CITATION: Vist v. Best Theratronics Ltd., 2015 ONSC 2619
COURT FILE NO.: 14-DC-2032
DATE: 2015/04/20
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: MARGUS VIST, Plaintiff (Respondent)
AND
BEST THERATRONICS LTD., Defendant (Appellant)
BEFORE: Patrick Smith J., D.L. Corbett J., and Pomerance J.
COUNSEL: Douglas W.J. Smyth, Christopher Rutherford, for the Plaintiff, (Respondent)
Frank Cesario, Siobhan M. O’Brien, for the Defendant (Appellant)
HEARD: April 20, 2015
ENDORSEMENT
D.L. CORBETT J. (ORALLY)
[1] Mr. Vist was 49 years old when his employment was terminated without cause by Best Theratronics. He was general manager at Best, earning $115,000 per annum, plus benefits. Roughly two months after termination, Mr. Vist obtained alternative employment paying him $85,000 per year.
[2] Mr. Vist had continuous employment with Best of 2.5 years at the time of termination. However, he had 14 years’ prior service with the company and its predecessors, with a four year break in his service. His employment contract treated his tenure as starting in 1993 for the purposes of “vacation and service milestones” and also spoke of treating him on the basis of his period of “accrued continuous service” with the company and its predecessors. The employment contract was silent on notice and severance upon termination without cause.
[3] Prior to his termination, Mr. Vist approached his employer about changing the nature of his employment from General Manager to his former role in engineering and product management. After termination, Mr. Vist accepted new employment consistent with his former role rather than as a General Manager.
[4] The trial judge found that Mr. Vist should be treated as a long-term employee, but did not place full weight on the 16 years of service. She found that the period of reasonable notice was six months. After calculating for lost pension accruals and deducting for mitigation earned during the notice period, the trial judge calculated that Mr. Vist was entitled to damages of $24,924.29.
[5] The trial judge concluded that after prejudgment interest was included, Mr. Vist recovered more than the $25,000 threshold for Small Claims Court proceedings, and fixed partial indemnity costs payable to him from the defendant employer at $23,000 for the action.
[6] The employer raises three issues on appeal:
The trial judge erred in placing any weight on Mr. Vist’s previous employment with the appellant. The term of employment should have been found to be 2.5 years. The contract reference to “continuous employment” could only be read in this way.
The trial judge erred in finding that Mr. Vist discharged his duty to mitigate his damages. Mr. Vist should have sought comparably remunerative employment at the General Manager level, and breached his duty by seeking work at the less remunerative level of engineering and product management.
The trial judge erred in finding (a) that prejudgment interest should be included in the damages award when considering liability for costs; and (b) that costs on the scale of the Superior Court should be awarded when Mr. Vist recovered an award within the jurisdiction of the Small Claims Court; (c) that in any event the costs awarded exceeded the claimed partial indemnity costs by $745.
[7] For the reasons that follow we conclude that the notice period selected by the trial judge is fair and reasonable on the basis of Mr. Vist’s continuous tenure of 2.5 years, given all of the surrounding circumstances. We see no merit to the argument that Mr. Vist failed to mitigate his damages appropriately. And although we agree with the appellant that liability for costs is assessed on the basis of the damages awarded net of prejudgment interest, we conclude that this was an appropriate case to award partial indemnity costs on a Superior Court scale.
[8] The standard of review of the trial judge’s findings of fact is deference: whether she made a palpable and overriding error. The standard of review of questions of law is correctness: see Dunsmuir v. N.B.
[9] The interpretation of the contract, in the context of this case, is a question of fact – what was meant by “accrued continuous service” in the context of this specific contract and the history of this employee and this employer. There was a path of reasoning open to the trial judge to find that some allowance should be given to Mr. Vist’s total period of service. That is the path that she took and we cannot say that she was unreasonable in so doing.
