DATE: 20060329

DOCKET: C42833

COURT OF APPEAL FOR ONTARIO

RE: Mike Dwyer (Plaintiff/Respondent) v. Mark II Innovations Ltd. (Defendant/Appellant)

BEFORE: Doherty, Moldaver and Gillese JJ.A.

COUNSEL: Richard B. Swan for the defendant/appellant

J.A. Renaud for the plaintiff/respondent

HEARD: March 22, 2006 RELEASED ORALLY: March 22, 2006

On appeal from the judgment of Justice Richard C. Gates of the Superior Court of Justice dated December 22, 2004.

E N D O R S E M E N T

[1] We are satisfied that the trial judge erred in law in failing to identify and then apply the threshold requirement for a finding of a fixed term contract of employment. The language relied on to establish a fixed term of employment must in the language of this court be “unequivocal and explicit”: Foreman v. 818329 Ontario Limited, [2003] O.J. 3327 (C.A.).

[2] The written contract of employment in this case made no reference to the terms of employment. The conversation relied on by the respondent to establish the fixed term of employment occurred after the respondent, who authored the written agreement, had signed it but before the employer had signed the agreement. We have carefully reviewed the appellant’s evidence relating to that conversation. At its highest, the evidence reveals an ambiguous answer (“I’m here until I retire.”) to an ambiguous question from the employer (“What about a cancellation clause?”).

[3] The ambiguity apparent in the conversation relied on by the appellant is made all the more apparent by the respondent’s own evidence concerning his obligations under this supposed fixed term of employment. The respondent took the position in his evidence that he was entitled to leave the job whenever he saw fit.

[4] The trial judge in coming to the conclusion that he did, drew an adverse inference from the failure of the employer to testify. We do not think an adverse inference was appropriate in these circumstances. An adverse inference should be drawn only after a prima facie case has been established by the party bearing the burden of proof. For the reasons given above, we do not think the evidence led by the respondent established a prima facie case that the contract of employment was for a fixed term.

[5] As the trial judge found that the contract of employment was for a fixed term, he did not deal with the question of reasonable notice. That question became relevant only if the contract of employment was for an indefinite period. While the parties see the advantage of the trial judge assessing reasonable notice, they agree that at this point in all the circumstances of this case, it would be best for this court to determine the reasonable notice period rather than remitting the matter to the trial judge.

[6] We would award damages equal to 8 months remuneration. This generous award recognizes:

♦ Mr. Dwyer’s age; he was 57 at the time he ended his employment with the appellant;

♦ his experience, training and qualifications upon which the appellant relied;

♦ his legitimate and reasonable expectation that his employment would be secure until age 62, or at least for a minimum of two to three years while he took the company to a “tier one” level;

♦ his senior position with the employer; he reported directly to the president; and

♦ the difficult labour market Mr. Dwyer faced when he was abruptly and summarily dismissed by the appellant.

[7] The appeal is allowed, the judgment below set aside and the judgment in accordance with this endorsement shall issue. We assume the parties can work out any of the necessary details.

[8] We have heard submissions on costs. At trial, costs were ordered in favour of the respondent partly on a substantial indemnity basis by virtue of an offer made by the respondent. The result achieved by the respondent at trial was better than his offer. In view of the outcome of the appeal, it is likely that the result achieved by the respondent will not be better than his offer. If this is so, the trial costs should be adjusted to provide for costs on a partial indemnity basis throughout. If the amount awarded to the respondent is still better than the amount of the offer then the costs order made at trial should stand.

[9] The appellant will have its costs on appeal on a partial indemnity basis fixed at $10,000, inclusive of GST and disbursements.

“D.H. Doherty J.A.”

“M.J. Moldaver J.A.”

“E.E. Gillese J.A.”