Mitigation, simplified procedure, and summary judgment

Geoffrey Lowe is an associate lawyer at Rudner Law in Toronto.

A not insignificant percentage of wrongful dismissal cases have several things in common:

• They are for a relatively low dollar amount.
• The subject matter of the case is straightforward, and a court’s assessment of the matter will be focused on the amount of reasonable notice to which the employee is entitled.

The Ontario Rules of Civil Procedure require that a matter be brought under Rule 76, Simplified Procedure where the claim is for above the small claims court limit of $35,000 but below $200,000. Rule 76 provides a shortened litigation timetable, including a shortened examination for discovery and a process for a summary trial. It also removes the right to cross-examine someone on their affidavit.

Rule 20 of the Rules of Civil Procedure allows for either party to apply to bring a motion for summary judgment. Summary judgment is an accelerated process which, in theory, benefits the parties by allowing for a speedy resolution of the matter, a byproduct of which, in theory, includes reduced legal fees. Evidence on summary judgment is introduced by affidavit or submission of documents to the court.

A recent decision of the Ontario Superior Court of Justice shows the limitations of summary judgment under Rule 76, specifically regarding the review of the employee’s mitigation efforts.  

The duty to mitigate: A quick review

An employee who is dismissed from their employment must keep two considerations in mind:

• They may have a cause of action against their former employer for wrongful dismissal.
• If they proceed with this cause of action, they likely have a duty to mitigate the losses resulting from their wrongful dismissal.

An employee’s duty to mitigate their losses means they must take reasonable steps to attempt to locate (and accept) comparable employment. Simply put, they must try to locate a job similar to the job from which they were dismissed.

The employee must take these reasonable steps or face a potential reduction in any award of reasonable notice from a court. Once the court has determined the employee’s entitlement to reasonable notice, it will review the employee’s job search efforts. If the court finds the employee failed, without good reason, to take reasonable steps to locate employment it will reduce the award of reasonable notice.

Like nearly everything in law, the requirement to mitigate is subject to some exceptions. For example, where the employee is of an advanced age, the court has held that there is no duty to mitigate.

The employer must show that an employee has failed to mitigate — the court will not conduct its own independent review of the facts. Nor is the employee required to lead evidence of their efforts towards mitigation.

When rules collide

From a 30,000-foot view, Lewis v. Blue Star Ford Lincoln Sales Ltd. seems like the ideal case for summary judgment. Blair Lewis, a 47-year-old employee with over 10 years of service, had been dismissed on a without-cause basis. Negotiations as to the amount of reasonable notice he was entitled to went nowhere. Judicial intervention was necessary to determine Lewis’ entitlement to reasonable notice.

Both parties introduced evidence via affidavit. Lewis asserted that he had taken reasonable steps to mitigate his losses, and accepted re-employment five months later, at a lower rate of pay.

Conversely, the defendant alleged that Lewis had not taken all reasonable steps in an attempt to mitigate. Further, the defendant introduced evidence that suggested Lewis had mitigated his losses at an earlier date than he claimed in his affidavit.

The defendant made submissions that it had not been able to properly test Lewis’ evidence regarding mitigation, as the application of Rule 76 prevented it from cross-examining Lewis on his affidavit. 

On review of both parties’ positions, the court acknowledged the defendant’s concerns, noting that “Blue Star has been denied the opportunity to fairly discharge its onus of showing that Lewis did not act reasonably in mitigating his damages.”

To address this issue, the court ordered a “mini-trial” under Rule 20.04(2.2), to address Lewis’ mitigation efforts, and his income at his new job. At this “mini-trial”, both parties would be able to introduce oral evidence, and the defendant could cross-examine Lewis. The balance of the decision was put on hold, pending this “mini-trial”.

Conclusions

Either party may attempt to move for summary judgment. Whether the court will permit this motion to proceed is not a foregone conclusion. The opposing party may contest this motion being brought at all, and insist on the matter proceeding via trial (or where the matter is under Rule 76, a summary trial).

From a practical standpoint, the availability of summary judgment has decreased with the pandemic, with many courts being hesitant to schedule summary judgment motions. The preferred process for dealing with a matter under Rule 76 now appears to be via summary trial. In many jurisdictions throughout Ontario, it is now significantly easier to schedule a summary trial under Rule 76 than it is to book a motion for summary judgment. 

Beyond the logistical difficulties in booking a motion for summary judgment, the outcome in Lewis v Blue Star Ford Lincoln Sales Ltd. provides a reason for an employer, as a defendant, to claim that a matter is not appropriate for summary judgment. The inability of either party under Rule 76 to cross-examine on an affidavit may lead to a mini-trial, offsetting, at least in part, any savings which may have resulted from the summary judgment process.

These same issues are avoided with the summary trial process, which permits for cross-examination on affidavit, and further opportunities for introducing evidence.  

Geoffrey Lowe is an associate lawyer at Rudner Law in Toronto. He can be reached at [email protected].