COURT FILE AND PARTIES

COURT FILE NO.: CV-09-378824

DATE: 20140320

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Helena Ho, Plaintiff

AND:

WFG Securities of Canada Inc. and World Financial Group Insurance Agency of Canada Inc., Defendants

BEFORE: W. Matheson J.

COUNSEL:
Helena Ho, Self-Represented Plaintiff

Doug McLeod, for the Defendants

HEARD: March 18, 2014

ENDORSEMENT

[1] This is a motion for summary judgment brought by the defendants, asking that this action be dismissed.

[2] The plaintiff sues for wrongful dismissal or, alternatively, breach of contact. Although she has been represented by counsel at earlier stages of this proceeding, she now represents herself. On this motion, the plaintiff has filed a number of affidavits of herself, as well as considerable documentation. She has been examined for discovery and excerpts of that discovery form part of the defendants’ record. As well, she was cross-examined on her affidavits on this motion.

[3] In brief, the plaintiff claims damages for wrongful dismissal, or breach of contract, and an accounting of and damages for commissions allegedly due and owing to her. She further seeks punitive, aggravated and exemplary damages, damages for discrimination and mental distress, and special damages. The amounts claimed total more than $3 million.

[4] The defendants (“WFG”) describe themselves as financial services companies that use an “entrepreneurial business model.” I make no comment about that model except where necessary to decide this motion. The plaintiff was a licensed life insurance sales agent. The plaintiff became an “Associate” of WFG.

[5] The statement of claim alleges that the plaintiff commenced employment with WFG in June 2002 for an indefinite period. There is no dispute that her contract was terminated in May of 2007. The main issues on this motion relate to the nature of her relationship with WFG and her claim for damages. In short, the defendants allege that she was an independent contractor, not an employee, that the termination of her contract was permitted under the applicable agreement, and that she has not, in any event, proved any damages as a result of the termination.

[6] In addition to their affirmative evidence, the defendants rely on numerous admissions of the plaintiff as well as her failure to produce documents that substantiate various aspects of her claim.

[7] As is highlighted below, there are some areas where the facts are in dispute. Having considered those disputes and the record before me, I conclude that the evidence will not be materially improved by holding a trial on those issues. I therefore conclude that there is no genuine issue requiring a trial. A fair and just determination can be made now and will be less costly and more efficient than a trial: Hryniak v. Mauldin, 2014 SCC 7 at para. 49.

Independent contractor or employee

[8] The defendants have put forward a package of documents that they submit form the agreement between WFG and the plaintiff. While the plaintiff agrees that she entered into an agreement with WFG, she has said that it was a “bulky Master contract” entered into in 2001, not the documents produced by the defendant from 2002. The plaintiff has indicated that she was not provided with a copy of the 2001 contract and therefore has not produced it. Most importantly, however, she has admitted that she signed various documents in the package put forward by the defendants. Further, those documents were signed in May/June of 2002, which is consistent with the plaintiff’s statement of claim.

[9] The package of documents put forward by WFG includes an application form for new associates and an associate membership agreement. The application was signed by the plaintiff and is dated in May of 2002. The associate membership agreement was signed by the plaintiff and dated in May 2002. There are related terms and conditions. There is also a consent and authorization form signed by the plaintiff and a lengthy application for contract sponsorship, which contains considerable personal information about the plaintiff, both dated in June of 2002.

[10] Upon my review of the package of documents, and the personal information they contain, and given the plaintiff’s admission that she signed them, I conclude that they form the agreement between WFG and the plaintiff (the “Agreement”).

[11] With respect to the nature of the relationship, the Agreement contains several references that support the position of the defendants that the plaintiff was an independent contractor. The following are examples:

[T]he Associate shall conduct and control his or her business activities, work hours, selection of customers, office location, and sales methods…

As an independent contractor, the Associate shall be responsible for paying any and all federal, provincial, city, or other taxes that may become payable with respect to any compensation the Associate may receive under the terms of this Agreement.

Associate shall promptly pay all expenses relating to the performance of Associate’s duties under this Agreement,.. WFG shall not provide any facilities, furniture, or equipment to Associate. Associate shall provide his or her own office, telephone, supplies, transportation and all other facilities which Associate may deem necessary.

The Associate’s sole compensation under and during the term of this Agreement shall be commissions paid by, or caused to be paid by, WFG pursuant to this Agreement... There is no guarantee that Associate will be financially rewarded by virtue of becoming a member of World Financial Group.

Associate will not receive any fringe benefits under this Agreement whatsoever, including but not limited to insurance benefits, disability income, paid vacation, expense reimbursement or retirement benefits unless otherwise specifically provided in the this Agreement.

[12] The terms of the Agreement do not, by themselves, determine the nature of the relationship between the parties. I am satisfied based upon the balance of the evidence that the relationship was one of independent contractor. This is most readily demonstrated by the plaintiff’s own characterization of the relationship. For example, in the context of a dispute over mail, the plaintiff wrote as follows:

No one can give you instructions to hand over my mail or go through my mail as in WFG all associates are independent contractors. All associates do not have bosses and no one has the right to exercise control over us.

[13] In making the determination that this was not an employment relationship, I have applied the well-accepted legal test for determining the nature of the relationship as summarized in McKee v. Reid’s Heritage Homes Ltd. 2009 ONCA 916, at paras. 38-39.

Termination of agreement

[14] The Agreement provided for termination without notice in a number of circumstances. In this case, the defendants submit that the Agreement was properly terminated because: (1) the plaintiff failed to maintain a commission level of $2,000 or more a year in each year; and, (2) for cause, as defined in the Agreement.

[15] I find that the defendants have failed to establish cause, however, I am satisfied that the other basis for termination has been established. The plaintiff failed to maintain a commission level of $2,000 or more in each year between 2002 and the termination in 2007.

[16] The financial evidence is less than ideal. Under the Agreement, it was the plaintiff’s obligation to maintain accurate and complete records of all transactions under the Agreement. Yet, the plaintiff has failed to produce those records. As well, the plaintiff has been asked to, and failed to, produce her income tax returns.

[17] The defendants’ have some records, but they are less than satisfactory. They have no comprehensive list of commissions paid to the plaintiff, by time period. In order to address this gap, they took the list of policy sales provided by the plaintiff on this motion, and identified the specific commissions paid on those sales. This evidence shows that the plaintiff made a very small number of sales over the entire approximately five year period (less than 20, five of which were to herself).

[18] The evidence about how commissions are paid demonstrates that the majority of the commission is paid in the year in which the policy was sold. All but two of the above sales were made in the period of 2002-2005. Only $147 of commission is attributable to the sales after 2005. This evidence supports the defendants’ position that little commission was earned in the last two years prior to termination.

[19] The defendants’ position is indirectly confirmed by numerous emails in the period from 2005 to 2007 showing that the plaintiff had not earned enough commissions to offset her monthly E&O premium of $85. In her examination for discovery, the plaintiff admitted that she was “effectively losing money” during the time she was working at WFG due to her mandatory E&O payments.

[20] The plaintiff submits that commissions due to her have not been paid, but she has not put forward evidence to substantiate this claim other than her own general assertion. Although she is now unrepresented, she has had counsel at earlier stages to assist her in gathering the necessary documents and other evidence. To the extent that the evidence on this issue is less than comprehensive, I draw an adverse inference from the plaintiff’s failure to put forward financial records to support her position, especially given her contractual obligation to maintain those records.

[21] I am therefore satisfied that in the later years, the plaintiff was earning very little commission; less than the required $2,000.

[22] The plaintiff did provide numerous examples of things she did and efforts she made to secure sales and new Associates. I accept that she did make significant, though somewhat unrealistic, efforts. It appears that rather than selling policies she was attempting to initiate relationships with major companies such as Sun Life and Citibank, among others. However, the Agreement does not provide compensation for these efforts. It expressly states that Associates earn income only from the sale of products and services.

[23] I therefore conclude that the Agreement was validly terminated and no monies are due to the plaintiff as compensation for unpaid commissions.

Other damages claims

[24] In addition to the relief claimed in the action related to commissions, the plaintiff sought other damages.

[25] The plaintiff complained about how she was treated, noting her speech disability and some communications with her when executives with WFG were terse, or impolite. She further complained that upon termination she was not given time to find a new place so that her licence would remain in place. In her affidavits and oral submissions, she said that her termination has caused her substantial emotional distress and caused her to lose her confidence.

[26] The plaintiff had a speech disability when she became an Associate, and most importantly WFG did not require that she do her work in any way that was inconsistent with it. While there were some terse and arguably impolite emails, they did not relate to her disability and I do not find that they lead to a damages claim especially in the context of an independent contractor relationship. With respect to the mental distress claim, the plaintiff has conceded that she has no medical records in support of that claim. On examination, she has confirmed that she did not seek out any medical attention.

[27] While I understand that it has been a difficult time for the plaintiff, I do not find a foundation for her other damages claims. Even in the employment context, the Supreme Court of Canada has held that the normal distress and hurt feelings arising from termination are not compensable: Honda v. Keays 2008 SCC 39 at para. 56.

[28] I therefore grant the defendants’ motion for summary judgment and dismiss this claim. If the parties are unable to agree on costs, WFG shall make its submissions by brief written submissions together with a costs outline to be served on the plaintiff by March 31, 2014. The plaintiff shall respond by providing WFG’s counsel with her written submissions by April 17, 2014. WFG’s counsel shall then file both submissions with the court for decision, copying the plaintiff on that correspondence.

W. Matheson J.

Date: March 20, 2014