Clarke-McLean v. Incredible World Trading Corp., 2015 ONSC 6737

DIVISIONAL COURT FILE NO.: 423/14

DATE: 2015-10-30

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Nicole Clarke-McLean, Plaintiff/Respondent

AND:

Just Incredible World Trading Corp. and Marie Critchlow, Defendants/Appellants

BEFORE: Mr. Justice H. Wilton-Siegel

COUNSEL: Jack Braithwaite, for the Appellant

Cindy Farrell, for the Respondent

HEARD: May 26, 2015

ENDORSEMENT

[1] The appellants, Just Incredible World Trading Corp. (the “Corporate Defendant”) and Marie Critchlow (the “Personal Defendant”) (collectively the “Defendants”), appeal a judgment of Deputy Judge McNeely delivered August 14, 2014 (the “Judgment”) granting the respondent, Nicole Clarke-McLean (the “Plaintiff”), damages in the amount of $13,240.99 for wrongful dismissal and certain other heads of damage plus costs, HST and interest.

Standard of Review and Applicable Law

[2] The appeal is brought under paragraph 31(a) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “Act”), which provides that an appeal to the Divisional Court lies in respect of an action for the payment of money in excess of a prescribed amount. Section 2(1) of Small Claims Court Jurisdiction, O. Reg. 626/00 thereunder (the “Regulation”) provides that the current monetary threshold applicable to an appeal is $2,500.

[3] The parties agree that the standard of review on an appeal from an order of a deputy judge of the Small Claims Court is set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 8, 10, 19, 25, 27-28. On this standard, a decision will be interfered with only if the Deputy Judge made an error of law or exercised her discretion on the wrong principles or misapprehended the evidence such that there is a palpable and overriding error of fact.

[4] In this action, the principal issue is whether the Plaintiff objectively evidenced an intention to abandon her employment after the events of the evening of October 6, 2012 described below. It is agreed that the test for abandonment of employment is that the statements or actions of the employee, viewed objectively by a reasonable person, must clearly and unequivocally indicate an intention to no longer be bound by the employment contract.

The Principal Issue

[5] The events giving rise to this litigation occurred between October 6 and October 21, 2012.

[6] On the evening of October 6, 2012, the Plaintiff cashed out the store for which she was responsible that day without a second employee being present, in breach of company policy. In a telephone conversation with the Personal Defendant, she attempted to get the second employee, Ms. Mwai, to state that she was present at the cashing out, but she refused. After the Personal Defendant realized this was not the case, the discussion became heated. The Deputy Judge found that, eventually, the Personal Defendant told the Plaintiff to surrender all three keys necessary to gain access to the three stores of the Corporate Defendant at which she worked and await a call from the Personal Defendant.

[7] The Plaintiff did not show up for work on October 9, 2012, when the Defendants say she was next scheduled to work, or thereafter. The Personal Defendant says she called the Plaintiff on October 10 and October 12, 2012, but did not leave a message on either occasion. On October 18, 2012, the Personal Defendant sent the Plaintiff a letter, dated October 12, 2012, asserting that she had abandoned her employment.

[8] The Plaintiff alleges that she was wrongfully terminated and seeks damages. The Defendants deny that the Personal Defendant terminated the employment of the Plaintiff and argue that the Plaintiff abandoned her employment by failing to return to work after October 6, 2012.

The Decision of the Deputy Judge

[9] The Deputy Judge made two critical findings. First, she held that the Personal Defendant told the Plaintiff to give Ms. Mwai all three keys in her possession, and to await a call from the Personal Defendant. These three keys were the only independent means of access to the three stores that she worked in and was responsible for opening and closing. Second, on the basis of this finding, the Deputy Judge held that “the plaintiff’s interpretation that she was being fired when he was asked to surrender those keys and told to await a call to [sic] was a reasonable interpretation.”

[10] The Defendants submitted that the Plaintiff ought reasonably to have expected to show up for work on October 9, 10, 11 and 12, 2012, and that the Plaintiff’s failure to report for work on those days constituted abandonment. The Deputy Judge held that these positions were neither reasonable nor credible. The Deputy Judge based this decision on two grounds.

