Court File and Parties
COURT FILE NO.: 316/06
DATE: 20080408
SUPERIOR COURT OF JUSTICE – ONTARIO
(DIVISIONAL COURT)
RE: WENDY ELLIOTT v. RITINS INTERNATIONAL INC. et al
BEFORE: Justice Low
COUNSEL: Steven N. Speropoulos, for the moving party
Aaron Rousseau, for the plaintiff/respondent
HEARD: April 8, 2008
On appeal from Small claims Court judgment of Deputy Judge Priddle dated May 19, 2006 at Toronto
E N D O R S E M E N T
[1] The appeal is allowed in part.
[2] Four issues were raised by appellant:
- personal liability of Andrejs Ritins
- liability of any of the defendants for overtime claimed
- imposition of joint and several liability of Ritins International Inc. with Ritins Studios Inc.
- absence or insufficiency of reasons for allowance of the claim for mileage.
[3] In my view, the trial judge erred in law in imposing liability on Andrejs Ritins personally in his Addendum to Judgment. No claim was pleaded against Adrejs Ritins in either of the plaintiff respondent's statements of claim. Although Mr. Ritins in his personal capacity had originally issued a claim seeking damages from the respondent, alleging that he had employed her, the three proceedings (two claims of the respondent and Mr. Ritins' claim) were consolidated for trial and the corporate defendants in the respondent's two claims were substituted for Mr. Ritins' name in the claim that he initiated, with the latter proceeding as a defendants' claim or counterclaim. In the result, Mr. Ritins ceased to be a party to the actions and no claim was ever asserted against him. It was wrong in principle for the trial judge to have imposed liability on him in those circumstances (see TSP-Intl Ltd. v. Mills, 2006 22468 (ON CA), [2006] O.J. No. 2702 (C.A.)).
[4] I would therefore set aside the judgment as against Andrejs Ritins.
[5] The appellants contend that the respondent is not entitled to payment for overtime under the Employment Standards Act, 2000, S.O. 2000, c. 41 as her work was supervisory or managerial in character. The appellants rely on s. 8 of the Employment Standards Act.
[6] The respondent's position is that the claim was not made in reliance on the Act but rather pursuant to the terms of the agreement or, in the alternative, on a quantum meruit basis. The claim was advanced on the basis that the company policy allowed for lieu time of one hour for each extra hour worked. The evidence supported this contention. As the respondent was discharged prior to her having an opportunity to take the hours in lieu, she claims the value thereof.
[7] The respondent alleged that she was an employee of Ritins Studio Inc. from February 24 to December 31, 2003 and that she was an employee of Ritins International Inc. from January 1, 2004 to March 1, 2004. She claimed overtime at the rate of $28.85 per hour based on a 37.5 hour work week. She claimed 587 overtime hours ($16,934.35) from Ritins Studio Inc. and 75.5 overtime hours (totalling $2,178.18) from Ritins International Inc.
[8] In respect of this aspect of the claim, I am not satisfied that the appellant has shown that the trial judge made a palpable and overriding error. In my view, a finding that the respondent was owed more than $10,000 by Ritins Studio Inc. is supportable on the evidence. That the trial judge may have misapprehended s. 8 of the Employment Standards Act does not, in my view, affect the correctness of the result because the claim is capable of standing as a matter of contract and outside the provisions of the Act.
[9] The appellant challenges the correctness of the imposition of joint and several liability for the whole of the judgment amount on both appellant corporations. In my view, the trial judge erred in so doing. While I find no error in imposing liability on Ritins International Inc. as to some of the claims made against it, the imposition of joint and several liability with Ritins Studio as to the full extent of the judgment against the latter is not reasonably supported by the evidence.
[10] The commencement of respondent's employment by Ritins Studio Inc. was on February 24, 2003 and terminated on December 31, 2003 according to the respondent's statement of claim. The respondent commenced to work for Ritins International Inc. on January 1, 2004 according to her statement of claim against that entity. Ritins International Inc. was not incorporated until December 31, 2003. There is no evidentiary basis for attaching liability to Ritins International Inc. for obligations accruing to respondent from Ritins Studio Inc. prior to the incorporation of Ritins International Inc.
[11] On the other hand, a finding that the respondent worked for Ritins International Inc. after it came into existence is supportable, and I would not interfere with a judgment against Ritins International for $2,178.18 for overtime. Similarly, with respect to the claim for mileage, a finding that 3,500 kilometres was incurred by respondent from January 1 to February 20, 2004 is supportable as against Ritins International, and using a multiplier of $0.32 per kilometer, the result is an award of $1120 against it which would, in my view, be proper.
[12] On the subject of mileage, while I agree with the appellants that the reasons are inadequate, it is nevertheless possible to deduce from the evidence that there was an agreement for mileage at $0.32 per kilometer despite the absence of evidence as to industry standard. In my view, in light of an agreement as to a rate for kilometrage, the industry standard became academic.
[13] As for liability on the part of either of the appellants for termination pay, my attention is drawn to the pleadings. The respondent claimed termination pay from Ritins International Inc. but did not make that claim from Ritins Studio Inc.
[14] It is impossible to discern the basis for the trial judge's decision and indeed, it is difficult to determine what the decision was. He stated"Ms Elliott was entitled to be [sic] whatever is appropriate in relation to termination without cause after the completion of a full year's employment."
[15] If the finding was that the respondent had been employed by Ritins Studio Inc. for a full year, then notwithstanding the respondent's pleading that she commenced to be employed by Ritins International on January 1, 2004, there is nevertheless some evidence consistent with her continuing to be employed by Ritins Studio Inc. after that date and until she was given notice of discharge in that the notice of termination of employment was given by Ritins Studio Inc. The claim for two weeks pay in lieu of notice was made against Ritins International, however, and not against Ritins Studio Inc. Even if the claim had been made against Ritins Studio Inc., it would have amounted to $2307.70 only and would not have augmented the judgment.
[16] As against Ritins International Inc., there is a viable claim for pay in lieu of notice although not on the basis of a one year employment. The period of employment by Ritins International cannot have exceed two months, given the date of incorporation. The trial judge did not deal with claim on that basis. Nor did his reasons deal with the possible argument that the respondent should have credit for service with Ritins Studio Inc. for purposes of notice of termination.
[17] In the interests of sparing additional delay and expense to the parties, I decline to remit the matter for a new trial. Instead, I would award pay in lieu of notice payable by Ritins International Inc. in the amount of $2,300, which amounts to just under two weeks' pay and which I consider reasonable though at the high end of the range for a person in a managerial/supervisory position earning $5,000 per month, with significant responsibilities as project manager and of the age and circumstances of the plaintiff (a woman in middle age who had been in the work force for 35 years). In coming to this conclusion I am not giving credit for service with Ritins Studio Inc.
[18] In summary, the appeal is allowed in part. Judgment enforceable as against Ritins International Inc. is reduced to the aggregate of $2,300, $1,120, and $2,178.18, a total of $5,598.18.
[19] Success has been divided. There will be no costs.
Low J.
DATE: April 8, 2008