SUPERIOR COURT OF JUSTICE - ONTARIO

Parties

RE:

DRAGAN DRAGANJAC

Plaintiff

-AND-

EQUITY FINANCIAL TRUST COMPANY FINANCIERE TRUST EQUITY and EQUITY FINANCIAL HOLDINGS INC.

Defendants

BEFORE: F.L. Myers J.

COUNSEL: Jennifer Heath & Ryan Campbell, for the Plaintiff
Chris Dockrill, for the Defendant

HEARD: September 24, 2014

endorsement

[1] This lawsuit is a contract interpretation case masquerading as a wrongful dismissal case. In this motion, the plaintiff seeks an order for partial judgment on admissions on the basis that the defendants have admitted owing him at least $75,000 for unpaid commissions. In addition, the plaintiff seeks summary judgment declaring that he is entitled to reasonable notice of termination at common law and pursuant to his employment contract in the monetary equivalent to 24.4 weeks remuneration.

[2] The defendants cross move, also for summary judgment, seeking the following relief:

a) dismissing the action against the defendant Equity Financial Holdings Inc.;

b) limiting the plaintiff’s claim for notice of termination to the amount already paid being the equivalent of two months base salary and two weeks of benefit continuation in accordance with the plaintiff’s contract of employment;

c) dismissing the plaintiff’s claim for breaches of the Ontario Human Rights Code; and

d) providing directions for a trial of the issues concerning the plaintiff’s claim for unpaid commissions.

[3] Combining the parties’ motions effectively brings before the court all of the subsidiary issues in the case leaving for trial the big ticket ($750,000) issue of contractual interpretation concerning the calculation of the plaintiff’s commission entitlement. While motions based on subsidiary issues may often be viewed as tactical and contrary to the expectation that litigation proceed to the most expeditious and least expensive resolution on the merits, in this case, by resolving all of the subsidiary issues, the chaff can be discarded to allow the parties to concentrate on harvesting the wheat.

Judgment on Admissions

[4] In the defendants’ statement of defence and notice of motion, they have pleaded that the plaintiff’s outstanding commission entitlement is $75,000 and that they offered that amount to the plaintiff as a “with prejudice” settlement offer in order to resolve that issue in the case. Reviewing the affidavit filed by the defendants makes clear, however, that the $75,000 amount is not just an arbitrary figure offered by way of settlement. Rather, Ms Robinson, the plaintiff’s former Vice-President of Human Resources, swears that the plaintiff earned precisely $75,000 in commissions from April 1 to June 30, 2011. This is supported by contemporaneous documentation. Moreover, she confirms at paragraph 16 of her initial affidavit that the commission has not been paid to the plaintiff because he claims he is entitled to a larger amount.

[5] Rule 51.06(2) provides that a party may move for judgment on admitted facts without waiting for the determination of other issues between the parties. There is no dispute in the lawsuit that the plaintiff is entitled to at least $75,000 in commissions. The issue for trial will be whether he is entitled to more. Accordingly, the plaintiff is entitled to judgment for $75,000 plus prejudgment interest from the date of his termination net of appropriate government withholdings.

Equity Financial Holdings Inc. is Not an Employer

[6] The partial judgment granted above is against the plaintiff’s former employer Equity Financial Trust Company alone. The plaintiff has presented no evidence suggesting any confusion as to the identity of his employer. The defendant Equity Financial Holdings Inc. is a public holding company vehicle. The plaintiff was engaged as a salesman for the operating subsidiary. The fact that two of his superiors may have had job duties to both the operating company and the parent company is of no consequence to the plaintiff. The plaintiff was a salesman. The public holdco did not sell the services that the plaintiff sold for the operating subsidiary. There is no ambiguity, nor any suggestion of injustice in recognizing the corporate veil in this case. Accordingly, judgment will issue dismissing the claim as against Equity Financial Holdings Inc.

Notice of Termination

[7] The plaintiff’s employment was terminated after approximately 11 months. At the time, he was 39 years old. He held the formal title of “Vice President” but he was one of many salesmen in the same position. He did not have any executive authority. He did not supervise any employees. No one reported to him. He earned an annual base salary of $100,000 plus commissions and benefits. All of the requisite facts necessary to assess the plaintiff’s express or implied contractual entitlement to notice are before the court.

[8] The employer provided no law to support its argument that the assessment of the appropriate notice period requires an assessment of the reasonableness of the plaintiff’s mitigation efforts. The two are distinct concepts. Moreover, the defendant provided no evidence to undermine the plaintiff’s evidence that his mitigation efforts were reasonable at least up to the end of the notice period claimed. Simply asserting a desire for production and further cross-examination is not an acceptable response to a motion for summary judgment.

[9] There was much argument at the hearing of the motions as to whether the plaintiff’s written contract of employment limited the plaintiff’s entitlement to reasonable notice of two months or whether he was entitled to more as an implied term at common law. Nothing turns on that outcome as I find that at common law the appropriate notice period for the termination of the plaintiff’s employment in light of all of the plaintiff’s circumstances assessed in accordance with the factors approved in Bardal v. Globe & Mail Ltd., 1960 294 (ON SC), [1960] OWN 253 (HC) and as approved in Machtinger v. HOJ Industries Ltd., 1992 102 (SCC), [1992] 1 SCR 986, was two months. See, for example, Harvey v. Shoeless Joe’s Limited, 2011 ONSC 3242.

