COURT OF APPEAL FOR ONTARIO

CITATION: Gill v. CPNI Inc., 2015 ONCA 833

DATE: 20151201

DOCKET: C59728

Hoy A.C.J.O., Blair and Hourigan JJ.A.

BETWEEN

Paramjit Gill, Mahamud Nadeem Khazi, and Ratan Chakraborty

Plaintiffs (Respondents)

and

CPNI Inc., Patrick Bird, Timothy Price, and Michael Foulkes

Defendants (Appellants)

Patrick Bird, acting in person for CPNI Inc.

Chris McClelland, for the respondents

Heard and released orally: November 20, 2015

On appeal from the decision of Justice D. G. Stinson of the Superior Court of Justice, dated November 10, 2014.

ENDORSEMENT

[1] The respondents were former employees of the appellant, CPNI Inc., who sued the appellant for unpaid wages and brought a motion for summary judgment.

[2] The appellant argued on the motion that it was authorized under s. 13 of the Employment Standards Act, 2000, S.O. 2000, c. 41, to deduct amounts from the respondents’ unpaid wages, because the respondents stole software and intellectual property when they failed to return a company computer.

[3] The appellant asserted that provisions in the respondent’s employment contracts requiring them to return company property on request constituted a written authorization by the respondents that permitted such deductions in accordance with s. 13(3) of the ESA.

[4] In addition, the appellant also commenced a counterclaim for the remainder of the damages it alleged that it suffered as result of the failure of the respondents to promptly return the company computer.

[5] The motion judge held that the appellant had not established a valid defence to the respondents’ claim and granted summary judgment against it. He found that, while it was common ground that the respondent Mahamud Khazi had the computer for a number of months, it was not entirely clear exactly when its return was demanded, what the consequences of its non-return were, and what losses, if any, were suffered by CPNI as a result. He also found that the evidence did not establish any involvement on the part of the respondents Paramjit Gill and Ratan Chakraborty in the alleged wrongful conversion of the computer by Mr. Khazi. Moreover, the motion judge was not persuaded that the employment contract between Mr. Khazi and CPNI contained an authorization of the sort contemplated by s. 13(3) of the ESA.

[6] The motion judge also refused to stay the enforcement of the respondents’ judgment while the appellant’s counterclaim for conversion in relation to the unreturned computer proceeded. He held that the claim and counterclaim were not closely connected factually, as the respondents’ claims were for wages and the counterclaim related to an alleged conversion of the corporate asset occurring after the termination of the employment relationship between the parties.

[7] The appellant submits that the motion judge erred in dismissing the ESA defence because the employment contracts establish that the employer had the right to avail itself of the deduction if an employee failed to return property when requested. The motion judge is also alleged to have erred in excluding Mr. Gill and Mr. Chakraborty from the s. 13 defence.

[8] We would not give effect to these arguments. Under s. 13 of the ESA, an employer is prohibited from making any deduction from an employee’s wages unless it is authorized to do so under that section. The motion judge was correct in concluding that there was nothing in respondents’ employment contracts that authorized deductions from the respondents’ wages pursuant to s. 13(3). The return of company property provision relied upon by the appellant does not make any reference to deduction from wages nor does any other provision in the contract. Accordingly, this defence did not raise a genuine issue requiring a trial.

[9] The appellant also submits that the motion judge made a number of errors in declining to order a stay pending a determination of the merits of its counterclaim. These include a failure to address the existence of language in the employment contracts concerning events subsequent to employment, failure to recognize the “binary effect” of these contracts, and a failure to explore the issue of valuation of the intellectual property.

[10] The issuance of a stay is a discretionary remedy. We are not persuaded that the motion judge erred in the exercise of his discretion and there is, therefore, no basis to interfere with his decision.

[11] The appeal is dismissed.

[12] The respondent will have costs of the appeal fixed in the amount of $6,927, inclusive of fees, disbursements, and HST.

“Alexandra Hoy A.C.J.O.”

“R. A. Blair J.A.”

“C. W. Hourigan J.A. ”