Category Archives: Cases

Weekly post on cases.

COVID Legislation and the Charter of Rights: Which Should Prevail?

Posted on by
Reply

The Ontario government’s legislation arising out of the COVID pandemic has given rise to a number of business disputes.  Many of them, for example, relate to commercial leases and the question of whether or not a tenant can rely on the government’s requirement that the tenant close its business for various periods of time as a basis for refusing to pay rent.

The legislation has also given rise to more fundamental questions, including its impact on the freedoms guaranteed to Canadian citizens in our Charter of Rights and Freedoms.

This was addressed in a constitutional challenge presented by former MPP, Randy Hillier in his application against the Province of Ontario in which he challenged the constitutionality of certain government regulations restricting the rights of Ontario citizens to gather outdoors. 

The Court of Appeal addressed this question in a recent decision worth considering.

As we will all recall, after the outset of the pandemic the Ontario government passed regulations prohibiting people from attending gatherings outdoors.  The regulation included exceptions for weddings, funerals and religious services provided that the number of people involved was limited to 10.

No exception was provided for any other peaceful assembly, such as political protests. 

Mr. Hillier attended several such protests between April and May 2021, made illegal by the COVID legislation, and allegedly acted as their host or organizer.  As a result of two of them, he was charged with provincial offences under which, had he been found guilty, he would have faced a substantial fine and possible imprisonment. 

Mr. Hillier challenged the constitutionality of those regulations on the basis that they contravened his right under section 2(c) of the Canadian Charter of Rights and Freedoms to peaceful assembly.

The Charter provides, in its section 1, that the rights and freedoms set out in it are subject to such reasonable limits prescribed by law as can be demonstrably justified.  Mr. Hillier’s argument was that the restrictions on his right to peaceful assembly could not be justified and that therefore, they were unconstitutional and unenforceable.

The judge at first instance disagreed with Mr. Hillier and ruled that the gathering limits were demonstrably justified.  Mr. Hillier appealed to the Court of Appeal.

The Court of Appeal observed that government decisions attempting to balance competing interests during the health crisis was deserving of a measure of deference.  As the Court said, Ontario should not be held to a standard of perfection.  Furthermore, hindsight is not the proper lens through which to view the necessity of the gathering limits of which Mr. Hillier complained.  Instead, the Court should contextually consider what was known and considered by the government at the time it imposed the limits. 

The Court pointed out, quoting an earlier text, that in principle, freedom of assembly works in concert with other fundamental freedoms. It forms part of an interrelated system that serves core democratic functions, such as freedom of expression.  Assemblies can leverage a message of protest or dissent, forcing the community to pay attention.  Assemblies with a political message (such as those attended by Mr. Hillier) should receive a “heightened level of accommodation and protection”.

Accordingly, as a form of peaceful assembly, political protests are given constitutional protection.  In this case, the ban on such activities was absolute.  There was no exception for gatherings of 10 or less.  They were simply prohibited.

The Court went on to consider whether that prohibition could be justified under section 1 of the Charter.  The Court determined that in order to justify its position, Ontario simply had to establish a reasoned apprehension that such assemblies would run contrary to the objective of preventing the spread of COVID-19 to some extent.  The Court of Appeal had no difficulty agreeing with the motion judge that restricting the gathering of people, even outdoors, was a rational means of reducing the transmission of COVID-19.

However, that was not the end of the story.  Where Charter rights are restricted, it is also necessary to demonstrate that the deprivation is limited to what is reasonably necessary to achieve the government’s objective.  In other words, Ontario had to demonstrate that the less drastic means were unavailable.

This led the Court to analyze the extent to which the ban on peaceful assembly actually mitigated the risk of the spread of COVID-19.  This in turn led to the conclusion that there was no evidence as to the increase in risk that would have been posed by an exemption for outdoor peaceful assembly or protests that matched the exemption for other types of gatherings. 

Furthermore, the Court was clearly troubled by the fact that there was no evidence of the Ontario government that even considered this possibility.

Ultimately, the Court allowed the appeal on the basis that the negative effects of the absolute ban on peaceful assembly exceeded the benefits with respect to the spread of COVID-19.  The Court determined that the outright ban could not meet the minimal impairment test.

This had to be a close and difficult call to make.  As the Court had observed, this was not an assessment to be made with the benefit of hindsight.  In that sense, the Court was really saying the Ontario government should have considered the impact of an absolute ban on peaceful assembly, and perhaps carved out a 10-person exemption for all gatherings.  And it should have done so while grappling with an unprecedented, life-threatening situation.

