Progress – our approach to litigation

This re-think is occurring at many levels, and is being directed to some extent top down by the court.
At Brown Litigation our tagline is “Progress”.  We believe this word captures our approach to litigation which puts value on strategic thinking, defining objectives, attaining outcomes, returning value to the client, efficiency, and only employing process where it can directly improve client outcomes.  We also believe that our approach to litigation does away with unnecessary process thereby allowing us to progress our client’s case rapidly towards client valued outcomes.
I have come across a well written article published in the Advocate’s Society Journal by a colleague Mr. Allan Rouben.  Mr. Rouben is a lawyer in Toronto, and I believe his article could use some light from our direction.
In its important decision in Hryniak v. Mauldin, 2014 SCC 7, the Supreme Court of Canada signalled the need for lawyers and judges to re-think their approach to the civil justice system in order to provide timely and affordable access to the courts. This “culture shift” entailed simplifying pre-trial procedures and “moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the individual case.”While the statements were made in the context of summary judgment, it is apparent the Court intended them to apply to the system as a whole. As with all general pronouncements, their application was left to judges to adapt to the circumstances of individual cases. With a month now having passed since the decision was rendered, we are beginning to see the stirrings of what this culture shift might mean on the ground.TheTrustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2014 ONSC 660, involved a motion related to preparation of a discovery plan in a complex class action. As civil litigators know, our current documentary and oral discovery processes are exhaustive, and account for much of the associated expense and delay in the system.In his January 29, 2014 decision, Justice Paul Perell referred to the mind-set of counsel to request every document and look under every rock during the discovery process. He said:

[88]           Proportionality recognizes that perfection is the enemy of the good. Naturally enough, a litigant wants to know everything that might possibly be known to prove his or her case and a litigant wants to know everything about their opponent’s case so as to not be taken by surprise and to be ready to disprove the opponent’s case. But what a litigant wants is not necessarily what he or she needs, and the development and settling of a Discovery Plan should be approached by needs not wants.

[89]          And what goes for discovery and disclosure needs must be approached having regard to the proportionality principle that means that a litigant – and more precisely his or her advocate – must be re-cultured to accept that the adversary system needs far less in procedure than a perfectionist and sometimes obsessed advocate might wish for.

Garner v. Bank of Nova Scotia, 2014 NSSC 63, involved a motion to adjourn a trial for purposes of obtaining additional discovery. Associate Chief Justice Deborah Smith said:

[34]         During the hearing of this motion, I referred counsel to the recent Supreme Court of Canada decision in Hryniak v. Mauldin, 2014 SCC 7 (CanLII), 2014 SCC 7.  In that case, the court, which was speaking in the context of a summary judgment motion, discussed a culture shift that must take place in relation to civil justice in Canada.  It recognized that our civil justice system is premised upon an adjudication process that must be fair and just.  The court went on to say, however, that undue process and protracted trials, with unnecessary expense and delay, can prevent the fair and just resolution of disputes (see ¶ 24).  It further stated that a fair and just process is illusory unless it is also accessible, proportionate, timely and affordable. The proportionality principle means that the best forum for resolving a dispute is not always that with the most painstaking procedure (see ¶ 28).  While these comments were made in the context of a summary judgment motion, in my view, they are applicable to all civil cases in Canada.

[35]         I am fully satisfied that if the Plaintiff’s first three motions were to be granted, this case would have to be adjourned once again.  The trial, which has been scheduled for over a year, will be further delayed while additional pre-trial steps are taken.  Delay will be warranted in situations where it is necessary to do justice between the parties.  In this case, however, I am satisfied that the Plaintiff’s solicitor is fully capable of dealing at trial with the new information that has come forward and I am further satisfied that it is neither appropriate nor necessary to embark upon further pretrial procedures.

Based on these early insights, a culture shift entails slimming down the process such that: (1) litigants obtain access only to the information they actually need to deal fairly with the claim; (2) pre-trial procedures are discouraged; and (3) there is a recognition that perfection is not needed to ensure a fair process.

