CITATION: McGroarty v. Linita Design, 2012 ONSC 1713
DIVISIONAL COURT FILE NO.: DC-10-59-00
DATE: 2012/01/20
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MATLOW, CHARBONNEAU, NADEAU JJ.
BETWEEN:
MAGGIE McGROARTY
David Cameletti, for the Plaintiff (Respondent)
Plaintiff (Respondent)
- and -
LINITA DESIGN AND MANUFACTURING LTD.
Justin Heimpel, for the Defendant (Appellant)
Defendant (Appellant)
HEARD October 18, 2011 at Brampton
REASONS FOR JUDGMENT
NADEAU, J.:
[1] The appellant appeals from the judgment of Justice Belleghem made on June 2, 2010 which determined that, as a result of the respondent being wrongfully dismissed from her employment by the appellant, she was awarded damages based on a reasonable notice period of 17 months. Her lost income during that time was calculated to be $66,300, subject to the deduction of mitigation income of $33,900, for an award of total damages of $32,400. For the following reasons, this appeal is dismissed.
[2] Counsel may make written submissions with respect to costs by exchanging them and filing three copies with the Registrar of the Superior Court at Brampton within one month of the release of this decision.
[3] The appellant submits that the trial judge erred in his determination that a 17 month notice period was reasonable having regard to all of the relevant factors. As well, it submits that the trial judge also erred in failing to deduct all of the income the respondent earned during that notice period in mitigation of her damages.
[4] The Supreme Court of Canada addressed the standard of review of an appeal from a trial judge’s decision in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 as follows:
Pure questions of law: On a pure finding of law, the standard of review is correctness.
Findings of fact: Such findings are not to be reversed unless the trial judge made a palpable and overriding error.
Inference of fact: An appellate court is not to verify that the inference can be reasonably supported by the findings of fact of the trial judge. The question is whether the trial judge made a palpable and overriding error in coming to a factual conclusion based on accepted facts.
Mixed fact and law (i.e. the application of a legal standard to a set of facts): Where the error involves the application of an incorrect standard, a failure to consider a required element of a legal test, or similar error in principle, such an error can be characterized as an error of law, subject to a standard of correctness. Otherwise, the general rule is that, where the issue on appeal involves the trial judge’s interpretation of the evidence as a whole, it should not be overturned absent palpable and overriding error.
[5] In our view, this appeal does not involve a pure question of law or even an error in principle that would engage the “correctness” standard of our review. The alleged errors here relate primarily to the trial judge’s findings of fact and the consideration of the evidence as a whole. Therefore, these questions involve determinations of fact or, at its highest for the appellant, of mixed fact and law. As indicated, the standard of review for questions of mixed fact and law is “palpable and overriding error unless the error is ‘extricable’ in that it can be attributed to an error in principle“: see UBS Securities v Sands Brothers, 2009 ONCA 328, 95 O.R. (3d) 93 (Ont. C.A.)
[6] Palpable errors include findings that are “clearly wrong, unreasonable or not reasonably supported by the evidence”: see Housen v Nikolaisen, supra, and H.L. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401, at para. 110. The appellant initially submitted in its factum that the trial judge made palpable and overriding errors of fact and law in his assessment of the reasonable notice period and that, having regard to all of the relevant factors, an appropriate range of notice was 9 to 13 months. At the hearing of this appeal, that appropriate range was revised to 12 to 13 months.
[7] In Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, the Supreme Court of Canada confirmed the following:
“In determining what constitutes reasonable notice of termination, the courts have generally applied the principles articulated by McRuer C.J.H.C. in [Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.)](https://www.canlii.org/en/on/onsc/doc/1960/1960canlii294/1960canlii294.html), at p. 145:
There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.”
[8] The purpose of the determination of reasonable notice is to compensate the employee for the amount of time that would reasonably be expected for that employee to find alternate employment. A rough “rule of thumb” or approach to facilitate the determination of reasonable notice has been informally developed to provide “one month for each year of service”. According to the Ontario Court of Appeal in Minott v. O’Shanter Development Company Ltd. (1999), 42 O.R. (3d) 321, this “rule of thumb” should not be used as “a starting point”. It is no more than a very rough guideline. Rather, as the trial judge did here, the period of notice should be determined by considering the four Bardal factors in the context of each particular case presented. In fact, although there was a finding that the respondent had almost seventeen years of service, this “rule of thumb” was not even referred to in the reasons.
