DATE: 2005-11-18

DOCKET: C42603

COURT OF APPEAL FOR ONTARIO

RE: MISTY RAE (Plaintiff (Respondent)) – and – ATTRELL HYUNDAI SUBURU (Defendant (Appellant))

BEFORE: LABROSSE, ROSENBERG and GILLESE JJ.A.

COUNSEL: Christopher M. Andree for the appellant R. Brent Raby for the respondent

HEARD: November 16, 2005

On appeal from the judgment of Justice Francine Van Melle of the Superior Court of Justice dated October 7, 2004.

E N D O R S E M E N T

[1] This is an appeal from the judgment of Van Melle J. in a wrongful dismissal action. The trial judge granted judgment in the amount of $28,000 on the basis that the respondent should have been given seven months notice. The respondent was a four-year employee and a component of the notice included Wallace damages (Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701). The trial judge allowed the counterclaim by the appellant employer in the amount of $229.72. The appellant defended the case on the basis that it had just cause to terminate the respondent’s employment because of dishonesty or because she breached a policy respecting authorization for credit.

[2] The trial judge dealt extensively with the breach of policy and found that the respondent was never made aware that breach of the policy was grounds for dismissal and was not given an opportunity to discuss the situation before her termination. The trial judge’s treatment of the dishonesty issue was somewhat more cursory:

I am not convinced that Ms. Rae’s conduct was dishonest or fraudulent.

[3] The appellant submits that the trial judge made palpable and overriding errors in respect of the dishonesty issue. Counsel submits that the trial judge appears to have found that the respondent was not credible and accepted the evidence of the appellant’s witnesses and yet found that there was no just cause. Further, the decision allowing the counterclaim is inconsistent with the finding that the respondent’s conduct was not dishonest or fraudulent. The appellant also challenges the granting of an increased notice period for the Wallace factors.

[4] Despite Mr. Andree’s very helpful submissions, we are not convinced that the trial judge made palpable and overriding errors. First, we do not agree with the appellant that the trial judge found the respondent to be incredible. The one portion of the reasons relied upon by the appellant is the finding by the trial judge that Mr. Smith spoke to the respondent on January 3, 2003. The appellant submits that this is inconsistent with the appellant’s testimony. However, the appellant merely testified that she was never contacted by anyone from the company to hear what she had to say about the allegations concerning breach of policy set out in the letter of January 28. Counsel for the appellant at trial (not Mr. Andree) never cross-examined the respondent on the conversation with Mr. Smith, which in any event concerned repayment not possible termination for breach of policy.

[5] We are also not convinced that the granting of a portion of the counterclaim is inconsistent with the finding that there was no dishonesty or fraudulent conduct. The appellant alleged that the respondent, in effect, created fictitious work orders to cover up the fact that she was having work done on family members’ vehicles and not paying for the work. The evidence led by the appellant on this issue was unsatisfactory. The case largely turned on an invoice that Mr. Smith created after the respondent went on maternity leave. The provenance of this invoice was questionable because of the lack of supporting documents and because it appeared to include parts for work that was not likely to have been performed. At the end of the case, counsel for the respondent conceded that his client was liable for a small portion of the charges relating to her mother’s vehicle and the trial judge allowed only that part of the counterclaim. This decision was not inconsistent with the finding that there was no fraud or dishonesty on the part of the respondent. The respondent had always accepted that she owed a certain amount of money for some work done on her sister’s car.

[6] The appellant offered an explanation, inconsistent with dishonesty and fraud. The trial judge expressly referred to the respondent’s explanation:

In June of 2002 Ms. Rae brought her sister’s Ford Taurus to the dealership to have work performed on it. It was looked at by a technician, Luis Mederios. The parts for the Taurus were not available at the dealership. Ms. Rae took the car away with the intention to bring it back at a later time to have the parts installed.

[7] It is apparent that the trial judge accepted the explanation or at least was not satisfied that the appellant showed the explanation was untrue. As the trial judge noted, “when just cause consists of allegations of dishonesty there must be clear and cogent proof”. It was open to the trial judge to find that this degree of proof was lacking given the respondent’s explanation and the unsatisfactory state of the documentary evidence. It is not reasonable to assume that merely because the trial judge accepted counsel’s concession that part of the counterclaim should be allowed she must have accepted the appellant’s elaborate theory of dishonesty and fraudulent practices.

[8] With respect to Wallace damages, the trial judge took into account that the appellant sent the notice of termination of employment two weeks before the respondent was to give birth. Given the context, this was the kind of conduct that may be properly stigmatized as a blatant disregard for the employee.

[9] Accordingly, we would dismiss the appeal with costs fixed at $5,842.20 inclusive of disbursements and G.S.T.

Signed: “J. M. Labrosse J.A.” “M. Rosenberg J.A.” “E.E. Gillese J.A.”