Monthly Archives: March 2015

Some Thoughts and Observations By a Toronto Mediator – Part 2

Posted on by
Reply

In this post, once again, I thought I would provide some additional observations on an aspect of the mediation process.  This post will comment on the relationship between neuroscience and conflict.

There are a number of studies in the booming area of neuroscience that focus on how the human brain relates to conflict and specifically on how male and female brains differ in that connection.  For example, psychologically, females are usually thought to be superior in inter-personal sensitivity than males.  That is a factor that is highly relevant to the issue of empathy, a critical element in the mediation context.

The entire issue of neuroscience is attractive because it deals with physical phenomena.  It produces pictures of brain activity which may suggest universal behavioural features.  In turn, this might enable mediators, counsel and parties to better understand decision-making processes and predict responses which people of a given gender, for example, may exhibit.

In my view, this type of study is particularly valuable to pick up where a mere economic analysis leaves off.  Economics gives us expected value calculations and litigation risk analysis.  It is based on the theory that decisions are made by rational people, who will act in a rational and logical manner in all circumstances.

Anyone with any life experience at all knows that this is simply not the case.  Firstly, people do not act on a rational basis in every case and every time.  Secondly, even where a party strives for rationality, what is rational behaviour to one person will not be rational to another.  Put another way, many if not most decisions are capable of more than one approach which may appear to be rational to some but not to others.  Variables in this connection likely include both culture and gender.  They will also include neuroscientific considerations.

For example, according to neuroscience, people speak in a universal emotional language.  The entire theory behind parties to a mediation gathering in a room and delivering opening statements is probably based on, or at least supported by, the theory of mirror neurons.  The assumption is that people are hardwired for empathy which, as we now know, probably varies with gender. Taken at face value, this may suggest that as a practical matter, the extent to which mediators should permit parties to engage in face-to-face discussion may be influenced by whether or not one or both is male or female.

Unfortunately, the literature is not at all consistent in this area.  Perhaps this is not surprising given the relative infancy of this area of study.  For example, one author suggests that the ability to interpret facial expressions is unconnected with culture.  On the other hand, there is evidence that suggests that the manner in which people perceive the facial expressions of others will indeed differ across cultures.

There is even controversy in the literature as to what mediators ought to do with this type of information.  There are those who consider face-to-face discussion to be important to any party interested in convincing the opposing party of his or her sincerity.  On the other hand, others consider face-to-face discussion to be highly problematic, at least in instances in which there is a perceived power imbalance between the parties.

While these nuances may be controversial, however, there appears to be solid evidence from neuroscientific studies as to the manner in which the brain reacts to emotionally charged issues such as those typical of conflict and efforts to resolve conflict.

For example, while it is normal and natural for a party to a legal dispute to feel angry, it would appear clear that such feelings represent an obstacle to settlement at least in the sense that angry people are less likely to make decisions in their own best interests.

Feelings of anger generally begin with a triggering event which causes a party to assess the relevance of a given situation to his own aspirations and the likelihood of achieving his own goals.  The party will then focus on who is to blame for the problem and assess whether or not the person will be able to cope with the situation as well as the likelihood that the situation will improve.  In the meantime, however, the party dealing with feelings of anger will be subject to an excessive amount of adrenaline produced in the brain.  This hormone is produced by the adrenal glands when the body is in a state of high anxiety, fear or excitement.  While it enhances alertness, and while neuroscience teaches us that emotion of this nature is an integral part of reason and the decision-making process, anger will affect cognitive processing and interfere with the ability to solve complex problems.  It has even been suggested that regardless of personal levels of intelligence, during anger arousal, people perform generally as if they have a learning disability.  Even subtle forms of anger impair problem-solving and general performance.  In addition to increasing error rates, anger narrows mental focus, obscuring alternative perspectives.

The angry person has one “right way” of doing things, which, if selected in anger, is seldom the best way.

Neuroscience tells us that this limitation to a person’s access to rational cognitive functions will arise whenever a person is under stress or threat or feels shame.  On the other hand, when the body senses safety, the nervous system becomes receptive to new information.  This suggests that there is a need for mediators, counsel and parties to be aware of physical dynamics in order to reduce a party’s perception of threat and thereby increase the chances of a successful resolution.

