Court of Appeal for Ontario

Date: 2019-06-07 Docket: C65542

Judges: Lauwers, Pardu and Nordheimer JJ.A.

Between

Jasmine Theberge-Lindsay Plaintiff (Respondent)

and

3395022 Canada Inc. o/a Kutcher Dentistry Professional Corporation Defendant (Appellant)

Counsel

Chris Dockrill, for the appellant

Ryan Kornblum, for the respondent

Heard

April 8, 2019

Appeal

On appeal from the judgment of Justice Victoria R. Chiappetta of the Superior Court of Justice, dated May 25, 2018, with reasons reported at 2018 ONSC 3222.

Reasons for Decision

[1] Ms. Theberge-Lindsay, the respondent, began working in Dr. Kutcher's dental practice in 1993. Over the succeeding years, Dr. Kutcher restructured his dental practice in various ways to minimize income taxes and split income. To maintain her employment with Dr. Kutcher, Ms. Theberge-Lindsay was required to sign a series of employment agreements starting in 1999, all of which limited her entitlement for wrongful dismissal to the minimum required by the Employment Standards Act, 2000, S.O. 2000, c. 41.

[2] In December 2012, Dr. Kutcher, via his practice's most recent corporate vehicle, terminated Ms. Theberge-Lindsay's employment without cause. She was given one week's salary as the Employment Standards Act, 2000 minimum, since she had signed her most recent employment agreement only in 2011.

[3] The trial judge made the following finding, at para. 19:

At all times between 1993 and December 20, 2012 the plaintiff's employment as a hygienist for Dr. Kutcher's practice continued uninterrupted. It was Dr. Kutcher who consistently signed her pay cheques. The cheques were issued from Dr. Kutcher personally from 1993 to 1999, by 339 from 1999 to 2011 and by Kutcher Dentistry Professional Corporation in 2012.

[4] The trial judge made the following determination, at para. 39:

In my view, none of the three employment contracts signed by the plaintiff are enforceable. Each of the contracts fail respectively for lack of consideration. The evidence clearly demonstrates that the intention of Dr. Kutcher was that each of the three contracts needed to be signed or the plaintiff could not continue to be employed with his practice. While there is no evidence of threat or duress, Dr. Kutcher was firm in his testimony that continued employment was conditional on the signing of the agreements. The plaintiff and Ms. Graham both testified to their understanding of this fact pertaining to the 2011 agreement. The plaintiff received no more from signing each of the three agreements but for continued employment. The fact that she received independent legal advice pertaining to the 2011 agreement does not negate this fact. Further, the three agreements, if enforceable, would substantially reduce the plaintiff's entitlements on termination.

[5] Based on her finding that Ms. Theberge-Lindsay was wrongfully dismissed, the trial judge assessed her damages in lieu of reasonable notice at common law at 15 months.

[6] The trial judge's legal conclusions are firmly grounded in this court's jurisprudence, which she set out in paras. 36 and 37. On this basis, we reject the appellant's argument that the 2011 employment agreement is binding on Ms. Theberge-Lindsay and obliges her to accept one week's salary as the Employment Standards Act, 2000 minimum for wrongful dismissal.

[7] However, the appellant argues that, even accepting this court's jurisprudence, the trial judge erred in failing to take proper account of Ms. Theberge-Lindsay's resignation from her employment in 2005.

[8] The trial judge's factual findings regarding the resignation are set out at paras. 8-10 of her decision:

By correspondence dated March 28, 2005 the plaintiff tendered her resignation to Dr. Kutcher effective July 7, 2005. She was engaged to be married to a gentleman who lived in Guelph, Ontario. The plaintiff had secured alternative employment in Guelph to be commenced after July 7, 2005. During the notice period and prior to her effective day of resignation, in or about May 2005, the plaintiff ended her engagement and advised Dr. Kutcher of her intention to remain employed as a dental hygienist working in his office. The plaintiff testified that Dr. Kutcher told her that he was pleased to hear it as he did not want her to leave.