[11] First, the Deputy Judge accepted the Plaintiff’s evidence that she was not scheduled to work on October 9, 2012. Second, and more importantly, the Deputy Judge concluded that the Plaintiff was legitimately uncertain as to her employment status after the events of October 6, 2012. The Deputy Judge considered that the Personal Defendant’s failure to meaningfully contact the Plaintiff regarding her absence from work was not sufficient to establish that the Plaintiff had abandoned her employment, given the Defendants’ failure to provide the Plaintiff with an opportunity to answer or explain her conduct. On this basis, the Deputy Judge held that the Defendants had failed to demonstrate clear and unambiguous words or conduct evidencing abandonment of employment. In short, having been told to await a call from the Personal Defendant that never came, the inaction of the Plaintiff in reliance on that demand did not constitute abandonment of her employment.

Grounds of Appeal

[12] The Defendants raise six grounds of appeal in their Notice of Appeal pertaining to the various claims asserted by the Plaintiff. I will address each in turn.

Termination for Cause

[13] The principal issue on this appeal is the Defendants’ submission that the Deputy Judge erred in finding that the Plaintiff did not abandon or quit her employment but was, instead, wrongfully dismissed and therefore entitled to damages.

[14] This issue engages the two principal grounds of appeal, which pertain to the determinations of the Deputy Judge regarding: (1) the relative credibility of the Plaintiff and the Personal Defendant; (2) the weight to be given to the evidence of Ms. Mwai; (3) the events of the evening of October 6, 2012; and (4) an alleged onus on the Personal Defendant to contact the Plaintiff after October 6, 2012. I will deal with both grounds of appeal after first setting out certain observations regarding the Judgment.

Observations Regarding the Judgment

[15] The Deputy Judge held that the Defendants’ position that the Plaintiff abandoned her employment after October 6, 2012 was not reasonable. The following sets out my understanding of the logic of the Judgment on this issue.

[16] The Deputy Judge found that the Plaintiff had been told to hand over her three keys to Ms. Mwai and await a call from the Personal Defendant and that, in these circumstances, the Plaintiff was legitimately uncertain as to whether she was to work at all, not having received a call from the Personal Defendant.

[17] On the basis of these findings, the Deputy Judge concluded that the Personal Defendant could not reasonably have expected the Plaintiff to show up for work on October 9, 10, 11 or 12, 2014 and that, therefore, the Plaintiff’s non-attendance at work did not, by itself, constitute clear and unambiguous words or conduct evidencing a resignation or abandonment. Whether or not the Deputy Judge was correct that the Personal Defendant was not scheduled to work on October 9, 2011, it was unreasonable to expect that the Plaintiff would show up for work unless and until the Personal Defendant called the Plaintiff to clarify her employment status.

[18] Accordingly, the Plaintiff was also not under any onus to contact the Personal Defendant if she wished to keep her job, although she did attempt to clarify her status by contacting the son of the Personal Defendant, who was also the manager of the Mississauga store of the Corporate Defendant, by email. Rather, the Personal Defendant placed herself in a position where she had to contact the Plaintiff if she wished to clarify the Plaintiff’s employment status. In these circumstances, if non-attendance was to be relied upon as evidence of resignation or abandonment of employment, the Personal Defendant would reasonably be expected to bring the non-attendance “clearly and directly” to the Plaintiff’s attention and to ask for an explanation. In this case, the Personal Defendant failed to act in this manner. The Personal Defendant did no more than call the Plaintiff twice without leaving any message, despite the Plaintiff’s failure to report for work on each of October 9, 10, 11 and 12.

[19] The Personal Defendant’s inaction was therefore significant in three respects. It evidenced behavior of the Personal Defendant that, on its own, did not reflect a belief that the Plaintiff had resigned, but rather an intention to take advantage of the Plaintiff’s absence to declare an abandonment of employment. For example, if the Personal Defendant had truly believed that the Plaintiff was scheduled to work on October 9, 2012, she would have called her on that day to determine the situation after she failed to appear. She would also have demonstrated increased urgency after the Plaintiff failed to appear at work the following day. Instead, the Personal Defendant waited until the following day to call the Plaintiff and then did not leave any message. Her inaction also had the result that the Plaintiff was denied a reasonable opportunity to respond to the inference of abandonment that the Personal Defendant says she drew from the Plaintiff’s conduct. Lastly, and most importantly, the Personal Defendant did not have any evidence, in the form of unambiguous words or conduct of the Plaintiff, to justify an inference of abandonment.

Analysis and Conclusions Regarding the Grounds of Appeal Pertaining to the Termination for Cause

[20] The Defendants argue that the Deputy Judge misapprehended the facts pertaining to the events of the evening of October 6, 2012 and the onus on the Personal Defendant arising out of such events. As a related matter, the Defendants submit that the Deputy Judge erred in finding the Personal Defendant to be less credible than the Plaintiff. They also submit that the Deputy Judge erred in failing to give weight to the evidence of Ms. Mwai, whose evidence was restricted to the events of the evening of October 6, 2012.