[10] The plaintiff has received two months base salary and benefits continuation for two weeks. Accordingly, he is entitled to a further six weeks benefit continuation measured by the employer’s costs of benefits. (Under the written contract, the term “compensation” includes benefits.) The plaintiff is not entitled to any further commissions that only accrued due during the notice period in light of the express provisions of the defendant’s variable compensation plan concerning departure and the date of departure. If the parties cannot agree on the employer cost of benefits for six weeks, I may be contacted.

Human Rights Claim

[11] The plaintiff had hernia surgery and was off work for 10 days in December, 2010.

[12] A month after he returned, the employer advised the plaintiff that his performance for 2010 was well below expectation. He earned commissions of only $7,000 although he spent approximately $20,000 entertaining clients during the year. There is no indication that his brief absence for hernia surgery in December had any bearing upon this issue.

[13] Under the terms of the performance improvement plan assigned to the plaintiff, he was required to fulfill a number of measurable steps (such as a fixed number of meetings per week, for example) in order to try to improve his sales productivity. In February, 2011, the plaintiff came down with pneumonia and was off work for two weeks. He returned to work on a reduced workload for one further week. Thereafter he was back to full capacity.

[14] On April 13, 2011, the defendant terminated the plaintiff’s employment without cause on the basis that he was not producing sufficient sales. The plaintiff points to an increase in his productivity in the months prior to his termination. But then he alleges that his termination was based in whole or in part upon disability or perceived disability and, as such, the plaintiff seeks $50,000 in damages.

[15] It is clear from paragraphs 14 and 15 of the Statement of Claim, the plaintiff alleges that the termination was the breach of his rights. But an employee does not have a right to a job. Rather, he has a right to equal treatment without regard to disability. The plaintiff is already obtaining damages for the termination of his employment in this proceeding. He has adduced no evidence at all in response to the defendants’ motion to establish that he was denied equal treatment on the basis of a disability or that he has suffered any other harm based on such allegations. Similarly, there is no evidence of the commission of any independently actionable wrong that could realistically support a claim for aggravated or punitive damages based upon the plaintiff’s allegations. The defendant accommodated the plaintiff’s illnesses by granting him time off work without question and without requiring medical documentation. He was not docked salary or vacation time. The plaintiff’s failure to produce sales in 2010 had nothing to do with the brief time that he took off for his hernia surgery in December of that year. The plaintiff claims that he must have been terminated in April due to his pneumonia in February. The defendant denies this and points to the plaintiff’s clear lack of production throughout the term of his employment. The plaintiff complains that the defendant’s witness on this motion did not have personal knowledge of his performance under the performance improvement plan. The plaintiff did not serve a summons to witness for his former supervisor, nor did counsel seek any undertakings concerning this issue that remain unfulfilled. The plaintiff has neither adduced nor sought any evidence to indicate that he suffered discrimination as compared to anyone else by reason of his brief bout of illness. In my view, the plaintiff has failed to put his best foot forward to rebut the defendant’s evidence that clearly establishes that there is no genuine issue requiring trial (see 1061590 Ontario Ltd. v. Ontario Jockey Club, 1995 1686 (ON CA), 1995 OJ No. 132 (CA) at 35)).

Out-of-Pocket Expenses

[16] At the commencement of the hearing, the plaintiff’s counsel conceded that the plaintiff does not claim for out-of-pocket expenses.

Hryniak

[17] Under the Supreme Court of Canada’s decision in Hryniak v. Mauldin, 2014 SCC 7, as I am dismissing portions of the motions of both sides, I am required to seize myself of the matter as the trial judge. Both counsel made submissions seeking production of documents and discoveries pending a brief trial on the remaining issue - whether the defendant is liable to pay further amounts to the plaintiff on account of commissions that accrued due prior to the date of termination of his employment. In accordance with rule 20.05(2)(a), each party will deliver sworn affidavits of documents within forty-five (45) days limited to the issue of commission entitlement of employees of the employer in 2011. Without limiting any party’s entitlement to seek further directions, the employer should be producing documentation concerning, at minimum, the transactions listed in paragraph 25 of the plaintiff’s supplementary affidavit and any other transactions that were underway as at the date of the termination of the plaintiff’s employment that might yield the plaintiff commission should his alleged interpretation of his commission entitlement be accepted by the court.

[18] Examinations for discovery should be scheduled to be concluded by the end of January, 2015. Any undertakings given on examination for discovery are to be fulfilled within thirty (30) days of the date given.

[19] I may be contacted by email to my Assistant for any matter concerning the scope or conduct of discoveries that may arise. We will not burden the Masters’ schedule with these discoveries. I will resolve any discovery disputes summarily. All documents that may be delivered to me are to be attached in searchable PDF format to emails sent to my Assistant. No Books of Authority are to be delivered. Rather, any case law is to be referred to by way of hyperlinks in written submissions.

[20] As to costs, neither side has enjoyed complete success on this motion. However, as I noted at the outset, the motion itself is only a prelude to the main event which will now be heard quickly by me. Accordingly, costs are reserved to the trial.

________________________________ F.L. Myers J.

Date: September 26, 2014