CITATION: Antunes v. Limen Structures Ltd., 2015 ONSC 2163

COURT FILE NO.: CV-13-472300

DATE: 20150602

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

John Antunes

Plaintiff

– and –

Limen Structures Ltd.

Defendant

J. VanWiechen, for the Plaintiff

A.B. Schwisberg, for the Defendant

HEARD: March 30, 31 and April 1, 2015

REASONS FOR DECISION

CAROLE J. BROWN J.

[1] The plaintiff brings this action for wrongful dismissal, breach of contract, and negligent misrepresentation. The plaintiff, John Antunes, alleges a failure of the defendant, Limen Structures (“the defendant” or “Limen”), to provide reasonable pay in lieu of notice, failure to issue shares pursuant to the terms of the employment contract, and negligent misrepresentations upon which he relied in accepting employment with the defendant.

[2] At the pretrial conference, the defendant abandoned the allegation of dismissal for cause. Until the time of closing submissions, the defendant maintained that the plaintiff had resigned and had not been terminated. However, this allegation was abandoned at the time of closing submissions. No evidence had been proffered by the defendants to substantiate the allegation during the course of the trial.

The Positions of the Parties

[3] It is the position of the plaintiff that the principal of the defendant, Tony Lima, induced the plaintiff to join the defendant company. He had worked as an independent contractor for Broccolini Construction (“Broccolini”) for one year prior to being offered a position as employee with Broccolini, when Mr. Lima approached him. After negotiations, he signed an employment agreement with the defendant dated May 28, 2012. The plaintiff’s position is that he was induced to come to the defendant corporation by virtue of the salary offered which was $150,000, with an increase to $200,000 after the first year of employment with the company, 5% of the company’s shares with the potential of an additional up to 5% of the shares of the Residential Division within one year of commencement of employment, and a termination clause which stipulated pay in lieu of notice for termination without cause of up to 12 months. He considered these terms to be generous.

[4] The plaintiff maintains that Mr. Lima represented the company as thriving and worth $10 million, such that the plaintiff’s shares would be worth $500,000. Based on all of the foregoing, the plaintiff accepted the employment offer.

[5] It is further the plaintiff’s position that he was never issued the shares which were to be issued on commencement of employment. He spent his time preparing delay claims rather than acting as Senior Project Manager of Construction Development, and found, after commencement of his employment, that the defendant corporation was not in a good financial situation. On November 9, 2012, after having been required to spend all of his time doing delay claims, he was terminated without notice and given his last week of salary pay owing, as well as “an additional cheque for one week of pay to compensate him for any employment related expenses incurred during his tenure” with the company.

[6] The defendant took the position that this is a wrongful dismissal claim with short-term service, and that there are issues as to interpretation of the employment agreement. The defendant maintains that no damages are owing. Further, it is the position of the defendant that there was no inducement to leave other secure, long-term employment. Finally, the defendant contended that there was no “secure long-term employment” which the plaintiff had left; based on a review of the plaintiff’s previous work history, and maintained that with 5 to 6 jobs over 10 years, the plaintiff had never held any secure, long-term employment.

[7] It is the position of the defendant that the plaintiff’s allegations regarding representations of the company’s net worth and the value of stocks to be issued to him are not substantiated, that he never obtained any evidence of such evaluations and that he relies only on an oral statement made at the negotiation meeting. Moreover, the defendant took the position that the plaintiff had misrepresented his qualifications to the defendant corporation, and had used those misrepresentations on emails sent by him on behalf of the company, thus misrepresenting himself on behalf of the company to the public-at-large. It is the position of the defendant that the misrepresentations were fundamental, going to the heart of the contract thus voiding the contract of employment.

The Evidence

John Antunes

[8] John Antunes is married with two teenage boys, who was, at the material time, 50 years old.

[9] His educational background is as follows. He obtained his BA equivalency in Business and Psychology from York University. He graduated from Ryerson Polytechnical Institute in Architectural Technology, from Humber College in Project Management and from Georgian College in Project Risk Management/Cost Control. As regards certification, he has his Project Management Professional (“PMP”) equivalency, but has not taken the certification examinations. He also has his Primavera P6 certification, which is required by those working on Toronto Transit Commission (“TTC”) projects. Further, he is “Gold Seal Certified” in Project Management by the Canadian Construction Association.

[10] He also explained that he has not obtained his Professional Quantity Surveyor “(PQS”) certification, as he must write the examinations, but is certified as an “Associate Quantity Surveyor.” He has been a member of the Association of Quantity Surveyors since 2012. In cross-examination, he conceded that there is no Associate Quantity Surveyor certification, but only membership in the organization as an associate. He indicated that he did not know whether he was entitled to use the designation Associate Quantity Surveyor but testified that, in the industry, those in his position are called “Quantity Surveyors.”

[11] In cross-examination, he was asked about the QS designation which appears on some e-mail communications in evidence in this action. He confirmed that he identified himself as “QS, GSC.” He testified that he had not completed his examinations as a PQS, and was not designated or certified as a “PQS.” He explained that, in the industry, colleagues, such as himself, who are not yet designated “PQS” often use the designation “QS.” While it was his understanding that he could use this designation, he stated that the CIQS recognized no such designation, and that he may have misunderstood that he could use the designation after his name. He denied that he had represented himself to the defendant in this way, in his resume or in interviews prior to being hired, and stated that he never had any discussions with Limen about this designation, or advised Limen that he was a “QS.” He stated that it was only when they asked how his business cards should read, after negotiations for his employment were finished, that he wrote his name in full with “QS, GSC” following his name, for purposes of ordering business cards.

[12] His evidence as regards his work history is as follows. While at University, he worked as a general laborer on construction projects and, as an assistant carpenter with Chemello Contractors. Following University, he established a business with his brother doing small projects and studio renovations. He did this for three years. Thereafter, he moved to Rosewood General Contractors, a small general contractor, as Project Manager, where he stayed for three years. He then went to Kawneer Company Canada, a large multinational firm, as a Project Manager. He stayed three years. He moved to Eastern Construction as a Senior Construction Project Coordinator, hired to manage the Woodbine Project. He managed the contracting and tendering, managing shop drawing plans and working with the designated Project Manager. He worked with Eastern Construction for one and a half years until the Woodbine Project was completed. When the project had ended, there was no appropriate work at his level in the company. He explained that positions such as those he held are often project-based. For a major project, the construction companies will “ramp up” and hire more workers. He then went to UMA Projects Ltd., a large corporation contracted to Brookfield for the Royal Bank Project, another short-term position, as Project Manager.

