CITATION: Wide Range v. Siebert, 2016 ONSC 6314
DIVISIONAL COURT FILE NO.: DC-16-717
DATE: 20161014
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
DAMBROT, SACHS and SHEARD JJ.
B E T W E E N :
WIDE RANGE TRANSPORTATION SERVICES INC.
Appellant
– and –
ED SIEBERT
Respondent
M. Huberman, Counsel for the Appellant
R. Whitmore, Counsel for the Respondent
HEARD: at Hamilton October 5, 2016
M. DAMBROT J.:
[1] Wide Range Transportation Services Inc. (“Wide Range”) appeals to the Divisional Court from the judgment of Milanetti, J. dated December 31, 2015 denying Wide Range’s claim for damages for breach of contract and allowing Siebert’s counterclaim in part by awarding him $7,340.52 for unpaid commission.
Background
[2] Siebert worked as a sales representative/major accounts manager for Wide Range from May 5th, 2003 until he was terminated for cause on April 14, 2009. At some point in 2009, Wide Range learned that Siebert was in the process of starting a new company that Wide Range believed would be in competition with it. He had taken significant steps towards establishing his new business.
[3] At trial, Siebert took the position that his plans were mere fantasy and that he was doing educational research, but the trial judge did not accept this evidence. In fact, by June 2009 Siebert was helping Acorn Kitchens, a Wide Range customer, with the very sort of work that Wide Range did for it. Siebert also did work for a business referred to as Moroz during his employment with Wide Range without telling Wide Range about it. The trial judge found that in doing so, Siebert was disloyal to Wide Range. While Siebert made only nominal earnings from this work, he did this work on Wide Range’s time and used Wide Range’s resources, including a computer to generate documents for Moroz. When Wide Range learned of these activities, it fired Siebert for cause and brought an action against him for breach of contract. Siebert counterclaimed for pay in lieu of notice and for unpaid commissions.
The Judgment
[4] The trial judge found that Wide Range had cause to terminate Siebert. She said that Siebert’s “double-dealing” employment behaviour, specifically his work for Moroz while working for Wide Range, was not in Wide Range’s interest and was accomplished using Wide Range’s time, tools, and client lists. She also found that Siebert was taking significant steps towards planning a business that was likely to compete with Wide Range. She found that Siebert had breached his employment contract with Wide Range by violating its duty of good faith and loyalty, specifically by undertaking contemporaneous undisclosed employment and making efforts to set up his own business.
[5] As a result, she dismissed Siebert’s claim for pay in lieu of notice. However, despite finding that Siebert had breached his contract with Wide Range, she awarded no damages to the plaintiff. She concluded that Wide Range had adduced no evidence to suggest that clients have been lost or lured away from Wide Range by Siebert and established no loss of revenue or potential sales as a result of Siebert’s activities. She found that a calculation of loss prepared by Wide Range’s Vice-President was based on assumptions that amounted to nothing more than speculation. She acknowledged that Siebert’s sales might have been higher if his focus had been singularly on the business of Wide Range, but she found no evidentiary foundation for such a finding.
[6] With respect to the claim by Siebert for unpaid commission, she found that Siebert was paid only half of the commission that he was entitled to for certain sales to Whirlpool. She rejected Wide Range’s explanation for the shortfall and awarded Siebert $7,340.52.
[7] The trial judge awarded partial indemnity costs to the defendant up to a Rule 49 offer and substantial indemnity costs thereafter for a total of $77,917.59. She noted that Wide Range launched this action seeking damages in excess of a million dollars, that the lion’s share of the case dealt with issues relating to the claim for breach of contact, that Wide Range chose to prove its case in the manner that left her unable to calculate damages and that while Siebert made efforts to settle the case, Wide Range did not. In fact, it simply ignored Siebert’s offers.
The Issues on Appeal
[8] Wide Range raises two issues on this appeal:
The trial judge erred in her calculation of damages; and
the trial judge erred in awarding $7,340.52 for unpaid commission.
Standard of Review
[9] The standard of review is correctness on issues of law and palpable and overriding error on questions of fact. An appellate court may interfere with an award of damages only if the appellant establishes a clear and overriding error.
Analysis
Damages
1) The Calculation of Damages
[10] The appellant argues that there is ample evidence on the record and in the trial judge’s findings of fact, which it enumerates, capable of supporting a conclusion that Siebert’s breach of conduct caused damage to Wide Range.
[11] In my view, for the most part, this simply misses the point. The trial judge found that Siebert had breached his contract with Wide Range and did not doubt that it might be inferred that the breach could have resulted in damage. However, she concluded that she could draw that inference in the absence of any evidentiary foundation. She was not convinced that any damages had been proven. Her conclusion that no damages were proven attracts considerable deference. She was entitled to reach this conclusion, save with respect to one issue: Siebert’s undisclosed income from his work for Moroz while working for Wide Range, accomplished using Wide Range’s time, tools, and client lists. Having regard to her findings of fact, the trial judge made a clear and overriding error in failing to order the disgorgement of this income in the amount of $5,152.15.
2) Unpaid Commission
[12] The appellant argues that the trial judge erred in concluding that Siebert was entitled to $7,340.52 in unpaid commission in the face of clear and uncontroverted evidence that by his conduct and with the passage of time, Siebert accepted, waived, and acquiesced in a reduced commission with respect to the Whirlpool sales. I would not give effect to this ground of appeal. The finding of the trial judge with respect to unpaid commission reflects no overriding and palpable error. There is no basis for us to make a finding of acquiescence which the trial judge declined to make.
Conclusion With Respect to Damages
[13] We allow the appeal and award damages to Wide Range on the claim in the amount of $5,152.15. We confirm the award of damages on the counterclaim. Having awarded damages to the appellant on its claim, it is open to us to revisit the award of costs.
Costs
[14] As a result of the foregoing, success on this matter at trial was divided. Consequently, it is appropriate that there be no award as to costs in respect of that trial. In saying this, we recognize that the appellant’s claim occupied far more trial time than did the counterclaim. However, the action was driven by the respondent’s egregious behaviour. A court should be reluctant to reward such conduct by an order for costs (see: Place Concorde East Limited Partnership v. Shelter Corporation of Canada Limited, 2006 16346 (ON CA), [2006] O.J No. 1964 (Ont. C.A))
Disposition
[15] For these reasons, the appeal is allowed to the extent that the appellant is awarded $5,125.15 on its claim. There will be no order for costs of the trial.
M. DAMBROT J.:
[16] Appeal allowed. The appellant is awarded damages in the amount of $5,152.15 on the claim. The damages awarded on the counterclaim stand.
[17] The trial costs award is set aside. We order no costs at the trial.
[18] Costs of the appeal are awarded to the appellant in the amount of $10,000, all-inclusive.
DAMBROT J.
SACHS J.
SHEARD J.
RELEASED: October 14, 2016
CITATION: Wide Range v. Siebert, 2016 ONSC 6314
DIVISIONAL COURT FILE NO.: DC-16-717
DATE: 20161014
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
DAMBROT, SACHS and SHEARD JJ.
B E T W E E N
WIDE RANGE TRANSPORTATION SERVICES INC.
Appellant
– and –
ED SIEBERT
Respondent
REASONS FOR JUDGMENT
M. DAMBROT J.
RELEASED: October 14, 2016