ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 07-CV-335012PD3

DATE: 20150727

BETWEEN:

Andrew Osadca

Plaintiff

– and –

Recyclenet Corporation, Recyclenet International Inc. and Inter-Continental Recycling Inc.

Defendants

William Greenley, for the Plaintiff

HEARD: June 24, 2015

M.A. SANDERSON J.

reasons for judgment

Introduction

[1] This is an undefended wrongful dismissal case. The Plaintiff Andrew Osadca, “Osadca” has alleged that he was terminated without cause by the Defendants on March 27, 2007 after 7 ½ years of employment.

[2] The Defendants’ Statement of Defence was struck by order of Frank J. on January 29, 2015.

[3] The Defendants were noted in default on May 11, 2015 and were notified by letter dated May 25, 2015 that the trial would take place during the week of June 22, 2015.

[4] The matter was called for trial before me on June 24, 2015.

[5] The defendants did not appear.

[6] The matter proceeded on that day.

[7] Since the Defendants had been noted in default, they were deemed under Rule 19.02 to have admitted the truth of all the allegations of fact made in the Statement of Claim.

[8] I have accepted as true the following facts as set out in the Statement of Claim:

(a) The Plaintiff commenced employment with the Defendant Inter-Continental which amalgamated with the Defendant Recyclenet Corporation “Recyclenet” on about September 3, 1999;

(b) He was employed by both Recyclenet and Inter-Continental;

(c) His duties were selling internet services, advertising, linking purchasers and sellers of recyclable materials, servicing customers and training new sales staff;

(d) As of January 1, 2004 he started to receive all of his compensation from Recyclenet;

(e) On March 27, 2007 Paul Roszel, “Roszel” the principal of both Recyclenet and Inter-continental who had hired him, and to whom he reported, told him that the defendants were being audited and that he had no option but to terminate his employment;

(f) He was dismissed on March 27, 2007;

(g) The Plaintiff had consistently and faithfully performed his duties.

[9] Rule 19.06 provides that a plaintiff is not entitled to judgment merely because the facts alleged in the Statement of Claim are deemed to be true unless the facts entitle the plaintiff to judgment. Therefore, I conducted a trial and heard the viva voce evidence of the Plaintiff Andrew Osadca and the affidavit evidence of Dr. Alton.

[10] I have accepted the following evidence of the Plaintiff:

(a) He is now 43;

(b) At the time of his termination he was 34;

(c) He started working for the Defendants immediately after he graduated from university;

(d) At the time of his termination, his employment with the Defendants constituted his only post-university work experience.

(e) His starting salary was $25,000;

(f) He worked from home 9 – 5, Monday – Friday, using a computer, internet and telephone supplied by Recyclenet;

(g) The Defendants were trading in scrap paper, plastics, metals, electronics;

(h) He was required to attend sales meetings in Guelph chaired by Roszel;

(i) Roszel signed both Recyclenet and Inter-Continental cheques;

(j) Both companies had the same head office;

(k) Both had the same postal address, PO Box 24017 Guelph;

(l) A year after he was hired, his salary was increased to $31,000 per year;

(m) In November 2002, Roszel agreed to also pay him a 15% commission on top of his salary. Thereafter, his salary was paid by Inter-Continental and his commission was paid by Recyclenet;

(n) In November 2003, Roszel offered him a 25% commission in lieu of salary. That constituted a pay increase and made him work harder;

(o) In the 2004 tax year he grossed $77,589.40;

(p) On the 2005 tax year he grossed $70,673.08;

(q) In the 2006 tax year, the last full year before his termination he grossed $89,760;

(r) A few days before March 27, 2007, Roszel called the Plaintiff and asked him for information about a particular customer. After the Plaintiff answered Roszel’s question, Roszel asked him whether he wanted to tell him anything else. The Plaintiff said no;

(s) Later the same day, the internet access that the Plaintiff used to do his work was turned off;

(t) On March 27, 2007, Roszel came to the Plaintiff’s house and unexpectedly told him that he was being fired;

(u) At the time of his termination, the Plaintiff had understood that he had been doing well and that his employment was secure. He had married in 2005 and had been hoping to start a family. He had felt confident enough to buy a house and to take on a mortgage.

(v) To Roszel’s knowledge the Plaintiff was an epileptic and had recently had his driver’s licence suspended for that reason. It was therefore important for him to be able to work from home;

(w) Roszel gave the Plaintiff no real explanation for his termination.

(x) The Plaintiff gave evidence that he had not done anything wrong;

(y) When he was terminated, in his own home, the Plaintiff felt blindsided, humiliated, embarrassed, angry and scared. He could not eat or sleep;

(z) He received a termination letter dated April 10, 2007 on Recyclenet letterhead (Exhibit 17) containing the following:

The purpose of this letter is to confirm the termination of all written and/or verbal agreements between Recyclenet Corporation and Andrew Osadca effective March 27, 2007. As of this date you are no longer to represent Recyclenet. All monies owing to you from Recyclenet for commission payments received up to March 31, 2007 have been calculated and are attached. (Cheque #3370 in the amount of USD $6083.75 and cheque 372 in the amount of CDN $152.50). Recyclenet will pay to you a one-time amount of USD $6028.07 which is the equivalent of one more commission (based on the average of the past 3 months combined commission you received). The final commission cheque dated on or before April 15, 2007 and the cheque in the amount of USD $6028.07 represent the final payments you will receive from Recyclenet payments. No other monies will be paid to you…

