff was seeking pay in lieu of notice for roughly that period, which would have the effect that the $7,458.17 sum would be backed out of his entitlements as 'mitigation earnings'.

However, the Deputy Judge did not award four months' pay in lieu of notice, rather making a surprisingly low award of two months.  From which the Deputy Judge proceeded to deduct the entire $7,458.17 sum (i.e. the earnings over the 4 or 5 month period) as mitigation earnings.

The only way for that result to be in line with the legal entitlements of the parties would be if the entire sum was earned during the first two months after his dismissal.  This, on its face, is highly improbable.  (In fact, based on evidence led in the subsequent motion, it appears that the sum earned through the two month period was $4,378.25.)

Nonetheless, in the absence of a breakdown as to when the sums were earned, I would have understood had the Deputy Judge simply pro-rated the mitigation reduction.  It would be imprecise, but the Small Claims Court permits some 'rough justice'.

However, applying four-five months of mitigation earnings to two months of pay in lieu of notice?  That simply seemed to get it wrong.

The New Development - A Motion to Correct

The Plaintiff brought a motion to correct the decision.  Such a motion, under the Rules, can be brought under only two circumstances:  Firstly, that there was a "purely arithmetical error in the determination of the amount of damages awarded"; or secondly, that there "is relevant evidence that was not available to the party at the time of the original trial and could not reasonably have been expected to be available at that time."

The second criterion clearly wasn't met, so the plaintiff had to try to characterize the mistake as a "purely arithmetical error".

The judge rejected the argument, stating that "[c]ounsel necessarily need to anticipate the broad range of possible outcomes and introduce evidence accordingly during the course of the trial" - basically, that it was the plaintiff's (or his counsel's) fault that the evidence of two months' mitigation earnings wasn't on the record at the trial, and not the judge's mistake for calculating mitigation based on what was on the record.


I might think that the Deputy Judge has a point about the necessity of counsel anticipating the range of outcomes and leading the appropriate evidence, but not in this case, for three reasons:

(1)  The Burden of Proof

It's well-established law that the burden to establish mitigation (or failure to make reasonable efforts to mitigate) is upon the defendant.  What exactly this proposition means has been the subject of some debate, as I discussed last June, but the proposition itself is not in question.

In other words, the failure to call evidence as to the mitigation earnings through the notice period actually granted...is the defendant's failure.  (In practice, the defendant should have asked about it on cross-examination.)

In the absence of any evidence as to what mitigation earnings were made during the two-month notice period, the principled answer would appear to be that the defendant has failed to meet its burden, and therefore there should be no deduction for mitigation earnings.

(2)  The Obviousness of the Problem

On a cursory review of the decision, the problem jumped out at me.  The Deputy Judge's result was clearly not supported on the evidence he described. Yes, the evidence on the record was incomplete, but that puts the Deputy Judge in a position of having to recognize and resolve the incompleteness, providing some rational basis for why he resolved it in a particular way:  Something to the effect of "No evidence was led as to what mitigation earnings were made specifically during the two month period following dismissal, and therefore..."  There are three logical possibilities:  Deduct the whole amount, deduct zero, or deduct somewhere in the middle.  As I've said, the third option - infer as fact that the earnings were distributed over the August-December period, and deduct an amount accordingly - would probably have been acceptable rough justice in a Small Claims Court setting.  If he wasn't prepared to make such an inference, then - again, as I've said - it seems to me that the principled response would have been the second one.

However, while I could perhaps understand selecting the first option (an error though I think it would be), the Deputy Judge seemed to be actually oblivious to the fact that there *was* an omission in the evidentiary record.

While I think the plaintiff's efforts to characterize the error as being 'arithmetical' were a stretch, this, if anywhere, is where that proposition finds a bit of support.  Simply, he applied 4-5 months of mitigation earnings against 2 months of pay in lieu of notice, and appeared not to have been aware that the equation didn't balance.

(3)  The Nature of the Small Claims Court

Yes, it is a part of any lawyer's job to anticipate the range of possible outcomes, and prepare accordingly.  However, this would not likely have happened in the Superior Court, because the evidentiary record is, by design, much more full.  The actual paper trail supporting mitigation earnings would probably have been entered into evidence, meaning that the calculation of mitigation earnings would have been simply an arithmetic extrapolation from the evidence.

It is in this way - through a rigourous review of the material evidence - that lawyers prepare for such a range of outcomes at the Superior Court.  Could we do the same at the Small Claims Court?

Well, yes, but it would kind of defeat the point of having a Small Claims Court, if the expectation of production of evidence remained at the same high level as in the Superior Court.


While the plaintiff's 'arithmetical error' argument was not totally groundless, it was tenuous, and I have to comment that the Deputy Judge probably got one thing right:
If I have erred in principle, that is a matter for an appellate court to determine. I lack jurisdiction to sit on an appeal from my own decision.
It does indeed seem to me that it's easier to characterize the trial judge's failure to account for the timeframe of the mitigation evidence as an error in principle, and he's likely correct that this means that he can't simply reverse it.  Sadly, that means an expensive Divisional Court appeal for a low-dollar-value issue, if the plaintiff chooses to pursue it.  It's not really where the 'justice' of the case lies, in my respectful opinion.


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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