Lawyers are paid to exercise judgment. That requires them to make decisions on what the client really needs to advance or defend the claim. It also requires them to make decisions on what procedures are really needed without compromising the client’s interests. If that becomes part of the culture shift we end up with, the justice system and public will be the beneficiaries.

– See more at:”

Posted by:  D. Jared Brown – Lead Counsel

Confidentiality in Employment Settlements

It is typical in most settlements of employment disputes for the employer to request, and the employee to agree, to provide a confidentiality provision with respect to the settlement.

Typically these clauses prohibit the employee from disclosing the details of the settlement to any third party (spouse, financial and legal advisors excepted).

Some clauses stipulate that the fact that the matter settled may be disclosed but nothing else.

Other clauses contain an explicit penalty provision that permits a clawback or forfeiture of settlement funds if a breach.

The rationale for these clauses is quite simple.  An employer in resolving a dispute has an interest in ensuring that a settlement of a dispute does not create a “shark effect” of future claimants coming forward with the mistaken notion that the employer will settle any dispute.  In most respects, it is the confidentiality clause that the employer is paying for as much as avoiding the time and cost of a trial.  A trial would be a public proceeding whereas a settlement affords the employer the opportunity to control disclosure.

The Toronto Star recently reported on the decision of a Labour Relations Arbitrator  that found that an employee should forfeit the financial remedy received on a successful grievance on account of the employee’s breach of the confidentiality provision.

Interestingly, the employee in question did not sign the settlement agreement or the confidentiality provision.  The grievance having been handled by the employee’s union and as is apparent from the article against the desires of the employee to have an airing of the grievance in a hearing.

We encounter many employee clients who, whether on account of emotion or bad feelings, actually would prefer to have a public airing of their issues with the employer in court for the world to witness, rather than a strictly monetary resolution of the claim.

Similarly, we encounter may employees who are part of a bargaining unit/union, and find that the union is not representing their interests in the way in which they may have expected.

We strive to meet the client’s objectives in any employment matter, however, it is our duty to properly inform the client on what reasonable objectives are attainable from the outset.  Conducting a trial or hearing simply for the purpose of broadcasting a complaint to the public ignores the fact that our civil court system is designed primarily to grant monetary remedies for wrongs.  Clients seeking publicity are best to achieve this objective through the media, rather than a costly and less than ideal court process.

Confidentiality provisions, properly negotiated, and agreed to by the parties are enforceable, and should be treated as such following conclusion of the settlement.

D. Jared Brown – Lead Counsel

Some thoughts on Private (in)Equity from the New Yorker


I have been sitting on this article from the New Yorker for some time (since January 2012), but am increasingly receiving inquiries from clients frustrated with the role of private equity in their businesses.  The reasonable expectations of a private equity firm holding shares in a business can be very different from that of other shareholders.  Understanding the reasonable expectations of different classes of shareholders allows for better planning and business decision-making, and minimizes risk of shareholder claims (oppression etc.).

Interesting read.

US Private Equity

Can settlement negotiations be binding?

Settlement is an integral aspect of most litigation.  The majority of court claims commenced in Ontario are settled by the parties at some point.

When negotiating a settlement agreement with another party, be very careful what you say.  Parties can be unpleasantly surprised when what they thought were simply part of ongoing negotiations have been found by the courts to be a binding component of a concluded settlement agreement.

Situations in which negotiations can be elevated to the level of a concluded settlement agreement include when the parties are negotiating by correspondence, email, or telephone, or where there is no single document which defines all of the terms of the alleged settlement.  In these situations, the courts will look at all of the documents and evidence of negotiations to determine whether the parties have reached consensus.

The end result is that you could be locked into a binding agreement which was not your intended bargain or final outcome, and may not be in your best interests.  This is true even if you have not executed settlement documentation.

In Olivieri v. Sherman (2007 ONCA 491), the Ontario Court of Appeal found that in order to determine whether a binding contract exists, the court must consider whether the words and action actions of the parties show that they had a mutual intention to create a legally binding contract, and reached an agreement on all of the essential terms.