[21] I will first address the credibility findings of the Deputy Judge and the weight to be accorded the evidence of Ms. Mwai. I will then consider the findings of the Deputy Judge regarding the events of October 6, 2012 and the onus on the Personal Defendant.

[22] The Appellants say that the proper test of credibility is whether the evidence is in harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in the particular place and conditions: see Faryna v. Chorny, 1951 252 (BC CA), [1951] B.C.J. No. 152 (C.A.). I accept this test for the purposes of this Endorsement.

[23] The Deputy Judge presided over a three day trial in this action. She was therefore in a position to make an informed assessment of the credibility of the principal actors. I am not persuaded that the findings of the Deputy Judge regarding the relative credibility of the Plaintiff and the Personal Defendant, or regarding the weight to be given to the evidence of Ms. Mwai, are unreasonable for the following reasons.

[24] First, the Deputy Judge found the Plaintiff to be more credible than the Personal Defendant principally for the reasons set out in paragraph 32 of the Judgment (the failure of the Personal Defendant to disclose the hiring of an unpaid replacement worker) and paragraph 33 of the Judgment (the inconsistency of the letter of October 18, 2012 with the facts in two respects), which reasons are relevant to the conduct of the Personal Defendant in the period after October 6, 2012.

[25] In particular, as the Deputy Judge noted, the express disclaimer of termination in the letter of October 18, 2012 suggests that the Personal Defendant understood that her actions on October 6, 2012 could have been, or indeed had been, interpreted by the Plaintiff as a termination of her employment and that the Personal Defendant took no steps to correct that impression. In addition, the Deputy Judge noted several inconsistencies between the Defendants’ pleadings and their position at trial.

[26] In reaching her decision regarding credibility, the Deputy Judge did not ignore the admitted facts that the Plaintiff lied to the Personal Defendant on October 6, 2012 and had previously failed to file tax returns for earlier years. The Deputy Judge concluded, however, that such facts did not outweigh the significance of the issues pertaining to the credibility of the Personal Defendant for the purpose of making her factual determinations regarding the events of October 6, 2012. Neither of the matters raised regarding the Plaintiff’s credibility is directly relevant to the principal issues in this action. On the other hand, the issues identified by the Deputy Judge regarding the Personal Defendant’s credibility are problematic as they pertain to the Defendants’ position and, given such inaccuracies, cast doubt on the remainder of the Personal Defendant’s testimony. The Deputy Judge could therefore reasonably make these determinations of credibility on the evidence before her and she is entitled to deference.

[27] Second, the Deputy Judge did not rely heavily on the evidence of Ms. Mwai. The Deputy Judge characterized the evidence of Ms. Mwai as “conclusory” and “somewhat vague”, stating it was “unclear what her definition of ‘drama’ is”. The Deputy Judge did not find her evidence to be important or of assistance. The Defendants say that, as an independent third party, Ms. Mwai’s testimony should have been preferred to that of the Plaintiff.

[28] I agree with the Deputy Judge that the evidence of Ms. Mwai is of a general nature. Given the limited testimony of Ms. Mwai, it is also not clear that it is a complete description of all of the communications between the Personal Defendant and the Plaintiff on October 6, 2012. Accordingly, the absence of any reference in Ms. Mwai’s testimony to any statement of the Personal Defendant to the effect that the Plaintiff should await a call from the Personal Defendant at home is not determinative. The Deputy Judge could reasonably reach the conclusion that she did regarding the weight to be given to the evidence of Ms. Mwai.

[29] As mentioned, the Personal Defendant argues that the Deputy Judge misapprehended the facts pertaining to the events of the evening of October 6, 2012. She says that she demanded that the Plaintiff give Ms. Mwai her key (or keys) to the Mississauga store only and depart the store, as she was concerned that Ms. Mwai was in danger from the shouting that she was hearing at her end of the telephone line. The Personal Defendant says she demanded that the keys be given to Ms. Mwai solely in order that Ms. Mwai could lock up after the Plaintiff left and could open up the next day. The Personal Defendant says she attended at the store on October 9, 2015 expecting the Plaintiff to arrive needing a key to open the store.

[30] Given the credibility findings of the Deputy Judge, when all the evidence regarding the events on that day is considered as a whole, including the subsequent conduct of the Personal Defendant, the Deputy Judge could reasonably make the two findings set out above as well as the consequential finding that the Plaintiff’s employment had been wrongfully terminated.

