CITATION: Marathon Heating & Cooling Supplies Inc. v. Ronchka, 2017 ONSC 2179
COURT FILE NO.: SC-11-0083-00
DATE: 20170407
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
MARATHON HEATING & COOLING SUPPLIES INC. o/a MARATHON INUSTRIES
H. Minz, for the Appellant
Appellant
- and -
RICHARD RONCHKA
E. Lane, for the Respondent
Respondent
HEARD: March 17, 2017, at Brampton
REASONS FOR JUDGMENT
[On appeal from a Decision of Deputy Judge Oliver of the Small Claims Court at Brampton dated July 29, 2015]
ANDRÉ J.
[1] Marathon Industries ("Marathon") appeals the July 29, 2015 decision of Deputy Judge Oliver awarding Mr. Ronchka damages after finding that Marathon had constructively dismissed Mr. Ronchka.
[2] Marathon's sole ground of appeal revolves around its position that the Deputy Judge failed to consider the issue of mitigation in his calculation of damages and that this constitutes reversible error.
BACKGROUND FACTS
[3] On September 10, 2010, Mr. Ronchka left his position as an Operations Manager at Marathon, a position the 61-year-old engineer had held for three years. He then initiated a Small Claims Court action against Marathon for damages on the ground that he had been constructively dismissed by the company. Mr. Ronchka received a job offer to start working with another company in October 2010, but did not begin his employment there until January 2011.
[4] Following the calling of evidence, counsel for both parties made submissions to the Deputy Judge. Marathon's counsel first addressed the issue of mitigation of damages. He pointed out Mr. Ronchka's testimony that he first spoke to a representative of a company called Thermal Hydronic Supply ("Thermal") two weeks after leaving Marathon. Mr. Ronchka was scheduled to commence employment with Thermal at the end of October 2010 but did not do so until January 2011.
[5] The reason for the delay in beginning his new employment, according to Mr. Ronchka, was the letter Mr. Ronchka received from Marathon's counsel on October 28, 2010. That letter cautioned him against maligning his previous employer. Mr. Ronchka testified that both he and Thermal sought legal advice after receiving this letter. The letter raised concerns about Mr. Ronchka allegedly contacting third parties concerning his dispute with Marathon. The lawyers of both Mr. Ronchka and Thermal advised their respective clients that in order to avoid any future claims of conflict or a possible injunction, Mr. Ronchka should wait to start his new employment. Both lawyers also advised that Mr. Ronchka should hold off on sales division duties during his first months at Thermal. (Transcript of the Evidence, January 7, 2015, pages 28, 33, 57, 60).
[6] In his submissions, Marathon's counsel stated that:
There was no reason for Mr. Ronchka to not take immediate steps to mitigate his alleged damages by taking the position and the evidence is clear, Mr. Ronchka's own evidence, that he could have started right away but for the advice he testified receiving that he should wait for four months … But the consequence of that – of doing so, is that he failed to take a reasonable step to mitigate his damages.
(Transcript of the Evidence, pages 175-177.)
[7] At trial, Deputy Judge Oliver found that Marathon had constructively dismissed Mr. Ronchka. He also determined that, given Mr. Ronchka's seniority and specialized skill and knowledge, he was entitled to a reasonable notice period of four months. The Deputy Judge capped damages at the Small Claims Court limit of $25,000 and costs in the amount of $3,750.
[8] Deputy Judge Oliver did not address the issue of mitigation of damages in his endorsement.
ANALYSIS
[9] This appeal raises the following issues:
(1) Did the learned Deputy Judge have a duty to address the issue of mitigation of damages in his reasons?
(2) If so, what is the appropriate remedy for his failure to do so?
ISSUE NO. ONE: Did the learned Deputy Judge have a duty to address the issue of mitigation of damages in his reasons?
[10] In R. v. Dinardo, 2008 SCC 24, [2008] 1 S.C.R. 788 at para. 31, Charron J. stated the following which is applicable to this case:
[T]he inquiry into the sufficiency of the reasons should be directed at whether the reasons respond to the case's live issues.
[11] The court cautioned however, at para. 32 that it is not open to an appellate court to "engage in a reassessment of aspects of the case not resolved by the trial judge" and that "the appeal court ought not to substitute its own analysis for that of the trial".
[12] Additionally, the Supreme Court of Canada noted in R. v. Sheppard (2002), 2002 SCC 26, 162 C.C.C. (3d) 298 (S.C.C.), at para. 55 that:
The trial judge's duty is satisfied by reasons which are sufficient to serve the purpose for which the duty is imposed, re, a decision which, having regard to the particular circumstances of the case, is reasonably intelligible to the parties and provides the basis for meaningful appellate review of the correctness of the trial judge's decision.
(emphasis added)
[13] These decisions relate to criminal cases but the duty to provide reasons is no less important in Small Claims Court cases. In Maple Ridge Community Management Ltd. v. Peel Condominium Corp. No. 231 ("Maple Ridge"), 2015 CarswellOnt 10397, 2015 ONCA 520, 255 A.C.W.S. (3d) the Court of Appeal noted at para. 35 that: "Reasons from the Small Claims Court must be sufficiently clear to permit judicial review. They must explain to the litigants what has been decided and why". See also Doerr v. Sterling Paralegal, 2014 ONSC 2335 (Ont. Div. Ct.) at paras. 17-19.
[14] However, the Court of Appeal in Maple Ridge made an important observation at para. 31 concerning the adequacy of reasons in a Small Claims case which has a great deal of resonance in this case. The Court cautioned that:
The level of requisite detail in reasons will be lessened "[w]here the record discloses all that is required to be known to permit appellate review": Hill v. Hamilton-Wentworth Police Services Board, 2007 SCC 41, [2007] 3 S.C.R. 129, at para. 101. If a detailed record is available, the appellate court should not intervene "simply because it thinks the trial court did a poor job expressing itself": R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, at para. 26.
[15] The court further cautioned at para. 35 that "failing to take the Small Claims Court context into account only serves to restrict access to justice by unnecessarily importing formality and delay into a legal process that is designed to be formal and efficient."
[16] The Deputy Judge does not specifically deal with the issue of mitigation of damages. On a strict application of the test of adequacy of reasons set out in Sheppard and Dinardo, the decision appears to be deficient in that it does not provide the "what" and "why" regarding the court's failure to specifically deal with the issue of mitigation of damages. If that was the sum total of the factors to be considered, then this court would have no option but to conclude that the Deputy Judge's failure to expressly deal with the issue of mitigation constitutes reversible error.
[17] That conclusion however, in light of the Court of Appeal's admonition in Maple Ridge, would be wrong. I must review the trial record to assess the context in which the Deputy Judge clearly concluded that in the circumstances of this case, Mr. Ronchka acted reasonably when he commenced work in January 2011, rather than in October 2010.
[18] Furthermore, s. 134 of the Courts of Justice Act provides that this court may make an order or decision that ought to or could have been made by the court or tribunal appealed from and may make any order or decision that is just.
Evidence At Trial
[19] The uncontested evidence at trial was that Mr. Ronchka received an opinion from his lawyer that he should delay starting his new job for three to four months. He testified that his lawyer told him that if Marathon filed an injunction against him, and Mr. Ronchka decided to contest it in court, the matter would take a long time and would cost $70,000 to $80,000 which, Mr. Ronchka testified, "was a non-starter for me" (Transcript of the Trial, page 57)
[20] Mr. Ronchka further testified that Thermal retained counsel to review Marathon's letter and similarly suggested that Mr. Ronchka should delay commencing work with Thermal.
[21] Mr. Ronchka conceded in cross-examination that the letter he received from Marathon did not threaten an injunction preventing him from working with anyone. He insisted however, that he relied on the legal advice he received regarding when he should start his employment with Thermal.
[22] Marathon maintains that Mr. Ronchka acted unreasonably because its letter to Mr. Ronchka never made any reference to an injunction neither did it relate to Mr. Ronchka's new job with Thermal.
[23] In my view however, it was entirely reasonable for Mr. Ronchka to seek legal advice following receipt of the letter and to rely on his counsel's legal advice. The issue is not whether the legal advice he received was wrong; the issue is whether he acted reasonably in relying upon that advice. In my view, he did. In any event, he had no option other than to delay his employment given that Thermal's lawyer had similarly recommended that the company should delay Mr. Ronchka's commencement date.
[24] For these reasons, I find that Marathon has not proven, on a balance of probabilities, that Mr. Ronchka has failed to mitigate his damages.
CONCLUSION
[25] The appeal is dismissed.
COSTS
[26] The parties have agreed that costs fixed in the amount of $7,500 is to be awarded to the successful party.
[27] Accordingly, Marathon Heating & Cooling Supplies Inc. will pay costs fixed in the amount of $7,500 inclusive, to Mr. Ronchka within ninety (90) days of today's date.
André J.
Released: April 7, 2017
CITATION: Marathon Heating & Cooling Supplies Inc. v. Ronchka, 2017 ONSC 2179
COURT FILE NO.: SC-11-0083-00
DATE: 20170407
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
MARATHON HEATING & COOLING SUPPLIES INC. o/a MARATHON INDUSTRIES
Appellant
- and –
RICHARD RONCHKA
Respondent
REASONS FOR JUDGMENT
ANDRÉ J.
Released: April 7, 2017