You can protect yourself in these situations.  Retaining a lawyer can ensure your interests are protected, that negotiations remain non-binding, and that concluded settlements are representative of your interests and intentions.  If you don’t have a lawyer, it is recommended that you ensure both parties work from one master settlement document during discussions and that any amendments in the context of negotiations are clearly identified as such (including marking them “without prejudice” as required).   Restrict any statements, either verbally or in writing, outside of the master document to ensure that they are not inadvertently relied upon by the other party.

The commercial litigators at Brown Litigation tenaciously represent the interests of our litigation clients, and can assist you with negotiating resolutions of all manner of disputes.

Posted by D. Jared Brown – Lead Counsel Continue reading

Employer assistance for the terminated employee (Mitigation)

Mitigation is a two-way street.  While we have discussed in a previous blog post the employee’s duty to mitigate when terminated, the duty to mitigate is a concept that should resonate with employers as well.

While most employers want to use an employee’s apparent failure to take reasonable steps to find alternative employment post-termination as a defence to a wrongful dismissal claim, prudent employers recognize that assisting employees to mitigate can reduce the overall risks associated with wrongful dismissal claims.

When representing employers who have made the decision to terminate an individual, we typically recommend offering post-employment support and outreach to the employee to assist the employee in their mitigation efforts.  Offering services such as outplacement counseling to the departed employee ensures that the employee begins the job search in a timely way, and further has all necessary tools and skills to ensure a successful job search.      As mitigation earnings can set off against entitlements to reasonable notice, timely re-employment (particularly during any period of reasonable notice) ensures cost and risk containment for the employer.

Further, offering post-employment assistance to transitioning employees evidences an employer acting in good faith during the termination process, with due regard to the sensitivities and issues inherent in an employee termination.

In certain situations, it may be appropriate for the employer to offer a new position in the organization to the departing employee either in a different department or geographic region.  In some court cases, the employee’s failure to accept a reasonable offer of alternative employment from the same employer, was ruled to be an unreasonable rejection of an opportunity to mitigate by the departing employee thereby reducing the employee’s entitlement to reasonable notice.

Whether these employer strategies (and the myriad of others available) are appropriate depend upon the circumstances in each case, including the employee in question, the personal relationships at stake, and the anticipated duration of the notice entitlement.

Posted by D. Jared Brown – Lead Counsel

I Don’t Want to Close My Real Estate Deal – Second Thoughts…

A real estate purchase and sale is one of the most significant decisions and transactions undertaken by the average individual in their everyday life. Typically the financial implications of the transaction are significant and accordingly the decision-making process can be fraught with stress and anxiety.

In some situations, the result is a sudden desire on the part of either the purchaser or seller to not close the transaction for which they have already signed a binding agreement of purchase and sale.

We have received inquiry from parties who are the subject of binding agreements of purchase and sale seeking to explore their options to avoid closing the transaction in question.  In the course of these conversations, we are generally asked about the effect if conditions contained in the agreement (i.e. home inspection) are not waived or satisfied, and the opportunity that may provide for the transaction to be avoided.

The short answer is that a party cannot utilize or rely upon the failure to satisfy a condition as justification to avoid the closing of a real estate transaction if the reliance is done in bad faith. In the Supreme Court of Canada case of Dynamic Transport v. OK Detailing, the court implied that each party is under an obligation to do all that is necessary on their part to secure performance of the contract.

Essentially a condition precedent to the closing of a real estate transaction can only be relied upon by a party acting in good faith. In cases involving conditions precedent, a party cannot take advantage of the condition unless is it acting in good faith and has made reasonable efforts to satisfy the condition. Focal Properties Limited. v. George Wimpy (Canada) Ltd. Marlo v. Savage.

Further, conditions such as a home inspection may not rise to the level of a condition precedent, and accordingly may not be relied upon even in good faith to avoid closing a transaction unless the outcome of the inspections reveals fundamental, significant, and unforeseen issues going to the heart of the deal.

