Kitzman v. Babcock & Wilcox Canada Ltd., 2007 ONCA 536

CITATION: Kitzman v. Babcock & Wilcox Canada Ltd., 2007 ONCA 536

DATE: 2007-07-24

DOCKET: C45940

COURT OF APPEAL FOR ONTARIO

O’CONNOR A.C.J.O., MOLDAVER and ROULEAU JJ.A.

BETWEEN:

ROBERT KITZMAN

Plaintiff (Respondent)

and

BABCOCK & WILCOX CANADA LTD.

Defendant (Appellant)

Counsel:

Stephen F. Gleave and Sean M. Sells for the appellant

David Bond for the respondent

Heard: July 6, 2007

On appeal from the order of Justice P.J. Flynn of the Superior Court of Justice dated August 23, 2006.

APPEAL BOOK ENDORSEMENT

[1] The trial judge found that the appellant did not have just cause to dismiss the respondent. In doing so, the trial judge did not refer to the Supreme Court’s decision in McKinley v. BC Tel. In particular, he did not specifically address the issue of whether the nature of the respondent’s misconduct went to the core of the employment relationship such that dismissal for cause was warranted.

[2] While it may have been preferable for the trial judge to have specifically used the analytical framework in McKinley when addressing the issue of cause, we are satisfied that his findings of fact would have inevitably led to a conclusion that the appellant had not met the test in McKinley.

[3] The trial judge considered all of the TAD transactions, the respondent’s previous discipline record and the company’s policies and past practices. Viewing the evidence in total, the trial judge was “not satisfied on the balance of probabilities that there were consistent breaches of the employer’s policy with respect to competitive bidding or, if there were that it was as a result of wilful neglect or even negligence on the part of the [respondent]”.

[4] There was ample evidence to support these conclusions. As a result, there was no factual basis for termination for a cause.

[5] Given our conclusion set out above, we see no merit to the appeal against the dismissal of the counterclaim.

[6] We take a different view, however, with respect to the issue of the Wallace damages.

[7] The respondent first claimed Wallace damages in his opening at trial and this claim was based solely on the failure of the appellant to warn the respondent of the impending dismissal and the failure to give the respondent an opportunity to explain his conduct.

[8] In awarding Wallace damages, the trial judge took the above matters into account, but also focused on three other matters not pleaded or argued by the respondent.

[9] In particular, the trial judge found that certain employees of the appellant had effectively engaged in a conspiracy to get rid of the respondent. He further found that the counterclaim was motivated by what amounted to bad faith and could be seen as a “loud and clear warning to any employee who dare[d] to sue [the appellant] for wrongful dismissal”.

[10] His view of these matters led him to find that “when we consider that [the company] in the context of the commencement and pressing of the counterclaim, one sees a picture of the kind of unfair, harsh, vindictive and malicious conduct that can qualify for consideration of Wallace damages”.

[11] These were very serious findings of misconduct.

[12] While it may be that these findings were theoretically available on the evidence, it is by no means obvious that these findings would have been made had notice of the possibility of such findings of misconduct been given to the appellant and the appellant been given an opportunity to respond.

[13] We are unable to conclude that the trial judge would have awarded Wallace damages in the absence of these findings of misconduct. We are satisfied that the award of Wallace damages must be set aside.

[14] The appeal is allowed in part. The award of Wallace damages is set aside. In all other respects, the judgment below is upheld.

[15] The respondent has been substantially successful on this appeal. We award costs to the respondent fixed in the amount of $7,500, inclusive of disbursements and GST.