The Court was clearly concerned to protect gatherings that involved political protests. Perhaps there was a concern that with an absolute ban, the government was preventing people opposed to the government’s programs in response to the pandemic from making their views known.  Having said that, how many political rallies involve 10 people or less?

Ignoring Court Orders is Not a Great Idea

Posted on by
Reply

As a commercial litigator and a mediator, occasionally I am reminded that all too often, people disregard Court orders in the sincerely held belief that they will get away with it.  Unfortunately, they sometimes do.

For that reason alone, I appreciate those instances in which such people are actually held to account for their sins. 

The recent decision of the Court of Appeal in Canadian Western Bank v Canadian Motor Freight Ltd. et al. is such a case.

In this case, a Receiver was appointed over the assets of a debtor, which was a trucking company.  The Receivership Order required the debtor to turn over its assets, principally a fleet of trucks, to the Receiver without interference.

Instead of doing so, the debtor and its management moved the fleet of trucks to a yard owned by a different entity, United Group.

After unsuccessful negotiations with United Group to recover the trucks, the Receiver obtained an Asset Recovery Order requiring United Group to provide the Receiver with access to its yard so that the Receiver could remove the trucks.  United Group and its management failed to do so and the Receiver made an application to the court to enforce the Order.

The motion judge found that the debtor and its management, and United Group and its management, were in civil contempt of the Receivership Order as well as the Asset Recovery Order.  In a separate hearing, the motion judge sentenced the directing mind of the United Group to four days in prison.  He also ordered others involved to pay significant costs awards.

United Group appealed from the decision, suggesting the motion judge had failed to take into account that there had been negotiations between United Group and its management with the Receiver concerning the Asset Recovery Order.  However, United Group put forward no evidence to contradict the evidence of the Receiver that it had come to United Group’s yard where the trucks were located for the purpose of removing them, but that United Group had refused to allow the Receiver to do so.

For its part, the debtor and its management argued before the Court of Appeal that the movement of the trucks to United Group was undertaken in the normal course of business because there was no room at its own premises to house the trucks.  The Court of Appeal observed that the motion judge, in an earlier Order, had referred to the fact that the implementation of the Receivership Order was being delayed specifically in order to give the debtor’s management time to assemble the trucks at its own premises to allow the Receiver to take possession of them.  At that time, the debtor’s management had made no reference to any need to deliver the trucks to United Group’s yard. 

The Receivership Order had clearly stated that immediate and continued access to the debtor’s property was to be provided and that all such property was to be delivered to the Receiver upon request.  The debtor and its management did not comply with that Order even though the implementation of the Receivership Order had been delayed for that express purpose.

The debtor’s management indicated to the Court that it had not intended to breach the Receivership Order.  The Court of Appeal made it clear that this was not an excuse.  It confirmed well settled law that in order to establish civil contempt, all that is required is proof beyond a reasonable doubt of an intentional act that is in fact a breach of a clear Order of which the person committing the act had knowledge.

In conclusion, the Court of Appeal pointed out that “it is a fundamental principle that orders of a court are to be obeyed.  There are not to be stalled, and they are not to be negotiated.  Serious consequences are to be expected by anyone who willfully fails to obey a Court Order”.  The Appeal was dismissed and presumably, someone spent 4 days in jail.

Call me old fashioned but to me, this was a win for the good guys!

Posted on by
Reply

How Not to Exercise an Option to Purchase Land

The recent Court of Appeal decision in 1785192 Ontario Inc. and 1043303 Ontario Ltd. v. Ontario H Limited Partnership provides useful guidance on the rules around the exercise of options to purchase land where the price to be paid is to be set in accordance with appraisal evidence.

In this case, a tenant under a pair of commercial leases wished to purchase the properties that it occupied.  Each lease contained an option to purchase which provided that the purchase price would be the midpoint of appraisals to be obtained by each party. 

The parties each obtained an appraisal.  They were far apart.  The tenant’s appraiser suggested a value of $11,746,000.  The landlord’s appraiser put the value at $31,200,000. The midpoint, therefore, was $21,473,000.

Both parties used reputable appraisers.  This gives rise to the question as to how two reputable appraisers could possibly be so far apart in valuing a commercial property.  As is typically the case, the difference was caused mostly by a difference in assumptions.  The landlord’s appraiser assumed that the highest and best use of the properties would involve having them re-zoned for the development of a residential condominium complex.  The tenant’s appraiser assumed that its highest best use should reflect the current zoning, which was for commercial use.