[31] The finding of the Deputy Judge that the Personal Defendant told the Plaintiff to give Ms. Mwai the three keys that she held to the three stores of the Corporate Defendant was reasonable on the basis of the evidence before the Deputy Judge considered together with her credibility finding. I note that the Personal Defendant's alternative submission that the demand was for three keys to the two adjacent Mississauga stores was discredited by the evidence regarding the back door key for the Mississauga store. Given her finding on the issue of the keys, the Deputy Judge could reasonably find that the Plaintiff was unsure of her status after she left the store on October 6, 2012 to the point where she could believe she was being fired. Further, the subsequent conduct of the Personal Defendant did not reflect the actions of someone who believed her employee had abandoned her employment. Instead, on a balance of probabilities, the inaction of the Personal Defendant reflected the conduct of a person who believed that the Plaintiff suspected, or even believed, that she had been fired. Lastly, given the absence of any contact between the Personal Defendant and the Plaintiff to clarify the status of the Plaintiff's employment, the Deputy Judge could reasonably conclude that the Plaintiff had not abandoned her employment on October 18, 2012 and, accordingly, that the Defendant's letter of that date resulted in the Plaintiff’s termination without cause.

[32] The Defendants also argue that the Deputy Judge made an error of law by, in effect, placing the onus on the Defendants to contact the Plaintiff after the events of October 6, 2012 when they say that the onus should have been on the Plaintiff to contact the Defendants. The Defendants say that it was reasonable for the Personal Defendant to have believed that the Plaintiff had abandoned her employment in light of her non-communication with the Personal Defendant, given their position that the Plaintiff had the onus to contact the Personal Defendant.

[33] I do not think it is correct to say that the Deputy Judge placed a legal onus on the Defendants. I have concluded above that, given the two critical findings of the Deputy Judge, the Deputy Judge could reasonably find that it was unreasonable for the Personal Defendant to have expected the Plaintiff to show up for work on October 9, 2012. In these circumstances, the determination of the Deputy Judge that the Personal Defendant could not reasonably have believed that the Plaintiff had abandoned her employment solely on the basis of her failure to report to work after October 6, 2012 is entitled to deference. Accordingly, the Defendants had no unambiguous words or conduct of the Plaintiff upon which to support an inference of abandonment of employment. In these circumstances, as a practical matter, if the Defendants intended to assert that the Plaintiff had abandoned her employment, they first had to clarify the situation with the Plaintiff. This is not however, a matter of the imposition of a legal onus on the Defendants. Rather, it is a practical matter of determining whether the facts supported the conclusion that the Plaintiff had abandoned her employment.

[34] Based on the foregoing, I conclude that there is no basis for the grounds of appeal upon which the Defendants seek to set aside the finding of the Deputy Judge that the Plaintiff was wrongfully dismissed.

The Determination of the Reasonable Notice Period

[35] The Defendants submit that the Deputy Judge erred in finding that 21.5 weeks was a reasonable notice period based on the factors enumerated in Bardal v. The Globe & Mail Ltd. (1960), 1960 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.J.). They submit that a period of one to three months was appropriate based on existing case law.

[36] The Deputy Judge concluded that a notice period of five months was reasonable “based in part on the notice award for the very analogous sales position dealt with in the Clara Isopo v. Kobe Fabrics Ltd. case cited by the plaintiff”. However, the factual circumstances in Isopo v. Kobe Fabrics Ltd., [1994] O.J. No. 1509 were very different from the present case. The employee in Isopo had been hired to develop a sales territory in downtown Toronto and had been successful in doing so. As a reflection of her role, she was remunerated by base salary and a commission, which in her case approximated her base salary.

[37] The Plaintiff acknowledges that there are no cases dealing with facts similar to the present proceeding. However, she suggests that the decision in Murphy v. Canadian Tire Corp. (1991), 39 C.C.E.L. 205 (Ont. C.J. [Gen. Div.]) is supportive of the award of the Deputy Judge. I find it is not. In that decision, the issue was obiter and both the length of employment and the award were materially different.

[38] I agree with the Defendants that, in making her determination of a reasonable notice period, the Deputy Judge did not address the relative balance of all of the Bardal factors. Instead, she appears to have focused principally on the relative seniority or responsibility associated with the Plaintiff’s position. In this case, none of the relevant factors—age, number of years of service, level of responsibility or the availability of comparable employment—argue for a longer than customary notice period. In particular, the Plaintiff’s level of responsibility should not be over-emphasized. In focusing on the Plaintiff’s level of responsibility, I think that the Deputy Judge erred at law.

