Colistro v. Tbaytel

[Indexed as: Colistro v. Tbaytel]

Ontario Reports

Court of Appeal for Ontario

Hoy A.C.J.O., Simmons and Pardu JJ.A.

March 13, 2019

145 O.R. (3d) 538 | 2019 ONCA 197

Case Summary

Employment — Wrongful dismissal — Constructive dismissal

Employer constructively dismissing long-time employee when it rehired executive who was dismissed 11 years earlier partly because he had sexually harassed that employee.

Employment — Wrongful dismissal — Damages

Employer constructively dismissing long-time employee when it rehired executive who was dismissed 11 years earlier partly because he had sexually harassed that employee — Trial judge not erring in awarding Honda damages on basis that defendant's conduct in course of dismissal was unduly insensitive.

Torts — Intentional infliction of mental suffering

Defendant rehiring executive who was dismissed 11 years earlier partly because he had sexually harassed plaintiff — Plaintiff rejecting defendant's offer to accommodate her by transferring her to equivalent position in another building — Plaintiff subsequently diagnosed with post-traumatic stress disorder and depression — Trial judge correctly dismissing plaintiff's claim for intentional infliction of mental suffering — Defendant not intending to cause plaintiff harm and plaintiff failing to establish that defendant knew that kind of harm suffered by plaintiff was substantially certain to follow from its rehiring of executive and offer of accommodation.

Facts

The plaintiff was a long-time, valued employee of the defendant. Her immediate supervisor, B, was dismissed in 1996 for sexually harassing the plaintiff and others. In 2007, the defendant rehired B, subject to a 12-month probationary term. The plaintiff strongly objected and informed the defendant that she was "not eating or sleeping, was vomiting and on the verge of a nervous breakdown". The defendant's chief executive officer decided to go forward with the hiring after the end of the probationary period and offered to accommodate the plaintiff by transferring her to an equivalent position in an adjacent building. The plaintiff rejected that offer and did not return to work. She was subsequently diagnosed with post-traumatic stress disorder and depression. She brought an action for damages for constructive dismissal and intentional infliction of mental suffering. The trial judge found that the plaintiff was constructively dismissed and awarded her damages equal to pay in lieu of 12 months' notice, less certain benefits that she had received over that period, and Honda damages in the amount of $100,000. He dismissed the claim of intentional infliction of mental suffering. The plaintiff appealed the dismissal of that claim, and the defendant cross-appealed the finding of constructive dismissal.

Held

The appeal and cross-appeal should be dismissed.

The three elements of the tort of intentional infliction of mental suffering are (1) flagrant or outrageous conduct; (2) calculated to produce harm; and (3) resulting in a visible and provable illness. The trial judge found that the first and third elements were satisfied, but found that the second element was not made out as the plaintiff had failed to establish that the defendant knew that the kind of harm that she suffered was substantially certain to follow from its rehiring of B. While the trial judge erred in law to the extent that he required the defendant to have known of the exact kind of harm that resulted, down to the particular psychiatric illness that was subsequently diagnosed, he did not err in dismissing the claim. It was not alleged that the defendant actually intended to cause the plaintiff harm. While its offer of accommodation was not acceptable to the plaintiff, it could have been acceptable to others. In light of that offer of accommodation, a finding that the defendant had subjective knowledge that serious psychological injury was substantially certain to follow from its rehiring decision and offer to accommodate was not reasonably available on the evidence.

The trial judge did not err in finding that the plaintiff was constructively dismissed. A single act by an employer can evince an intention not to be bound by the employment contract and can render an employee's continued employment intolerable. The trial judge's finding that the defendant's position on B's rehiring was demeaning and dismissive, revictimized the plaintiff and minimized the past conduct of B in the eyes of the plaintiff and other employees was well-founded.

The trial judge did not err in awarding Honda damages on the basis that the defendant's conduct in the course of the dismissal was unduly insensitive. The quantum of $100,000 was not dissimilar to amounts recently awarded to other employees mistreated in their manner of termination.

APPEAL AND CROSS-APPEAL

From the judgment of Fregeau J., [2017] O.J. No. 3114, 2017 ONSC 2731, 40 C.C.E.L. (4th) 51 (S.C.J.).

Counsel:

Michael Cupello and Luke Ruberto, for appellant.

Bradley A. Smith and Jonathon Clark, for respondents.