[13] In 2001, he was hired by VanBotts Construction, a large corporation, as Project Manager for the Casino Rama Projects, overseeing construction of the Casino, entertainment center and hotel. He remained there managing all work related to the project through 2003, when the project ended. He thereafter went to EllisDon, one of the largest construction companies in Canada, as Project Manager for the Vaughan Mills Mall. In that capacity, he managed contracts, issued tenders, looked after scheduling and handled changes which added costs to the estimates. He testified that this was such a large project that there were 2 to 3 Project Managers. He managed the trades. He was there approximately 2 years, until the project ended. Again, as his work was project-based, there was no further work at his level and appropriate for him at that time.

[14] He established ANC Project Management and Consulting (“ANC”), whereby he was the principal of the company and contracted out to various companies for management of specific projects. He did this for a year, working at projects at Versa Construction, and then obtained a position at Bellrock Design Build/Construction as a Senior Project and Development Manager, where he stayed for three years.

[15] He testified that, after the 2008-2009 crash, there were fewer large construction projects and he was unable to find another position for three months. He ultimately found a position at Buttcon Limited, a mid-sized company, as Senior Project Manager for the TTC project and for the Jarvis Street courthouse renovations, and remained with Buttcon for approximately two years, during the life of the projects. He testified that his project-based job is dependent on economic conditions.

[16] He thereafter went to Broccolini Construction, a large contractor located in Québec, which wanted to open offices in Toronto. He testified that he worked for the first year as an independent contractor under his business, ANC, because he was not certain whether Broccolini would be successful in establishing offices and attracting business in Toronto; therefore, he started work with Broccolini as a consultant. He assisted in developing proposals for clients and tendering bids for projects, including the Erin Mills Project and other small projects which he worked to attract. He stated that his work with Broccolini went well, they were pleased with him, and an offer of employment was made in late March of 2012. An unsigned offer of employment with Broccolini was adduced in evidence. It was the plaintiff’s testimony that negotiations with Broccolini had begun as regards the terms of employment, that there were two clauses which he was seeking to have changed and thereafter he wanted to obtain legal advice, such that this contract was never signed. He testified that he was never presented with a draft employment offer which he was prepared to sign. He considered the position at Broccolini a good employment offer but wanted certain provisions changed before he would sign the contract. He stated that when the offer from Limen Structures came, he felt that this was a better offer. It was his evidence that he advised Broccolini that he would not sign the agreement.

[17] At about the time that he was negotiating the offer with Broccolini, he came across Limen Structures through his involvement in the tendering process at Broccolini. He testified that he had known Tony Lima for many years, as Mr. Lima’s brother was his uncle. The plaintiff testified that he and Mr. Lima met a few times for lunch, began to talk and then began to discuss opportunities that may be available for him at Limen Structures. He was told to send a resume to the defendant, which he did. He testified that he was unable to produce that resume, as his computer had been affected by a virus and all documents on the hard drive were lost. Another resume, in existence at the same time, was produced, although he conceded that this was not the same resume that was sent to Limen, but was substantially the same in content.

[18] He met with Mr. Lima at Limen Structures and discussed their respective expectations as regards potential employment. Mr. Antunes testified that they discussed the position, responsibilities, and the terms of his employment, including salary and shares. He testified that Mr. Lima advised him that the company was, in his opinion, worth $10 million and that the shares which he was offered, namely 5% of the company, would be worth $500,000. He testified that there were negotiations including several phone calls and two meetings prior to their signing the employment offer dated May 22, 2012, and signed by the parties on May 28, 2012, the day on which he commenced his employment with Limen Structures.

[19] The provisions of the contract which are relevant to this action are as follows:

1. Position: Your position is Senior V.P. of Operations/Concrete Forming. You will report to the President, and have such duties as determined by the President of the Company from time to time during your employment by the Company.

2. Base Salary, Vacation Pay Included: You will be paid a salary of $150,000 per year for the first year and after one full year of employment with the company the salary will increase to $200,000 per year.…

3. Company Share: John Antunes shall be issued 5% of the Company shares at the start of this employment contract with a potential option for an additional up to 5% of the Residential Division within one year of the start of this agreement at the current evaluation of the company shares as of the date of this agreement. Share value is per the Shareholders’ Agreement.

4. Effect of Termination of Employment:

In the event of the termination of the employment of you by the Company for any Cause, you shall be entitled to the following payments and benefits, subject to any appropriate offsets, as permitted by applicable law, for debts or money due to the Company:

(i) unpaid salary through the Termination Date; and

(ii) up to twelve (12) months of salary compensation paid on a weekly basis rate commencing two weeks after the Termination Date; and

(iii) any unpaid reimbursable expenses outstanding as of the Termination Date.

[20] The plaintiff was asked in cross-examination what he had done to verify the $10 million valuation that Mr. Lima had given him. He testified that he trusted what Mr. Lima had told him, that Mr. Lima was a part of the family and he thought he could trust him. He knew that his relative was doing well in his business. He did not inquire as to whether the shares were subject to restrictive rules, were closely held or were free trading. He did request the financial statements, but was not provided with them at the time he was hired. Based on read-ins of the examination for discovery of Mr. Rocco Micciola, Controller-Finance & Operations at the defendant corporation, while a valuation of the defendant or its shares was undertaken to be produced on examination, nothing was ever produced. Financial statements for fiscal years 2011 to 2013 were ultimately produced in this action, although not at the time of the plaintiff’s hiring or during his employment with the defendant.

[21] The plaintiff testified that he commenced employment on May 28, 2012, the date the contract was signed. However, no shares were ever issued to him, despite requests for same. In fact, no documentation was ever provided. No Shareholders’ Agreement as referenced in the employment contract was ever provided to him, nor was it produced in this action. Based on the read-ins of the examination for discovery of Mr. Micciola, the defendant conceded that no shares were ever issued to the plaintiff.

[22] As regards the potential option for an additional 5% of the Residential Division after one year, based on the read-ins from the examination for discovery of Mr. Micciola, no “Residential Division” was incorporated at any time material to this action.