[39] Taking all these factors into consideration, I agree with the Defendants that a more appropriate notice period would be three months, which would translate into 13 weeks. The Deputy Judge found that the Plaintiff’s rate of pay was $460 per week. I would therefore substitute the amount of $5,980 for the award of the Deputy Judge in respect of damages in lieu of reasonable notice.

The Award for Lost Pay Prior to Termination

[40] In their Factum, the Defendants also submit that the Deputy Judge erred in awarding the Plaintiff lost pay for the days of work missed between October 7 and October 19, 2012. Given the Court’s determination above that the Deputy Judge did not err in finding that the Plaintiff had been wrongfully dismissed on October 19, 2012, this ground of appeal cannot succeed. The Plaintiff remained an employee of the Corporate Defendant. She made herself available during the relevant period at the Defendants’ direction. She is therefore entitled to be paid for the days on which she would ordinarily have worked during this period. In any event, the Defendants did not seriously press this ground of appeal at the hearing of the appeal.

The Award for Unpaid Wages Relating to Statutory Holidays

[41] The Defendants argue that the Deputy Judge erred in her award of $2,098 for unpaid wages relating to statutory holidays. The Plaintiff made two separate submissions in this regard.

[42] First, the Defendants argue that the Deputy Judge erred in finding that the Plaintiff did not discover her claim for statutory holiday pay for purposes of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. until late December 2012, when she learned that her relationship in the period 2008 to 2010 was properly characterized as one of employment rather than independent contractor status and that, accordingly, statutory holiday pay was owing for such period. Second, they say the Deputy Judge misapprehended the facts in respect of the 2011 year and that statutory holiday pay had, in fact, been paid.

[43] With respect to the limitation period issue, the Deputy Judge determined that the Plaintiff's status was “an intricate legal issue” on which she reasonably required legal advice before being aware of her entitlement and that this did not occur until late December 2012. In this regard, it is relevant that the Defendants advised the Plaintiff that she was not entitled to statutory holiday pay prior to the time that she became a full-time employee and apparently did not know of the obligation to make such payments until the action.

[44] The Deputy Judge concluded that discoverability of the Plaintiff's claim was postponed to the date of receipt of such legal advice. The Deputy Judge could reasonably reach this conclusion on the facts before her. There is no evidence that the Plaintiff knew of her entitlement to statutory holiday pay for the period 2008 to 2010 before 2012, when she learned of her employee status during that period. Accordingly, the Deputy Judge did not err in reaching her determination on this aspect of the Plaintiff’s claims.

[45] The Defendants did not raise the factual issue of the quantum of statutory holiday pay actually paid in 2011 in their Notice of Appeal, nor did they address this issue in their Factum. It was raised for the first time at the hearing. It is too late to raise this ground of appeal, which is therefore dismissed.

[46] In any event, I note that the Defendants’ appeal in respect of unpaid statutory holiday pay does not, in the aggregate, exceed the monetary threshold under paragraph 31(a) of the Act. As this is a separate claim from the claim for wrongful termination, there is no right of appeal under the Act in respect of the claim for unpaid statutory holiday pay.

The Award for Bad Faith Damages

[47] The Defendants argue that the Deputy Judge erred in awarding damages of $250 for “bad faith” damages, which the Deputy Judge tied to stress that the Plaintiff says she suffered arising from the Defendants' manner of termination of her employment.

[48] The Deputy Judge found that, in the termination of the Plaintiff's employment, there was “carelessness about the plaintiff's rights and the indignity of failing to afford her a right to respond before the inference alleged to have been drawn [of abandonment] was drawn”. The Deputy Judge could reasonably reach this determination on the facts of this case.

[49] The Defendants say that there is no evidence to support the quantum of $250 in damages. However, given the modest amount awarded, I do not think that $250 is an unreasonable amount for the stress which the Deputy Judge found had been suffered nor that any documentary support is required.

Damages for Lost Overtime

[50] The Defendants submit that the Deputy Judge erred in awarding damages for overtime not paid in the amount of $82.99. There is no right of appeal in respect of this claim given the monetary threshold under paragraph 31(a) of the Act.

Conclusion

[51] The appeal is denied except in respect of the damages in lieu of reasonable notice, which is reduced as set out above. If the parties cannot agree on costs, they shall each have 30 days to provide costs submissions not exceeding five pages in length.

Wilton-Siegel J.

Date: October 30, 2015