Perhaps needless to say, both sides accused the other of putting forward appraisals which either artificially devalued or overvalued the properties for the advantage of their respective clients.

In any event, the option to purchase clause in each lease was clear in specifying that the price would be the average of the two appraisals.

The landlord took the position that its appraiser was correct. However, for closing, the landlord ultimately agreed to accept the average amount of about $21,000,000.

The tenant was more obstinate.  After insisting that its appraisal was accurate, it tendered the amount specified by its appraiser but paid over to its lawyer in trust the difference between that amount and the mid-point amount, to be held in trust pending the outcome of future litigation.

The landlord refused to convey title on that basis and had the $11,746,000 that had been tendered by the tenant returned to the tenant’s solicitor. 

The tenant brought an application to the court for an Order requiring the landlord to close at a price of $11,746,000. 

The judge hearing the application concluded that it would have been understood in the lease that each party can seek an appraisal using reasonable assumptions most favourable to that party and that this is what had happened.  As both parties obtained a compliant appraisal, the purchase price was the midpoint between the two.  However, as to whether the tenant had properly tendered at closing, the judge accepted the tenant’s argument that given the dispute about the purchase price the tenant was justified in tendering the undisputed amount while placing the disputed balance with a reputable stakeholder pending a court decision.  Accordingly, the judge required the landlord to convey the property in exchange for the midpoint amount, to be made up of the funds originally tendered by the tenant together with the additional amount held by the tenant’s solicitor in trust.

Note that this would have meant that the landlord would be paid the total amount which it had been prepared to accept before the start of the litigation, namely the midpoint amount.

By this point, however, and for reasons not set out in the initial decision or the subsequent decision of the Court of Appeal, this was no longer satisfactory to the landlord.  The landlord appealed the application judge’s decision to the Court of Appeal on the basis that the tenant had defaulted by tendering only part of the purchase price while sending the balance over to its own lawyer to be held in trust.  The tenant cross-appealed on the basis that the application judge had made a mistake in concluding that the landlord’s appraisal was valid.  The tenant argued that the dramatic difference between the two valuations was not within the realm of reasonable disagreement and one of them had to have been a product of a methodological error.  As the landlord’s appraiser had allegedly incorporated “speculative assumptions”, it was not valid and therefore the only valid appraisal before the court was that of the tenant. 

The Court of Appeal first concluded that there has been no error made by the application judge in dealing with the appraisals.  Whether or not an appraisal is valid is a question of fact and, the judge having decided that they were valid without making any obvious error in the process, that decision had to be respected.

However, the Court of Appeal ruled that the judge had been wrong in finding the tenant’s partial tender of funds to be adequate.  On the contrary, the Court of Appeal decided that this had been a breach of the tenant’s obligation to tender an amount equal to the midpoint of the two valuations.  This was the methodology specified in the option clauses and the parties had a legal obligation to close the transaction on those terms. 

There are cases in which a partial tender may be satisfactory but those are generally restricted to circumstances in which a purchaser wants to close the purchase of a property with an abatement.  In some of those cases, it may be possible to tender the amount which the purchaser feels is appropriate while paying the amount of the claimed abatement into court or in escrow. 

That approach is not appropriate in a case in which a closing is taking place pursuant to an option to purchase.  Options must be exercised strictly and the tenant, not having tendered exactly as required by the option, was in default and therefore no longer entitled to close on any basis.  As the court indicated, the tenant should have tendered the purchase price properly and litigated about it afterwards. 

In my view, the entire issue goes back to the wording in the option clause.  We now know without question that options are going to be enforced strictly in accordance with their wording.  While the wording with this option might seem sensible on its face, this case illustrates how such wording can lead to an unexpected result given that appraisals by their very nature, can lead to very different results depending on assumptions made by the appraisers.  Perhaps the best lesson to be learned from this case has to do with the importance of drafting option clauses of this nature in such a way as to try to limit the possible range of outcomes.

So You’ve Lost Your Arbitration: Now What?

Posted on by
Reply

It has been commonplace to include arbitration clauses in commercial agreements. The benefits of arbitrating disputes rather than litigating over them are well known. Arbitrations are usually considered to be a cheaper and faster way to adjudicate disputes than litigation. Typically, arbitrations are seen to be the better approach particularly when the parties expect to continue to do business with each other after the dispute has been resolved. For example, where a dispute arises during a contract where the performance of obligations by each side is expected to continue on a long-term basis and the dispute is not serious enough for either party to actually terminate the agreement, arbitrations are thought to be a somewhat less acrimonious and certainly more efficient way of handling the issue at hand.

