SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-13-19066

DATE: 2014-05-30

RE: John Kimball, Plaintiff

AND:

Windsor Raceway Inc., Defendant

BEFORE: Heeney R.S.J.

COUNSEL: Myron Shulgan Q.C., Counsel for the Plaintiff

Christopher Kruba, Counsel for the Defendant

HEARD: May 29, 2014 at Windsor

ENDORSEMENT

[1] This is a motion for summary judgment, brought by the plaintiff in a wrongful dismissal case.

[2] The plaintiff began working for the defendant on August 25, 1970, and has worked continuously from then until his termination in 2012, but for short periods when he was on seasonal layoff or on medical leave.

[3] One of those brief layoffs occurred on November 15, 2006, when his position of Purchasing/Security Director was eliminated, and he was placed on temporary layoff. However, recognizing the difficulty that the plaintiff would have finding alternate employment at age 64, the defendant created a new position called Mutuel Supervisor. It involved a reduction in pay from $61,400 to $55,260 per year. On December 4, 2006, this position was offered to the plaintiff and he accepted it.

[4] He continued to work at that position until his termination.

[5] Mr. Kruba, for the defendant, does not argue that this brief layoff period of 19 days served to interrupt the plaintiff’s continuous period of service since 1970 for purposes of quantifying the applicable notice period. He did make an argument that this new position served to mitigate the plaintiff’s damages, but that argument was summarily rejected. It would have mitigated any damages arising from the layoff that occurred in November, 2006, but that is not the termination that is relevant for purposes of the present case. The plaintiff accepted the new position and his employment continued. The relevant termination is the one that occurred in 2012, and his acceptance of the new position in 2006 has nothing to do with mitigation of his losses arising out of the recent termination.

[6] In February, 2007, enquiries were made about the plaintiff’s plans to retire. On February 26, 2007 he wrote an email to the defendant that said: “I am anticipating continuing to work for a year after I reach my 65th birthday in Dec. of 2007. I trust that this is what you need to work on your future projections.” He did not, however, retire at that time.

[7] On January 1, 2008, the plaintiff began receiving his monthly pension of $921, shortly after his 65th birthday, which has been referred to as his “normal retirement date”. He did not, however, retire, but continued working at his regular duties.

[8] In December, 2008, he was asked about whether he was going to honour his commitment to retire. According to the affidavit of Patrick Soulliere, President of the defendant, sworn November 29, 2013, the plaintiff told several employees of the defendant that he was not going to retire, because if he waited long enough, the defendant would have to offer him some sort of buyout or severance.

[9] It is conceded that this evidence is hearsay. However, under R. 20.02(1), the court may rely on an affidavit made on information and belief. An adverse inference may be drawn from the failure of a party to provide evidence of any person having personal knowledge of contested facts, but the plaintiff did not contest these facts. No affidavit was filed by the plaintiff in response to that of Mr. Soulliere to challenge this evidence.

[10] On July 29, 2010, the plaintiff was asked during a Human Resources Planning Meeting when he would retire. The report that was produced from that meeting reports that he “would like to retire at the end of 2012”. Once again, this fact was not contested by the plaintiff.

[11] On March 1, 2012, the Ontario Lottery and Gaming Corporation announced that it was closing slot machine facilities at the defendant’s premises in Windsor, along with other locations. Revenue from slot machines had helped support horse racing operations. The defendant issued a press release on March 14, 2012 condemning the decision and pointing out the negative impact it would have on the industry and associated jobs.

[12] A further press release was issued on May 4, 2012, which advised that the defendant was in the process of decommissioning the slot machine operation, but that OLG would continue to provide some funding until Aug. 31, 2012.

[13] Mr. Kruba argued that these press releases could be considered as notice of termination of the plaintiff’s employment. Once again, this argument can be summarily dismissed. These notices were not even addressed to the plaintiff, did not reference his job in particular, and did not expressly put him on notice that his employment was being terminated.

[14] Written notice was, however, given to the plaintiff on July 9, 2012. It advised that, due to the government ending slot operations at the raceway, it has become necessary to reduce the workforce. He was advised that he “will be placed on indefinite layoff effective August 31, 2012”.

[15] According to the affidavit of Mr. Soulliere, which is not disputed, the plaintiff requested that he be permitted to exhaust his outstanding four weeks of vacation entitlement at the end of the notice period. Accordingly, he was paid through September 29, 2012.

[16] The plaintiff was also paid the sum of $6,110.47, less statutory deductions, representing 5.75 weeks of salary, pursuant to the Employment Standards Act 2000, S.O. 2000 c. 41 (“the Act”). He has not been paid any further salary by the defendant, nor has he ever returned to work for the defendant.

[17] The plaintiff claims that, as an employee of 43 years of service and being 71 years of age, and having been terminated without just cause, he is entitled to 24 months’ salary in lieu of notice, and seeks summary judgment in that amount. In the alternative, he seeks partial summary judgment for 26 weeks’ salary in the amount of $27,629.94, being his statutory entitlement under the Act. It is conceded that the defendant has a payroll of $2.5 million or more. Thus, pursuant to sections 64 and 65 of the Act the plaintiff is entitled, upon the severance of his employment relationship, to severance pay of one weeks’ wages per year for each year worked, to a maximum of 26 weeks.

[18] The defendant opposes the motion and claims that there are genuine issues requiring a trial.

[19] The approach to be taken by the court on a summary judgment motion has now been clearly articulated by the Supreme Court of Canada in Hyrniak v. Mauldin, 2014 SCC 7, [2014] S.C.J. No. 7. There, the court emphasized that a shift in culture is required that emphasizes the principle of proportionality. Summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims.

[20] A party is entitled to summary judgment whenever there is “no genuine issue requiring a trial”: Rule 20.04(2)(a). Karakatsanis J., speaking for the court, explained at paras. 49 - 50 what these words mean:

There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

These principles are interconnected and all speak to whether summary judgment will provide a fair and just adjudication. When a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.

[21] At para. 66, Karakatsanis J. provided a roadmap for the court to follow in addressing this question:

On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[22] The plaintiff’s claim for his statutory entitlement to 26 weeks’ severance pay can be determined without a trial, and without using any of the new fact finding powers granted under the amendments to Rule 20. The employment relationship has clearly been severed. The plaintiff has been continuously employed by the defendant for 42 years, which is well beyond the 5-year threshold in the Act, and the defendant’s payroll meets the threshold of $2.5 million whereby severance pay is payable under s. 65 of the Act. There is no question as to the plaintiff’s entitlement to this severance pay.

[23] Mr. Kruba suggested that I should decline to grant judgment for this amount because there is no evidence before the court as to whether or not the plaintiff has filed a complaint under the Act with the Minister of Labour. Had he done so, he would be precluded from commencing a civil proceeding with respect to the same matter, pursuant to s. 97 of the Act.

[24] There is no merit to this argument. Had the plaintiff filed such a complaint, it would have constituted a complete defence to this claim. However, the defendant has pleaded no such defence in its Statement of Defence. Had such a defence existed, I would expect it to have been pleaded. To suggest that the plaintiff may have filed a complaint with the Minister is nothing more than speculation, without any evidentiary foundation.

[25] The other argument against granting partial summary judgment is that, as will be seen below, a trial will be required in any event because there are, in my view, genuine issues for trial. While Hyrniak warns of the risk of granting partial judgment, due to the risk of duplicative proceedings and inconsistent findings of fact, Karakatsanis J. nevertheless notes, at para. 60, that it will be appropriate to do so when it disposes of an important claim against a key party:

The "interest of justice" inquiry goes further, and also considers the consequences of the motion in the context of the litigation as a whole. For example, if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. On the other hand, the resolution of an important claim against a key party could significantly advance access to justice, and be the most proportionate, timely and cost effective approach.

[26] The plaintiff’s entitlement to 26 weeks’ severance pay is clear. It is a substantial amount of money, and there is no compelling reason to make him wait for it until a trial of this action. There is no risk of inconsistent findings of fact because the issues that do require a trial, as will be seen below, do not involve the straightforward facts relating to the plaintiff’s statutory entitlement.

[27] Accordingly, the plaintiff is entitled to judgment for 26 weeks’ severance pay in the amount of $27,629.94.

[28] Should that sum be reduced by the 5.75 weeks of salary in lieu of notice that the defendant already paid to the plaintiff pursuant to the Act?

[29] The Act, in Part XV, provides for various notice periods to be given depending on the length of service, and s. 61 provides for the payment of salary in lieu of notice. However, severance pay is payable under s. 65 of the Act. Section 65(7) provides as follows:

(7) Subject to subsection (8), severance pay under this section is in addition to any other amount to which an employee is entitled under this Act or his or her employment contract.

[30] None of the exceptions in ss. 8 apply here. I therefore conclude that no deduction should be made from the severance pay that I have ordered to be paid, other than statutory deductions. Both amounts will, however, be credited to the defendant if the plaintiff recovers damages for wrongful dismissal at trial over and above these amounts.

[31] As to the main part of the plaintiff’s claim, it is impossible to fairly and justly adjudicate upon the plaintiff’s entitlement to damages for wrongful dismissal on the record before me, nor does the record permit me to make the findings of fact necessary to decide this case, given the complete absence of certain key evidence. There have been no Affidavits of Documents exchanged, nor have the parties been cross-examined on the affidavits filed. The plaintiff has filed one affidavit only, sworn October 25, 2013. It fails to address one very significant point among others: whether the plaintiff has earned any income since his dismissal. This information is essential in order to determine whether the plaintiff has suffered any damages as a result of his dismissal.

[32] A similar situation was dealt with by Wilton-Siegel J. in Garcia v. 1162540 Ontario Inc. (c.o.b. as Venice Fitness), [2013] O.J. No. 5689 (Div. Ct.). That was an appeal of a Small Claims Court decision, which awarded damages for wrongful dismissal in a situation where there was no evidence whatsoever as to the plaintiff’s employment status following termination. Wilton-Siegel J. ruled that this was fatal to the plaintiff’s case, and set aside the award of damages. He was careful to point out that proving that the plaintiff did not work, or that he worked for less money, is not an issue relevant to mitigation, but is part and parcel of the plaintiff’s own case in proving damages. He said this, at paras. 29 to 32:

For ease of reference, I will restate the relevant statement of Laskin C.J. in Michaels v. Red Deer College, 1975 15 (SCC), [1976] 2 S.C.R. 324, at para. 11, referred to by the Deputy Judge in his reasons:

In the ordinary course of litigation respecting wrongful dismissal, a plaintiff, in offering proof of damages, would lead evidence respecting the loss he claims to have suffered by reason of the dismissal. He may have obtained other employment at a lesser or greater remuneration than before and this fact would have a bearing on his damages. He may not have obtained other employment, and the question whether he has stood idly or unreasonably by, or has tried without success to obtain other employment would be part of the case on damages. If it is the defendant's position that the plaintiff could reasonably have avoided some part of the loss claimed, it is for the defendant to carry the burden of that issue, subject to the defendant being content to allow the matter to be disposed of on the trial judge's assessment of the plaintiff's evidence on avoidable consequences. From this passage, the following is clear. First, the plaintiff must demonstrate that he suffered damages in the form of a loss of income. Second, if the plaintiff has established damages, the defendant has the onus of demonstrating a failure to mitigate. Third, if the defendant asserts a mitigation defence, the plaintiff has no legal onus to demonstrate mitigation but, in most circumstances, self-interest would dictate that a plaintiff adduce such evidence.

In the present case, the plaintiff failed at the first stage. He failed to demonstrate damages in the form of a loss of income. This is not the same as saying the plaintiff failed to mitigate. That is a conclusion reached if and when evidence pertaining to a mitigation defence is adduced. The problem in the present case is simply that the plaintiff never testified that he was unemployed for any period of time after his dismissal.

The level of proof required to establish lost income is not onerous. It is not the same as the proof required to establish mitigation. It is simply evidence that the plaintiff was not employed, or not employed at the same level of salary or wages as he was prior to the wrongful termination of his employment.

This issue was never raised on examination-in-chief and, not surprisingly, was never raised by the defendants. Indeed, as the defendants correctly note, there is a complete veil of secrecy drawn over the plaintiff's employment status after his constructive dismissal. On the evidence, it is just as probable that he replaced his lost income with income from a new job as that he incurred lost income because he was unemployed. Accordingly, the Deputy Judge had no basis for finding that the plaintiff suffered any loss as a result of the wrongful termination.

[33] The case before me is indistinguishable. There is no evidence whatsoever as to whether the plaintiff has or has not earned any income since his termination. Without such evidence, the plaintiff has not proven that he has suffered any damages, and is not, therefore, entitled to summary judgment.

[34] The defendant has also raised the related issue of failure to mitigate in its factum although, surprisingly, has failed to plead it. Mr. Shulgan, for the plaintiff, does not oppose the amendment of the Statement of Defence to do so. Obviously, I am in no position to adjudicate upon the issue of mitigation on the record that is before me, given the complete absence of evidence.

[35] Another issue requiring a trial relates to the plaintiff’s intention to retire. Once again, this issue was raised in the affidavit filed by the defendant, but no reply was offered by the plaintiff.

[36] In McKay v. Camco, Inc., 1986 2544 (ON CA), [1986] O.J. No 2329 (C.A.) at p. 10, Blair J.A. discussed the nature of damages for wrongful dismissal:

The breach of the implied term requiring reasonable notice gives rise to an entirely different right. The employee is entitled to damages measured by the salary and other benefits to which he would have been entitled during the notice period but subject to his duty to mitigate. Earnings from alternative employment during the notice period or such earnings as the employee might reasonably have been expected to earn had he diligently sought alternative employment must be deducted from the damages payable to the employee.

The appellant's rights under the contract of employment to disability payments and to proper notice of dismissal are not only different in kind but also serve different purposes. The right to disability payments is intended to provide income to the appellant when he is unable to work. The purpose of requiring reasonable notice is to give the dismissed employee an opportunity to find other employment. As Lord Deas put it more than a century ago, in Morrison v. Abernathy School Board (1875-76), 3 S.C. (4th) 945 at p. 950, the object of notice is

... to give the servant a fair opportunity of looking out for and obtaining another situation, instead of being thrown suddenly and unexpectedly upon the world, with, it may be a wife and family to support, and no means, either from savings or otherwise, of supporting either himself or them.

[37] If the dismissed employee has no intention to look for work, but has instead decided to retire, the very purpose for which reasonable notice is required to be given is absent. That is a factor that may well be relevant in assessing what constitutes reasonable notice in this case.

[38] The issues that must be addressed at trial are relatively narrow, and I anticipate that a trial will take no more than two days at most. Thus, a trial will not involve a disproportionate expenditure of resources.

[39] Accordingly, the balance of the plaintiff’s case is adjourned for trial. In accordance with the direction in para. 78 of Hyrniak, there is no compelling reason why I should not seize myself of the matter, so the trial will be before me. Since I do not regularly sit in Windsor, counsel have indicated their willingness to travel to London to try the matter, if it will assist in expediting the trial.

[40] The following directions will apply:

• The defendant will file a Fresh As Amended Statement of Defence within 15 days;

• The parties will exchange Affidavits of Documents by the end of June;

• Examinations for Discovery, limited to 2 hours each, shall be completed by the end of August;

• Undertakings shall be complied with by the end of September;

• Any motions arising out of the undertakings shall be brought by the end of October;

• The action shall be set down for trial by the end of November.

[41] If the parties cannot agree on costs, I will accept brief written submissions from the plaintiff within 15 days, with the defendant’s response within 10 days thereafter, and any reply within 5 days thereafter. Failing that, the parties will be deemed to have agreed upon costs between themselves.

Original signed “RSJ Heeney”

Regional Senior Justice T. A. Heeney

Date: May 30, 2014