JUDGMENT

The judgment of the court was delivered by

I. Overview

[1] HOY A.C.J.O.: — This appeal considers the consequences that flow from a company's decision to place its business interests above the expectations and concerns of a valued, long-time employee by rehiring an executive dismissed in part due to allegations of harassment of that same employee and others a decade earlier. It raises two main questions: (1) whether this decision constituted intentional infliction of mental suffering on the appellant, Linda Colistro; and (2) whether it resulted in her constructive dismissal.

[2] The appellant worked for the respondent, Tbaytel and its predecessor, the Corporation of the City of Thunder Bay (the "City"), for nearly 20 years. On January 29, 2007, Tbaytel announced the hiring of Steve Benoit as vice-president of business consumer markets.

[3] The appellant was shocked and upset by the announcement. Some 11 years earlier, before Tbaytel had assumed management and provision of the City's telecommunications services, Mr. Benoit had been her immediate supervisor in the City's telephone department. At the time of the announcement, the appellant was the executive assistant of Ken Esau, executive vice-president of operations. After the announcement, she advised Mr. Esau that she was not feeling well and went home.

[4] That evening, the appellant and her husband met with Mr. Esau and Tbaytel's vice-president of human resources, Christine Seeley, and told them that the City had terminated Mr. Benoit's employment in early 1996 for sexually harassing the appellant and others.

[5] In a February 1, 2007 e-mail to Mr. Esau, the appellant advised that she was "not eating or sleeping, was vomiting and on the verge of a nervous breakdown". She saw her doctor, who provided a note advising that she would be off work due to stress until March 1, 2007.

[6] Tbaytel made inquiries. Mr. Benoit had not been interviewed by the City when it conducted its investigation into the allegations of sexual harassment and had not been terminated by the City for cause. Nonetheless, the complaints of sexual harassment were part of the reason for his termination.

[7] Tbaytel had hired Mr. Benoit effective February 19, 2007, subject to a 12-month probationary term. Tbaytel could have chosen not to proceed with hiring Mr. Benoit without consequences. Instead, by letter dated February 6, 2007, Peter Diedrich, Tbaytel's president and chief executive officer, advised the appellant that he had decided to go forward with hiring Mr. Benoit. He indicated that he took her "accusations of 11 odd years ago seriously and will discuss appropriate behaviour with Mr. Benoit". Tbaytel offered to accommodate the appellant by transferring her to an equivalent position in an adjacent building. But the appellant would accept nothing less than Tbaytel not proceeding with the hiring of Mr. Benoit.

[8] The appellant did not return to work. Ultimately, she was diagnosed with post-traumatic stress disorder ("PTSD") and depression. In June 2008, the appellant commenced this action against Tbaytel and the City, claiming damages for intentional infliction of mental suffering and wrongful dismissal. The City accepted that it was vicariously liable for any compensatory damages awarded against the respondent, Tbaytel, a Municipal Services Board created under s. 197(1) of the Municipal Act, 2001, S.O. 2001, c. 25.

[9] On June 16, 2017, the trial judge dismissed the appellant's claim for intentional infliction of mental suffering and assessed her damages in the event that he erred in doing so. However, the trial judge found that the appellant had been constructively dismissed on February 6, 2007. He ordered Tbaytel and the City to jointly and severally pay the appellant damages equal to pay in lieu of 12 months' notice, less the short-term salary continuance and long-term disability benefits she had received over that period, leaving a net award of $14,082, plus Honda damages in the amount of $100,000, and prejudgment interest.

[10] The trial judge held that Tbaytel and the City were the substantially successful parties to the litigation. By order dated January 26, 2018, he ordered the appellant to pay costs to Tbaytel in the amount of $150,000 and to the City in the amount of $50,000.

[11] The appellant appeals the trial judge's dismissal of her claim for intentional infliction of mental suffering and argues that he erred in his assessment of her damages flowing from the tort. She also seeks leave to appeal the trial judge's costs order.

[12] Tbaytel and the City cross-appeal, arguing that the trial judge erred in finding that Tbaytel had constructively dismissed the appellant and, in any event, erred in awarding Honda damages. In the cross-appeal, they also argue that the trial judge erred in finding that the first element of the tort of intentional infliction of mental suffering was made out.

[13] For the following reasons, I would dismiss the appellant's appeal of the dismissal of her claim for intentional infliction of mental suffering and Tbaytel and the City's cross-appeal from the trial judge's declaration that the appellant was constructively dismissed by Tbaytel on February 6, 2007. I would deny the appellant leave to appeal the costs award.