[9] One of the virtues of the Bardal test is its flexibility. To adopt the “rule of thumb” approach risks overemphasising only one of the Bardal factors, “length of service”, at the expense of the others in determining “a range of reasonableness”. However, in this appeal, the appellant takes greater issue with the trial judge’s consideration of “the character of the employment” and of “the availability of similar employment”. The suggestion is that the trial judge misapprehended or failed to recognize the evidence of her employment duties and history.
[10] We disagree with the appellant. The trial judge gave careful and balanced consideration, with detailed reasons, to all of the relevant factors in the Bardal criteria in assessing the reasonable notice period at 17 months. This determination is not “outside the acceptable range” for an employee in similar circumstances as the respondent. In our view, the trial judge did not err in principle for this determination or make an unreasonable finding unsupported by the evidence. Since there was no palpable and overriding error, we do not interfere with the length of the notice period applied.
[11] Although it appears that this was not raised at trial, the appellant next submits that the trial judge erred in law by failing to subtract all of her mitigation income earned during the notice period from her damages for pay in lieu of reasonable notice. The appellant submits that all of the income the respondent earned during the 17 months, including that portion earned by working longer hours to earn the same income as before, be deducted from her damages in lieu of reasonable notice. It is now argued that any benefit derived from complying with her duty to mitigate must be deducted from her damages.
[12] The submission by the appellant on this issue is that it is a pure question of law or that the trial judge erred in principle such as to engage the “correctness” standard of our review. In this regard, since this issue under appeal appears to be more of an attack on the trial judge’s assessment of her damages, the standard of review regarding an award of damages has been confirmed by the Ontario Court of Appeal in Magnussen Furniture Inc. v. Mylex Limited (2008), O.A.C. 329, at para 71, as follows:
“This court’s review of the damages award in this case must proceed on the basis that, absent legal error, a trial judge’s assessment of damages attracts great deference from an appellate court. This court is not entitled to substitute its own view of a proper award, unless it is demonstrated that the trial judge made an error in principle, misapprehended the evidence, failed to consider relevant factors, considered irrelevant factors, made an award without any evidentiary foundation, or otherwise made a wholly erroneous assessment of the damages.”
[13] At the time of her wrongful dismissal, the respondent had a regular work week of 30 hours at $30 per hour and earned a weekly income of $900. During the reasonable notice period, she obtained new employment at a rate of $20 per hour; however the requisite hours of work initially increased over five days, then eventually curtailed to four days a week, and then again went down to three days a week. On these specific facts, the trial judge determined that it was not necessary to deduct all of the income she earned during the notice period because the employment she found required her to work more and differing hours at substantially less remuneration per hour. Therefore, the trial judge determined that she was required to account only for mitigation income of up to a 30 hour work week at $20 per hour, or $600 per week, during the relevant time period and that the extra hours she was required to work weekly at the much lower hourly rate would not be deducted from her damages arising from her wrongful dismissal.
[14] One of the decisions relied upon by the appellant requires our closer examination. In Michaels v Red Deer College, [1976] 2 S.C.R. 324, the Supreme Court of Canada outlined the following general principles:
“It is, of course, for a wronged plaintiff to prove his damages, and there is therefore a burden upon him to establish on a balance of probabilities what his loss is. The parameters of loss are governed by legal principle. The primary rule in breach of contract cases, that a wronged plaintiff is entitled to be put in as good a position as he would have been in if there had been proper performance by the defendant, is subject to the qualification that the defendant cannot be called upon to pay for avoidable losses which would result in an increase in the quantum of damages payable to the plaintiff. The reference in the case law to a "duty" to mitigate should be understood in this sense...In short, a wronged plaintiff is entitled to recover damages for the losses he has suffered but the extent of those losses may depend on whether he has taken reasonable steps to avoid their unreasonable accumulation...