When Will A Suspension From Employment Amount To A Constructive Dismissal?

Posted on by
Reply

In the recent case of Potter v. New Brunswick Legal Aid Services Commission, the Supreme Court of Canada provided some interesting clarifications on the law of constructive dismissal.

In this case, Potter was appointed by the defendant as its executive director for a seven-year term.

During the first half of the term the relationship between the parties deteriorated and they began to negotiate a buy-out. Potter became ill before the negotiation was completed. Just before he returned to work, the Commission suspended him indefinitely with pay and delegated his powers and duties to another person. At the same time, it wrote to the Minister of Justice recommending that his employment be terminated for cause. It refused to give Potter any clear reason for the suspension.

Potter claimed that he had been constructively dismissed and sued. He lost at trial and at the Court of Appeal.

The Supreme Court of Canada had a completely different view and allowed the appeal.

The Supreme Court of Canada pointed out that in order to find that a constructive dismissal has taken place, the court must first identify an express or implied term of the contract that has been breached. The court will then determine whether or not that breach was sufficiently serious to constitute a constructive dismissal. The point of the exercise is to determine whether the employer’s conduct shows that it does not intend to be bound by the employment contract any longer.

The primary burden is on the employee to establish constructive dismissal but where an administrative suspension is at issue, as in this case, the burden will shift to the employer to show that the suspension was reasonable or justified. If the employer cannot do so, a breach will have been established and the employee will then have to satisfy the court that the breach substantially altered an essential term of the contract.

In this case, the contract had no express provision for a suspension. The Commission did have an implied authority to relieve Potter from his duties provided that it could show a business justification for doing so. The Commission could not show a business justification, for at least two reasons. Firstly, Potter was never given any reason for his suspension. To the court, an administrative suspension cannot be justified without basic level of communication with the employee. Secondly, the Commission’s claim that the suspension was simply to facilitate a buy-out was undercut by its own conduct, namely its letter to the Minister recommending a termination, the fact that Potter was replaced during a suspension period, and the fact that the suspension was indefinite.

As a result, the unilateral suspension constituted a breach and it was reasonable for Potter to perceive the breach as a substantial change to his contract. There had been a constructive dismissal and Potter was entitled to damages.

This case is a useful reminder to employers who are under the impression that suspensions are a viable alternative to outright terminations. If a suspension is merely a preliminary step towards a termination, which an employer chooses to take in the hope that the employee will simply get the message that is intended to be sent and resign, the employer is taking a risk that might not be worthwhile.

Injuries During Sporting Events: When Does a Participant Give Up His Right To Sue?

Posted on by
Reply

Last month my recreational hockey career was (temporarily) interrupted by a season-ending injury suffered during a game. While it would never occur to me to blame anyone for the injury, it is interesting to consider when a participant in a sporting event might actually have the right to sue someone who causes him or her an injury.

The issue was addressed by the Ontario Court of Appeal in the recent case of Kempf v. Nguyen.

This was a case arising out of an incident that took place in 2008 during a charity bicycle ride to benefit the Heart & Stroke Foundation.  In that ride, which was is an annual event, over 12,000 cyclists took to the Don Valley Parkway in Toronto.  The ride was open to cyclists of all abilities.  Participants could choose a 25, 50 or 75 kilometre route.  The road was closed to cars for the event.

Like most charity rides, this was not a competitive event.  There were no prizes.  Having said that, many cyclists at these events tend to ride as fast as they can.  The entire roadway was open to the cyclists but experienced cyclists at these events often ride in packs to take advantage of the ability to draft.  Inside the packs, riders roughly organize into lines with one cyclist following immediately behind another.  The front wheel of a cyclist is often within a foot or less of the back wheel of the cyclist ahead.

The parties in this action, Mr. Kempf and Mr. Nguyen, were both experienced cyclists and members of cycling clubs, riding several times a week.  Both were familiar with the generally understood rules pertaining to cycling safely in a group.

To participate in the ride, Kempf and Nguyen signed a waiver that made it clear that each cyclist was releasing the Heart & Stroke Foundation of Canada and its sponsors from any liability arising out of the cyclist’s participation in the event.