Often, one of the key features of arbitration has to do with the limits on appeal rights. It is not uncommon for an arbitration clause to provide that there simply is no appeal of any kind from the arbitrator’s decision.

A limit on appeals may seem like a good idea at the time the contract is signed. Presumably, neither party actually anticipates there is going to be a dispute during the course of the business relationship and it may provide some comfort to know that if there is a dispute, its resolution will not be dragged out by an appeal process.

However, this feature becomes a lot less appealing when one engages in an arbitration to resolve a dispute and loses. What then?

An arbitration provision that provides that the arbitration’s decision is final will be interpreted by the court in exactly that manner – as final. If it turns out that the arbitrator didn’t understand the evidence or simply got it wrong in the opinion of one of the parties (or perhaps both), that’s simply too bad. That is a risk that one takes when entering into such an agreement. Presumably, the risk cuts both ways.

Having said that, in Ontario, the Arbitration Act does provide for some recourse in certain circumstances. Section 46 of the Act allows an unhappy party to ask the court to set aside an arbitration award on the basis that the arbitrator failed to conduct the hearing in a procedurally fair manner. For example, an award can be set aside by a party who is not treated equally and fairly, was not given an opportunity to present its case or respond to the opponent’s case, or was not given proper notice of the arbitration or the appointment of an arbitrator.

There is often a temptation to bring such a motion on the basis of allegedly unequal or unfair treatment when all that has really happened is that one of the parties does not like the award. In the recent case of Aquanta Group Inc. et al. v. Lightbox Enterprises Ltd., 2023 ONSC 971, Aquanta applied to the court for an order to set aside the award because a few days before the commencement of the arbitration, the arbitrator dismissed its motion to amend its pleading. The arbitrator, a retired trial judge, had considered the arguments on both sides and exercised his discretion to dismiss the motion and require the arbitration to proceed as scheduled.

At the motion to set the award aside, Aquanta argued that the arbitrator’s refusal to allow it to amend its pleading amounted to unfair and unequal treatment. The court disagreed and dismissed the motion.

In doing so, the judge relied on a decision of the Ontario Court of Appeal released in December 2022 called Tall Ships Development Inc. v. Brockville (City), 2022 ONCA 861. In that case, the Court of Appeal made it abundantly clear that the basis for setting aside an award for procedural unfairness is extremely narrow. That provision of the Act “is not concerned with the substance of the parties’ dispute and is not to be treated as an alternate appeal route.”

Accordingly, it appears clear that at a motion to set aside an award, the court will not consider the substantive issues in the dispute. It will only concern itself with matters of a procedural nature. In the Lightbox decision, for example, the issue was not whether or not the arbitrator exercised his discretion correctly or even reasonably. The only issue was whether or not the arbitrator had the jurisdiction to make the decision that he made. As the arbitrator acted within the bounds of the authority granted to him by the arbitration agreement, that ended the matter. Arbitration clauses in commercial agreements have become popular because they offer the possibility of a speedy resolution to disputes. However, an arbitration provision with no appeal rights does present some element of risk which should be considered carefully before the agreement is signed.

The Latest on the Duty of Good Faith in Real Estate Transactions

Posted on by
Reply

The case of Sarai et al. v. Singh et al., 2023 ONSC 2102 (CanLII) is an important reminder of the duty of parties to a real estate transaction to act in good faith.

In this Application to the Ontario Superior Court of Justice, three applicants entered into an agreement of purchase and sale with three respondents on May 24, 2021, for the purchase of a 14-acre property in Caledon to be used by the applicants to accommodate their growing trucking business. The transaction had a closing date of November 30, 2021.

The agreement provided that the applicants would provide their $100,000 deposit to the respondents’ lawyer in trust within 48 hours of the respondents’ acceptance of their offer.

However, the respondents did not bother to tell the applicants who their lawyer was until May 28, 2021.

Within 24 hours thereafter, the applicants provided that lawyer with a bank draft to satisfy the deposit. The bank draft was accepted by the respondents’ lawyer.

Over five months later, on the day before closing, one of the respondents, a Mr. Singh, notified the applicants that he did not intend to close. Singh’s position was that the delivery of the deposit was too late because it was not within 48 hours of acceptance. The applicants had therefore breached the agreement and thus Singh did not have to close.

