Court of Appeal for Ontario

Citation: 2007 ONCA 566

Date: 20070820

Docket: C43740

Before: ROSENBERG, ARMSTRONG and JURIANSZ JJ.A.

Between:

CRYSTAL TILE AND MARBLE LTD.

Appellant (Plaintiff)

and

DIXIE MARBLE & GRANITE INC., TORONTO DOMINION BANK, LESZEK MISKIEWICZ, BARBARA MISKIEWICZ AND VITOR ALVES

Respondents (Defendants)

Counsel:

Kevin D. Sherkin and Phong Phan for the appellant

Kenneth W. Watts or the respondents

Heard: August 16, 2007

On appeal from the judgment of Justice Bonnie L. Croll of the Superior Court of Justice dated May 24, 2005.

ENDORSEMENT

[1] The main issues in this appeal are whether the trial judge erred in failing to find that Mr. Miskiewicz was a fiduciary and erred in finding that he did not make unfair use of confidential information. Mr. Miskiewicz was a very successful salesman for the plaintiff at the time that he and Mr. Alves, another employee of the plaintiff, set up their own company. The trial judge found, however, that Mr. Miskiewicz was not in a fiduciary relationship and did not make use of confidential information. The appellant submits that the trial judge erred in three respects. First, she failed to take into account the evidence that two weeks before he left, Mr. Miskiewicz took some telephone messages while telling a fellow employee that they were worth a million dollars. Second, she misapprehended the evidence as to the appellant’s power to set prices. Finally, she failed to find that Mr. Miskiewicz was a key employee and hence a fiduciary based on the volume of sales for which he was responsible.

[2] The trial judge set out the correct test for finding a fiduciary relationship. She gave comprehensive reasons for why Mr. Miskiewicz was not a fiduciary. She pointed out that he did not supervise any other employees, was not involved in corporate decision-making, had no power or ability to guide the affairs of the plaintiff, had no hiring or firing authority and in short “never rose above the position of salesman”. Rather, he was entirely accountable to one of the firm’s owners who was responsible for sales.

[3] We are not persuaded that the trial judge misapprehended the facts that were relevant to this determination. In particular, it was open to the trial judge to find that Mr. Miskiewicz had little discretion in respect to pricing. Like any salesman, it was part of his job to price the jobs but he was bound by the formula that established a fixed amount for overhead. If he made a serious error then he could be charged back for the loss. This was an appropriate factor to take into account in finding that Mr. Miskiewicz was not a fiduciary. It was no more than a factor and that is how the trial judge used this evidence.

[4] As to the telephone messages, the trial judge referred to this evidence. But she also drew the inference that Mr. Miskiewicz did not use any confidential information to contact customers. This inference was available on the evidence. He had been dealing with some of these customers for years and the information required to solicit their business was not confidential. Aside from the comment attributed to him about the messages being worth a million dollars, there was no other evidence to indicate that he used confidential information. We can thus see no basis for interfering with the holding that Mr. Miskiewicz did not engage in unfair competition. The trial judge heard considerable evidence as to the nature of the marble fabricating business and the loss in sales after Mr. Miskiewicz left the plaintiff’s employment. She drew the inference that “as is the case with many other businesses, the ‘commercial relationships between contractors and customers in this industry are more a function of price and service than the result of personal influence arising out of previous business dealings’”. That was a finding that was open on the evidence and severely undercut the plaintiff’s theory of unfair competition.

[5] Finally, the plaintiff argues that the volume of sales generated by Mr. Miskiewicz was so large and since these customers dealt only with Mr. Miskiewicz, it was peculiarly vulnerable to the exercise of discretion or power by Mr. Miskiewicz. However, the trial judge found that he had little discretion or power; that he was nothing more than a salesman. While his volume of sales was substantial, it accounted for less than forty percent of the total sales and we were not referred to any evidence showing that Mr. Miskiewicz had any power or discretion different from the other salesmen. As the trial judge said:

The fact that the business decision to rely so heavily on Mr. Miskiewicz may have turned out to be a less than prudent one is not sufficient to brand Mr. Miskiewicz as a fiduciary when the other hallmarks of a fiduciary relationship, such as the power to make or influence management decisions or set corporate policy, are absent. To find otherwise would mean that every salesperson, regardless of his or her position or authority in the business, would have a fiduciary duty simply because of his or her success in sales. [Emphasis added.]

[6] Accordingly, the appeal is dismissed with costs fixed at $10,000 inclusive of G.S.T. and disbursements.

Signed: “M. Rosenberg J.A.”

“Robert P. Armstrong J.A.”

“R.G. Juriansz J.A.”