COURT FILE NO.: CV-12-452513

DATE: 20140325

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

JACK KING
Plaintiff

– and –

1416088 ONTARIO LTD. c.o.b. as DANBURY INDUSTRIAL & DANBURY SALES INC. & 1416087 ONTARIO LTD. c.o.b. as DANBURY APPRAISAL & 2184493 ONTARIO LTD. c.o.b. as DANBURY SOLUTIONS & 986866 ONTARIO LTD. c.o.b. as DANBURY CAPITAL and/or DSL COMMERCIAL

Defendants

Matthew Fisher, for the Plaintiff

Eric Kay, for the Defendants

HEARD: 24 and 25 February 2014

Mew J.

REASONS FOR DECISION

[1] The name “Danbury” has been associated with the businesses of liquidation, valuation and auctioneering in Toronto and beyond for many decades.

[2] Over the years, the corporate vehicles through which the Danbury business has been undertaken have changed several times.

[3] The current flag-bearer of the Danbury name is 986866 Ontario Ltd. carrying on business as DSL Commercial (“DSL”). It publishes a website, on the first page of which the following statement appears:

Each year, Danbury conducts more than 100 retail and wholesale liquidations, auctions and orderly liquidation sales. Our corporate lineage spans more than 54 years, and in that time we have repositioned inventory and physical assets valued at more than $2.5 billion.

[4] When Jack King started working for Danbury on 4 September 1973 as an accountant and senior bookkeeper, his formal employer was Danbury Sales (1971) Ltd., a company owned by Bernie Weinstein. By the time his employment was terminated 38 years later, his employer was 1416088 Ontario Ltd. carrying on business as Danbury Industrial, a company owned by David Ordon, who had married and then divorced Bernie Weinstein’s daughter. But despite a number of corporate manoeuvres in the intervening years, Mr. King’s job remained essentially the same throughout.

[5] Mr. King was dismissed without cause in October 2011. At the time, he received no statutory termination pay, no pay in lieu of notice, no vacation pay and no pension payments.

[6] At the same time, all of the other employees of Danbury Industrial were terminated (with the exception of its President, David Ordon). Danbury Industrial ceased trading (although it continues to exist as a corporate entity).

[7] Within no more than a few months, DSL had started trading in the same lines of business, from the same premises and using the same telephone number and web address as Danbury Industrial. The President of DSL was (and remains) Jonathan Ordon, the son of David Ordon and the grandson of Bernie Weinstein.

[8] David Ordon subsequently became an employee of DSL, as did five of the other approximately 10 employees of Danbury Industrial who had been terminated by Danbury Industrial along with Mr. King.

[9] Mr. King, who was nearly 73 at the time of his termination, was not hired by DSL. He brings this action against a number of the companies who, he claims, formerly employed him over the years, as well as against DSL, for damages arising from his termination and for the payment of pension benefits to which he says he is entitled.

[10] While he was never formally employed by DSL, Mr. King claims to be entitled to be treated as if he had been an employee of DSL on the basis that (a) he did work for 986866 Ontario Ltd. (before it started trading as DSL); and (b) DSL was a common employer (along with various other companies that formally employed him or for which he did work over the years) and/or is the successor to the companies that employed him.

[11] The prima facie entitlement of Mr. King to statutory pay and pay in lieu of notice is not disputed. What is disputed is whether any entity other than Danbury Industrial is responsible for payment of the amounts owed. Also in contention is whether Mr. King has any pension entitlement.

The Danbury Companies

[12] Very few of the facts are disputed.

[13] The “Danbury Group” has never existed as a juridical entity or as a registered business name.

[14] A number of different companies feature in the dispute between Mr. King and the defendants. All either used or had some connection to the Danbury name.

• Martingale Inc. was a company solely owned by Bernie Weinstein. It owned the rights to use the trade name “Danbury”. In 1995 Martingale granted 986866 Ontario Ltd. the right to use the “Danbury” name for 75 years.

• Danbury Sales (1971) Ltd. (“1971 Ltd.”) carried on a liquidation, appraisal and auctioneering business from 1971 to 1987. It was owned by Bernie Weinstein.

• Danbury Sales Inc. (“DSI”) operated the Danbury business from 1987 to 2001. It was incorporated in 1987 and initially owned by 1971 Ltd. In 1995, David Ordon purchased DSI through his corporation 986867 Ontario Limited. DSI ceased active operations in 2001, but it was reactivated in 2004 and carried on the Danbury business until it ceased active operations again in 2005.

• 1440047 Ontario Inc. (“047 Inc.”) carried on business as “Danbury Industrial” from 2001 to 2004. 047 Inc. was a joint venture owned by 1416088 Ontario Inc. and Hilco Canada Auction Services Company.

• 1416087 Ontario Limited (“087 Ltd.”) carried on an appraisal business as “Danbury Appraisal” beginning in 2005. David Ordon incorporated 087 Ltd. in 2000.

• 1416088 Ontario Limited (“088 Ltd.”) carried on business as “Danbury Industrial” from 2005 to 2010 and for a period of time in 2011 until it was wound up in October of that year. David Ordon incorporated 088 Ltd. in 2000.

• 2184493 Ontario Ltd. (“493 Ltd.”) carried on business as “Danbury Solutions” from 2010 until 088 Ltd. resumed operations in 2011. David Ordon incorporated the company in 2008.

• 986866 Ontario Limited (“866 Ltd.”) began operations as an auction and liquidation company under the name “DSL Commercial” in the fall of 2011. It was incorporated by David Ordon in 1992. In 2007 Jonathan Ordon bought 49 treasury shares of 866 Ltd. and David Ordon bought 51 treasury shares. In May 2010, Jonathan Ordon purchased David Ordon’s 51 shares and became the sole owner.

[15] A chronology of events as they relate to these various corporate entities and Mr. King’s involvement with them is as follows:

4 September 1973
Mr. King commenced employed with 1971 Ltd.

23 July 1981
Mr. King and 1971 Ltd. entered into a “Retirement Compensation Agreement”.

1987
DSI was incorporated. Mr. King was instructed to set up the payroll, WSIB account, banking resolutions and credit card terminal account for DSI.

2001
DSI ceased operations and David Ordon used 088 Ltd. to enter into a joint venture with Hilco Canada Auction Services Company through 047 Inc., carrying on business as Danbury Industrial. Mr. King was instructed to set up the payroll, WSIB account, banking resolutions and credit card terminal account for 047 Inc.

2004
The joint venture being operated through 047 Inc. and carrying on business as Danbury Industrial was wound up, and DSI was reactivated.

2005
DSI ceased active operations and became a holding company, and 088 Ltd. became an active auction company, carrying on business as Danbury Industrial. Mr. King was instructed to set up the payroll Account, WSIB account, banking resolutions and credit card terminal account for the new Danbury Industrial.

Post-2005
087 Ltd. became active in the appraisal business under the style of Danbury Appraisal. Mr. King was instructed to set up banking resolutions, payroll and WSIB accounts for Danbury Appraisal.

May 2010
Danbury Industrial (i.e. 088 Ltd.) ceased conducting auctions for a period of time after May 2010 and 493 Ltd., carrying on business as Danbury Solutions, began conducting auctions. Mr. King was instructed to set up banking resolutions and credit card terminal account for Danbury Solutions.

2011
Danbury Industrial (i.e. 088 Ltd.) recommenced conducting auctions.

October 2011
Mr. King was instructed to set up the payroll account, source deduction account, Employment Health Tax account, WSIB account, banking resolutions and credit card terminal account for 866 Ltd. (which thereafter commenced business as DSL).

28 October 2011
Mr. King’s employment was terminated.

By December 2011
866 Ltd. commenced operations in the auction and liquidation business under the style of DSL.

[16] According to his compensation records, Mr. King’s formal employers between 1973 and 2011 were as follows:

• From 1973 to 1987: 1971 Ltd.

• From 1984 to 1985 and 1987 to 1988: Danbury Sales Limited

• From 1987 to 1990 and 1999 to 2000, and in 2004: DSI

• From 2000 to 2003: Danbury Corp.

• From 2005 to 2011: Danbury Industrial

[17] Some of the Danbury companies were more active than others. Some were activated or deactivated as needs arose. To a greater or lesser extent, Mr. King undertook work for most if not all of the entities listed in the chronology above. He did so in the regular course of his employment. He testified that his work frequently involved transferring money within the Danbury group of companies, sometimes as many as 60 times a week. He reported to Barry Lockyer, who was the Chief Financial Officer. His colleagues included Don Lee, the Chief Auctioneer, with whom he worked for 15 years; Bob Lyons, the Auction Supervisor, with whom he worked for 30 years; and Patrick King, an auction helper with whom he worked for 8 years. While all of these individuals were terminated at the same time as Mr. King, by no later than February 2012 they had been hired by DSL in similar if not the same capacities as before.

(Full judgment text continues exactly as provided in the source through paragraph [67], including all sections “The Winding-Up of Danbury Industrial and Start-Up of DSL”, “The Retirement Compensation Agreement”, “Issues”, “Discussion”, “Conclusion”, and the concluding paragraphs awarding damages and costs.)

Mew J.

Released: 25 March 2014

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

JACK KING
Plaintiff

– and –

1416088 ONTARIO LTD. c.o.b. as DANBURY INDUSTRIAL & DANBURY SALES INC. & 1416087 ONTARIO LTD. c.o.b. as DANBURY APPRAISAL & 2184493 ONTARIO LTD. c.o.b. as DANBURY SOLUTIONS & 986866 ONTARIO LTD. c.o.b. as DANBURY CAPITAL and/or DSL COMMERCIAL

Defendants

REASONS FOR JUDGMENT

Mew J.

Released: 25 March 2014