Accordingly if you have entered into a binding agreement of purchase and sale that includes conditions that must be satisfied or waived by the closing, you are  under an obligation to act in good faith to take reasonable steps to ensure that those conditions are satisfied.  Any indication that a party is not acting in good faith resulting in a failure to satisfy or waive a condition could be grounds for a claim for breach of contract seeking full performance and closing of the transaction in question, or alternatively a claim for damages arising from the failure to close including forfeiture of deposits.

Posted by D. Jared Brown – Team Lead

Fired? Get a Job!

If you have been dismissed from your job, there is a duty in contract law which states that you have an obligation to mitigate your damages.  This doctrine means that a dismissed employee must take steps to minimize the losses they suffered as a result of losing their job.  Basically, this means that you need to take steps to look for another job.

The leading case on the duty to mitigate is the Supreme Court of Canada decision of Red Deer College v. Michaels.  In this case, the Supreme Court explained the duty to mitigate as follows:

The primary rule in breach of contract cases, that a wronged plaintiff is entitled to be put in as good a position as he would have been in if there had been proper performance by the defendant, is subject to the qualification that the defendant cannot be called upon to pay for avoidable losses which would result in an increase in the quantum of damages payable to the plaintiff.  There reference in the case law to a “duty” to mitigate should be understood in this sense.

The Court held that the burden is on the defendant to provide proof that the plaintiff failed to mitigate her/her damages:

It seems to be the generally accepted rule that the burden of proof is upon the defendant to show that the plaintiff either found, or, by the exercise of proper industry in the search, could have procured other employment of an approximately similar kind reasonably adapted to his abilities, and that in absence of such proof the plaintiff is entitled to recover the salary fixed by contract.

The Court went on to emphasize that the onus on the employer is heavy, citing a previous decision, because “the burden which lies on the defendant of proving that the plaintiff has failed in his duty of mitigation is by no means a light one, for this is a case where a party already in breach of a contract demands positive action from one who is often innocent of blame.”

Despite the burden being on the defendant to show that efforts were made, plaintiffs have been criticized by the courts for not making enough of an effort. In Chambers v. Axia Netmedia Corp., it was held:

Clearly, the efforts of Mr. Chambers [the plaintiff] were to a large extent confined to reading the local newspaper and forwarding his resume to employers. Although commendable, I am satisfied, by restricting his search to this one vehicle, the effort was too limited. Although there is no evidence as to whether these other efforts would necessarily have produced a positive result, earlier than he was able to find the employment he did, I am satisfied there was, to some extent at least, a failure to take all reasonable steps to mitigate

There are simple steps that a plaintiff can take to demonstrate that they attempted to mitigate their damages in an attempt to avoid an adverse decision like the one in Chambers.  We counsel our clients to keep a running log or mitigation journal outlining all the key events, dates, and information related to their job search post-termination including identifying job search efforts, networking, applications, and other career building steps.  This is typically done in the form of a diary or a calendar.  Second, retain copies of the letters, emails, or any other correspondence you sent in an attempt to secure a position.  Third, diversify your search.  You don’t need to limit to just one means.  You could add yourself to the social networking site LinkedIn, search on websites such as Workopolis, scan the newspapers and attend local networking events in your city.  Further, Human Resources Development Canada (“HRDC”) offers a range of free networking, job search, and outplacement services for qualifying dismissed individuals.  All of these steps will assist you in demonstrating that a genuine effort was made to secure new employment.

Posted by D. Jared Brown – Lead Counsel

Employee Non-Competition and Non-Solicitation Covenants: Where are we at?

The departure of an employee from a business can result in harm to the business when that former employee begins to either compete and/or approach the customers and contacts of the business with an eye to securing the business relationships for themselves.

Many employers have developed contracts which contain post employment covenants on the part of the employee, whereby the employer attempts to secure the employees agreement to refrain from competing against and/or soliciting the employer’s customers for a period of time post-departure.