On June 30, 2005 the plaintiff was presented with and signed an employment agreement between herself and [339] ("the 2005 agreement"). The 2005 agreement limited the liability of [339], should it terminate the plaintiff without cause, to notice or payment in lieu of notice in accordance with the ESA. Again, the plaintiff testified that she reviewed the agreement with Dr. Kutcher prior to signing it. Her evidence is that Dr. Kutcher advised her not to worry about the termination provision as "it was never going to happen." Dr. Kutcher denies he made this statement. Dr. Kutcher signed the 2005 agreement on behalf of [339]. The plaintiff continued her employment with Dr. Kutcher without interruption between March 28, 2005 and June 30, 2005. There were no changes to the terms and conditions of her employment as a result of the 2005 agreement.

Throughout the period of notice of resignation and prior to the effective date of resignation, Dr. Kutcher commenced the process of hiring a hygienist. He advertised the position for a cost of $365.94, received resumes and conducted interviews. All resumes presented to the court were addressed to Dr. Kutcher, not Mrs. Kutcher. No offers of employment were made as Dr. Kutcher testified that he was getting the sense from the plaintiff that things were not working with her fiancé.

[9] In dealing with the effects of Ms. Theberge-Lindsay's 2005 resignation, the trial judge held, at paras. 29-30:

Separately, by correspondence dated March 28, 2005 the plaintiff advised that her last day working for the practice of Dr. Kutcher was to be July 7, 2005. Her resignation was rescinded well prior to July 7, 2005. The evidence demonstrates that the plaintiff was happy to remain employed with the practice of Dr. Kutcher and Dr. Kutcher was happy that she was to do so. The plaintiff continued with her responsibilities for the practice consistently and without interruption after March 28, 2005. Dr. Kutcher's efforts to replace the plaintiff were brief and uncostly. A record of employment was never issued at this time. By correspondence dated February 20, 2006, for the purposes of the plaintiff obtaining financing, Dr. Kutcher penned a letter to whom it may concern, confirming her employment "in our office since 1993."

The evidence demonstrates that the retraction of the resignation was accepted by Dr. Kutcher and that the circumstances of the 2005 resignation had no impact on the plaintiff's continuity of service with the practice of Dr. Kutcher. It further indicates that that at least in February 2006, Dr. Kutcher was prepared to recognize the continuity of the plaintiff's employment with his practice since 1993, independent of both her rescinded resignation and his use of 339 [the new corporate vehicle].

[10] The appellant argues that the 2005 resignation broke the chain of Ms. Theberge-Lindsay's employment since 1993. She was required on June 30, 2005 to sign a new employment agreement in order to be re-hired July 1, 2005. Consequently she is, at best, entitled to the Employment Standards Act, 2000 minimum notice measured from the date that she was re-hired in 2005.

[11] We agree with the appellant's submissions that Ms. Theberge-Lindsay's unequivocal resignation and re-hiring in 2005 marked a break in the employment relationship after which an entirely new contract was reached between her and Dr. Kutcher. There was consideration for that new employment contract, that is, Ms. Theberge-Lindsay's offer to again be employed by Dr. Kutcher and his acceptance of her offer to again employ her. On this basis, the Employment Standards Act, 2000 minimum notice is the maximum amount to which the respondent is entitled, measured from 2005. On this basis, she is entitled to 7.5 weeks of salary at $1,204 per week, less $1,200 severance already paid.

[12] Ms. Theberge-Lindsay's obligation to mitigate her damages does not apply to the statutory entitlement: Brake v. PJ-M2R Restaurant (2017), 2017 ONCA 402, 135 O.R. (3d) 561 (C.A.), at para. 111. Consequently, we do not address the mitigation issue.

[13] The appeal is allowed and the judgment varied in accordance with para. 11 of these reasons. If the parties cannot agree on the costs, then they may make submissions not more than three pages in length on a ten-day turnaround starting with the appellant.

P. Lauwers J.A.

G. Pardu J.A.

I.V.B. Nordheimer J.A.