II. Intentional Infliction of Mental Suffering

The trial judge's reasons

[14] The trial judge correctly summarized the three elements of the tort of intentional infliction of mental suffering:

1. flagrant or outrageous conduct;
2. calculated to produce harm; and
3. resulting in a visible and provable illness.

[15] He noted, again correctly, that the first and third branches of the test are objective, and the second is subjective. Citing this court in Prinzo v. Baycrest Centre for Geriatric Care (2002), 60 O.R. (3d) 474, [2002] O.J. No. 2712 (C.A.), at para. 45, he wrote that the "calculated to produce harm" element is established "where the actor desires to produce the consequences that follow from the act, or if the consequences are known to be substantially certain to follow". He referred to Piresferreira v. Ayotte, [2010] O.J. No. 2224, 2010 ONCA 384, 319 D.L.R. (4th) 665, at paras. 78-79, leave to appeal to S.C.C. refused [2010] S.C.C.A. No. 283, and instructed himself that the second element is not satisfied by evidence of foreseeability or reckless disregard: "Foreseeability, which indicates only that a result may follow, is much less than knowledge that a result is substantially certain to follow." He also cited Piresferreira for the principle that while the extent of the harm suffered need not be anticipated, the kind of harm must have been intended or known to be substantially certain to follow.

[16] The trial judge found that the first element of the test was satisfied. In his view, Tbaytel's conduct in deciding to proceed with hiring Mr. Benoit was "objectively viewed and in all the circumstances, flagrant and outrageous conduct": para. 280. He found that, as a result of Tbaytel's investigations, it knew that Mr. Benoit had sexually harassed the appellant in 1995 and had been terminated in 1996 because of this behaviour.

[17] He wrote, at paras. 283 and 284:

Possessed with this knowledge, Tbaytel chose to finalize the hiring of Mr. Benoit, the person that [Peter] Diedrich, [Tbaytel's President and Chief Executive Officer,] wanted for the vacant position of VP Business Consumer Markets, while at the same time hoping to put [the appellant's] concerns to rest by shuffling her to another building. This decision minimized and invalidated the sexual harassment complaints of [the appellant], a 20-year valued and respected current employee of the company.

Tbaytel's conduct in this regard exceeds insensitivity or poor management[.]

[18] The trial judge also found that the third element of the test was met. He was satisfied that the hiring of Mr. Benoit resulted in the appellant suffering visible and provable illnesses: PTSD and depression. Tbaytel and the City do not challenge this finding.

[19] However, the trial judge concluded that the second element of the test had not been met. The appellant did not allege that Tbaytel intended to cause her harm. Therefore, the trial judge held [at para. 285] the appellant was required to prove that Tbaytel "knew that the kind of harm suffered by the [appellant] (PTSD [page544] and a major depressive disorder) was substantially certain to follow from their hiring of Mr. Benoit".

[20] The trial judge was not convinced that Tbaytel had the necessary subjective knowledge. He wrote, at para. 286:

Tbaytel knew the [appellant] was very upset. They were aware that the [appellant] was unable to work. They were aware of the [appellant's] statement that she was vomiting and on the verge of a nervous breakdown. I find that Tbaytel also had Dr. Rao's note as of February 6, 2007, which merely stated that the [appellant] would be off work due to stress. In my opinion, however, this evidence cannot bear the weight the [appellant] suggests that Tbaytel knew it was substantially certain that their conduct would precipitate the [appellant's] PTSD and depression.

Analysis

[21] The appellant argues that in concluding that the second element of the test was not met, the trial judge erred in law by imposing a requirement that Tbaytel had to know that the exact kind of harm that she suffered was substantially certain to follow, down to her specific diagnoses. Tbaytel and the City argue that the trial judge correctly interpreted and applied Piresferreira, which directs that the defendant must have subjective knowledge that the kind of harm that resulted was substantially certain to follow.

[22] In Boucher v. Wal-Mart Canada Corp. (2014), 120 O.R. (3d) 481, [2014] O.J. No. 2452, 2014 ONCA 419, at para. 44, Laskin J.A., citing Piresferreira, summarized the relevant principle:

The plaintiff cannot establish intentional infliction of mental suffering by showing only that the defendant ought to have known that harm would occur. The defendant must have intended to produce the kind of harm that occurred or have known that it was almost certain to occur.

