Citation: Maxwell v. United Rentals, 2015 ONSC 2580
COURT FILE NO.: 14-4001-SR DATE: 2015-04-20
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Kevin Maxwell Plaintiff
– and –
United Rentals of Canada Inc. Defendant
COUNSEL: Pamela Krauss, for the Plaintiff Daniel Attwell, for the Defendant
HEARD: March 31, 2015
Introduction
[1] This is a motion for summary judgement in a wrongful dismissal action. Both parties agree that it is appropriate to decide this case on a motion for summary judgment.
Facts
[2] The plaintiff is currently 51 years of age. He began working for a predecessor of the defendant on August 31, 1981 when he was 18 years old. As of October, 2013 the plaintiff was the service manager of the defendant’s Kitchener Branch responsible for managing a team of seven mechanics. He reported to the branch manager.
[3] On October 3, 2013, the plaintiff’s employment with the defendant was terminated. It is acknowledged that the termination was without just cause.
[4] As of the date of termination of employment, the plaintiff’s remuneration included an annual salary of $67,000, an annual performance bonus, four weeks’ vacation, group medical and dental insurance and employer contributions to a group RRSP up to a maximum of 3.5% of earnings. The defendant continued to pay the plaintiff his base salary and provide him with medical and dental benefits for one year up to October 2, 2014. This amounted to $64,723.
[5] The plaintiff’s T4 for 2013 showed employment income in the amount of $81,093.84 which included the salary continuation from the date of termination to the end of the year and vacation pay for the period up to the date of termination. According to the plaintiff’s paystub for the period ending October 9, 2013 his hourly rate was $33.71.
[6] The defendant’s contribution to the plaintiff’s group RRSP for the first nine months of 2013 totals $2291.28. This translates into a monthly amount of $254. The defendant made no further contributions to the plaintiff’s pension following the date of termination.
[7] As of the date of the motion for summary judgment, the plaintiff had not yet secured alternate employment. The plaintiff has contacted approximately 120 prospective employers since his employment with the defendant was terminated with a view to securing alternate employment. The defendant did not provide a reference letter to the plaintiff, nor did the plaintiff make a request for a letter of reference.
Positions of the Parties
[8] The plaintiff’s position is that he ought to be entitled to the equivalent of 20 months remuneration in lieu of notice of termination. The plaintiff says that for the purpose of calculating the dollar value of 20 months, the income as shown on his 2013 T4 reduced by the amount of vacation pay he received at the date of termination of his employment, should be used. This amounts to $73,607.52.
[9] The defendant’s position is that the plaintiff is entitled to a total of 16 months’ salary in lieu of notice of termination. The defendant says that for the purpose of calculating the dollar value of 16 months, the appropriate calculation is the plaintiff’s hourly rate of $33.71 for a 40 hour week. This translates into an annual income of $70,116.80.
[10] The defendant’s position is that whatever notice period is determined to be appropriate, the amount owing to the plaintiff should be reduced by 25% because the plaintiff failed to take adequate steps to mitigate his damages. Finally, the defendant submits that the plaintiff’s maximum recovery for all amounts paid by the defendant to date and to be paid pursuant to a judgment in his favour is $100,000 because the plaintiff chose to limit his claim to that amount in order to commence this action pursuant to Rule 76 of the Rules of Civil Procedure.
Discussion and Analysis
Annual Income
[11] I agree with the plaintiff’s position that the basis on which his damages ought to be calculated is the amount of T4 income for 2013 adjusted for the vacation pay received at the date of termination of employment. Based on my review of the plaintiff’s paystub, he received amounts in addition to his base salary which, in my view, should be included in his total income for the purpose of determining the damages to which the plaintiff is entitled.
[12] Therefore, for the purpose of calculating damages, the plaintiff’s annual income for 2013 less the amount paid in vacation pay, will be utilized.
Limitation on damages
[13] The defendant’s position on this issue is that the plaintiff’s total recovery is limited to $100,000 which is the amount claimed in the Statement of Claim. It is common ground that the defendant continued to pay the plaintiff’s salary and group benefits for a period of one year post termination in the amount of $64,723. The defendant says this amount ought to be included in the claim for damages of $100,000 which means the plaintiff’s maximum possible recovery in this action is $35,277.
[14] The plaintiff commenced this action pursuant to the simplified procedure governed by Rule 76 of the Rules of Civil Procedure. In order to come within the simplified procedure rule, the plaintiff abandoned any damages in excess of $100,000. The defendant objected in the Statement of Defence to the action continuing under the simplified procedure rule. Pursuant to Rule 76.02 (6), the action then continued under the ordinary procedure.