Shortly after the ride started, Nguyen was at the back of the first group of cyclists intending to ride 75 kilometres.  A second group was slightly behind. Kempf was at the front of the second group.

Wanting to join the first group, Kempf approached Nguyen’s left side.  At a point at which Kempf’s front wheel overlapped Nguyen’s back wheel, Nguyen swerved to the left, clipping Kempf’s front wheel with his back wheel.  Kempf fell to the ground.  A number of other cyclists rode over him.  Some of them fell as well. Kempf was seriously injured.

It appears that Kempf tried but was unable to avoid the contact with Nguyen.  Both cyclists were travelling between 20 and 25 kilometres per hour and the contact happened in a split second.

Nguyen did not stop after the impact of the two bicycles.  Kempf was later able to identify Nguyen as the rider who collided with him by looking through pictures of the ride posted online.

Kempf sued Nguyen for damages for negligence.  Nguyen’s evidence at trial was that immediately before the impact, the rider two places ahead of him suddenly slowed down.  This caused the rider directly ahead of him to take the evasive measure of decelerating and swerving to the right.  Nguyen was not forewarned of this and had no time to consider his options.  To avoid impact with the riders ahead, he swerved to his left.  He had no time to shout out a warning.  He was not aware that there was someone moving up behind him on his left.  In cross-examination, he admitted that his sudden movement to the left was not one that he would ordinarily make in a group ride.

Immediately after swerving to the left, he heard a crash behind him.  He did not look back as he was concentrating on the rider in front of him.  He carried on with the ride apparently unaware of his involvement in what had just happened.

The trial went on for five days. The trial judge found that Nguyen’s actions had caused Kempf’s injuries.

Nguyen appealed to the Court of Appeal on a number of grounds, including the fact that at the outset of the trial, the trial judge had dismissed the jury and proceeded with the trial on a “judge alone” basis for certain technical reasons.

At the appeal, in a two-to-one decision, the majority set aside the judgment on the basis that the jury notice should not have been struck, and ordered a new trial.  However, the interesting point in my view has to do with the court’s views as to Kempf’s right to recover on any basis.

Kempf had signed a waiver at the outset.  However, the waiver was very clearly intended to benefit the ride organizer.  No document was signed in which Kempf waived his rights against other cyclists acting negligently.

However, Nguyen argued at trial that Kempf should not have been able to recover anything on the basis of a doctrine of law identified by the Latin phrase volenti non fit injuria – literally, “to one who is willing, no harm is done”.  Kempf had agreed to participate in this event knowing full well that people sometimes fall off bicycles and hurt themselves.  As a result, when that happened to Kempf, he had no one to blame but himself.

This type of argument is not new. People have tried to sue each other over injuries suffered, for example, during fights on the ice at hockey games. There is always an argument about whether or not a participant voluntarily assumes the risk of an injury arising out of that type of violent event, given that hockey typically involves physical contact.

The Court of Appeal made it clear that in sports such as hockey or basketball, for example, players have to assume some risk of injury from bodily contact even if it is intentional or in breach of the rules. This type of thing is part of the ordinary risk of the game. Nevertheless, such conduct in these contact sports will be unacceptable where it is malicious, out of the ordinary or beyond the bounds of fair play.

Having said that, sports participants are not exempted from the application of ordinary negligence law. If a defendant conducts himself in a negligent manner, he will have to answer for the damages that he causes. When Kempf decided to participate in the ride, he assumed the usual risks associated with it including the actions of reasonable cyclists who could be expected to follow the known rules governing group rides. However, in the view of the court, by its nature “cycling is not a contact sport or one that involves physical encounters with opponents such as football or rugby”. Since Nguyen’s actions went beyond what Kempf agreed to reasonably expect given the nature of the activity, he was liable for damages.

In my view, it would seem that the extent to which a participant accepts the risk of injury will actually depend on two things. The first is the nature of the activity.  Clearly, the more violent the activity, the less likely an injured party will be able to sue.  Secondly, it seems fair to say that any negligence on the part of a participant causing injury to another will be actionable. However, the question of whether or not a participant’s conduct was negligent will be related to the nature of the sport. In other words, the more inherently violent the sport, the less likely that violent conduct on the part of a participant causing injury will be considered to be negligent.

