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Should I Stay or Should I Go?

 “Should I stay or should I go” was quite possibly what Lauwers J.A. of the Court of Appeal was asking himself when he was tasked with deciding whether to lift a stay under Rule 60.01(5) of the Rules of Civil Procedure. Although, to be honest, he probably wasn’t, but the title does have a ring to it.

 A “stay” is a legal term for the halting of legal processes. It often arises in the context of a decision which is being appealed so as to prevent the losing party from having to pay funds under a judgment which may ultimately be overturned. In this case, the plaintiffs were awarded close to $700,000 in damages before the defendants appealed, which invoked an automatic stay with respect to payment under Rule 60.03(1) under the Rules. The damages were broken down as follows:

  • $105,228.54 for pay in lieu of reasonable notice;
  • $3,504.25 for pre-judgment interest;
  • $37,500 for legal costs;
  • $500,000 in ‘other damages’, representing the plaintiff’s share entitlements under the employment contract.

Following the decisions—the defendant, Limen Structures Ltd.—filed a notice of appeal asking that the judgment be varied by setting aside the award for “other damages.” Under rule 63.01(1) of the Rules of Civil Procedure, a notice of appeal automatically resulted in a ‘stay’ of the order for the payment of money, meaning the defendant was not required to pay the damages award being appealed pending a decision. The plaintiff—Mr. Antunes—brought a motion to lift the stay with respect to the damages not being appealed because he was worried the company may be insolvent. In response, Limen Structures filed a supplementary notice of appeal challenging the wrongful dismissal damages as well, thereby invoking an automatic stay with respect to the remaining damages. The appeal judge found in favour of the plaintiff, lifting the stay in respect of the wrongful dismissal damages, pre-judgment interest and costs.

Reasoning

An appellate court judge has the discretion to lift a stay imposed by 63.01(1). When determining whether to do so, the court will look to three main factors:

  1. financial hardship to the respondent if the stay is not lifted;
  2. the ability of the respondent to repay or provide security for the amount paid; and
  3. the merits of the appeal.

With respect to the merits of the appeal, Limen Structures was challenging the quantum of damages Mr. Antunes was awarded, which is a highly fact-driven analysis in employment law. Judges will look at a variety of factors to determine the appropriate length of time an employee of like age, experience and expertise can find in a comparable position in their field. Trial judges are granted a high level of deference in these findings. In order to overturn a fact-based finding such as this, an appellate court must find that the trial judge made a “palpable and overriding error.” Given the high burden placed on the appellants in overturning the trial judge’s findings with respect to the wrongful dismissal damages, the appellate Judge found the merits of the wrongful dismissal appeal to be weak. Further, the appellate judge found that Mr. Antunes had established financial hardship and that there was a possibility that Limen Structures may not be in a position to make payment if a stay were granted because they may soon be insolvent.

Our Thoughts

The rules regarding granting of an automatic stay can be particularly harmful in the employment context, where an employee is wrongfully dismissed and left without an income to support their family. This is especially the case when employees are laid off as a result of large-scale restructuring in the midst of financial turmoil. In these situations, it is extremely important to act quickly and consult your lawyer about setting aside a stay so as to ensure that you receive what is owed to you under a judgment.

See: Antunes v. Limen Structures Ltd., 2016 ONCA 61

The above article is for general information purposes only and does not constitute legal advice. If you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere.