COURT OF APPEAL FOR ONTARIO
Hourigan, Wilson and Madsen JJ.A.
BETWEEN
Sylvia Beaumont
Plaintiff/Defendant by Counterclaim (Appellant)
and
Dakota Beaumont and Brodan Beaumont
Defendants/Plaintiffs by Counterclaim/Claimants in Third Party Claim/Defendants by Counterclaim in Third Party action (Respondents)
and
Bart Beaumont*, Sylvia Beaumont*, Boemar Canada Inc., Boemar Inc., Boemar Surfaces Inc., Boemar Products Inc. and Boemar Surface Systems Inc.*
Third Parties/Bart Beaumont and Boemar Surface Systems Inc. being Claimants by Counterclaim (Appellants*)
Jonah Waxman and Carissa DeMarinis, for the appellants Bart Beaumont, Sylvia Beaumont and Boemar Surface Systems Inc.
Louis Century and Amy Chen, for the respondents Dakota Beaumont and Brodan Beaumont
Heard: February 6, 2025
On appeal from the judgments of Justice Peter J. Cavanagh of the Superior Court of Justice, dated October 27, 2023, with reasons reported at 2023 ONSC 6085, and from costs endorsement dated April 11, 2024, with reasons reported at 2024 ONSC 2123.
REASONS FOR DECISION
Introduction
1This appeal arises from litigation between family members related to a family business. Ultimately, the case at trial came down to two incompatible narratives. The respondents, Dakota and Brodan Beaumont, testified that their father, Bart Beaumont, who runs several companies including Boemar Surface Systems Inc. (“BSSI”) (together, the “Boemar companies”)1 “banked” their earnings, with the intention that they would be paid at a later date. In contrast, Bart testified that there was no plan to bank wages. Instead, he said that money advanced to his sons were loans from him and his wife Sylvia Beaumont.2
2At the conclusion of the appellants’ oral submissions, we dismissed the appeal with reasons to follow. These are our reasons.
Background
3Dakota and Brodan were raised by their mother and did not have contact with Bart following their parents’ separation in 1996. Dakota reached out to Bart when he turned 18 and began working for him in 2009. Brodan also reached out to Bart when he turned 18 and began working for him in 2011. Dakota and Brodan worked for Bart and BSSI until July 2016 when they both resigned. During their employment, Dakota and Brodan worked at job sites across Canada and would submit weekly timesheets to Bart. Dakota and Brodan testified that the majority of their earnings during this period were banked by Bart in what he called the “Boemar Bank”. Bart only provided enough money for Dakota and Brodan to live on and explained that it was in their interest that he manage their money.
4In December 2013, Dakota and Brodan purchased a condominium for $230,000. To purchase the condominium, they received a $100,000 cheque from Sylvia and cheques totaling $45,000 from Bart. To pay down their line of credit on the condominium, they received additional cheques from their father. The parties agreed that Bart paid them a total of $148,000. Dakota and Brodan testified that they were told these payments were from their banked earnings based on hours they worked but were not paid.
5The litigation arose when Sylvia sued Dakota and Brodan for repayment of $100,000 which she claimed she loaned to them. Dakota and Brodan denied that the payment was a loan and alleged that it was payment for banked earnings. Dakota and Brodan then brought a counterclaim against Sylvia and a third-party claim against Bart and the Boemar companies. They sought payment for unpaid wages, damages for breach of contract, and punitive damages. In response, Bart and the Boemar companies brought a counterclaim to the third-party claim seeking repayment of the $148,000 loan, damages for breach of the “duty to be faithful to their employer”, damages for business disruption, and punitive damages.
6The trial judge dismissed the claims asserted by Sylvia, Bart, and the Boemar companies. He considered the evidence about the agreement to bank earnings and accepted Dakota and Brodan’s evidence that their earnings were banked in the “Boemar Bank”. Bart could not refute these claims because he failed to produce records of employments, timesheets, or pay stubs for Dakota and Brodan. The trial judge did not accept Bart’s evidence where it contradicted the evidence of Dakota and Brodan. He found that Bart was untruthful when he testified that he did not recall when Dakota and Brodan were working for him. Instead, the trial judge accepted the evidence that Brodan was employed for approximately five years and Dakota was employed for approximately seven years. This finding was supported by timesheets and job site photos that they had taken during this period.
7The trial judge admitted into evidence recordings made by Dakota and Brodan in the final weeks of employment. The recordings captured conversations with Bart that contradicted his evidence. It is evident from the recordings that Bart was well aware of the banked earnings scheme. Based on the recordings, the trial judge rejected Bart’s evidence that the “Boemar Bank” was fabricated by Dakota and Brodan to avoid repayment of debts. The trial judge accepted Dakota and Brodan’s evidence that they made an agreement with Bart that their compensation, other than payments made at Bart’s discretion, would be banked by Bart and paid to them at a later date. The trial judge concluded that when Sylvia and Bart made payments to Dakota and Brodan for the purchase of the condominium, they were told that these payments were money owed to them from their banked earnings, not loans.
8The trial judge allowed the claim for unpaid wages. He awarded Brodan unpaid wages in the amount of $31,062.25 and Dakota unpaid wages in the amount of $33,019.25. These awards cover the period between December 10, 2015-May 2016 and June-July 11, 2016 when neither Dakota nor Brodan were paid. The trial judge accepted Dakota and Brodan’s calculation of unpaid wages based on their hourly wage of $19. The trial judge held that Bart was liable to pay these unpaid wages because he personally acted as their employer, finding that a reasonable person in Dakota and Brodan’s position would conclude that Bart intended to be a common employer with BSSI based on his handling of their earnings and his personal control over them as employees.
