Court File and Parties

CITATION: Benson v. Bird Mechanical Ltd., 2013 ONSC 6603

DIVISIONAL COURT FILE NO.: 406/13

DATE: 2013-11-04

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Scot Benson, Plaintiff (Responding Party)

AND:

Bird Mechanical Ltd., Defendant (Moving Party)

BEFORE: Mr. Justice H.J. Wilton-Siegel

COUNSEL: Andrew McCoomb, for the Defendant (Moving Party)

D. Jared Brown and Lauren Findlay, for the Plaintiff (Responding Party)

HEARD: October 23, 2013

ENDORSEMENT

[1] The defendant seeks leave to appeal an order dated August 20, 2013 of Moore J. (the “Order”).

[2] The motion judge concluded, applying the full appreciation test in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, that it was not plainly clear that the limitation period within which the plaintiff was required to commence his claims for bonuses under his employment agreement had expired before this action was brought. The motion judge therefore dismissed the partial summary judgment motion on the basis that the defendant had failed to demonstrate the absence of any genuine issue requiring a trial.

[3] The actual language of the provision respecting bonuses in the plaintiff’s employment contract is not in the record before the Court but is, apparently, set out in the defendant’s factum. The motion judge made a number of relevant observations regarding the bonus arrangement.

[4] First, the agreement did not specify when the bonuses would be paid and whether any bonus entitlement would accrue during the term of the plaintiff’s employment. Second, the employment contract was silent on how and by whom Benson's performance was to be judged and whether he had any right to input into the assessment of his performance and/or to contest any decision his employer made by factoring performance into the determination of bonus entitlements. Third, Mr. Bird did not explain to the plaintiff whether or how he factored the tasks the plaintiff did or failed to do in measuring his performance for bonus entitlement purposes nor what other components of performance he measured. Lastly, the employment agreement did not define sales and so, while the plaintiff managed up to 65 % of the defendant’s projects, he was not aware of how, if at all, projects underway at any given time affected annual sales nor whether sales applicable to his bonus entitlement were sales as booked or sales on projects actually completed or funded in a given bonus period. In addition, the motion judge observed that the plaintiff was neither offered nor given access to the financial information that Mr. Bird proposed to use in determining the plaintiff’s entitlement to sales-based bonuses and, while he did not request such information, there was no evidence that he would have received such information if he had done so.

[5] There was evidence from the plaintiff, which the motion judge accepted, to the effect that, although the plaintiff’s bonuses were not what he expected them to be, given the power imbalance between him and the defendant as his employer, it would not have been workable for him to have brought a claim for bonuses unpaid or short paid while employed by the defendant. The motion judge specifically found in the present case that the defendant had failed to testify, let alone establish, that the plaintiff could have sued for bonuses with impunity while employed.

[6] In addition, the plaintiff testified that it was not until he had been terminated that he realized that no further bonus payments would be forthcoming. The defendant challenges this evidence saying that the plaintiff believed that the employment contract provided for a $10,000 bonus each year and knew that he would not receive that amount in any of the three years in question. On this basis, the defendant says that the plaintiff ought to have known that he had a claim after the end of each of the three years.

[7] The motion judge concluded that, on the evidence before him, the defendant failed to explain its decision-making process or to provide the plaintiff with sufficient information upon which he could come to an informed, reasonable understanding of his bonus entitlement for any of the years during which he was employed by the defendant. The motion judge then concluded that the defendant had failed to demonstrate that the plaintiff knew, or ought to have known, at some point in time earlier than the commencement of this action, that he had a claim for an unpaid bonuses that the defendant would not honour and that he needed to sue to recover that claim.

[8] The issue in this proceeding is governed by section 5 of the Limitations Act, 2002, S.O. 2002, Chapter 24 Schedule B (the “Act”), the relevant portions of which provide as follows:

5. (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

[9] Rule 62.02(4) of the Rules of Civil Procedure governs the test for granting leave to appeal.

[10] The applicant says the decision of the motion judge conflicts with case law in which an employee’s claim was found to be statute-barred without requiring the employee’s employment to terminate prior to the commencement of a limitation period.

[11] However, each case in this area turns on its own facts. The defendant relies on the decisions in Germain v. Clement [2008] O.J. No. 1441 (S.Ct.) and Caglar v. Moore, [2006] O.J. No. 445, (S.Ct.) Germain is distinguishable, among other grounds, on the basis that discoverability appears not to have been an issue and the terms of the alleged bonus were clear. Caglar was decided under the previous statute and therefore did not engage the issue addressed in paragraph 5(1)(a)(iv) of the Act discussed below.

[12] I therefore conclude that there are no conflicting decisions as contemplated for the purposes of Rule 62.02(4)(a).

[13] I also see no basis for doubting the correctness of the decision of the motion judge as that term is understood for the purposes of Rule 62.02(4)(b). The motion judge applied the correct test – the full appreciation test – for a partial summary judgment motion.

[14] As mentioned above, there was evidence that raised a genuine issue for trial regarding whether the plaintiff knew before the termination of his employment that no further bonus payments would be forthcoming. This is a fact-specific issue that requires a trial in the present circumstances in order to weigh the evidence of the plaintiff described above against the inferences that the defendant argues should be made on the basis of the plaintiff’s evidence on cross-examination on his affidavit. Further, this is essentially an issue of the plaintiff’s credibility. Courts are typically reluctant for good reason to make findings of credibility in the absence of viva voce evidence. The Court must also give some deference to the motion judge in respect of his conclusion that he did not believe that he had a full appreciation of this issue, among others, based on the record before him.

[15] In addition, as mentioned, the motion judge concluded that there was a genuine issue regarding whether the plaintiff knew, or ought to have known, during his employment that he had a claim for an unpaid bonus for which a legal proceeding would be an appropriate means to seek to obtain it. As mentioned, the motion judge found, on the evidence, that it would not have been workable for the plaintiff to sue the defendant while employed. The defendant would appear to be correct that the decision in Novak v. Bond, [1999] 1 S.C.R. 808, referred to by the motion judge, turns on different language in the applicable statute of British Columbia. However, the motion judge clearly had regard to the language of paragraph 5(1)(a)(iv) of the Act in reaching his conclusion stated above. In the absence of case law that addresses the present circumstances, that is not an unreasonable interpretation of the operation of paragraph 5(a)(iv) in such circumstances. Therefore, I cannot conclude that there is good reason to doubt the correctness of the conclusion of the motion judge that a genuine issue for trial exists regarding the operation of this provision in the context of an employment arrangement.

[16] In addition, for the sake of completeness, I also conclude that the defendant’s motion does not involve issues of such importance that leave should be granted. The issues raised on the motion are fact-specific. They do not involve matters of public importance or the administration of justice. Nor do they involve legal issues of broad significance or of general application. Moreover, to the extent that the action does raise novel issues, such issues are best addressed with the benefit of a full factual record after a trial.

[17] Accordingly, the motion for leave to appeal the Order is dismissed. Costs in the amount agreed between the parties of $5,000 shall be payable by the defendant.

Wilton-Siegel J.

Date: November 4, 2013