The Ontario Court of Appeal, in a decision released November 3, 2016, has indicated that summary judgment motions may not be an appropriate avenue for certain wrongful dismissal claims, specifically those that proceed under the simplified procedure, and particularly where there are issues of conflicting evidence or credibility.

Facts

Singh v. Concept Plastics Limited, 2016 ONCA 815, involved two long term employees of Concept Plastics (“Concept”) who were terminated as a result of a plant closure where both declined an invitation to work at a different plant location. When their home plant closed in June 2014, both individuals commenced wrongful dismissal actions under the simplified procedure provided in Rule 76 of the Rules of Civil Procedure and then brought motions to dispose of their actions by way of summary judgment under Rule 20.

Rule 76.04 provides that:

(1) The following are not permitted in an action under this Rule:

1. Examination for discovery by written questions and answers under Rule 35.

2. Cross-examination of a deponent on an affidavit under rule 39.02.

3. Examination of a witness on a motion under rule 39.03.

(2) Despite rule 31.05.1 (time limit on discovery), no party shall, in conducting oral examinations for discovery in relation to an action proceeding under this Rule, exceed a total of two hours of examination, regardless of the number of parties or other persons to be examined.

The Summary Judgement Motion

At the summary judgment motion, Concept argued that summary judgment was inappropriate, as the procedural constraints under Rule 76.04 precluded it from putting its best foot forward on the motion. Concept did have limited discovery of the plaintiffs prior to the motion. However, the plaintiffs’ affidavits contained certain evidence which appeared to contradict evidence they had given on discovery. Due to the discovery time limits, Concept had not explored these facts as thoroughly as it might otherwise have done. As Rule 76.04 also prohibits cross-examination on affidavits, Concept was unable to probe these perceived inconsistencies before the motion judge.

Concept argued that there were credibility issues around the plaintiffs’ mitigation efforts, as well as conflicting evidence regarding the notice received by the plaintiffs and whether or not they had been constructively dismissed. The plaintiffs counter-argued that the evidence was consistent, that they had reasonably mitigated their losses, and that there were therefore no genuine issues requiring a trial.

The motion judge agreed with the plaintiffs and granted summary judgment in favour of the employees. The motion judge further found that 18 and 20 months, respectively, were appropriate notice periods for the two plaintiffs, and that the plaintiffs’ mitigation efforts, while not exemplary, had been sufficient.

Arguments On Appeal

Concept appealed this decision on the grounds that the motion judge had incorrectly adjudicated the matter by way of summary judgment and that she had also erred in concluding that the plaintiffs had reasonably mitigated their losses. Concept did not dispute the fact that the closing of its plant caused a dismissal of the plaintiffs for which they were owed reasonable notice. Concept reiterated the argument that the time limits on discovery and the prohibition against cross-examination on an affidavit provided by Rule 76.04 prevented it from putting its best foot forward on the summary judgment motion.

Concept’s primary argument was that there were numerous conflicts in the evidence that raised genuine issues requiring a trial. Specifically, Concept argued that there were discrepancies between the plaintiff’s affidavits and the evidence they had given at discovery, and that Rule 76.04 had precluded Concept from cross-examining the plaintiffs on these discrepancies. The time limit on discoveries also prevented Concept from more fully exploring the issues which would later become contentious. Concept argued that the use of the simplified procedure combined with proceeding by summary judgment resulted in unfairness to its case, and further, that the motion judge had an obligation to consider this potential unfairness in making her decision on the motion.

Concept also argued that the plaintiffs had failed to mitigate their losses, and that there were significant credibility issues that should have been considered on this issue. As such, summary judgment was also inappropriate on this basis.

The plaintiffs argued in turn that there were no factual matters in dispute that were material to the central legal issues. They contended that Concept had ample opportunity to ask relevant questions on discovery and that Concept was overstating the impact of Rule 76.04 on their ability to make their case. The simplified procedure had not prevented Concept from putting their best foot forward. In addition, the plaintiffs argued that the motion judge had correctly found that they had properly mitigated their losses and that there was an absence of evidence to support otherwise.

The Appeal Decision

The decision from Huscroft J.A. found in favour of the appellant employer, with the Court agreeing that the motion judge had failed to assess the unfairness against Concept of the procedural constraints from Rule 76.04 and the summary judgment process.

The Court noted that there were significant discrepancies in the evidence with respect to the notice that had been given to all terminated employees. Similarly, there were discrepancies with respect to the evidence around the plaintiffs’ mitigation efforts. These discrepancies went to the heart of the legal matters in dispute and raised serious credibility issues.

The Court further noted that Rule 76.04 placed significant limitations on Concept’s ability to prove its case. Following its prior decision in Combined Air Mechanical v. Flesch, 2011 ONCA 764, the Court held that a motion judge should generally not grant summary judgment where there is significant conflicting evidence on the key issues confronting them.

Moreover, the Court found that a motion judge must at the very least demonstrate in their decision that they have considered the constraints of Rule 76.04 and any resulting prejudice upon a respondent in situations such as these. In the instant matter, the Court found that the motion judge had not referred to any such considerations in her decision.

Further, the Court found that the motion judge had not made any findings with respect to credibility in her decision. The Court’s prior decision in Baywood Homes v. Haditaghi, 2014 ONCA 450, had warned that a motion judge must carefully scrutinize any credibility issues with respect to affidavit or transcript evidence, and clearly make findings on these issues before allowing a summary judgment motion. In this case, the Court found that the motion judge had not made any findings on these issues, nor had she explained in her decision how she resolved the evidentiary conflicts that were apparent.

The Court found that these absences in the motion judge’s decision represented reversible error.

As a result of this finding, the Court allowed Concept’s appeal and dismissed the motions for summary judgment.

Conclusion

The Court’s acknowledgement that Rule 76.04 “establishes significant limitations” on a respondent’s ability to put its best foot forward could be good news for employers facing summary judgment motions in similar situations. The Court has clearly reiterated an understanding that summary judgment, while a useful tool in many cases, should be applied carefully where there are significant factual or legal issues in dispute.

Plaintiffs wishing to make summary judgement motions in cases revolving around a dismissal notice period may now have to give careful consideration as to whether the simplified procedure represents their best avenue of success. Proceeding outside the simplified procedure will of course require more time, more steps, and potentially more costs (not to mention potential cost consequences if the Court later determines that the claim should have been made under the simplified procedure). This may result in fewer summary judgment motions made in such cases, or in a greater appetite for settlement amongst plaintiffs in such circumstances.

There is little doubt that employers can expect continued use of summary judgment motions in many wrongful dismissal actions. It can be hoped, however, that this decision provides employers an additional tool in responding to such motions successfully.