[Citation omitted]

[23] In my view, Piresferreira does not require that the defendant must have intended to produce a particular, recognized psychiatric illness or have known that it was substantially certain to follow. The confusion arises from para. 79 of Piresferreira, where Juriansz J.A. commented that the evidence did not support the inference that the defendant intended or knew that it was substantially certain to follow that the plaintiff would suffer post-traumatic stress disorder or a major depressive disorder. However, subsequent passages in para. 79 indicate that Juriansz J.A. accepted that the requisite "kind of harm" in that case was the more general category of serious psychological injury. He wrote that, at most, the trial judge found that serious psychological injury was foreseeable and, "[f]oreseeability, which indicates only that a result may follow, is much less than knowledge that a result is substantially certain to follow". The second element of the test was not satisfied in Piresferreira because the trial judge had wrongly applied a test of reckless disregard or reasonable foreseeability, not because the harm that was foreseeable was not of the right kind.

[24] I agree with the appellant that the trial judge erred in law to the extent he required Tbaytel to have known of the exact kind of harm that resulted, down to the particular psychiatric illness that was subsequently diagnosed. In this case, medical evidence confirmed that the appellant was suffering from visible and provable illnesses that satisfied the third element of the tort. And in this case, as in Piresferreira, the kind of harm that occurred was serious psychological injury. A finding that Tbaytel knew its February 6, 2007 letter was substantially certain to cause the appellant serious psychological injury would have sufficed to satisfy the second element.

[25] However, I agree with the trial judge that the second element of the test was not made out.

[26] As the trial judge noted, the second element of the test is subjective. Further, as Juriansz J.A. stressed in Piresferreira, where, as in this case, a plaintiff relies on the "substantially certain to follow" branch of the second element of the test, more than evidence of foreseeability or reckless disregard is required: Piresferreira, at paras. 77-79; Boucher, at paras. 43-44. The bar is necessarily high where a defendant is to be liable for all of the consequences of an intentional wrongful act.

[27] The requirement that the defendant have intended to produce the harm that occurred, or known that the harm was substantially certain to follow as a result of his or her conduct, is an important limiting element of the tort and distinguishes it from actions in negligence. It is now well established that a plaintiff can recover in negligence for psychological injury. A plaintiff seeking recovery in negligence for mental injury must show that (1) the defendant owed a duty of care to the claimant to avoid the kind of loss alleged; (2) the defendant breached that duty by failing to observe the applicable standard of care; (3) the claimant sustained damage; and (4) such damage was caused, in fact and in law, by the defendant's breach: Saadati v. Moorhead, [2017] 1 S.C.R. 543, [2017] S.C.J. No. 28, 2017 SCC 28, at para. 13; Mustapha v. Culligan of Canada Ltd., [2008] 2 S.C.R. 114, [2008] S.C.J. No. 27, 2008 SCC 27, at paras. 8-9. Frequently, the issue will be whether it is reasonably foreseeable that a person of ordinary fortitude would suffer the mental injury incurred as a consequence of the defendant's allegedly negligent behaviour. However, in Piresferreira, this court held, at paras. 50-63, that an employee cannot pursue a claim for negligent infliction of mental suffering in the employment context.

[28] It was not alleged that Tbaytel actually intended to cause the appellant harm. Tbaytel sought to accommodate the appellant in its February 6, 2007 letter. It was open to accommodating the appellant ostensibly for the purpose of avoiding the imposition of mental suffering upon her. Individuals subjected to harassment of any kind respond in different ways. While Tbaytel's offer of accommodation was not acceptable to the appellant, it could have been acceptable to others. In light of that offer of accommodation, a finding that Tbaytel had subjective knowledge that serious psychological injury was substantially certain to follow from its February 6, 2007 decision and offer to accommodate was not reasonably available on the evidence. The evidence might support an inference that serious psychological injury was reasonably foreseeable, but that is not sufficient to ground an intentional tort. The evidence does not support the inference that Tbaytel subjectively knew that the serious psychological injury which ensued was substantially certain to occur.

[29] Because I agree with the trial judge that the second element of the test was not made out, it is unnecessary to address Tbaytel's arguments that the trial judge erred in finding that its conduct was "flagrant and outrageous". Nor is it necessary to address the appellant's argument that the trial judge erred in his calculation of damages for intentional infliction of mental suffering. Accordingly, I turn to Tbaytel's cross-appeal from the trial judge's declaration that the appellant was constructively dismissed by Tbaytel on February 6, 2007.

III. Constructive Dismissal

The trial judge's reasons

[30] The trial judge found, at para. 310, that "Tbaytel's actions between January 29, 2007 and February 6, 2007 and their treatment of [the appellant] made her continued employment with Tbaytel intolerable such that she was constructively dismissed on February 6, 2007".