[10] It is clear, however, from the trial judge’s reasons, that she did not give Mr. Vist full credit for his entire service with Best. Had she done so, Mr. Vist would have had over 16 years’ tenure and would have been entitled to a longer notice period than six months – likely in the range of 12 to 18 months. In our view, in substance, the trial judge fixed notice on the basis of the Bardal factors for a 2.5 year employee, with some modest additional credit because of the prior period of employment.
[11] In our view, the minimum period of reasonable notice for Mr. Vist, assuming a 2.5 year period of employment, was 3 months. We see the maximum at between 5 and 6 months. The trial judge fixing the period of reasonable notice at the outer end of this range in view of the prior service and her reading of the contract. We see no reversible error in respect to this point.
[12] On the mitigation issue, the duty on the employee is not to obtain the highest paying job he can find, no matter how poorly it suits his history, training, or personality. It seems that Mr. Vist did not feel he was suited for a General Manager’s job and that Best, at least on some level, agreed with him. In any event, if Mr. Vist had insisted on a more senior position, it seems very likely that it would have taken him longer, perhaps much longer, to find new work. It would have been very much in Mr.Vist’s own interests to do this if it was a reasonable prospect for him – the difference for this defendant is something in the order of a $6,900 shortfall over three months; the reduction in income may well impact Mr. Vist for the rest of his career. The trial judge made no error in concluding that Mr. Vist discharged his duty to find suitable alternative employment. Indeed, we consider it tendentious of the employer to have pursued this issue at all.
[13] Finally, on the issue of costs, we note that costs are highly discretionary. We agree with the appellant that the calculation should not include prejudgment interest. And we also agree that Mr. Vist recovered $75.71 less than the threshold for a Small Claims Court action. The trial judge did not exercise her discretion to award costs despite this shortfall; rather, she included interest in the total and then concluded that the threshold had been exceeded. This was an error. But did it make any difference? We think not.
[14] Rule 57.05 provides that the court may order that a plaintiff recover no costs when judgment is for an amount within the jurisdiction of the Small Claims Court. It is not mandatory. Where the court is satisfied that partial indemnity costs ought to be awarded of $23,000 in a simple employment law case where the recovery is roughly equal to the costs award, it is pretty clear where the trial judge’s views lie on the issue of costs. We see the case in much the same way. As for awarding $745 more than the claimed partial indemnity costs, this was a rounding up of the amount claimed and was well within the trial judge’s discretion.
[15] The employer’s offer of five weeks – the statutory minimum – for this senior and experienced middle manager – was not reasonable. Once it was clear that Mr. Vist had mitigated a substantial part of his damages, one would have thought that the case would settle – the risk to the employee of an adverse decision is far more material than it would be for a substantial employer. The net amount owing for the first three months – the difference between five weeks paid and thirteen weeks of the period – was roughly $17,000. Each additional month of notice, net of mitigation, was an additional $2,300. Mr. Vist did not beat one of his own offers, so he did not receive substantial indemnity costs, but he was reasonable to pursue the claim in Superior Court, and this was an appropriate case in which to exercise discretion to award him his costs.
[16] Had we considered it otherwise, we would have remitted the matter back to the trial judge to consider whether to exercise her discretion to award the costs in light of the shortfall of about $75. We did not see any point in that – the result would be a foregone conclusion.
[17] We would dismiss the appeal, with costs payable by the appellant to the respondent fixed at the agreed sum of $8,500.
D.L. Corbett J.
Patrick Smith J.
Pomerance J.
Date: April 20, 2015
CITATION: Vist v. Best Theratronics Ltd., 2015 ONSC 2619
COURT FILE NO.: 14-DC-2032
DATE: 2015/04/20
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
RE: Margus Vist, Plaintiff (Respondent)
AND
Best Theratronics Ltd., Defendant (Appellant
BEFORE: Patrick Smith J., D.L. Corbett J., and Pomerance J.
COUNSEL: Douglas W.J. Smyth, for the Plaintiff (Respondent)
Frank Cesario, Siobhan M. O’Brien for the Defendant (Appellant)
ENDORSEMENT
Patrick Smith J.
D.L. Corbett J
Pomerance J.
Released: April 20, 2015