9The trial judge awarded punitive damages in the amount of $75,000 each to Dakota and Brodan, payable by Bart and BSSI. The trial judge relied on Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419 regarding the elements required for an award of punitive damages in a claim for wrongful dismissal based on breach of an employment contract. He concluded that Bart’s conduct qualified as harsh, offensive, and reprehensible by any measure because he used his superior power as the employer to take advantage of his sons’ vulnerabilities. Further, he found that a significant amount of punitive damages was required because Bart’s conduct continued over a long period of time, and he failed to acknowledge any misconduct or show any remorse.
10Finally, the trial judge awarded substantial indemnity costs to Dakota and Brodan, payable by Bart and BSSI, in the amount of $302,189.99. He found that Bart’s conduct towards his sons during their employment and his pre-litigation and litigation conduct amounted to misconduct justifying substantial indemnity costs.
Analysis
A. Finding about banked wages
11The appellants submit that the trial judge erred in characterizing the payments as banked wages instead of loans. With this submission, the appellants invite this court to reweigh the evidence and reach an alternate finding. That, of course, is not the role of an appellate court. In any event, the trial judge’s finding in this regard was well rooted in the evidence. Indeed, it is difficult to conceive of how the trial judge could have found otherwise given that Bart was recorded on tape confirming the existence of the banked wages scheme.
B. Finding about common employer
12The appellants submit that the trial judge erred by piercing the corporate veil and circumventing the test for director liability for unpaid wages under the Business Corporations Act, R.S.O. 1990, c. B.16. We disagree.
13The trial judge did not pierce the corporate veil. Instead, he correctly focused on the critical issue of whether the parties intended to contract about employment with each other: O'Reilly v. ClearMRI Solutions Ltd., 2021 ONCA 385. The trial judge found that Bart exercised personal control over Dakota and Brodan by, among other things, banking their earnings and paying them from his personal funds. Further, by suing personally for repayment of the $148,000 he paid to Dakota and Brodan he effectively sued to recover paid wages received by them. This is clear and objective evidence that Bart exercised personal control over Dakota and Brodan as employees and personally acted as their employer. The trial judge also found that Dakota and Brodan had established that they had a reasonable expectation that Bart was a party to their employment contract. There is no basis for this court to interfere with those findings, which were well rooted in the evidence and available to the trial judge.
C. punitive damages
14The appellants submit that the trial judge erred in his finding that punitive damages were appropriate and in fixing the quantum of such damages too high. There is no merit in this submission.
15The trial judge identified an independent actionable wrong in the employer’s failure to comply with the Employment Standards Act, 2000, S.O. 2000, c. 41 consistent with Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419, at paras. 79-80. Further, his conclusion that Bart’s conduct towards his employees and his sons “qualifies as harsh, offensive, and reprehensible by any measure” was born out by the evidence and is owed deference.
16Regarding the quantum of punitive damages, the appellants assert that they are excessive and the ratio of punitive damages to compensatory damages in this case demonstrates the disproportionality or irrationality of the punitive damages award. This submission finds no support in the law of punitive damages. As the Supreme Court stated in Whiten v. Pilot Insurance Co., 2002 SCC 18, at para. 92, “punitive damages are directed to the quality of the defendant’s conduct, not the quantity (if any) of the plaintiff’s loss.” See also Hill v. Church of Scientology of Toronto, 1995 59 (SCC), [1995] 2 S.C.R. 1130, at para. 196.
17There is no basis for this court to interfere with the quantum of punitive damages awarded. Punitive damages awards are “designed to punish wrongful conduct, to denounce that misconduct, and to act as a deterrent for future misconduct. […] Deterrence is impossible unless the punishment is meaningful”: Baker v. Blue Cross Life Insurance Company of Canada, 2023 ONCA 842, at paras. 32 and 34. The punitive damages awarded in this case are reasonable, proportional, and rational.
D. Costs
18The appellants submit that the trial judge erred in awarding costs on a substantial indemnity basis having already awarded a significant sum in punitive damages. This argument was rejected by the trial judge in his costs endorsement. He found, relying on NDrive Navigation Systems S.A. v. Zhou, 2022 ONCA 602, that “it would not be an error in principle to award costs of this litigation on an elevated scale based on conduct that I found justified an award of punitive damages. This is because the purposes of punitive damages and full indemnity costs differ.”
19The trial judge summarized various actions by Bart that, in his assessment, “qualifies as harsh, offensive and reprehensible by any measure.” Further, the trial judge found that “Bart’s dishonest conduct in this litigation and his refusal to produce relevant documents” further justify an award of costs on an elevated scale. Therefore, it is clear that the trial judge was responding to different actions undertaken by Bart in awarding costs and punitive damages.
20Where an appeal from the main award is dismissed, the appellant needs leave to appeal the costs order pursuant to s. 133(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43. Leave to appeal a costs order will not be granted except in obvious cases where the party seeking leave convinces the court there are “strong grounds upon which the appellate court could find that the judge erred in exercising his discretion”: Baker, at para. 40. This test is designed to impose a high threshold because appellate courts recognize that fixing costs is highly discretionary and that trial judges are best positioned to understand the dynamics of a case and to render a costs decision that is just and reflective of what actually happened on the ground: Baker, at para. 40. The appellants have not met their onus in this regard.
21In any event, we see no basis to interfere with the trial judge’s costs award.
Disposition
22The appeal is dismissed. The appellants shall pay costs to the respondents in the agreed upon all-inclusive sum of $15,000.
“C.W. Hourigan J.A.”
“D.A. Wilson J.A.”
“L. Madsen J.A.”