[31] He explained, at paras. 315 and 316:

It was impossible for Tbaytel to employ the [appellant] and Mr. Benoit without the two of them potentially coming into contact with one another. [The appellant] found this unacceptable. It was not just that she was unable to tolerate even incidental contact with Mr. Benoit. Tbaytel had been her employer for approximately 20 years. Their position on this issue re-victimized the [appellant] and minimized the past conduct of Mr. Benoit in the eyes of the [appellant] and other Tbaytel employees.

In my opinion, Tbaytel's position, as enunciated in Mr. Diedrich's February 6, 2007 letter to the [appellant], was demeaning and dismissive: "I have come to the decision that there is no legal or other reason not to go forward with hiring Mr. Benoit . . . You may find that you are unable to accept my decision and, in that case, you will have to proceed as you see fit." The issues raised by [the appellant] were not "accusations," as suggested by Mr. Diedrich. Tbaytel chose to proceed with the hiring of an individual whom they knew had previously sexually assaulted one of their apparently valuable employees, who had an unblemished 20 year history with the company and who was objecting "vehemently" to her abuser being hired. I find this to have been a blatant disregard for the interests of [the appellant].

[32] He also noted, at para. 313, that Tbaytel was aware "that the hiring of Mr. Benoit prompted a very significant negative reaction from the [appellant]". The trial judge concluded, at para. 317, that "an objective reasonable bystander, aware of all the facts, would find that [the appellant's] continued employment with Tbaytel in these circumstances was intolerable".

[33] As noted above, he ordered Tbaytel and the City to jointly and severally pay the appellant damages for wrongful dismissal equal to pay in lieu of 12 months' notice, less the short-term salary continuance and long-term disability benefits she had received over that period, leaving a net award of $14,082.

[34] Further, the trial judge concluded that the appellant was entitled to Honda damages in the amount of $100,000 due to the manner of her dismissal. At para. 325, he explained why:

In the tort claim, I found that Tbaytel's conduct toward [the appellant] was flagrant and outrageous. I also find that Tbaytel's treatment of [the appellant] was grossly unfair, unduly insensitive and in blatant disregard of her interests. The Court has the benefit of extensive expert medical evidence which establishes that [the appellant] has suffered actual damages as a direct result of the way in which she was treated by Tbaytel at the time of her dismissal.

Tbaytel's position on the issue of constructive dismissal

[35] Tbaytel advances three main arguments:

(1) Although Tbaytel acknowledges that a court may find that an employee has been constructively dismissed if the employer's treatment of the employee made continued employment intolerable, it argues that constructive dismissal on this basis cannot be founded on a single act by the employer. While the trial judge referred [at para. 310] to "Tbaytel's actions between January 29, 2007 and February 6, 2007", Tbaytel submits that the trial judge's finding effectively rests on a single act: Tbaytel's communication to the appellant on February 6, 2007 of its decision to proceed with the hiring of Mr. Benoit. In Tbaytel's view, the persistent or repeated conduct required to found constructive dismissal was not present.

(2) It argues that the trial judge erred by concluding that the appellant's employment was intolerable based on the subjective feelings of the appellant, rather than on an objective standard, as the law requires.

(3) It argues that the trial judge erred in awarding Honda damages.

Analysis

[36] I am not persuaded that there is a basis for this court to interfere with the trial judge's finding that the appellant was constructively dismissed or his award of Honda damages. Below, I address the appellant's arguments, in turn.

(1) A single incident can ground a finding that continued employment was intolerable

[37] In addressing Tbaytel's first argument, it is helpful to begin by briefly reviewing the Supreme Court's summary of the guiding principles in Potter v. New Brunswick Legal Aid Services Commission, [2015] 1 S.C.R. 500, [2015] S.C.J. No. 10, 2015 SCC 10.

[38] Constructive dismissal arises when an employer's conduct evinces an intention to no longer be bound by the employment contract. The courts have taken a flexible approach in determining whether an employer's conduct evinced an intention to no longer be bound by the contract: Potter, at para. 32.

[39] Two approaches have emerged. In the first, the court identifies an express or implied term that has been breached and then determines whether the breach was sufficiently serious to constitute constructive dismissal: Potter, at para. 32. In the second, the court considers whether the employer's conduct more generally shows that the employer intended not to be bound by the contract. The second approach permits the court to find that an employee has been constructively dismissed without identifying a specific fundamental term of the employment contract that has been breached where the employer's treatment of the employee makes continued employment intolerable: Potter, at para. 33.

[40] In this case, the trial judge employed the second approach described in Potter. The second approach "requires consideration of the cumulative effect of past acts by the employer and the determination of whether those acts evinced an intention no longer to be bound by the contract": Potter, at para. 33.

[41] Tbaytel grounds its argument that a single act by Tbaytel cannot constitute constructive dismissal under the second approach on this reference in Potter to the "cumulative effect of past acts". It argues that "cumulative" and "acts" make clear that more than a single act is required.

[42] I reject Tbaytel's argument that a single act by an employer cannot evince an intention not to be bound by the contract. As Wagner J. (as he then was) noted, at para. 32 of Potter, courts have properly taken a flexible approach in determining whether the employer's conduct evinced an intention to no longer be bound by the contract. The rigid approach argued for by Tbaytel is contrary to Potter. In my view, a stand-alone incident can render an employee's continued employment intolerable. Whether it does so will depend on all the circumstances.

[43] This court recognized, albeit in obiter and before Potter, that a single egregious act could make continued employment intolerable in General Motors of Canada Ltd. v. Johnson (2013), 116 O.R. (3d) 457, [2013] O.J. No. 3467, 2013 ONCA 502, at para. 67.

[44] In General Motors, an employee's constructive dismissal claim, based on racism in the workplace, was founded on a single incident. On appeal, Cronk J.A., writing for the court, held that the trial judge's conclusion that that there was racism in the workplace was unreasonable and not supported by the evidence and, accordingly, the trial judge's holding of constructive dismissal could not stand. The racism complaint arose from a single employee's refusal to attend a single training session conducted by the plaintiff. On the evidentiary record, it was unreasonable for the trial judge to have held that the employee's absence was solely racially motivated.

[45] Cronk J.A. went on to comment, in obiter, that even if the employee's absence were racially motivated, it would not have supported a finding that the workplace was poisoned by racism, warranting a finding of constructive dismissal. The incident in question was but one incident over an eight-year working relationship. In this context, Cronk J.A. cautioned, at para. 67, that "except for particularly egregious, stand-alone incidents, a poisoned workplace is not created, as a matter of law, unless serious wrongful behaviour sufficient to create a hostile or intolerable work environment is persistent or repeated".

[46] The facts in this case are very different from those in General Motors. Here, the trial judge's holding of constructive dismissal is rooted in a series of key factual findings that were made following a 13-day trial:

• Mr. Benoit had sexually harassed the appellant in 1995, when both were employed by the City telephone department, and Mr. Benoit was the appellant's immediate supervisor;

• by February 6, 2007, Tbaytel knew that Mr. Benoit had been the subject of sexual harassment complaints in 1995, that the appellant was one of several complainants, and that her complaint was one of the reasons for Mr. Benoit's 1996 termination, but proceeded to hire him;

• the appellant was a valued employee with an unblemished 20-year history with the company; and

• Tbaytel knew that the appellant was shocked and very upset by its hiring of Mr. Benoit and "vehemently" opposed to his continued employment.

[47] These findings were amply supported by the evidence and are not challenged on appeal.

[48] The trial judge evaluated Tbaytel's February 6, 2007 letter communicating to the appellant its decision to proceed with the hiring of Mr. Benoit in light of Tbaytel's knowledge of the sexual harassment the appellant and others had experienced in 1995. As the trial judge highlighted, Tbaytel referred to the sexual harassment that led to Mr. Benoit's dismissal as the appellant's "accusations of 11 odd years ago". Mr. Diedrich concluded that "there is no legal or other reason to not go forward with hiring Mr. Benoit" (emphasis added). However, it is clear that Tbaytel knew the appellant's harassment complaint was more than an allegation. The trial judge's finding [at para. 315] that Tbaytel's position, as reflected in this letter, was demeaning, dismissive and "re-victimized the plaintiff and minimized the past conduct of Mr. Benoit in the eyes of the plaintiff and other Tbaytel employees" was well-founded.

[49] Although Tbaytel frames its February 6, 2007 letter as a single act, as found by the trial judge, the letter took its significance from the sexual harassment and ensuing investigation that led to Mr. Benoit's termination in 1996. Whether the letter communicating Tbaytel's decision to re-instate Mr. Benoit despite his past conduct is viewed as a particularly egregious, stand-alone incident or the last in a series of past acts with cumulative effect is of no consequence. I am not convinced that the trial judge committed a palpable and overriding error in concluding that a reasonable person would see the appellant's continued employment as intolerable under such circumstances and I defer to his finding.

[50] Further, I would add this. While the trial judge employed the second approach to constructive dismissal described in Potter, there is overlap between the two approaches Potter describes. Some courts have found constructive dismissal based on the breach of an implied term or duty that the employer will treat the employee with civility, decency, respect and dignity (Piresferreira; Sweeting v. Mok, [2015] O.J. No. 5646, 2015 ONSC 4154, 27 C.C.E.L. (4th) 161 (S.C.J.), affd [2017] O.J. No. 1185, 2017 ONCA 203, 37 C.C.E.L. (4th) 1) or that the work atmosphere be conducive to the well-being of its employees (Stamos v. Annuity Research & Marketing Service Ltd., [2002] O.J. No. 1865, 18 C.C.E.L. (3d) 117 (S.C.J.)). The trial judge could have approached his task by considering whether there was a similar implied term in the appellant's contract and a sufficiently serious breach to constitute constructive dismissal. Tbaytel does not suggest that under the first approach described in Potter a single, serious breach of an implied term cannot give rise to constructive dismissal.

[51] I turn now to the appellant's argument that the trial judge's conclusion was improperly based on the subjective feelings of the appellant.

(2) The trial judge's conclusion was not based on the subjective feelings of the appellant

[52] As Tbaytel submits, whether an employer's treatment of an employee made continued employment intolerable is assessed objectively: General Motors, at para. 66; Potter, at para. 42. Where a constructive dismissal claim is based on the employer's work environment or treatment of the employee, the trial judge must ask whether a reasonable person, putting herself in the position of the claimant, would consider the employer to have evinced an intention to no longer be bound by the contract by making the employee's continued employment intolerable: Potter, at paras. 42 and 47; General Motors, at paras. 69 and 91; Shah v. Xerox Canada Ltd., [2000] O.J. No. 849, 49 C.C.E.L. (2d) 166 (C.A.), at paras. 6-9.

[53] Tbaytel argues that the trial judge's references to the appellant's reaction to the hiring (at paras. 313 and 316) and to Tbaytel's position having re-victimized the appellant and minimized the conduct of Mr. Benoit in the eyes of the appellant (at para. 315) demonstrate that he improperly based his conclusion on the subjective feelings of the appellant.

[54] I reject this argument.

[55] It is clear that the trial judge directed his mind to the correct legal standard. He adverted to the governing legal principles and the objective nature of the test before conducting his analysis: see paras. 241-246. He then applied those principles to the facts. As indicated above, at para. 317, the trial judge specifically concluded that "an objective reasonable bystander, aware of all the facts, would find that [the appellant's] continued employment with Tbaytel in these circumstances was intolerable" (emphasis added). The trial judge's references to the reactions of the appellant and other Tbaytel employees formed an important part of the narrative and the context in which Tbaytel's actions were objectively assessed.

(3) The trial judge did not err in awarding Honda damages

[56] The respondents did not pursue this ground in their oral submissions. Nonetheless, I will briefly address it.

[57] Tbaytel acknowledges that the trial judge properly directed his mind to Honda Canada Inc. v. Keays (2008), 92 O.R. (3d) 479, [2008] 2 S.C.R. 362, [2008] S.C.J. No. 40, 2008 SCC 39. In that case, the Supreme Court reaffirmed that damages in addition to compensatory damages for wrongful dismissal can be awarded only if the employer engages in conduct during the course of dismissal that is "unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive": at paras. 57 and 59.

[58] Tbaytel essentially makes two arguments in its factum. First, it argues that the trial judge's findings about Tbaytel's conduct that underpinned his award of Honda damages amounted to palpable and overriding error. It takes particular exception to the finding that its conduct was "flagrant and outrageous", and satisfied the first element of the tort of intentional infliction of mental suffering. Second, it argues that the trial judge did not provide any reasons for awarding the sum of $100,000, as opposed to some other amount.

[59] It was not necessary to address Tbaytel's argument that the trial judge erred in finding that its conduct satisfied the first element of the tort of intentional infliction of mental suffering in order to dispose of the appellant's appeal of the trial judge's dismissal of its tort claim. Nor is it necessary to address it here. Whether or not Tbaytel's conduct was "flagrant and outrageous" for the purposes of the tort analysis, the factual findings underpinning the trial judge's conclusion that the appellant was constructively dismissed adequately support his finding that Tbaytel's conduct in the course of dismissal was unduly insensitive.