(aa) After he received the letter he noted that $1700 US was owing to him from Artech;

(bb) He went to see a therapist, a Dr. Alton, once a week for 11 weeks, at a cost of $150 per session ($1650). However, he had to stop seeing her because he could not afford her fees;

(cc) He immediately started to look for work. However, he could not find a position where he could work from home that paid anything like the amounts he had been earning;

(dd) He paid $196.10 to have a resumé prepared, and then he sent it to prospective employers;

(ee) Apart from a part-time job at a friend’s golf shop in the summer of 2007 for a few hours a week, for which he earned a total of $558, he was unable to find work until November 2007 when he started to train as a salesman of London Life products including life insurance, RRSPs and RESPs;

(ff) In 2007 he earned $3,640;

(gg) In 2008 he earned $11,992;

(hh) He paid London Life $3080 for a book of business [Exhibit 21].

Conclusions on the Facts re Liability

[11] On the facts as admitted and on the evidence, I have concluded that on March 27, 2007 the Plaintiff was wrongfully dismissed after 7 ½ years of employment. He was entitled to reasonable notice from Inter-Continental and Recyclenet In reaching this conclusion, I have considered that at the time of his hiring, Roszel informed him that he would be working for his companies, Inter-Continental Recycling Inc. and Recyclenet Corporation. They had the same address. The Plaintiff was paid by both in the early years of his employment. He received cheques from both. He had no control over the source of his pay.

Quantum of Damages in Lieu Of Reasonable notice

[12] Applying the factors set out in Bardal v. Globe and Mail [196] OWN 253, including length of service, age of the plaintiff, nature of the position, availability of similar employment, having regard to the experience training and qualifications of the employee, counsel for the Plaintiff submitted that a 12-month notice period would be appropriate.

[13] In Keays v. Honda Canada ONC 2008 SCC 39, the Supreme Court of Canada noted that Keays suffered from an illness that greatly incapacitated him and that he had spent his entire adult-working life with Honda. These factors reduced his chances of re-employment. Those factors were held to be relevant in considering the reasonable notice period.

[14] Were it not for his medical condition, the fact that this was a commissioned sales position where commissions depend on a book of business that must be built over time and the fact that he had never worked post university for any other employer, I would have held that 8 months was a reasonable notice period. However, the Defendants knew that it would be difficult for someone with the Plaintiff’s experience and qualifications to find a similar position and with similar pay, especially since he was an epileptic who at the time of the termination was without a driver’s licence and needed to work from home. The Defendants knew that post university he had never worked for anyone else. Because the Defendants knew that it would be especially difficult for the Plaintiff to find a similar position away from I home, in all the circumstances here, I find that the period of reasonable notice should be 12 months.

Damages for Defendants’ Conduct in Dismissing the Plaintiff

[15] I allowed the Plaintiff to file the affidavit of Dr. Alton, a psychotherapist, and ordered that it be entered into evidence.

[16] I accept Alton’s evidence as follows:

(a) The Plaintiff began attending psychotherapy sessions on April 10, 2007 to deal with anxiety and depression;

(b) He had experienced a traumatic incident at the kitchen table in his family home when his employers had wrongfully dismissed him from his job. He felt humiliated and panicked, as he had just recently purchased a home, believing he had job security;

(c) The Plaintiff had considered himself to be an integral part of the defendants and was committed long term;

(d) The Plaintiff advised her that he had been falsely accused of lacking integrity, which was shocking to him.

(e) Osadca experienced sleep disturbances, including night terrors and a high level of anxiety during the day. He began avoiding the kitchen in his own house where his employment had been terminated. He felt he had been emasculated in his own home.

(f) After treatment, he was able to move through some of the symptoms of anxiety.

[17] Dr. Alton opined that the difficulties the Plaintiff experienced were as a result of the trauma he experienced from the termination.

Calculation of Damages

Calculation of Damages in Lieu of Reasonable Notice

[18] The Plaintiff’s average commission income in the two years before he was terminated was $89,760 + 70,673 ÷ 2 = $80,216.50. I find his loss in lieu of 12 months reasonable notice is $80,216.50.

[19] From that amount must be deducted amounts received from the Defendants on termination.

[20] He received a one-time amount of US $6028.70 US. I find of that amount, US $1700 was already owing to the Plaintiff for commissions from sales to Artech. I find he received $4328.70 US of severance pay or $4328.70 US x .88 Canadian =$3809.24 Canadian.

[21] He was required to mitigate during the 12 month notice period. He earned $3648.08 from London Life in 2007, $558 from Gorilla Golf, $2998.19 from London Life January to March 2008 = a total of $7204.27.

[22] The Plaintiff is entitled to deduct a $196.10 expense for preparation of a resumé.

[23] He claimed an expense of $3480 that he paid to buy a London Life book of business and $1650 for 11 psychotherapy sessions with Dr. Alton.

[24] In my view the $3480 should have continued to benefit the Plaintiff after the notice period and is not an allowable offsetting expense.

[25] The $1650 for psychotherapy would be recoverable if at all under the heading of mental distress.

[26] The amount owing in lieu of reasonable notice is $80,216.50 - ($3809.24 + $7204.27 = $11,013.51) = $69,202.99 (+ $196.10) = $69,399.09.

Damages for Mental Distress

[27] I have considered that the fact of termination of employment in itself cannot ground a claim for damages for pain and mental distress. Damages from disability or mental distress subsequent to termination can only be compensated where there is evidence that the disability or mental distress flowed from the manner of termination.

[28] In Fidler v. