DIVISIONAL COURT FILE NO.: 515/16
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
LEDERMAN, SWINTON and RADY JJ.
BETWEEN:
Bertram Thambapillai
Bruce Baron and Maija Pluto, for the Plaintiff (Respondent)
Plaintiff (Respondent)
– and –
Labrash Security Services Ltd.
Caitlin Dale, for the Defendant (Appellant)
Defendant (Appellant)
HEARD at Toronto: October 12, 2017
RADY J.
BACKGROUND
1The defendant Labrash Security Services Ltd. (Labrash) appeals from the decision of Goldstein J. dated September 27, 2016 in which he granted judgment to Bertram Thambapillai (the plaintiff) pursuant to Rule 20 of the Rules of Civil Procedure. It seeks leave to appeal the costs order as well.
2The plaintiff sued Labrash for wrongful dismissal arising from the termination of his employment as a security guard at a Cascades Tissue plant where he had worked since 2000. Labrash was in the business of providing security services. It had assumed the plaintiff’s contract of employment in 2003.
3The plaintiff, who was born in Sri Lanka and immigrated to Canada in 2000, was 71 years old at the time of his termination. He earned $24,000 per year. On November 24, 2014, he received a letter from Labrash advising that his employment would be terminated because Cascades would no longer require Labrash’s services after January or February 2015.
4No specific end date had yet been determined but Labrash advised that “as soon as we are given a firm date we will advise you”.
5No further notice was given. The plaintiff continued to work for Labrash until July 20, 2015 when he was terminated, without notice, without pay in lieu of notice or statutory severance. He commenced an action under the Simplified Rules, seeking damages of $60,000 for wrongful dismissal and $15,000 for infliction of mental suffering.
6In April 2016, and after moving for summary judgment, the plaintiff found other employment as a security guard earning the same compensation. Consequently, his mitigation efforts reduced his damages to $17,076 for lost income.
7Judgment was granted for the plaintiff. The motion judge concluded:
(1) the proceeding should not be transferred to the Small Claims Court;
(2) no oral evidence was necessary;
(3) Labrash did not give proper notice to the plaintiff as it should have once a firm end date for the termination of its services had been established with Cascade; and
(4) the plaintiff was entitled to $17,076 for damages for wrongful dismissal, $7,500 for mental distress, and $35,000 for costs on a substantial indemnity basis.
the parties’ positions
8Labrash submits that the motion judge made the following factual errors:
finding the plaintiff had limited English;
finding that the plaintiff had no idea when he would be let go; and
finding that it acted in bad faith and treated the plaintiff unfairly.
9Labrash submits further that the motion judge erred in law because:
he denied its request to transfer the case to the Small Claims Court;
he concluded that an independent actionable wrong was not necessary to found damages for mental distress;
he failed to reduce the notice period in light of advance warnings;
he refused to permit viva voce evidence; and
he considered improper evidence tendered by the plaintiff during the course of the hearing and in particular a “Manta” search containing information about Labrash’s estimated revenue, leading to a reasonable apprehension of bias.
10The plaintiff responds that the motion judge made no palpable and overriding error in his findings of fact and his conclusions were supported by the evidentiary record. He submits that the motion judge’s conclusions on the law were correct.
STANDARD of REVIEW
11The parties are agreed that the standard of review for questions of law is correctness and palpable and overriding error for findings of fact: Housen v. Nikolaisen, 2002 SCC 33.
ANALYSIS
12There is no basis to interfere with the motion judge’s finding of fact respecting whether the plaintiff knew when his employment would come to an end. That finding was available on the evidence before him and in particular that the November 24, 2014 letter contained no final termination date, and that, despite oral reminders, the business continued, other employees were relocated and the plaintiff continued to have a job.
13With respect to the plaintiff’s facility with English, the motion judge observed at para. 30 of his Reasons that he “was not a native English speaker”, which is true. Later, he said that the plaintiff had “limited English”. This finding is not supported on the evidence but it was not an overriding error that would affect the finding of the lack of notice. Rather the comment was made in the context of the power imbalance between the employer and employee.
14I would not interfere with the motion judge’s refusal to transfer the proceeding to the Small Claims Court or his decision to proceed without viva voce evidence. These are not questions of law but rather involve the proper exercise of his discretion.
15I reject the argument that he considered improper evidence. There is no indication that he relied on the Manta search results in making his decision.
16I see no merit to the allegation that there was a reasonable apprehension of bias on the part of the motion judge. It is alleged that after receiving the improper evidence, he awarded the plaintiff everything he sought and that he was made aware before he released his decision on costs that an appeal from his judgment had been launched. The threshold for a finding of actual or apprehended bias is high. It requires cogent evidence. The mere suspicion that the motion judge was biased because of the internet search material, or the amount that he awarded, or because of an awareness of an appeal does not rise to the level of proof that is required.
17The motion judge’s calculation of the appropriate period of notice of ten to twelve months is within the range that courts have typically found for an employee in the plaintiff’s circumstances. Further, the motion judge made no palpable and overriding error in failing to reduce the notice period because of advance warnings that the plaintiff’s job would end. Given the evidence that other employees were repositioned to other locations and that the plaintiff’s employment continued well past February, 2015, contrary to what was stated in the November 24, 2014 letter, it was open to the motion judge to decline to reduce the notice period.
18For reasons that follow, however, I have concluded that the motion judge made a palpable and overriding error in his finding that Labrash acted in bad faith and treated the plaintiff unfairly. This led him into error respecting his legal conclusion about the plaintiff’s entitlement to damages for mental distress.