The applicants asked the court to declare that the agreement was binding and to require the respondents to close the transaction. They argued that the respondents had conducted themselves as if the agreement was binding until just before closing. Specific performance was the appropriate remedy because the property was so unique that damages would not be an adequate remedy. Finally, they argued that Singh was acting in bad faith by relying on the deposit clause when the respondents had failed to identify their lawyer, to whom the deposit was to be delivered, until after the deadline.

Singh pointed out that the applicants could have delivered the deposit directly to the respondents within the 48 hours and that, having failed to do so, the applicants had breached a fundamental term of the agreement of purchase and sale.

The court had no hesitation in granting the application. The respondents had made strict performance of the deposit condition impossible by delaying in identifying their lawyer. Furthermore, they waived strict compliance with that deadline by accepting the deposit when it was delivered.

The court also considered Singh’s failure to notify the applicants in writing about his position until the very last moment to be completely unreasonable. Singh did not act in good faith and, given the uniqueness of the property and this unreasonable behaviour, the applicants were entitled to specific performance.

There are a number of important lessons to learn from this decision.

Firstly, the court will have no sympathy for behaviour that is patently unreasonable. If a party to a transaction intends to take the position that the agreement has been breached by the other party, it is incumbent upon that party to give timely written notice of that position. A failure to do so may be considered unreasonable and bad faith behaviour.

Secondly, if one wishes to take such a position, it is critical that one not act in a manner that is inconsistent with that position. In this case, acceptance of the deposit after the 48-hour deadline period contemplated by the agreement amounted to a waiver of that deadline so that it could not be relied upon at a later date as a breach of the agreement of purchase and sale. Thirdly, where a party has an obligation to do something, the other party cannot make satisfaction of that obligation impossible and then claim that the agreement has been breached.

The Latest on Non-Competition Covenants

Posted on by
Reply

On December 2, 2021, the Working for Workers Act, 2021, came into force. The Act prohibits non-competition clauses in employment or other agreements except in the context of a sale of the business, or if the employee operates at an executive level. The effective date of the Act is October 25, 2021. The Court has held that it does not apply to agreements entered into prior to that date.

Non-competition clauses have always been fertile ground for litigation simply because many employers consider them vital to their business. But, they are also very difficult to enforce. At the end of the day, at common law, the enforceability of such clauses depends on whether or not a court considers them reasonable. For that reason, it is important for both employers and employees to give careful thought to how a Court will make that determination when negotiating the terms of a non-competition clause.

In the recent case of M & P Drug Mart Inc. v. Norton and Whitehead Pharmacy Ltd., the Ontario Court of Appeal took the opportunity to review this process.

Norton, a pharmacist, had been the pharmacy manager of a pharmacy owned by M & P in Huntsville, Ontario. His employment agreement contained a non-competition covenant. The clause in issue provided that for one year after the termination of Norton’s employment for any reason, he would not “carry on, or be engaged in, concerned with, or interested in, directly or indirectly, any undertaking involving any business the same as, similar to, or competitive with the business within the 15 km radius of the business located at 10 Main Street East, Huntsville, Ontario”.

The agreement also provided an acknowledgement on Norton’s part that the clause was necessary to protect M & P’s legitimate business interests and was reasonable in the circumstances.

Norton resigned and became an employee at a pharmacy less than 3 km away.

M & P sued Norton and the matter was determined by Application. The Application judge found the covenant to be unreasonable and therefore unenforceable. The Application was dismissed. The decision was appealed to the Court of Appeal, which dismissed the appeal.

The Court of Appeal began its analysis by observing that, as a general rule and on public policy grounds, a non-competition clause is unenforceable unless it is reasonable considering the interests of the parties and the public based on the circumstances at the time that the covenant is made. In order to determine whether the clause is reasonable, the Court will consider the extent of the activity to be prohibited, the geographic coverage of the restriction, and its duration. The covenant must be clear as to activity, time and geography. If it is ambiguous on any of these factors, it is likely to be considered unenforceable simply because the ambiguity will make it impossible to show that it is reasonable.

If the covenant is clear and unambiguous, it will then be assessed for reasonableness. The Court will not rewrite the covenant in accordance with what it thinks is reasonable. If it is unreasonable, the Court will simply decline to enforce it.