[15] On February 11, 2015, this matter was before Sloan J. His endorsement on that day is as follows:
For oral reasons given this file should have proceeded under the ordinary procedure and the parties should have been able to question each other. At this late stage I order:
the matter shall proceed under the ordinary procedure
the summary judgment motion is adjourned to [various dates specified]
each party may question the other for a maximum of two hours
Sloan cannot hear this matter.
[16] From this endorsement, I conclude that this matter ceased to be governed by the simplified procedure at least from the date of the endorsement of Sloan J. and that the parties have had the benefit of questioning on affidavits which would not have been available unless the case were to proceed under the ordinary procedure.
[17] Based on first principles, it would therefore seem to me that with the action proceeding under the ordinary procedure the waiver of damages for any amount in excess of $100,000 would no longer apply. This would mean the plaintiff would be entitled to judgment for whatever amount is determined, subject to an amendment to the amount claimed if the judgment exceeds $100,000.
[18] During the course of argument, counsel for the plaintiff, for the first time, requested an amendment to the Statement of Claim, if necessary, to increase the amount of the claim to $150,000. Counsel for the defendant objected to any amendment to the Statement of Claim so late in the proceeding. However, counsel was unable to point to any prejudice that would be suffered by the defendant if such an amendment were granted other than to vaguely suggest that a different litigation strategy might have been adopted if the defendant had been alerted at an earlier date to a potential claim in the amount of $150,000. This is not a satisfactory justification for refusing an amendment to increase the amount of the claim, if necessary.
[19] This reasoning is sufficient to reject the defendant’s position that the maximum amount of any judgment that can only be awarded to the plaintiff is $35,277. If I am wrong in this analysis and the action remains subject to Rule 76, I will address the defendant’s submissions accordingly.
[20] The defendant relies on the decision of Bonneville v. IITC Holdings Limited, [1999] O.J. No. 428 in support of its position. This was a motion for summary judgment, pursuant to the simplified procedure, for damages for wrongful dismissal. The plaintiff claimed the then maximum amount pursuant to the simplified procedure of $25,000. The defendant continued to pay the plaintiff’s salary and benefits for a period of time following the date of termination in the amount of $16,790.58. In addition, the plaintiff earned income during the notice period. Accordingly, it was agreed that the defendant was entitled to a credit of $20,352.58. The defendant did not object to the action proceeding under Rule 76.
[21] The plaintiff’s position in Bonneville was that the credit should be applied to the total of the damages as assessed. The defendant’s position was that the credit should be applied to the simplified procedure limit of $25,000. At paragraph 16, Forget J. stated:
The credit, to which a defendant is entitled to as set out in the pleadings in our motion, forms, in my view, an integral part of the plaintiff's claim. It appears to me that a plaintiff should not consider the provisions of either other legislation or the application of common law considerations as to deductibility of monies received by the plaintiff, in order not to confuse the proper interpretation of the Rule. The deduction of monies paid by the defendant in lieu of notice is to be taken from the assessed damages. Accordingly, said deduction forms part of the plaintiff's claim and pursuant to Rule 76.02(1) it is the claim as stated that must concern the Court and not the judgment after assessment.
Forget J. then proceeded at paragraph 18 to state:
For all of the above reasons, I conclude that the plaintiff's claim does not comply with the Rules for an action under the simplified procedure and the matter should proceed as an ordinary action after all proper amendments have been made.
[22] It therefore appears to me that while Forget J. was of the same or a similar view as the defendant in this case, the plaintiff was ultimately allowed to claim the full amount of her loss because the action was continued under the ordinary procedure.
[23] One of the cases referred to by Forget J. in Bonneville was the decision of the Divisional Court in Lillie v. Bisson, 1998 CanLII 18853 (ON CA), [1998] O.J. No. 5338. The issue in that case was whether a plaintiff could use the simplified procedure under Rule 76 to recover non-pecuniary damages of $25,000, for injuries suffered in a motor vehicle accident net of the statutory deductible of $10,000. Writing for the majority, Southey J. stated at paragraph 12:
After the amount of damages has been determined without regard to the statute, the amount arrived at is reduced by $10,000 in a case like the one at bar. If the result is an award of more than $25,000, judgment for the male plaintiff would be for $25,000, because he abandoned the portion of his claim in excess of $25,000.
[24] The decision of the Divisional Court in Lillie was appealed to the Court of Appeal. The decision of the Court of Appeal had not been released at the time of the judgment in Bonneville. The decision of the Court of Appeal which is reported at 1999 CanLII 2860 (ON SCDC), [1999] O.J. No. 3677 dismissed the appeal for the reasons of Southey J. In its reasons for dismissing the appeal the Court stated at paragraph 4:
The simplified procedures contained in rule 76.01 of the Rules of Civil Procedure are intended to provide a readily understandable and cost-effective method of resolving disputes where the monetary claim is $25,000 or less. The court should encourage a liberal interpretation of rule 76 to carry out the policy behind the rule which is to reduce the cost of litigating claims of modest sums by reducing the amount of procedure available in such cases.
[25] In Qubti v. Ontario Jockey Club, 2002 CanLII 18795 (ON SCDC), [2002] O.J. No. 4753, the Ontario Divisional Court had occasion to deal with a negligence claim commenced under Rule 76 when there was a finding of contributory negligence. The trial judge assessed damages at $34,933.15 but also found the plaintiff to be 50% contributorily negligent. Accordingly, judgment was awarded in favour of the plaintiff for $17,466.50. The Court distinguished between the amount of the claim specified in the Statement of Claim in the amount of the judgment awarded at trial, finding that each served a different purpose. It held that the purpose of the amount of the claim is to determine whether the case is one to which the simplified procedure applies and defines of the maximum exposure of the defendant. The court concluded that abandonment of the amount in excess of the amount permitted to be claimed in a Rule 76 proceeding relates to the amount for which judgment is awarded. The Court approved of the approach adopted by the trial judge in that case.
[26] I therefore conclude that the correct approach is to determine the total amount to which the plaintiff is entitled for damages for wrongful termination of employment. From that amount is to be deducted the voluntary payments made by the defendant. Only if the difference exceeds $100,000 is that difference abandoned in a simplified procedure action.
The Period of Notice
[27] In determining what is a reasonable period of notice to be provided to an employee upon termination of employment, the starting point is the decision of McRuer C.J.H.C. in Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC), [1960] O.J. No. 149 where the Chief Justice stated at paragraph 21:
There can be no catalogue 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.
[28] The Bardal factors were adopted by the Supreme Court of Canada in Machtinger v. HOJ Industries Ltd., 1992 CanLII 102 (SCC), [1992] 1 S.C.R. 986 at paragraph 22. In Wallace v. United Grain Growers Ltd., 1997 CanLII 332 (SCC), [1997] 3 S.C.R. 701, at paragraph 82, the Supreme Court of Canada held that the Bardal factors are not exhaustive.
[29] Both counsel submitted several previously decided cases supporting the period of notice which they submit is appropriate. I have reviewed and considered each of those cases but each case is different and is to be decided on its own particular facts.
[30] Habraken v. MacMillan Bathurst Inc., [1995] O.J. No. 1951 is a case relied on by the plaintiff. In that case, a 50-year-old plant superintendent was terminated after 35 years of service. At the date of termination, the plaintiff was earning a salary of $46,500 annually. As plant superintendent, the plaintiff was responsible for supervising approximately 150 employees. The appropriate notice period was found to be 21 months.
[31] The plaintiff also relies on the decision of the British Columbia Supreme Court in Younger v. Canadian National Railway Co., [2014] B.C.J. No. 1429. The plaintiff was 50 years of age when his employment of 32 years was terminated. The plaintiff’s position was that of Assistant Superintendent Mechanical which required him to supervise approximately 100 employees. The appropriate period of notice was established at 24 months.
[32] The defendant relies on the decision of the British Columbia Supreme Court in Hart v. EM Plastic & Electric Products Ltd. (c.o.b. EM Plastics), [2008] B.C.J. No. 316, a case in which a 49-year-old customer service manager earning a salary of $50,000 annually who was terminated after 25 years of service was awarded 15 months’ notice.
[33] In Havens v. John Watson Ltd., [1999] B.C.J. No. 1201, the British Columbia Supreme Court found a 52-year-old plant supervisor with responsibility for seven employees, who was earning $34,400 per year and who was terminated after 27 years of service entitled to 16 months’ notice.
[34] The defendant cites the case of Rivers v. Gulf Canada, [1986] O.J. No. 212, a decision of the Ontario Supreme Court. In that case a 51-year-old senior administrator earning a salary of $39,708 annually was terminated after 28 years of service. The plaintiff did not have any supervisory responsibilities. Galligan J. (as he then was) found that the 16 ½ months’ salary paid by the defendant was reasonable although he would have awarded a notice period of 18 months.
[35] In Gauvin v. Coca-Cola Bottling Ltd., [1998] M.J. No. 109, a 55-year-old Superintendent Sales Equipment Services with 32 years and 10 months service earning a salary of approximately $57,000 annually who is described as “a lower management employee” was found to be entitled to 18 months’ notice of termination.
[36] The last case submitted by the defendant to which I propose to refer is Girling v. Crown Cork & Seal Canada Inc., [1994] B.C.J. No. 164, a decision of the British Columbia Supreme Court. In that case, the plaintiff was 54 years of age and had worked at the defendant’s plant for 34 years. His title was Supervisor of Human Resources, Shipping, Warehousing and Quality Assurance which was described by the trial judge is a “lower management position”. His salary at the date of termination was $46,000 per annum. The plaintiff was found entitled to a notice period of 18 months.
[37] In my view, the important Bardal factors are the plaintiff’s age and length of service. The plaintiff has had only one job throughout his working career. It is to be expected that his skills were acquired in the course of a single business or industry. The plaintiff occupied a management position although not a member of senior management. I would also add to the Bardal factors that in this case the plaintiff had no experience in searching for employment because he had spent his entire working career in the employ of the defendant. In all of the circumstances, I find that the plaintiff was entitled to 18 months’ notice of termination of his employment.
Mitigation
[38] The burden is on the defendant to prove the failure to mitigate damages on the part of the plaintiff and that burden is not light: Michaels v. Red Deer College, 1975 CanLII 15 (SCC), [1976] 2 S.C.R. 324.
[39] The evidence before me is that the plaintiff has applied for approximately 120 jobs since the date of the termination of his employment. The defendant attacks the sincerity of the plaintiff’s efforts in this regard. However, in my view, it is significant that the defendant offered no assistance to the plaintiff in seeking and obtaining alternate employment. Although an employer is not obligated to provide such assistance to the dismissed employee, that is an important factor to be taken into consideration when the employer then accuses of the former employee of not taking adequate steps to secure alternate employment.
[40] As I said in Aucoin v. Liturgical Publications of Canada Ltd., 2009 CarswellOnt 1354 at paragraph 15:
I am not suggesting that the employer has an obligation to provide outplacement counseling to a dismissed employee or to bring job opportunities to the intention of the former employee but if an employer intends to argue the failure to mitigate on the part of the former employee, it would be well advised to present evidence of assistance that was offered to the terminated employee during his or her job search.
[41] No such evidence was presented in this case. I am not satisfied that the defendant has satisfied the burden on it to show that there was a failure to mitigate on the part of the plaintiff.
Damage Calculation
[42] I have found that the plaintiff’s annual income for the purpose of calculating his entitlement to damages is $73,607.52. The plaintiff is therefore entitled to a total of $110,411.28 in lieu of 18 months’ notice of termination. The plaintiff is also entitled to damages for the loss of the defendant’s contribution to his pension in the amount of $254 per month for the period of notice. This amounts to $4572. The defendant is entitled to credit for payments totaling $64,723.20 which results in a net amount owing to the plaintiff of $50,260.
[43] The plaintiff is also entitled to interest on the net damages from the date of termination.
[44] I light of the amount which I have found the plaintiff is entitled to in damages, it is not necessary for me to deal with the plaintiff’s request to increase the amount claimed in the Statement of Claim.
Conclusion
[45] For the foregoing reasons, judgment shall issue in favour of the plaintiff for $50,260 plus interest from the date of termination calculated in accordance with the Courts of Justice Act.
[46] If counsel are unable to agree on the appropriate disposition as to costs they may make written submissions. The written submissions on behalf of the plaintiff are to be delivered to my office within 14 days of the release of these Reasons, not to exceed three pages in length exclusive of a Bill of Costs and Costs Outline. Responding submissions are to be delivered to my office within 28 days of the release of this these Reasons, not to exceed three pages in length. Counsel are directed to file electronic copies of their cost submissions at Kitchener.Superior.Court@ontario.ca to my attention.
G. E. Taylor, J.
Released: April 20, 2015
CITATION: Maxwell v. United Rentals, 2015 ONSC 2580 COURT FILE NO.: 14-4001-SR DATE: 2015-04-20
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Kevin Maxwell Plaintiff
– and –
United Rentals of Canada Inc. Defendant
REASONS FOR JUDGMENT
G. E. Taylor, J.
Released: April 20, 2015