19The motion judge first considered whether an independent actionable wrong was necessary. He concluded that it was not and that Wallace v. United Grain Growers Limited, [1997] 3 S.C.R. 701 had overtaken Vorvis v. Insurance Corporation of British Columbia, [1989] 1 S.C.R. 1085 on which Labrash had relied.
20There is support for the proposition that an independent actionable wrong is not, strictly speaking, necessary before damages for mental distress may be awarded. In addition to Wallace, see also Greater Toronto Airports Authority v. P.S.A.C. Local 004, 2011 ONSC 487 (Div. Ct.).
21The motion judge next discussed Wallace on the issue of good faith. He quoted from para. 98:
The obligation of good faith and fair dealing is incapable of precise definition. However, at a minimum, I believe that in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive…
22He also quoted from Keays v. Honda Canada Inc., 2008 SCC 39, [2008] 2 S.C.R. 362:
…where “parties have contemplated at the time of the contract that a breach in certain circumstances would cause the plaintiff mental distress, the plaintiff is entitled to recover”. See: Keays v. Honda Canada Inc. at para. 55. Bastarache J., for the Court, further observed at para. 57 that Wallace type damages could be available where an employer engages in behaviour that is unfair or is an act of bad faith. This principle arises from the type of relationship between employer and employee.
23Examples of bad faith conduct are set out in Keays and include attacking an employee’s reputation, misrepresenting the reason for termination or terminating an employee for improper ulterior motives.
24The motion judge concluded at para. 39 that the appellant’s actions were unfair because:
the respondent was 71 years old and worked in the same location since his immigration in 2000;
he had limited English and was not sophisticated; and
by extending the plaintiff’s employment, and failing to give fresh notice, Labrash “left him hanging in the wind for some seven months” before his abrupt termination.
25The difficulty arises in the next paragraph where the motion judge said he “appreciated the defendants sincerely believed that they treated the plaintiff fairly by warning him that his employment would end”. Earlier in his reasons, he noted that there was evidence that Labrash urged the plaintiff to seek alternative work (para. 9). He found that Labrash reminded the plaintiff that his employment would end at some point (para. 29).
26These findings undermine the contention that Labrash “engage[d] in conduct during the course of dismissal that is unfair or in bad faith…” as that term is used in cases such as Wallace and Keays. On the contrary, Labrash honestly thought it was meeting its obligations under the Employment Standards Act, S.O. 2000, c. 41 and was not required to pay statutory entitlements. Labrash considered that it was complying with the ESA by giving the plaintiff working notice.
27This led the motion judge into error in awarding damages for mental distress for two reasons. His finding that Labrash acted in good faith is inconsistent with a finding of liability for such damages. Second, the motion judge did not make a finding that Labrash caused mental distress of a kind that is compensable. All that the scant evidence shows is the upset consistent with the loss of a job.
28As a result, I would grant the appeal with respect to damages for mental distress and set aside the award of $7,500 in damages but affirm the balance of the judgment respecting damages.
COSTS
29Labrash sought leave to appeal the motion judge’s award of costs. Given my conclusion above, leave is granted.
30In my view, the motion judge erred in awarding costs on a substantial indemnity basis in the amount of $35,000 from the beginning of the lawsuit. He properly considered the parties’ offers to settle and referred to Rule 49.10. However, he gave no reason why he awarded substantial indemnity costs throughout rather than from the date of the relevant offer.
31This is not a case where Rule 49.10 would apply in any event. Labrash was unable to assess the plaintiff’s offers to settle because it could not determine if they represented a compromise. The offers were made on an all or nothing basis. They contained a fixed amount of costs to the date of the offers but Labrash could not intelligently evaluate their reasonableness in the absence of a bill of costs.
32The motion judge also erred in principle in failing to give proportionality sufficient emphasis, particularly given the fact that this was a motion for summary judgment in a Simplified Rules case. Indeed, proportionality was arguably the governing factor in the circumstances of this case. The quantum awarded for costs exceeded the judgment by approximately 140 percent.
33He should also have considered the overall reasonableness of the plaintiff’s bill of costs, which was almost twice that of the defendant. In this case, there were no discoveries or cross-examinations on affidavits, only a simple affidavit of documents and simple pleadings. In my view, the hours of counsel were excessive, and there was no need for two counsel - for example, at the motion itself.
34The motion judge did not explicitly address the reasonable expectations of the parties – also relevant to the exercise of discretion. His finding with respect to hardball conduct by Labrash is not supported by the evidence.
35In my view, a fair and reasonable assessment of costs for the action is $10,000.
CONCLUSION
36I would allow the appeal in part and set aside the award of $7,500 in damages for mental distress. I would allow the costs appeal and substitute an award of costs of the action in favour of the plaintiff in the amount of $10,000.
37Success on this appeal is divided. However, Labrash was successful in eliminating the award for mental distress and significantly reducing the costs of the action. As a result, I would award Labrash costs, but on a reduced basis of $3,000 as well as costs of $1,000 for the motion before Nordheimer J.
___________________________ RADY J.
I agree
LEDERMAN J.
I agree
SWINTON J.
Date of Release: December 2017
CITATION: Thambapillai v. Labrash Security Services Ltd., 2017 ONSC 6072
DIVISIONAL COURT FILE NO.: 515/16
DATE: 20171213
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LEDERMAN, SWINTON and RADY JJ.
BETWEEN:
Bertram Thambapillai
Plaintiff (Respondent)
– and –
Labrash Security Services Ltd.
Defendant (Appellant)
REASONS FOR JUDGMENT
RADY J.
Date of Release: December 13, 2017