McGuinty v. 1845035 Ontario Inc. o/a McGuinty Funeral Home

[Indexed as: McGuinty v. 1845035 Ontario Inc.]

Ontario Reports

Court of Appeal for Ontario

Strathy C.J.O., Brown and Huscroft JJ.A.

December 17, 2020

154 O.R. (3d) 451 | 2020 ONCA 816

Case Summary

Employment — Wrongful dismissal — Constructive dismissal — Damages — Plaintiff selling funeral home business to defendant and being retained as manager under ten-year contract — Lack of trust developing between plaintiff and employer, resulting in plaintiff taking medical leave — Plaintiff not returning to work and issuing statement of claim after almost two years — Trial judge finding that course of conduct led to conclusion that employer no longer intended to be bound by contract and that plaintiff was constructively dismissed — Trial judge did not misapprehend evidence and did not err in finding that plaintiff did not condone employer's conduct — Calculation of damages was reasonable — Employer's appeal dismissed.

The plaintiff sold his funeral home business to the defendant. Under a transitional consulting services agreement (TCSA), the plaintiff would continue to work as general manager of the funeral home for ten years. The TCSA included no provisions for early termination but did include a non-competition clause that ran for ten years. A lack of trust soon developed between the plaintiff and one of the defendant's principals, G, who arranged for an employee to track the amount of [page452] time that the plaintiff spent in the office and who informed the plaintiff that he was no longer permitted to use the company vehicle for personal use. Shortly thereafter, the plaintiff removed from the business premises some furniture he had stored there. G, believing that the plaintiff while on the premises had discarded some files without authorization, had the locks to the funeral home changed without notice to the plaintiff. The plaintiff then sent a note to the defendant's principals stating that he was on medical leave and was not stepping down from his position as general manager. He subsequently discovered that his desk had been moved to the kitchen in the basement of the funeral home and that his picture had been removed from the wall near the front desk. In October 2013, he sent an e-mail to G raising issues such as unpaid commissions, unauthorized deductions from his paycheque, and payment for pre-arranged funeral packages. The plaintiff never returned to work. In September 2015, he commenced an action for wrongful dismissal. The trial judge concluded that the plaintiff did not treat removal of the vehicle as a repudiation of the contract and as a result was not constructively dismissed on that account. However, the judge found that the removal of the vehicle, the tracking of the plaintiff's time at work, unpaid commissions, removal of the plaintiff's photograph and changing the locks was a course of conduct that would have led a reasonable person in the plaintiff's position to conclude that the defendant no longer intended to be bound by the terms of the TCSA. The judge found that the plaintiff accepted that repudiation and as such was constructively dismissed. The plaintiff was awarded $900,000 in salary, $108,000 for vehicle expenses, $90,000 in benefits, $9,000 for a golf membership, and $167,173.83 in commissions. The defendant appealed.

Held, the appeal should be dismissed.

The plaintiff did not condone the defendant's actions. The plaintiff's note and his e-mail indicated that he was attempting to resolve his various concerns with the defendant, which he was entitled to do. By any standard, the time taken by the plaintiff to elect to either continue to work or to treat the contract as breached was lengthy. However, the trial judge found that the plaintiff did not and could not return to work due to depression and anxiety caused by the defendant. That was the trial judge's decision to make and the defendant established no basis to interfere with it. The trial judge's finding that the plaintiff condoned the defendant's decision to take back the company vehicle did not compel the conclusion that the plaintiff condoned the defendant's course of conduct considered as a whole.

The trial judge did not misapprehend the evidence. The defendant submitted that the judge ignored the evidence of three current or past employees who testified that the events alleged by the plaintiff as part of the narrative about the toxicity of the workplace did not occur. That evidence was peripheral and did not need to be addressed, as the trial judge found that G's conduct toward the plaintiff was not oppressive, humiliating or improper. The trial judge's failure to resolve conflicting evidence regarding a phone call and meeting alleged by G to have occurred in December 2013 ultimately did not undermine the finding of absence of condonation, which was well supported by the record. A mere expression by the plaintiff of a desire to return to work relatively early in the course of the dispute did not constitute condonation.