In the ordinary course of litigation respecting wrongful dismissal, a plaintiff, in offering proof of damages, would lead evidence respecting the loss he claims to have suffered by reason of the dismissal. He may have obtained other employment at a lesser or greater remuneration than before and this fact would have a bearing on his damages. He may not have obtained other employment, and the question whether he has stood idly or unreasonably by, or has tried without success to obtain other employment would be part of the case on damages. If it is the defendant's position that the plaintiff could reasonably have avoided some part of the loss claimed, it is for the defendant to carry the burden of that issue, subject to the defendant being content to allow the matter to be disposed of on the trial judge's assessment of the plaintiff's evidence on avoidable consequences...
The rule of avoidable consequences here finds frequent application. The consequence of this injury is the failure of the employee to receive the pay which he was promised but, on the other hand, his time is left at his own disposal. If the employee unavoidably remains idle, the loss of his pay is actually suffered without deduction. If, however, the employee can obtain other employment, he can avoid part at least of these damages. Therefore, in an action by the employee against the employer for a wrongful discharge, a deduction of the net amount of what the employee earned, or what he might reasonably have earned in other employment of like nature, from what he would have received had there been no breach, furnishes the ordinary measure of damages.
It seems to be the generally accepted rule that the burden of proof is upon the defendant to show that the plaintiff either found, or, by the exercise of proper industry in the search, could have procured other employment of an approximately similar kind reasonably adapted to his abilities, and that in absence of such proof the plaintiff is entitled to recover the salary fixed by the contract…But the burden which lies on the defendant of proving that the plaintiff has failed in his duty of mitigation is by no means a light one, for this is a case where a party already in breach of contract demands positive action from one who is often innocent of blame.”
[15] It is clear that this employer bears the burden of showing with evidence that this wronged employee has failed to mitigate her damages. In the absence of proof by the employer that this employee obtained other employment of “approximately similar kind”, this employee should in fairness be entitled to recover the former salary owing arising from that number of hours required to be worked. Certainly, it cannot fairly be said that this reduction in the hourly wage, by a full one-third, is “employment of like nature”. This was clearly an inferior employment position to that which she had previously enjoyed with the appellant. Recognizing this fact, and looking “at the entire picture”, the trial judge took into account and gave proper allowance for the “extra time and trouble” expended for the respondent to mitigate, and that at the substantially lower rate of hourly pay.
[16] A review of the case law presented by the parties in this appeal confirms that the assessment of damages by a trial judge where an employee obtains new employment within the notice period at a substantially lower rate of pay, and with differing hours of work, remains quite unsettled in law. Having regard to the breadth of possible re-employment fact situations, our law is not so inflexible such that any and every benefit derived from complying with the duty to mitigate must in every circumstance require a deduction from the resulting damages. On the unique facts of this case, the trial judge correctly applied the law. It is our view that there was no legal error, or error in principle, in the manner that the trial judge calculated the respondent’s damages. As well, there is no palpable and overriding error in that determination; such an award of damages is not clearly wrong, unreasonable or not reasonably supported by the evidence. The evidence that was presented by the employee, and properly considered by the trial judge, is sufficient to justify such an award of damages and it is entitled to our deference. The appellant has not satisfied its burden of proving with evidence that there was such a failure to mitigate as to require a diminution of these damages. Therefore, we do not disturb the assessment of her damages in these specific circumstances.
Nadeau J.
Matlow J.
Charbonneau J.
Released: January 20, 2012
CITATION: McGroarty v. Linita Design, 2011 ONSC 6260
DIVISIONAL COURT FILE NO.: DC-10-59-00
DATE: 2012/01/20
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MATLOW, CHARBONNEAU, NADEAU JJ.
BETWEEN:
MAGGIE McGROARTY
Plaintiff (Respondent)
- and –
LINITA DESIGN AND MANUFACTURING LTD.
Defendant (Appellant)
REASONS FOR JUDGMENT
NADEAU, J.
Released: January 20, 2012