“Hard and Pointed” Conduct Does Not Pay

Posted on by
Reply

The recent decision of the Ontario Court of Appeal in High Tower Homes Corporation v. Stevens is a useful illustration of the extent to which the court will go to deprive a party of relief where that party has acted in a way which some might consider unfair, even if the conduct was not unlawful.

In this case, a vendor owned two adjacent properties. One contained the principal residence of the vendor and his wife. They decided to sell the properties together, having decided that doing so would maximize their value.  For tax planning purposes, they wanted to allocate as much of the total purchase price for the properties as possible to one containing their personal residence.

The purchaser, a builder, submitted offers to buy both properties. The first offers contained conditions that made the sale of each property conditional on the sale of the other. After a series of revised offers went back and forth, the purchaser revised the offer for the parcel that did not contain the principal residence to provide that the sale of that property was not conditional on the sale of the property containing the principal residence. That change was not black-lined or otherwise drawn to the vendor’s attention. No such change was made to the corresponding clause in the offer involving the principal residence. The vendor did not notice the change.

As the vendor had preferred, the bulk of the amount offered for the properties together was attributed to the property containing the principal residence.

The agreement for the property that did not contain the principal residence had a clause making the purchaser’s obligation to close that purchase conditional on a variety of items.  The clause indicated that if the conditions were not waived by a particular time “by notice in writing to the seller”, the agreement would become null and void.

The two agreements were signed. On the deadline date for the waiver of conditions with respect to the property that did not contain the principal residence, the purchaser attempted to waive those conditions by delivering a notice to that effect to the vendor’s lawyer by fax.

By doing so, it appears that the purchaser tried to put into effect a plan that it must have concocted right at the outset. That plan involved purchasing the property that did not contain the principal residence at a bargain price while allowing the agreement for the other parcel, in respect of which the price was somewhat inflated, to go by the wayside.

As the Court of Appeal indicated, “the vendor was stunned when he learned of his mistake, and the purchaser’s attempt to take advantage to buy only Blue Water at a bargain price.”

The vendor refused to proceed. The purchaser sued for specific performance and in the alternative, damages of $5 million. The purchaser brought a motion for partial summary judgment.

The motion judge declared the agreement unenforceable on the very technical ground that notice of the waiver of conditions should have been delivered personally to the vendor and not by fax to his lawyer.

The purchaser appealed to the Court of Appeal, arguing in essence that the delivery of the notice by fax to the vendor’s lawyer was good enough based on a variety of legal doctrines.

The only doctrine that would appear to have had a glimmer of hope of success for the purchaser involved the equitable doctrines of waiver and promissory estoppel. The purchaser argued that by his conduct throughout, directly and through his lawyer, the vendor had demonstrated that he was not going to insist on strict compliance with the requirement that the purchaser’s notice in writing of its waiver of the conditions be delivered personally to the vendor. The purchaser argued that having been led to believe that strict compliance would not be required, he had somehow acted to its financial detriment in proceeding with the transaction, at least up to the date that the vendor pulled the plug on it.  As a result, it would be unfair for the vendor to be able to terminate the deal.

The Court of Appeal dismissed these arguments for a number of reasons. Most interestingly, however, the Court of Appeal pointed out that promissory estoppel is equitable relief. Therefore, a party seeking to invoke it must show that its past record in the transaction is clean. In this case, the Court of Appeal stated that it would decline to grant relief to the purchaser in view of the purchaser’s conduct at the outset. The motions court judge had concluded that while the purchaser’s conduct in changing the condition clause without notifying the vendor was not equivalent to fraud, the purchaser must have known that it was important to the vendor that the properties be sold together. The motion judge characterized the purchaser’s conduct as “hard and pointed”. Given that conduct, the purchaser was held not to be entitled to equitable relief.

The law now appears to be clear that there is a duty of good faith on parties to a transaction in terms of the manner in which they deal with each other after an agreement is made. There is no such duty on parties before they enter into a transaction.  Accordingly, this purchaser’s conduct during the negotiation process was not unlawful.  However, as it learned the hard way, conduct that might be characterized by a court as “hard and pointed” – to say the least – may well give rise to a negative result in court later on.