There was no error in calculating damages. The plaintiff had estimated the annual value of the company vehicle at $12,000 to $15,000. That was information within his knowledge and his evidence was not challenged by the defendant. The trial judge's decision to use the low end of the plaintiff's range and award $12,000 per year for the nine years remaining on the fixed-term contract was reasonable. Although the judge's award of damages for commissions was based on an estimation, that estimation was necessary because of the nature of pre-paid funerals. The judge calculated the plaintiff's average monthly commission during an 11-month [page453] period for which payroll records were available and multiplied that amount by the remaining 108 months of the contract. That was a reasonable approach. It was also reasonable for the judge to approximate the value of the plaintiff's benefits at ten per cent, rather than requiring the plaintiff to prove the amount.

Potter v. New Brunswick (Legal Aid Services Commission), [2015] 1 S.C.R. 500, [2015] S.C.J. No. 10, 2015 SCC 10, 381 D.L.R. (4th) 1, 468 N.R. 227, 2015EXP-830, 2015EXPT-425, J.E. 2015-438, D.T.E. 2015T-173, EYB 2015-248943, 21 C.C.E.L. (4th) 1, 33 B.L.R. (5th) 1, 432 N.B.R. (2d) 1, 18 C.C.P.B. (2d) 1, [2015] CLLC para. 210, apld

Chapman v. GPM Investment Management, [2017] O.J. No. 1503, 2017 ONCA 227, 2017 CLLC para. 210, leave to appeal to S.C.C. refused [2017] S.C.C.A. No. 195, distd

Other cases referred to

Belton v. Liberty Insurance Co. of Canada (2004), 2004 6668 (ON CA), 72 O.R. (3d) 81, [2004] O.J. No. 3358, 189 O.A.C. 173, 34 C.C.E.L. (3d) 203, [2004] CLLC para. 210, 2004 6668, [2004] I.L.R. para. I-4327 (C.A.); Cormier v. 1772887 Ontario Ltd. (c.o.b. St. Joseph Communications), [2019] O.J. No. 6189, 2019 ONCA 965, 2020 C.L.L.C. 210-01, 312 A.C.W.S. (3d) 725, 58 C.C.E.L. (4th) 177, 2020 CLLC para. 210-018, 2019, CarswellOnt 19955; Howard v. Benson Group Inc. (2016), 129 O.R. (3d) 677, [2016] O.J. No. 1814, 2016 ONCA 256, 348 O.A.C. 381, 31 C.C.E.L. (4th) 18, 397 D.L.R. (4th) 485, leave to appeal to S.C.C. refused [2016] S.C.C.A. No. 240; R. v. Lohrer, [2004] 3 S.C.R. 732, [2004] S.C.J. No. 76, 2004 SCC 80, 249 D.L.R. (4th) 1, 329 N.R. 1, J.E. 2005-163, 208 B.C.A.C. 1, 193 C.C.C. (3d) 1, 24 C.R. (6th) 225, 63 W.C.B. (2d) 216; Ruston v. Keddco Mfg. (2011) Ltd., [2018] O.J. No. 2636, 2018 ONSC 2919, 2018 CLLC para. 210, 49 C.C.E.L. (4th) 113 (S.C.J.), affd [2019] O.J. No. 825, 2019 ONCA 125, 52 C.C.E.L. (4th) 1, 2019 CLLC para. 210

APPEAL from judgment of Gordon J. finding constructive dismissal, reported at [2019] O.J. No. 3627, 2019 ONSC 4108, 2019 CLLC para. 210 (S.C.J.).

Eric O. Gionet and Sabrina A. Lucenti, for appellant.

Sara Yousefi, for respondent.

The judgment of the court was delivered by

HUSCROFT J.A.: —

[1] This is an appeal from the judgment of the trial judge finding that the respondent was constructively dismissed and awarding him $1,274,173.83 in damages, a figure that reflects the nine-year term remaining on the respondent's fixed-term contract, along with commissions, benefits, and expenses.

[2] The appellant's principal argument is that the trial judge erred in finding that the respondent did not condone the course of conduct that he found met the test for establishing constructive [page454] dismissal. The appellant says that the respondent did not treat the appellant's actions, either individually or collectively, as a repudiation of the employment agreement. In addition, the appellant argues that the trial judge erred in calculating the respondent's damages.

[3] I conclude the trial judge did not err in finding that the respondent was constructively dismissed, despite the lengthy passage of time that he took to accept the appellant's repudiation and sue. It was open to the trial judge to find that the respondent did not condone the appellant's conduct, not least because the respondent was incapable of working as a result of the depression and anxiety he suffered because of that conduct. The trial judge did not misapprehend the evidence, nor did he make any error in calculating the damages.

[4] I would dismiss the appeal for the reasons that follow.

Background

[5] The respondent was the third-generation owner of the McGuinty Funeral Home in North Bay, a family business that was started by his grandfather. He had taken over the business from his father in 1990 and operated it with his brother. By 2012, his brother was no longer able to continue to work in the business and the respondent decided to sell the business to the appellant company, controlled by Gary and Steven Eide. The respondent was then 55 years of age. The funeral home business was the only career he had known.

[6] It was a term of the agreement that the respondent would enter into a Transitional Consulting Services Agreement ("TCSA"), pursuant to which he would continue to work as General Manager of the funeral home for a ten-year period. The agreement included a vehicle and fuel allowance and set out a commission payment system for prepaid funerals and prearranged funeral packages. Despite its lengthy term, the TCSA did not include any provisions dealing with early termination. The agreement did, however, include a non-competition clause that ran for a ten-year period following termination of the respondent's employment.

[7] The trial judge found that a lack of trust soon developed between the respondent and Gary Eide. For example, Gary arranged for an employee to track the amount of time the respondent spent at the office and required the respondent to complete time sheets. On August 30, 2013, Gary Eide sent a note to the respondent informing him that he was no longer permitted to use the company vehicle for his personal use. That same day, the respondent sent a letter of objection, stating the vehicle was part of the TCSA and he expected that he should continue to be able to use it. [page455]

[8] The respondent entered the funeral home during the Labour Day weekend and removed some furniture he had stored there. Gary Eide believed that during the course of this visit the respondent threw away funeral home files without authorization. He changed the locks to the funeral home shortly thereafter, without notice to the respondent.

[9] On September 4, 2013, the respondent commenced a two-week medical leave as set out in a note from his doctor. The respondent testified that he attempted to drop off the note at the funeral home but on his arrival found that he could not unlock the doors. A text exchange with Gary Eide followed in which Eide instructed the respondent to drop the note off the next day during regular work hours, in order that he could send it to his lawyer. On September 6, 2013, the respondent sent a handwritten note to Gary and Steve Eide in which he stated: "I wish to make clear I am on medical leave and am not stepping down from my position as general manager at McGuinty Funeral Home."

[10] On September 16, 2013, the respondent was reassessed by his doctor, who provided a second note stating that he was "Off work for medical reasons while work issues are resolved." No further medical information was provided by the respondent. The respondent testified that he spoke by telephone with Gary Eide on October 4, 2013 and that Gary indicated he wanted the respondent back at work. The respondent says he met with Gary at the funeral home at his invitation and concluded that he was no longer welcome. Gary Eide denied that this meeting took place.

[11] On October 14, 2013, the respondent went to the funeral home to attend the funeral of his cousin. He testified that his desk had been moved to the kitchen in the basement of the funeral home and that his picture, which had hung on the wall by the front desk of the funeral home along with pictures of his brother, father, and grandfather, had been removed.

[12] The respondent sent an e-mail to Gary Eide on October 28, 2013 in which he raised "Just a few matters to clear up so we can move forward." In particular, he raised commissions he said were owing to him, deductions from his paycheque that he considered in breach of contract, and payment for pre-arranged funeral packages. He also sought records for all prearranged funerals since October 31, 2012, so that he could confirm the accuracy of payment he was owed. The e-mail stated:

I will drop by the funeral home to give you an update on my medical status and continued absence from work-related stress.

Feel free to call me in the meantime to discuss an amicable solution to all issues so that we can both move forward. I mentioned this to Steve last week but have not heard back. [page456]

[13] The respondent applied to his insurer for long-term disability benefits but his application was denied and, on April 7, 2014, his internal appeal from that decision was dismissed. Gary Eide wrote to the respondent on April 24, 2014 indicating that the respondent was on "an unsupported absence from work" and asked him to call to discuss his "ongoing employment options" by May 1, 2014. Eide said that if the respondent did not return to active employment, in accordance with the contract, benefit coverage would cease.

[14] The respondent never returned to work. There were no further communications between the parties until the respondent's statement of claim was issued on September 2, 2015.

The trial judge's decision

[15] The trial judge found that Gary Eide's decision to require the respondent to return the company vehicle would have led a reasonable person in the respondent's position to conclude that the employer intended to no longer be bound by the TCSA. However, he concluded that the respondent did not treat removal of the vehicle as a repudiation of the contract and as a result was not constructively dismissed on this account.

[16] The trial judge noted that although the respondent had objected to the loss of the company vehicle, in his September 6, 2013 letter to Gary Eide the respondent stated that he was on medical leave and was "not stepping down" from his position as General Manager. He also noted that although the respondent's October 28, 2013 e-mail to Gary Eide raised some matters in dispute, including commissions and expenses, it did not mention the vehicle. The trial judge stated that the respondent's express indication that he was not stepping down from his employment and his two-year delay in proceeding with his claim "speak to his not having treated the Defendant's removal of the vehicle as a repudiation of the employment contract" [para. 74].

[17] However, the trial judge went on to apply the second branch of the test set out by the Supreme Court in Potter v. New Brunswick (Legal Aid Services Commission), [2015] 1 S.C.R. 500, [2015] S.C.J. No. 10, 2015 SCC 10, and found the appellant's course of conduct would have led a reasonable person in the respondent's position to conclude that the appellant no longer intended to be bound by the terms of the TCSA. Specifically, the trial judge found the appellant:

(i) Improperly terminated the respondent's use of his company vehicle; [page457]

(ii) recruited a subordinate employee to track the respondent's time at work, without notifying him;

(iii) failed to pay the respondent commissions to which he was entitled;

(iv) removed the respondent's photograph from the funeral home; and,

(v) changed the locks to the funeral home without notice or explanation.

[18] The trial judge then considered whether the appellant's conduct was the cause of the respondent's refusal to return to work. He rejected the appellant's argument that the respondent no longer wanted to continue to work because he regretted having sold the family business, finding that the respondent's regret arose not simply from having sold the business but from having sold the business and the situation turning out as it had.

[19] The trial judge rejected the appellant's argument that the extended period of time during which the respondent was on sick leave without notice should be understood as condoning the appellant's conduct. The trial judge stated [at paras. 121-22]:

I do not agree. What is required for condonation or acquiescence is acceptance of the new situation, which may be inferred by the employee's willingness to remain in the altered position for a significant time period, absent other mitigating factors.

In the case before me, it cannot be said that [the respondent] willingly remained in his position subject to the conduct of [the appellant] for the intervening period. The evidence is clear that he did not and could not return to work during that period of time due to depression and anxiety cause by that very conduct.

[20] The trial judge concluded that the appellant had engaged in a course of conduct that would lead a reasonable person in the respondent's position to conclude that the appellant no longer considered itself bound by the terms of the TCSA, and that the respondent accepted this repudiation and was constructively dismissed. He awarded the respondent $900,000 in salary, $108,000 for vehicle expenses, $90,000 in benefits, $9,000 for a golf membership, and $167,173.83 in commissions.

Discussion

[21] The case law governing constructive dismissal is not in dispute. It was set out by the Supreme Court in Potter, at paras. 37-43. In short, constructive dismissal can be established by either (i) the employer's breach of an essential term of the employment contract, or (ii) a course of conduct by the employer that [page458] establishes that it no longer intends to be bound by the employment contract.

[22] The trial judge's review of the evidence was careful and balanced. He found that Gary Eide had not acted in an oppressive, humiliating, or improper manner, and that neither Eide nor the respondent was blameless for the falling out that had occurred. Nevertheless, he found that the appellant's conduct would lead a reasonable person in the respondent's position to conclude that the appellant no longer intended to be bound by the terms of the TCSA. This was a reasonable finding that was open on the record before him and supports his conclusion that the respondent had an election to condone the breaches or claim wrongful dismissal.

[23] The thrust of the appellant's argument is that the respondent condoned its conduct and as a result was not entitled to claim constructive dismissal. I will address the issues in the order raised by the appellant.

The respondent did not condone the appellant's actions

[24] It is well established that an employer's conduct that would otherwise support a finding of constructive dismissal under the first or second branch of the Potter test may be condoned by the employee, such that the employee cannot claim to have been constructively dismissed. The employee has an election to make -- whether to continue to work, and so accept the single breach/course of conduct, or to treat that breach/conduct as bringing the contract to an end and sue for constructive dismissal. A claim that the employee has condoned a breach or course of conduct is a defence to a claim of constructive dismissal and the burden is on the employer to establish it.

[25] The difficulty is that condonation must be inferred from circumstances in which an employee's intentions may be unclear. As this court confirmed in Persaud v. Telus Corp., [2017] O.J. No. 3039, 2017 ONCA 479, at paras. 14-15, an employee must make his/her election within a "reasonable period of time". Of course, reasonableness is not a rule but a standard, and it is a notoriously vague standard at that. Thus, whether an employee acts within a reasonable period of time is a fact-specific determination that must be made by the trial judge based on consideration of a number of factors, and the trial judge's finding is entitled to deference.

[26] In the usual case, a finding of condonation occurs where an employee has continued to work or resumed work despite the employer's actions. But continuing or resuming work is not determinative of condonation; employees must have a reasonable period of time to attempt to resolve workplace problems short of litigation: see Belton v. Liberty Insurance Co. of Canada [page459] (2004), 2004 6668 (ON CA), 72 O.R. (3d) 81, [2004] O.J. No. 3358 (C.A.), at para. 26. Care must be taken before concluding that an employee has given up his or her right to sue for constructive dismissal, and employees' unique personal circumstances must be taken into account. For example, an employee's health, including his or her mental health, may be a relevant consideration in determining whether his or her conduct implies condonation. Given the wide variety of personal circumstances, it is not surprising to find cases in which employees have been found not to have condoned breaches or repudiation of their contracts of employment despite having continued to work even for relatively extended periods of time. Each case turns on its facts.

[27] In this case, the trial judge found that the respondent did not treat withdrawal of the company vehicle -- something the trial judge considered a serious breach -- as a repudiation of the contract. He referred to the respondent's September 6, 2013 note in which he stated: "I wish to make clear I am on medical leave and am not stepping down from my position as general manager at McGuinty Funeral Home", along with the fact that the appellant did not proceed with his constructive dismissal claim until two years later.

[28] The appellant says it follows that the respondent must be taken to have condoned the appellant's course of conduct considered as a whole. I disagree. The trial judge's findings on the first branch of the Potter test are not incompatible with his findings on the second.

[29] The respondent's October 28, 2013 e-mail to Gary Eide came not long after he had informed Eide that he was on medical leave and was not stepping down from his position. In that e-mail, the respondent sought to "clear up" a few matters "so we can move forward". This included commissions he claimed were owing on pre-paid funerals; wrongful deduction of expenses from his paycheque; and payment of the marketing allowance component of in-house pre-arranged funerals. The respondent sought records going back to October 31, 2012, in order to review past payments. He said that he would drop by the funeral home to provide an update on his medical status and continued absence and invited Eide to call him "to discuss an amicable solution to all issues so that we can both move forward", indicating that he said the same thing to Steve Eide the prior week but had not heard from him.

[30] The respondent's September 6 note and his October 28, 2013 e-mail indicate that he was attempting to resolve his various concerns with the appellant. He was entitled to do so and his efforts in this regard do not compel the conclusion that he condoned the appellant's course of conduct. The main problem in this [page460] case appears to be delay. The respondent did not purport to accept the appellant's repudiation of the contract until September 2, 2015, when he issued his statement of claim.

[31] By any standard, the period of time taken by the respondent to make his election was lengthy. But while it may be reasonable to find that an employer's burden to establish condonation is discharged where the employee has continued to work for a lengthy period of time despite the employer's impugned conduct, it is more difficult to conclude that condonation has been established where the employee has been unable to work because of the very conduct that establishes the constructive dismissal.

[32] The trial judge found that the respondent could not be taken to have accepted the new situation -- that is, it could not be said that he willingly remained in his position as General Manager of the funeral home despite the appellant's conduct -- because he "did not and could not return to work during that period of time due to depression and anxiety", and that his depression and anxiety was caused by the appellant.

[33] This was the trial judge's decision to make and the appellant has established no basis to interfere with it. The trial judge's finding that the respondent condoned the appellant's decision to take back the company vehicle does not compel the conclusion that the respondent condoned the appellant's course of conduct considered as a whole. The cumulative effect of the appellant's actions went to the heart of the respondent's role as General Manager at the funeral home, and a reasonable person in the respondent's position would conclude that the appellant no longer intended to be bound by the TCSA.

[34] The respondent's delay in making his election must be seen in light of the particular circumstances of his employment. The funeral home was a family business in which the respondent had worked for over 30 years before selling it to the appellant. At that time, the respondent, a licensed funeral director, was 55 years of age. The sale was conditioned on the parties entering into the TCSA, which effectively guaranteed the respondent employment in his chosen profession until he reached retirement age, while continuing the goodwill his connection to the business maintained -- a business that continued to bear his family name. As noted above, the TCSA did not contain a provision for its cancellation but the respondent was subject to a non-competition clause that would fairly be understood by the respondent to bar him from working in his community in the only profession he had known -- again, until he reached retirement age. The time taken by the respondent to make his election must be understood in this context, as well as the depression and anxiety caused by the appellant. [page461]

[35] The appellant asserts that there was no medical evidence that the respondent was incapable of communicating his election or instructing legal counsel to commence or assert a claim for constructive dismissal before he did. The short answer to this submission is that the question was not whether the respondent was incapable of making or communicating his election, but instead whether in all of the circumstances, including the passage of time, it should be inferred that he accepted the new situation -- that he condoned the appellant's course of conduct and so lost his right to sue for constructive dismissal. The trial judge was entitled to find that the respondent did not return to work, could not return to work, and did not condone the appellant's actions. These findings were open on the record and I would not interfere with them.

[36] Finally, there is no merit to the submission that this was merely a contractual interpretation dispute, as in Chapman v. GPM Investment Management, [2017] O.J. No. 1503, 2017 ONCA 227, 2017 CLLC para. 210, leave to appeal to S.C.C. refused [2017] S.C.C.A. No. 195. Although a dispute over the calculation of a bonus or a commission does not necessarily constitute a constructive dismissal, the finding of constructive dismissal in this case flows from the entire course of the appellant's conduct, only one part of which concerned payment of the respondent's commission.

The trial judge did not misapprehend the evidence

[37] The appellant argues that the trial judge erred by ignoring evidence and by failing to make necessary findings of fact concerning key events. I would reject these arguments.

The trial judge did not ignore evidence

[38] The appellant submits that the trial judge ignored the evidence of three current or past employees who testified that events alleged by the respondent, as part of his narrative about the toxicity of the workplace, did not occur.

[39] There is no merit to this submission. It is well established that a misapprehension of evidence must go to the substance of a matter, rather than to the detail, and must be material rather than peripheral: R. v. Lohrer, [2004] 3 S.C.R. 732, [2004] S.C.J. No. 76, 2004 SCC 80, at para. 4. A trial judge need not make findings on every disputed matter in order to provide meaningful reasons for a decision.

[40] The evidence of the three current or past employees concerned a matter that was ultimately peripheral, for the trial judge found that Gary Eide's conduct toward the respondent was not oppressive, humiliating, or improper. Thus, there was no need to [page462] address this evidence in his decision. The trial judge did not misapprehend the evidence.

The trial judge did not fail to make necessary findings of fact

[41] The appellant acknowledges that the trial judge was not required to refer to all of the evidence tendered at trial but argues that he failed to make findings on a significant matter that might have changed the decision. Specifically, the appellant says that trial judge should have resolved conflicting evidence concerning a phone call and meeting the appellant says took place on December 13, 2013.

[42] Gary Eide testified that the respondent called him on December 13, 2013. He was "very distraught" and crying. According to Eide, the respondent apologized, expressed remorse, and asked how he could return to work. Eide testified that the respondent "just didn't sound like he was in good shape" on the phone call. Eide said that he told the respondent to get a doctor's approval before seeking to return. A few hours later the respondent showed up, unannounced, at the funeral home. Eide claimed that the respondent again told him that he was "ready to return to work". Eide testified that the respondent did not look well -- that he was shaking and crying -- and that he was concerned for him. Eide said he reiterated that the respondent had to see his doctor before returning to work and that the respondent became upset and left the funeral home. The respondent denied that this meeting took place.

[43] The appellant says that this evidence suggests that the respondent did not treat its conduct as a repudiation of the TCSA and that this could have affected the analysis under either or both branches of the Potter test. The respondent argues that the trial judge's decision, read as a whole, suggests that he must have concluded that the meeting did not occur, but, in any event, whether the meeting occurred was peripheral to the condonation issue given the trial judge's conclusion that the respondent did not and could not return to work because of his depression and anxiety.

[44] The trial judge's decision to recount the evidence concerning the meeting alleged to have taken place on December 13, 2013 suggests that the evidence was relevant to the question of condonation. Having raised the conflict, the trial judge should have either resolved it or to explained why it was not necessary to do so.

[45] Nevertheless, the trial judge's failure to resolve this conflict ultimately does not undermine his finding that the respondent did not condone the appellant's actions and was constructively dismissed. That finding is well supported by the record. In any [page463] event, the respondent's inability to return to work during the relevant time is key to the trial judge's decision. The respondent may well have preferred to return to work if his concerns with the appellant's actions had been resolved. But they were not, and in all of the circumstances of this case the mere expression of a desire to return to work relatively early in the course of the parties' dispute would not constitute condonation of the employer's course of conduct.

Damages

[46] The lion's share of the damages awarded by the trial judge -- $900,000 -- reflects salary for the nine years that remained on the fixed-term contract. The appellant does not contest the trial judge's finding in this regard, which flows from this court's decision in Howard v. Benson Group Inc. (2016), 129 O.R. (3d) 677, [2016] O.J. No. 1814, 2016 ONCA 256, leave to appeal to S.C.C. refused [2016] S.C.C.A. No. 240.

[47] The appellant argues that the trial judge erred in calculating damages in three respects. First, the trial judge accepted the respondent's guess as to the value of the company vehicle and fuel allowance. Second, the trial judge awarded damages for commissions on pre-arranged funerals even though the respondent failed to prove actual damages based on figures that were available to him. Third, the trial judge awarded an arbitrary amount of damages for the respondent's employee benefits rather than requiring the respondent to prove them.

[48] I would reject these arguments.

[49] First, in answer to the question as to the approximate value of the company vehicle, including lease expense, insurance, fuel and maintenance, the respondent testified that when he was ready to sell the business it was roughly $12,000-$15,000 annually. This was information within his knowledge and his evidence was not challenged by the appellant, nor did the appellant lead evidence establishing that the replacement vehicle expense was unreasonable.

[50] The trial judge's decision to use the low end of the respondent's range and award him $12,000 per year for nine years, or $108,000, was reasonable.

[51] Second, although the trial judge's award of damages for commissions on pre-arranged funerals was based on an estimation, that estimation was necessary because of the nature of pre-paid funerals. The trial judge agreed with the appellant that the respondent's damages assessment was untenable, because it could not be said with certainty how many persons with pre-arranged funerals could be expected to die during the period of [page464] the respondent's commission entitlement, what the costs of their funerals would be, and how that cost would be apportioned between fees and disbursements.

[52] In these circumstances, the trial judge calculated the respondent's average monthly commission during an eleven-month period for which payroll records were available, in addition to email correspondence from Gary Eide, and multiplied that amount by the remaining 108 months of the contract, arriving at a figure of $125,350. In my view this was a reasonable approach, one that follows the instruction set out by this court in Martin v. Goldfarb (1998), 1998 4150 (ON CA), 41 O.R. (3d) 161, [1998] O.J. No. 3403 (C.A.), leave to appeal to S.C.C. refused [1998] S.C.C.A. No. 516, which the trial judge cited.

[53] At the hearing, the appellant did not pursue the argument it made in its factum -- that the respondent could have obtained specific reports from third party insurance companies that would have established a factual basis for the calculation of damages. The closing submissions of the respondent's trial counsel show that the trial judge was apprised of the relevant issue and there is no basis to interfere with his decision on the matter.

[54] Third, the trial judge considered it appropriate to approximate the value of the respondent's benefits, including medical, dental, life and disability coverage, at 10 per cent, rather than the 15 per cent of salary sought by the respondent. This approach has been followed in several trial decisions, including Ruston v. Keddco Mfg. (2011) Ltd., [2018] O.J. No. 2636, 2018 ONSC 2919, 2018 CLLC para. 210 (S.C.J.), affd [2019] O.J. No. 825, 2019 ONCA 125, which the trial judge cited, as well as by this court's decision in Cormier v. 1772887 Ontario Ltd. (c.o.b. St. Joseph Communications), [2019] O.J. No. 6189, 2019 ONCA 965, 2020 CLLC 210-018. This approach was reasonably followed in this case. The cost of the respondent's benefits would have been information known to the appellant and the appellant proffered no evidence to the contrary. There is no basis to interfere with the judge's decision in this regard.

Conclusion

[55] I would dismiss the appeal.

[56] I would award the respondent costs in the agreed amount of $30,000, all inclusive.

Appeal dismissed.

End of Document