The Canadian courts have repeatedly held that restrictive covenants in the nature of non-competition are considered a restraint of trade and accordingly are contrary to public policy and generally not enforceable.

However, there are some circumstances in which these covenants may be enforced, but those situations are few and far between.

In the Court of Appeal case of Mason v. Chem-Trend Limited, the court of appeal summarized the principles that will be utilized when determining whether to enforce the restrictive covenants in a written employment contract.

These principles are:

1.         To be enforceable the clause must be reasonable as between the parties and with reference to the public interest;

2.         The clause must balance the general public policy in favour of open competition, with the right of the employer to the protection of trade secrets, confidential information and trade protections; and,

3.         The court must engage in a review of the surrounding circumstances when analyzing the reasonableness and enforceability of the restrictive covenant in question.

The court then went on to identify the 3 main areas of consideration in determining when to enforce restrictive covenants.

A.        Did the employer have a proprietary interest entitled to protection?

B.        Are the temporal (time) or spatial limits (geographic distance) to broad?

C.        Is the covenant overly broad in the activity it prohibits because it prohibits competition generally and not the solicitation of the employer’s customers specifically?

In Mason v. Chem-Trend Limited the court of appeal made particular note of the fact that the employee in question was not a senior level employee or officer, but rather part of the sales force operating within a small sales territory.  The contract in question went beyond prohibiting the solicitation of former customers but also prohibited the employee from dealing with any of them in competition with Chem-Trend.  Further, the court noted the contract attempted to prohibit the employee from doing business with potential customers of Chem-Trend, something that would be very difficult if not impossible for the employee in question to know when they had run afoul of the prohibition period.  As a result of the foregoing analysis the court of appeal concluded that the restrictive covenant was unreasonable and unenforceable.

The prevailing case law which trends against the enforcement of restrictive covenants means employers and employees are best advised to seek out proper legal advice prior to drafting and entering into agreements that contain restrictive covenants. While it is entirely possible to craft a fully enforceable restrictive covenant that protects the legitimate proprietary interests of the employer these types of covenants and contracts must be carefully scrutinized to ensure that the result in Mason v. Chem-Trend Limited does not occur.

Posted by D. Jared Brown – Team Lead

The Aggressive Commercial Landlord

The relationship between a tenant and a landlord is typically the most important relationship for any commercial tenant.  Preserving a positive relationship with the commercial landlord is not only of utmost importance to the tenant’s business but should be a primary priority.  Failure to maintain a positive relationship exposes the tenant’s business to the frailties and nuance of commercial landlord and tenant law in the Commercial Tenancies Act R.S.O. 1990.  This area of law entails much risk and potential for harm to all parties.

We regularly receive contact from businesses that are on the receiving end of an overly aggressive landlord. Typically the aggressive landlord arises from a general breakdown in the relationship between the tenant business and the landlord.  When the relationship is strained, the landlord’s primary motivation aside from collecting rent and enforcement of other covenants is typically a desire to see an end to the tenancy at whatever cost. These objectives on the part of the landlord can manifest themselves in many ways, however, we primarily observe interference with the tenant’s business or the tenancy generally.

When these actions on part of the landlord rise above mere nuisance to a level that actually causes harm and material interference with the tenant’s business, the tenant is afforded very few options to prevent further harm and to realize any damages suffered.  In these situations it is possible for a commercial tenant to explore obtaining a civil restraining order.  Civil restraining orders are very similar to their criminal cousins in that they are judicial declarations meant to restrain or prohibit behavior on the part of one party which is deemed to be offensive to the court, and the potential to cause irreparable harm to another party.

We have been successful in protecting tenant business by obtaining civil restraining orders as against aggressive commercial landlords in situations where a landlord is acting in bad faith, and resulting in a breach of the tenant’s right to quiet enjoyment of the leased property.  While a civil restraining order is not ideal in all situations and in fact should be explored only as an option of last resort, it can have the effect of preserving the battle lines in place, preventing further irreparable harm while the parties explore their objectives moving forward.

Posted by D. Jared Brown – Lead Counsel