[23] From the preliminary discussions between Mr. Lima and Mr. Antunes prior to signing the agreement, Mr. Antunes understood that his duties would include managing coordinators, business management and some delay claims. He described these delay claims as follows. Where there are changes to a contract which would impact the estimate given by Limen Structures, a delay claim would be compiled. An analysis of the impact of the changes on labour, material and the timeline would be done as regards an increase in costs. These costs were recoverable and would be reflected back on the client. The delay claims had to be properly quantified as regards additional costs resulting from the changes. These delay claims involved changes that were not due to Limen Structures, and which would be reflected back to the client for payment of all or a portion of the claims, if justifiable.

[24] Mr. Antunes testified that he had done a quick review of projects when he first commenced employment with Limen Structures and found numerous unquantified changes which should have resulted in delay claims being prepared. Unfortunately, they had not been, and the claims were outstanding.

[25] On August 30, 2012, while he was on vacation, he received correspondence from Mr. Micciola advising that as at that date, his full time was to be spent working on delay claims and outstanding changes for five projects: Ellis Don, Sona Construction, Pomerleau, Buttcon and Walsh Construction, in that order. He testified that all of these contracts and projects had commenced before he came to the defendant company.

[26] It appeared that the Walsh delay claim alone was in the $4 million range. He had discussions with Mr. Lima and Don Fleming in his first weeks with the company. He indicated that the delays were growing into an all-consuming effort and he advised Mr. Lima that the delays were significant enough that a third party would have to be brought on, as the claims would otherwise consume his entire time. John Pearson, a Claims Consultant who specializes in analyzing, quantifying and reviewing claims, was brought into the company.

[27] Mr. Antunes discussed his concerns about being taken away from the operational duties and was told that the delay claims needed his full attention. He wanted to ensure that he would be able to go back to his previous job when the delay claims were completed. He agreed, in cross-examination, that it was not unreasonable to have assigned him to the delay claims, given the urgency, as they were needed for financial year end to give to the auditors. He understood that because the delay claims were substantial, there was urgency to his undertaking the duties in order to provide the quantum of potentially recoverable claims to the auditors for financial year end, as well as for the bonding company and the bankers, who all needed an update on the claims.

[28] Mr. Antunes testified that he did the duties assigned and worked hard – many hours per day as well as weekends – to put together all of the claims binders. He completed the task by November 9, at which time he had set up a meeting with the claims consultant, Roger Bridges, as Mr. Pearson had not continued in that role. He testified that the substance of the meeting was to hand over the delay binder regarding the last claim (the Walsh claim), as the others had already been completed, and to discuss the claims binders and Mr. Bridges’ review of the claims.

[29] Mr. Antunes testified that the delay claims were substantial, and were in the millions as regards potential receivables. He did not know the extent of the delay claims until after he had been employed and assigned these duties. He stated that after he began the review of the delay claims, he concluded that the company was not worth $10 million as Mr. Lima had advised him at the time of the contract negotiations.

[30] Mr. Antunes testified that, once his review and quantification of the delay claims had ended, he was about to call Mr. Lima as regards going back to his original duties, when he was requested to meet with Mr. Micciola in his office. At the meeting, Mr. Micciola explained that his previous position as Vice President was no longer available, and that he was no longer needed by the Corporation.

[31] Mr. Antunes inquired as to whether there were any other positions, as he was the primary breadwinner of his family, and needed employment, and was told that there may be a Project Manager position. However, he was then asked for his keys and was required to clean out his offices. Thereafter, he inquired again as regards the Project Manager position and was told that there was none available.

[32] He testified that he attempted to get through to Mr. Lima to speak with him about his termination and other positions that may be available, but was always unsuccessful.

[33] He testified that on November 13, 2012, a Record of Employment (“ROE”) was issued by the defendant, indicating the reason for issuing the ROE to be “Shortage of work/End of contract or season.” A second ROE was issued 20 days later, on December 3, 2012, with the only change being the reason for issuing the ROE, which was indicated to be “Quit.” There was no evidence adduced by the defendant to explain the second ROE, and as indicated above, the defendant did not pursue the allegation that the plaintiff had resigned. The plaintiff testified that he was surprised to receive the second ROE and that it resulted in his being cut off EI insurance. He had to attend at the EI office, explain the two ROEs and was thereafter reinstated. He testified that he looked for work, but that Christmas and the winter season was a time when construction usually slowed down.

[34] Mr. Antunes stated that he contacted colleagues and former clients. He sent resumes to companies in his search for employment, had several interviews, and ultimately reached out to over 100 employers. Some were concerned with his qualifications, which they found too senior. Others were concerned about his age. He was unable to find employment from just after he lost his position with Limen Structures until March of 2014. He is now the Vice President of Operations for a small construction firm, with his remuneration substantially less than is was with Limen.

[35] In cross-examination, he was asked about any documentation regarding any attempts to find alternate employment from the time his job was terminated until March of 2014, as the only documentation produced in this regard included a list of several pages of contacts that was undated, and correspondence commencing September 26, 2013, some 10 months after termination of his employment. He testified that the e-mails that he had sent had been destroyed as a result of a computer virus in January of 2014. When asked why the affidavit of documents in this matter had not contained any documents for 2013, he indicated that he had made a mistake, and that the virus that attacked his computer had not been in January of 2014, but rather in January of 2013. When asked why the affidavit of documents did not explain, in Schedule C, the loss of the documents, he stated that he produced what he had available. As regards the list of contacts and his handwritten notes thereon, he testified that this was a list of consulting firm members of the Quantity Surveyors Institute, of which he is an associate member, and which he obtained from the Institute.

The Defendant

[36] The defendant, Limen Structures, called no viva voce evidence. The defendant’s only evidence consisted of read-ins from the transcripts on examination for discovery of Mr. Antunes. It further submitted, in evidence, a printout from the website of CIQS as regards recognized designations and certifications.

[37] Mr. Lima was not called as a witness in this trial. Based on read-ins from the examination of Mr. Micciola, the defendant conceded that the plaintiff had no discussions as regards hiring with anyone other than Mr. Lima. While questions were asked to be put to Mr. Lima as regards the details of the negotiations during the examination of Mr. Micciola, all questions to be put to Mr. Lima were taken under advisement and none of these questions was answered. Also as regards Mr. Lima’s understanding of the designations “QS” and “GSC,” an undertaking was given at the examination of Mr. Micciola to ask Mr. Lima his understanding of these designations, but no answer was ever provided.

Analysis

Whether the Contract of Employment Is Valid

[38] The defendant submits that the employment contract was void ab initio on the following grounds. It is the position of the defendant that the plaintiff induced the defendant to extend an offer of employment and enter into the employment contract based on misrepresentations as to the plaintiff’s qualifications and professional designations. The defendant maintained that the plaintiff used the qualification “QS” after his name, which is not a qualification recognized by the Canadian Institute of Quality Surveyors (“CIQS”) and that only the designations PQS (Professional Quantity Surveyor) and CEC (Construction Estimator Certified) are recognized designations pursuant to the CIQS. As evidence of the defendant’s reliance on the plaintiff’s representation that he was a “QS,” counsel for the defendant maintains that the letter memorializing the employment agreement dated May 22, 2012, which was addressed to “John Antunes, QS, GSC,” was evidence that the defendant had relied on that qualification in offering a position to Mr. Antunes. He further submitted that the address on the letter which set forth the terms of the employment contract should be read similarly to a recital in a contract, and therefore as part of the contract. He submitted that the evidence of Mr. Antunes was sufficient to establish that the QS designation was a misrepresentation; Mr. Antunes, as an associate member of the CIQS, was not designated by the Institute as a QS, which was not a recognized designation. Only the “PQS” and “CEC” designations were recognized by the CIQS.

[39] I note that the statement of defence does not allege this representation as regards the use of “QS.” While the defendant alleges numerous other specified misrepresentations which, it is alleged, fundamentally misled the defendant as to the plaintiff’s competence, experience, expertise and ability, and which “financially and otherwise damaged” the defendant, none of these was canvassed in the evidence.

[40] It is clear that the pleadings define the issues in the proceeding, and that this allegation of misrepresentation of the professional designation was not pled. While it appears, from the transcripts of examination of Mr. Antunes that the issue of the designation was canvassed therein, no amendment to the statement of defence was sought, and I do not entertain this ground further.

[41] Nevertheless, and in any event, based on the evidence before me, both viva voce and documentary, I do not agree with the defendant that the address of the correspondence to Mr. Antunes is to be read as a recital to the contract and therefore incorporated in the contract. Accordingly, I do not accept the defendant’s submission that the representation as regards the plaintiff’s designation and use of QS is a misrepresentation which is fundamental to the contract, goes to the heart of the contract, and which voids the contract.

[42] I do not find there to be any evidence which supports the defendant’s submission that the defendant was induced into entering the contract based on the plaintiff’s use of the designation “QS.” That designation was not set forth or anywhere included in the resume submitted to the company prior to or at the time of the interviews with Mr. Lima. It is the evidence of Mr. Antunes that it was not until finalization of the contract, when the defendant inquired of the plaintiff as to how his business card should read, that he provided a handwritten note indicating “John Antunes, QS, GSC.” This does not support the position of the defendant that it was the defendant who was induced into offering a position to the plaintiff. The defendant has adduced no other evidence in support of this contention.

[43] Accordingly, and based on the foregoing, I do not find that the employment contract was void ab initio on the ground of misrepresentation.

Termination without Cause and Pay In Lieu of Notice

[44] There is no issue that the plaintiff was terminated without cause. The defendant’s allegation of cause was abandoned at the pretrial conference. I have further found that there is nothing which would have voided the employment contract. Accordingly, the only issue is the appropriate pay in lieu of notice to which the plaintiff is entitled.

[45] The factors to be considered in determining the reasonable period of notice where an employee is dismissed without cause were set forth in Bardal v. Globe & Mail Ltd. (1960), 1960 294 (ON SC), 24 D.L.R (2d) 140 at p. 145 (recently cited with approval in Honda Canada Inc. v. Keays, 2008 SCC 39 at paras. 28-29, [2008] 2 S.C.R. 362 [Honda v. Keays]):

There can be no catalog laid down as to what is reasonable notice, in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.

[46] I have considered each factor, below.

Character of Employment

[47] The plaintiff had worked in the construction industry as Project Manager and Senior Project Manager on a number of high-profile contracts for over 20 years, as set forth in detail at paragraphs 11-15, supra.

[48] In his previous positions, he had been responsible for coordination of staff, as well as facilitating coordination and communication among project staff, owners, architects and contractors. In his position with the defendant, he had had supervisory responsibilities, with staff under his direction until such time as he was requested to work solely on the delay claims.

Length of Service

[49] Mr. Antunes commenced employment as Senior Project Manager on May 28, 2012, and was terminated on November 9, 2012, without prior notice. He was, accordingly, in the defendant’s employ for five months and 11 days.

Age of Employee

[50] At the time of his termination, the plaintiff was 50 years old.

Availability of Similar Employment Having Regard to the Experience, Training and Qualifications of the Employee

[51] The plaintiff’s training and qualifications are set forth at paragraphs 9-11, supra.

[52] He had worked in the construction industry during the summers while he was at university, from 1985 through 1988. From 1991 through the material time, he worked as Project Manager, Senior Construction Project Coordinator, Senior Project and Development Manager and Senior Project Manager at a number of construction corporations prior to joining Limen Structures. These included, inter alia, EllisDon Corporation, Belrock Design Build/Construction, Buttcon Limited and Broccolini Construction, working on both private and public development projects. For approximately seven years, he had worked as a Senior Project Manager, responsible for management of projects, project staff, facilitating coordination and communication among project staff, owners, architects, contractors, as well as project budgets, schedules and cost control reviews.

[53] It was the evidence of the plaintiff that he sought comparable employment from the time of his termination until he ultimately secured employment some 16 to 17 months later. He testified that, given that he was the primary breadwinner in his family, had two teenaged sons and was not provided with any termination salary by the defendant, he was compelled to find work as quickly as possible.

[54] While I acknowledge the defendant’s submissions as regards the plaintiff’s documentary evidence of his employment searches and the missing documentation which he explained as being due to a computer virus in January of 2013 or 2014, I do not accept the defendant’s submission that this discrepancy in dates renders the plaintiff’s evidence unreliable or lacking in credibility. I accept the plaintiff’s viva voce evidence that he began to search for new employment after his termination, due to the fact that he is the primary breadwinner, had not been given termination pay, and had a family including teenaged sons.

[55] Based on all of the evidence before me, both viva voce and documentary, I am of the view that the plaintiff looked for new employment without success. It was the evidence of the plaintiff that his jobs were, for the most part, “project-based.” It was his evidence that when he was attempting to find new employment following his termination, potential employers often commented that he was overqualified for the position, too senior, or they made reference to his advanced age. Based on his efforts to find employment and his evidence in this regard, it appears that similar, comparable employment, given his qualifications and age, was not readily available.

[56] The defendant adduced no evidence of any comparable positions available at the material times which the plaintiff could have pursued.

Mitigation of Damages

[57] The plaintiff’s efforts to find new employment following his termination are, in part, set forth above.

[58] As regards mitigation, it was the evidence of the plaintiff that he searched for the entire time from his termination from the defendant until he finally secured alternate employment 17 months later. The defendant submitted that the plaintiff made no efforts to search for employment from the time of termination through September 2013, as there is no documentary evidence thereof. I note that the onus is on the employer to prove that no reasonable mitigation efforts were made to secure comparable employment and has failed to do so. The defendant provided no evidence of comparable positions which may have been available to the plaintiff at the material times: Yiu v. Canac Kitchens Ltd., a division of Kohler Ltd., [2009] O.J. No. 871 at paras. 15-16 (S.C.).

[59] I recognize that the plaintiff’s documentation as regards the efforts to mitigate his damages does not commence until some 9 to 10 months after termination. He attributed this to a virus which had attacked his computer. I have taken into account that his evidence changed as to the time of the computer virus which destroyed the documentation and that he had no evidence in this regard. However, other than this one point, his evidence was not shaken in cross-examination as regards his efforts to find alternate employment. I accept that he did try to find alternate employment given his circumstances as a primary breadwinner. As well, I take into consideration his evidence that his job was seasonally based and project-related, which would make such employment more difficult to obtain. When he ultimately was offered and accepted new employment, it was not as a Senior Project Manager, which position he had held previously, but as a Project Manager and for a reduced income. This suggests that he was prepared, at that juncture, to accept something less than “comparable,” and less than he had previously held, to mitigate his losses.

Special Circumstances

[60] The plaintiff further submits that other special considerations should be taken into consideration along with the above factors in determining a reasonable period of notice, including the inducements to enter the employment contract and misrepresentations made by the President of the defendant corporation, Mr. Lima, to Mr. Antunes during the course of negotiating the contract, as follows.

Inducements

[61] The plaintiff alleges that that he was “recruited… to leave secure, long-term employment and to accept a position as a member of the defendant’s senior leadership team.” He alleges that the inducements consisted, inter alia, of negligent or intentional misrepresentations as regards the financial condition of the defendant corporation, the value of the corporation and the value of shares which he was to be issued pursuant to the employment agreement. The evidence as regards the secure employment and the misrepresentations is set forth above.

[62] The defendant maintained that the plaintiff did not have “secure, long-term employment,” but rather that the plaintiff had worked for many different corporations over 10 years, with no employment lasting longer than 2 or 2 1/2 years, with at least two intervals between jobs of roughly 3 months. The defendant further submitted that, just before the plaintiff accepted employment with the defendant, he was in a contractual arrangement between Broccolini and his professional company, was in the process of negotiating employment with Broccolini, but did not have a signed contract of employment. It further argued that based on the draft employment agreement being negotiated with Broccolini, there was no “security” of employment from which to be lured.

[63] Based on all of the evidence before me, I find that the plaintiff had been employed by Broccolini on an independent contractor basis from 2011, and was in the process of negotiating an employment contract. However, I am of the view that this cannot be considered secure, long-term employment from which he was induced to join the defendant.

Misrepresentations

Duty of Good Faith Dealing

[64] There is a general duty of honesty in contractual performance. Parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of a contract. A party to a contract must be able to rely on a minimum standard of honesty from the contracting partner in relation to performing the contract with the reassurance that if the contract does not work out, they will have a fair opportunity to protect their interests: Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494. In the sphere of employment law, the employer has a duty to act in good faith and with a sense of fair dealing towards its employees: Wallace v. United Grain Growers Ltd., 1997 332 (SCC), [1997] 3 S.C.R. 701, 152 D.L.R. (4th) 1; Honda v. Keays, supra. It is the position of the plaintiff that the defendant did not act in good faith or deal fairly with him in offering employment or in his termination.

[65] I am of the view that the defendant did not deal with the plaintiff honestly in the contractual negotiations. There were misrepresentations made, upon which the plaintiff relied in accepting employment with the defendant. These included the misrepresentations made as regards the financial circumstances of the defendant corporation, which subsequently proved not to be accurate or true. While Mr. Lima advised the plaintiff that the company was valued at $10 million, there was no evidence to substantiate this. The plaintiff, based on his knowledge of Mr. Lima, a relative by marriage, did not doubt Mr. Lima’s word, as he knew or believed through the family relationship, that Mr. Lima was very successful in his business and also believed that he could trust his word. He relied on the values of the Corporation and his 5% shareholding given by Mr. Lima in accepting the offer of employment. The initial shareholding of 5% was never issued. Further, the evidence indicates that no Residential Division was in existence at any material time, nor had there been discussion of the creation of a Residential Division. It was Mr. Antunes’ evidence that he relied on these representations in accepting employment with the defendant.

[66] There was no evidence to refute this. Based on all of the evidence before me, I am satisfied that the defendant failed to act honestly in its contractual performance vis-à-vis the plaintiff, both in negotiations entering into the contract of employment and at the time of termination.

[67] It is the position of the defendant that, based on the evidence given by the plaintiff, he cannot be said to be credible. The defendant points to several examples on which he bases his submissions, including what the plaintiff termed “reassignment” of his duties to the delay claims, although on examinations he indicated that it was not a reassignment; the computer virus which counsel for the defendant termed convenient and self-serving evidence; and the false professional designation as regards “QS.”

[68] As indicated above, I have taken into consideration the different time frames given by the plaintiff as regards the computer virus. I am also of the view that the term “reassignment” does not hold the importance placed on it by the defendant. It is clear that the plaintiff’s duties were changed to 100% delay claims prior to the fiscal year end, and shortly thereafter, he was terminated. There is no claim advanced for constructive dismissal. Furthermore, as indicated, there is no evidence that Mr. Lima or Limen Structures relied on the “QS” designation in any way in hiring the plaintiff. This designation was not listed in the resume provided by the plaintiff to the defendant prior to the hiring interview. In this regard, I have considered that the resume in evidence was not that actually provided to the defendant, but was substantially the same in content, as set forth at para. 17, above. Nor is there any evidence that anyone in the public relied on this designation or that, as a result of the use, the defendant sustained any damage.

[69] I find the testimony of the plaintiff to be forthright and direct. I do not find it to be lacking in credibility, as urged by the defendant, nor inconsistent with the documentary evidence.

[70] No one was called from the defendant company to testify. Critically, Mr. Lima, with whom Mr. Antunes had negotiated his employment and the employment contract, and who would have direct knowledge of the negotiations and discussions, was not called. Further, while undertakings were requested at examinations for discovery as regards Mr. Lima’s knowledge concerning the negotiations and specific aspects thereof in issue in this action, no answers were given to those undertakings/advisements. Nor was there any documentary evidence as regards negotiations concerning the terms of his employment, or to refute the evidence of the plaintiff. Mr. Lima would have been a key material witness in this case, given his involvement in the negotiation of the employment agreement. The evidence indicates that he was the only person from the defendant corporation who negotiated the employment contract with the plaintiff or spoke to him prior to his hiring The only reason given to the Court for his not being called was that he was president of the company. I do not accept this as a reason for his not being called as a witness. Only the transcript of the examination of Mr. Micciola, Controller-Finance & Operations, was in evidence.

[71] I draw an adverse inference against the defendant corporation regarding the failure to produce Mr. Lima as a witness. He was a material witness with direct and relevant knowledge of the negotiations regarding the employment agreement. In this regard, I have taken into consideration the discussion of the caselaw set out in 1664550 Ontario Inc. v. 1240393 Ontario Ltd., [2011] O.J. No. 6441 (S.C.), a case relied upon by the plaintiff. While this is a decision of the Small Claims Court, and is not binding upon this Court, it sets forth in three pages the relevant law with respect to adverse or negative inferences, citing cases from this Court, the Court of Appeal and the Supreme Court of Canada, as well as Sopinka, Lederman and Bryant, The Law of Evidence in Canada.

[72] In all of the circumstances, and based on the evidence before me, I accept the evidence of Mr. Antunes as regards the representations made to him. I further accept his evidence that he relied on these representations in accepting the offer of employment. While the defendant argues that such reliance is not reasonable, as the plaintiff did not request supporting documentation as to the financial circumstances of the company and knew or should have known that the company was not in such good financial circumstances, I do not find the plaintiff’s reliance to be unreasonable. Mr. Antunes testified that he knew or believed, given his familial relationship with Mr. Lima, that Mr. Lima was a successful businessman with a successful company. Further, and for the same reason, he trusted Mr. Lima’s representations.

[73] Based on the evidence before me, no reason was given for the termination, and the plaintiff was simply told that his position was no longer available. When the plaintiff inquired about another position, he was lead on for a short while, and told that a Project Management position may be available, but then told to clean out his office and leave. Although he attempted to contact Mr. Lima on numerous occasions thereafter, his calls were not taken, nor were any messages left by the plaintiff responded to. I note further that as regards the ROE, the first ROE issued indicated that his employment had been terminated due to a shortage of work. Another ROE issued later indicated that the plaintiff had “quit,” a position that the defendant maintained throughout the proceedings until the trial, when the defendant withdrew that claim.

Quantum of Pay in Lieu of Notice

[74] Having found that the plaintiff was terminated without cause, I am of the view that the plaintiff is contractually entitled to notice of up to 12 months, as stipulated in his employment contract. In all of the circumstances, I am of the view that the plaintiff is entitled to eight months’ notice. I have based this on the plain wording of the contractual provision, on the defendant’s failure to act in good faith vis-à-vis the employment contract and the misrepresentations on which the plaintiff relied, and on the adverse inference I have drawn against the defendant corporation for its failure to call Mr. Lima to testify or to defend this action in a meaningful way. In the absence of any explanation as to why this Court should not award Mr. Antunes “up to twelve (12) months” salary upon termination, and given my findings, I find that Mr. Antunes is entitled to eight months’ salary as a result of his termination by the defendant corporation. In coming to this conclusion, I have also considered the misrepresentation as regards the potential for receiving up to 5% of the Residential Division. In that regard, I have taken into account, as regards breach of the duty to contract in good faith, that upon entry into the employment contract, the president of the defendant corporation made it appear that there was another division in existence of which the plaintiff had the opportunity to obtain an additional 5% of shares. Such a Division did not exist, nor is there evidence that it was ever contemplated. Simply put, the defendant corporation’s conduct is contrary to the requirement to execute contractual obligations in good faith: Bhasin v. Hrynew, supra.

[75] If I am wrong in this respect, then I find that the plaintiff is entitled to pay in lieu of notice, to be assessed in accordance with the Bardal factors, the misrepresentations and the failure of the defendant to act in good faith as regards the plaintiff’s contract.

[76] As regards the notice period, it is the position of the plaintiff that, even before considering the special circumstances, reasonable notice should be 9.45 months, or $128,937.26. He bases this on a summary of pay in lieu of notice awards contained in Fisher’s Wrongful Dismissal Database, which was placed in evidence.

[77] While many of the cases relied on by the plaintiff involved shorter-term service, as is the case here, the majority also involved inducement from prior secure employment, as was alleged here, but not proven.

[78] The plaintiff takes the position that, based on the special circumstances enumerated above, namely inducement from secure employment, and breach of the duty of good faith contracting and misrepresentations made, that notice should be increased to 12 months, and that I should award $172,466.80 in damages.

[79] As indicated above, I do not find that the plaintiff was induced to leave other secure, long-term employment. I do find, however, that there was a breach of the duty to contract in good faith, and that misrepresentations were made in the context of employment negotiations with the plaintiff.

[80] Taking into account the Bardal factors as set out above, I find that the plaintiff would have been entitled to a reasonable notice period of eight months. In so finding, and while cognizant of his short tenure with the defendant, I have also considered his senior position, his supervisory duties, his age and the availability of similar employment, as well as the defendant’s misrepresentations and the defendant corporation’s failure to abide by the rules of contractual conduct as set out in Bhasin v. Hrynew.

Shares of Defendant Corporation

[81] Mr. Antunes’ employment contract entitled him to 5% of the shares of the defendant corporation upon commencement of his employment. The plaintiff argues that an additional 5% of shares in the “Residential Division” of the company should have been issued after one year. However, I have already found that this division does not exist, never existed, and does not appear to have been contemplated. Further, the contract states that this is “a potential option for an additional up to 5% of the Residential Division.” I am not prepared to find that this contractual provision created anything more than a mere possibility of acquiring shares at some future date. However, with respect to the duty to contract in good faith, I do note that the president of the defendant corporation made it appear as though there was another corporate division in existence, and that this appears not to have been the case based on the evidence before me.

[82] I am, however, satisfied that the plaintiff was entitled to 5% of the defendant corporation’s shares as a term of his employment contract. It is clear from the evidence that no shares were issued to the plaintiff. Indeed, the defendant has conceded this point. The defendant’s failure to issue the shares to the plaintiff was a clear breach of the plaintiff’s employment contract.

[83] The more difficult issue is the remedy to which the plaintiff is now entitled. The evidence indicates that no information or documentation regarding the value of the shares or the value of the company was ever provided to the plaintiff, nor was he ever provided with a copy of the Shareholders’ Agreement at any time prior to or during his employment. Mr. Antunes testified that in the initial negotiations with Mr. Lima, he was told that the defendant corporation was worth $10 million, such that his shares would be worth $500,000. He testified that he relied on this oral valuation in accepting the position with the defendant. The defendant did not call Mr. Lima with respect to his recollection of that conversation, nor did the defendant produce the Shareholders’ Agreement or any documentation that would help value the shares, either when they were to have been issued to the plaintiff or at the trial proper. The plaintiff, and subsequently his counsel, made numerous requests for these documents, to no avail.

[84] The plaintiff submits that Mr. Lima’s verbal statement to him regarding the value of the defendant corporation’s shares is uncontradicted and should be accepted. The plaintiff also submits that an adverse inference should be drawn against the defendant based on the fact that Mr. Lima did not testify at trial, nor did the defendant permit the plaintiff to examine Mr. Lima for discovery, nor did Mr. Lima give any answers to the undertakings and questions taken under advisement at the discovery of Mr. Micciola. The plaintiff submits that Mr. Lima was the only other person involved in the contract negotiations; as an officer and major shareholder of the Corporation, as well as the only other person involved in the contract negotiations, Mr. Lima was particularly and uniquely suited to give relevant evidence. As such, the plaintiff asks that I draw a strong adverse inference on the basis of Mr. Lima’s failure to testify.

[85] The defendant takes the position that the plaintiff’s assertions with respect to what Mr. Lima told him are not credible: the conversation was in closed quarters, with no witnesses present and no supporting documentation in proof of said statement. The defendant submits that the plaintiff has not met the evidentiary burden that he bears in this action. The defendant also takes the position that the plaintiff has not met the test for negligent misrepresentation as set out in Queen v. Cognos Inc., 1993 146 (SCC), [1993] 1 S.C.R. 87 at p. 110, [1993] S.C.J. No. 3 [Queen v. Cognos]. In particular, the defendant contends that the plaintiff’s testimony on this point is not credible; in the alternative, the defendant argues that it was not reasonable for the plaintiff to have relied upon any alleged misrepresentation. In sum, the defendant takes the position that the statement is self-serving and should not be relied upon by this Court. The defendant maintains that no reasonable person could determine that this statement, made privately and without witnesses, is credible.

[86] The issue with respect to remedy is twofold. The first question is whether Mr. Antunes is entitled only to shares in the corporation, or whether he is entitled to damages in lieu of the shares. If he is entitled to damages, the next question is the quantum. Is Mr. Lima entitled to $500,000 in damages? Is he entitled to damages in an amount equal to 5% of the defendant corporation’s value as of the date on which he ought to have received his shares? If not, should the 5% interest be valued as of the date of trial?

[87] The difficulties are compounded by the fact that there is no evidence as regards restrictions on the shares, a shareholder’s ability to alienate or sell all or some of the shares, nor any evidence that the plaintiff intended to do so. There is no evidence upon which to conclude that the shares could have been sold, or at what price. It is clear from the evidence that the company was not a public company and that the shares were not publicly traded on the market.

[88] The plaintiff argues that his contractual expectation was that he would receive shares worth $500,000. There is no evidence to the contrary. He submits that he should now be put in the same position he would have been had he been issued the shares. The plaintiff’s primary position is that he is entitled to damages in the amount of $500,000. In support of this proposition, the plaintiff relies on the case of B & A Bobcat & Excavating Limited v. Sangha, 1999 BCCA 49, 43 C.L.R. (2d) 167 [B & A Bobcat], as regards the relationship between contract, negligent misrepresentation and recovery of damages. The plaintiff submits that he relied on Mr. Lima’s representation as to the value of the shares in accepting the employment, that the representation formed part of the contract of employment as well as a part of his expectations arising out of the contract.

[89] In the alternative, the plaintiff submits that if the Court finds that Mr. Lima’s representation was false, shares should issue and an assessment should be made as to the value of the shares. The plaintiff submits that in that scenario, he would be entitled to damages in an amount equal to the difference between the represented value of the shares ($500,000) and the actual value of the shares as assessed. As a final fallback position, if this Court finds that Mr. Lima did not make the alleged representations, or that the plaintiff did not meet all the steps in the Queen v. Cognos test, such that the plaintiff is not entitled to damages for negligent misrepresentation but is entitled to damages for breach of contract for the defendant’s failure to issue the shares, shares should be issued. Thereafter, an assessment should be conducted to determine the difference between the value of the shares on May 28, 2012 (the date upon which the shares should have been issued), and the current value, and the plaintiff should be awarded the difference in the value.

[90] In any civil action, “the plaintiff bears the onus of proving his or her claimed loss and the quantum of associated damages on a reasonable preponderance of credible evidence”: TMS Lighting Ltd. v. KJS Transport Inc., 2014 ONCA 1 at para. 61 [TMS Lighting]. For the reasons that follow, I am of the view that the plaintiff has met that burden and is entitled to an award of damages in the amount of $500,000.

[91] At the outset, I note that the plaintiff has elected to sue for damages rather than specific performance of the defendant corporation’s contractual obligation (the delivery of the shares). It is the plaintiff’s right to elect the remedy and I see no reason to interfere with that decision. The plaintiff seeks the delivery of shares as an alternative remedy, but his primary position advanced at trial was that he is entitled to damages in lieu of the shares.

[92] The plaintiff’s claim for damages is based upon breach of contract. The remedy for a breach of contract is to put the plaintiff in the position he would have been in had the contract not been breached: B & A Bobcat, supra at para. 10. This measure of damages is otherwise known as “expectation damages”: what did the plaintiff expect to receive had the defaulting party not breached the contract?

[93] Recovery on the basis of negligent misrepresentation is not limited to actions sounding in tort. Parties may have a contractual relationship and bring an action against their counterpart on the basis that the other party negligently (or fraudulently) misrepresented a material fact. Thus, negligent misrepresentation may be pleaded alongside breach of contract: BG Checo International Ltd. v. British Columbia Hydro and Power Authority, 1993 145 (SCC), [1993] 1 S.C.R. 12, [1993] S.C.J. No. 1.

[94] Negligent misrepresentation may therefore affect the quantum of damages arising out of a breach of contract. Indeed, “[i]n contract the aim of damages is to put the plaintiff in the position it would have been in had the representation been true; i.e., to compensate the plaintiff for its contractual expectation”: Rainbow Industrial Caterers Ltd. v. Canadian National Railway Co., 1991 27 (SCC), [1991] 3 S.C.R. 3 at pp. 21-22, cited in B & A Bobcat, supra at para. 10.

[95] Mr. Antunes is contractually entitled to 5% of the defendant corporation’s shares. He testified, however, and I accept, that he was told that these shares were worth $500,000. Therefore, the plaintiff was told he was to receive something worth $500,000 in exchange for commencing employment with the defendant. Whether 5% of the company was worth $500,000 at that moment in time is immaterial. The plaintiff expected to receive shares worth $500,000 and received nothing. He is to be put in a position commensurate with his expectations arising from the contract and from Mr. Lima’s representations to him.

[96] This is not a case with a proven loss that is difficult to quantify, though the courts have an obligation to do their best with the evidence before them even in those instances: British Columbia Hydro and Power Authority v. Marathon Realty Co., [1992] B.C.J. No. 514 (C.A.); TMS Lighting, supra at paras. 61, 64, citing Martin v. Goldfarb, 1998 4150 (ON CA), [1998] O.J. No. 3403 at para. 74 (C.A.), leave to appeal to S.C.C. refused, [1998] S.C.C.A. No. 516. Nor is this a case in which the Court is being asked to “postulate a method for the quantification of damages that is not supported by the evidence at trial [… or …] to employ an approach to the quantification of damages that the parties did not advance and had no opportunity to test or challenge at trial”: TMS Lighting, supra at para. 65. The defendant was represented by counsel prior to and at trial. The defendant had notice that the plaintiff intended to testify that Mr. Lima told him the shares were worth $500,000. The defendant could have called Mr. Lima. The defendant could have called evidence to rebut the $500,000 valuation. The defendant did neither. As indicated above, I have drawn an adverse inference against the defendant on this basis.

[97] I have awarded Mr. Antunes damages in the amount of $500,000. It is therefore unnecessary for me to entertain his alternative position advanced at trial, namely that he ought to be issued shares and have the value of those shares assessed by a Master. I would simply add that I do not think that it would be practical, efficient or in the interests of justice to order the defendant to issue Mr. Antunes the shares to which he is contractually entitled and to have the value of those shares assessed by a Master. For one, Mr. Antunes has pled both breach of contract and negligent misrepresentation in this action, entitling him to recover the total damages owing pursuant to one or both of those causes of action without need for the valuation of shares by a Master. Second, the defendant had an opportunity to produce documentation pertaining to the valuation of shares in advance of and at trial. The defendant was singularly unwilling to do so and there is no reason to believe that production would be forthcoming on an assessment before a Master. Third, as mentioned above, the plaintiff wishes to receive damages in lieu of the shares. The issuance and valuation of the shares is a longer, more expensive process that would ultimately achieve the same result: putting the plaintiff in the position he would have been in had the contract been performed, assuming that Mr. Lima’s representations leading up to that contract were relied upon by the plaintiff.

[98] Mr. Antunes framed this action in both breach of contract and negligent misrepresentation. Both parties were aware that his entitlement to 5% of the corporation’s shares and the credibility of his testimony with respect to his conversation with Mr. Lima would be live issues at trial. Defendant’s counsel challenged Mr. Antunes’ credibility on this issue. I have found that Mr. Antunes’ employment contract entitled him to 5% of the company’s shares, and also that Mr. Lima represented to him that those shares were worth $500,000. In sum, Mr. Antunes expected to receive shares worth $500,000 and received nothing. He is therefore entitled to an award of damages in the amount of $500,000.

Conclusions

[99] For the reasons set out above, I find that the defendant corporation wrongfully terminated the plaintiff’s employment. In accordance with his contract of employment, the plaintiff is entitled to recover eight months’ salary. Furthermore, the plaintiff is entitled to recover $500,000 from the defendant for the defendant’s failure to issue shares to Mr. Antunes in accordance with his contract of employment, and premised upon Mr. Lima’s misrepresentation of the defendant corporation’s value at the time of the contract negotiations.

Costs

[100] I would urge the parties to agree upon costs, failing which I would invite the parties to provide any costs submissions in writing, to be limited to three pages, including the costs outline. The submissions may be forwarded to my attention, through Judges’ Administration at 361 University Avenue, within thirty days of the release of this Endorsement.

Carole J. Brown, J.

Released: June 2, 2015

CITATION: Antunes v. Limen Structures Ltd., 2015 ONSC 2163

COURT FILE NO.: CV-13-472300

DATE: 20150602

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

John Antunes

Plaintiff

– and –

Limen Structures Ltd.

Defendant

REASONS FOR JUDGMENT

Carole J. Brown, J.

Released: June 2, 2015