[60] Assessing Honda damages is an imprecise and fact-specific exercise: Rougemount Capital Inc. v. Computer Associates International Inc., [2016] O.J. No. 5786, 2016 ONCA 847, 410 D.L.R. (4th) 509, at para. 42; Doyle v. Zochem Inc., [2017] O.J. No. 748, 2017 ONCA 130, 2017 CLLC para. 210-030, at para. 14. From the trial judge's reasons as a whole, it is apparent that in his view the appellant's conduct warranted an award of damages in the amount of $100,000.

[61] While the quantum of damages awarded is necessarily fact-specific, this quantum is not dissimilar to amounts recently awarded to other employees mistreated in their manner of termination: Galea v. Wal-Mart Canada Corp., [2017] O.J. No. 6444, 2017 ONSC 245, 44 C.C.E.L. (4th) 251 (S.C.J.); Johnston v. Arran-Elderslie (Municipality), [2018] O.J. No. 6702, 2018 ONSC 7616 (S.C.J.); Strudwick v. Applied Consumer & Clinical Evaluations Inc., [2016] O.J. No. 3556, 2016 ONCA 520, 34 C.C.E.L. (4th) 235; some of which have been affirmed by this court: Boucher; Doyle.

IV. The Trial Judge's Costs Order

[62] The trial judge held that, given the damages sought at trial by the appellant and the result achieved after trial, it was obvious that Tbaytel and the City were the substantially successful parties to the litigation, and were therefore entitled to an award of costs. While the appellant's judgment was less favourable on its face than the financial terms of Tbaytel and the City's 2015 and 2016 offers to settle, the trial judge chose not to invoke the cost consequences of rule 49.10(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Instead, he chose "to fix costs in an amount which partially indemnified the defendants and which [he found] to be fair and reasonable taking into account all parties' Bills of Costs, the terms of the 2015 and 2016 offers" and other relevant factors: costs endorsement, para. 36.

[63] By order dated January 26, 2018, the trial judge ordered the appellant to pay costs to Tbaytel in the amount of $150,000 and to the City in the amount of $50,000.

[64] The appellant argues that the trial judge erred in the exercise of his discretion by not:

• considering that vindication was important to her, and that a settlement without admission of liability would not have vindicated her;

• comparing the tax consequences of Tbaytel and the City's settlement offers to the tax consequences of the judgment she received after trial; and

• considering her partial indemnity costs to the date of Tbaytel and the City's settlement offers.

[65] The test for leave to appeal an order as to costs is stringent. Leave to appeal will not be granted save in obvious cases where the party seeking leave convinces the court there are strong grounds upon which the court could find that the judge erred in exercising his discretion: Carroll (Litigation guardian of) v. McEwen (2018), 2018 ONCA 902, 143 O.R. (3d) 641, [2018] O.J. No. 6344, 34 M.V.R. (7th) 1, at paras. 58-59, application for leave to appeal to S.C.C. pending, 38514 (February 4, 2019).

[66] I am not persuaded that the appellant has met this stringent test and would deny leave to appeal the costs order.

[67] The appellant's submissions suggest that the trial judge determined that she was entitled to her costs, subject to the application of rule 49.10(2). But he did not. He proceeded on the basis that Tbaytel and the City were the substantially successful parties and entitled to costs. Further, the record on appeal does not contain the settlement offers. The trial judge's endorsement on costs suggests that Tbaytel's second settlement offer did not include a "no admission of liability" clause. Finally, the trial judge acknowledged that the appellant argued that some of the amount of the settlement would have been taxable, but it is not clear that she quantified or substantiated that assertion and she does not do so before us.

V. Disposition

[68] For these reasons, I would dismiss the appellant's appeal of the dismissal of her claim for intentional infliction of mental suffering, and Tbaytel and the City's cross-appeal from the trial judge's declaration that the appellant was constructively dismissed by Tbaytel on February 6, 2007. I would deny the appellant leave to appeal the costs award. In light of the parties' mixed success, I would award no costs of the appeal or the cross-appeal.

Appeal and cross-appeal dismissed.

Notes

1 The appellant conceded at trial that the long-term disability benefits were deductible from her damages, Colistro v. Tbaytel, [2017] O.J. No. 3114, 2017 ONSC 2731, 40 C.C.E.L. (4th) 51 (S.C.J.), at para. 299.

End of Document