In this case, M & P argued that the clause merely restricted Norton from working as a pharmacist for a pharmacy or a store that includes a pharmacy. However, the words contained in the clause went well beyond this restriction. In the view of the Court, the covenant would have prohibited Norton from working in a job at a supermarket, for example, that included a pharmacy department, even if his job was in a completely different department and he was not employed as a pharmacist. Furthermore, Norton would have been prevented by the clause from being a passive investor in any such business.

As it happens, Norton did become re-employed as a pharmacist. Nevertheless, as the clause included activities beyond working as a pharmacist, it was considered overly broad and, therefore, unenforceable.

The jurisprudence is filled with cases in which a non-competition clause was found to be unenforceable. This is because historically, employers have insisted on protections well beyond what is truly necessary, thinking that inclusion of an acknowledgment by the employee that the employer’s concerns are reasonable will preserve the clause.

While the number of such cases will start to decrease given the new legislation, the vast majority of contracts existing today that include such clauses will not be subject to the legislation. They will continue to be litigated, and Courts will continue to be vigilant in protecting the ability of employees to make a living elsewhere unless the clause restricting the new employment is eminently reasonable.

Even with the new legislation, the common law will apply to “executive” employees. In addition, this issue will arise in the context of the sale of businesses. In the latter cases, while the attitude of the Court has always been more generous to parties seeking to enforce non-competition covenants, the issue of reasonability will continue to be one to which attention must be paid.

Wrongful Dismissal and Mitigation: What is the Extent of the Employee’s Obligation?

Posted on by
Reply

In the recent case of Lake v. La Presse (2018) Inc., the Ontario Superior Court provided some useful guidance concerning an employee’s obligation to mitigate damages when there has been a wrongful dismissal.

In this case, the Plaintiff had been employed by the Defendant for 5.5 years. The employment was terminated without cause and there was no issue as to the fact that the Plaintiff was entitled to reasonable notice at common law.

The matter came before the Court as a summary judgment motion to determine the reasonable notice period, compensation for loss of a bonus over the reasonable notice period, and whether or not the Plaintiff took reasonable steps to mitigate her damages.

The particularly interesting aspect of this case has to do with the mitigation question.

In my experience, it is typical in these cases for former employees to produce evidence of unsuccessful job applications and leave it to the former employer to lead evidence at trial that, had more diligent efforts been made, the former employee would have become re-employed much sooner than actually was the case. Most employers find this to be an extremely difficult task.

In this case, the Plaintiff was the most senior employee in the Toronto division of a company that carried on business as a daily online French-language newspaper based in Montreal. The Plaintiff had ample experience working in sales and sales operations for media companies. She reported to the Vice-President of Sales and Operations of the Defendant, who was based in Montreal. Her duties included client development, training and management of sales teams, and developing and implementing the Defendant’s sales strategies. However, she did not attend weekly executive meetings or participate in setting strategic direction within the organization.

Her employment ended on May 30, 2019. At that time, she was 52 years of age. At the time of the motion, about two years later, she remained unemployed.

The Court noted that the onus is on the Defendant to demonstrate that the Plaintiff did not mitigate damages and that the onus is not a light one. However, where the Defendant overcomes that onus, the notice period can be reduced or eliminated altogether.

The Court pointed out that the Plaintiff was entitled, firstly, to some reasonable period of time before starting the job search in order to adjust to the situation and plan for the future, and secondly, to seek out reasonably comparable work for which she was qualified. However, after a reasonable period of attempting to find similar work, a Plaintiff must, at some point, lower her sights and take a lesser paying job, or use her skills in a perhaps unrelated industry.

Considering the Plaintiff’s position, the Court concluded that the Plaintiff should have been ready to begin her job search after a one-month adjustment period. In the year following the termination, she applied for 11 jobs, nine of which were for a vice president role, which was a more senior title than one that she had ever had. Accordingly, she focused her job search on a role that represented a promotion over her prior role.

The Court found that the appropriate notice period was nine months. In that time frame, the Plaintiff only applied for seven positions, six of which were a vice president role. Her first job application was submitted four and a half months after she stopped working for the Defendant.

Taking these facts into account, and apparently without any direct evidence from the Defendant as to available jobs, the Court concluded that the Plaintiff had failed to properly mitigate her damages. She should have started her search earlier, expanded the parameters of her job search, and applied for more positions in more junior roles. Accordingly, the period of reasonable notice to which she was entitled was reduced by two months. This case provides the useful reminder as to the seriousness with which the search for alternate employment must be pursued. It also demonstrates that while the onus to prove a failure to mitigate is always on the Defendant, that onus can be met if the Plaintiff can be shown to have acted unreasonably and without proper diligence.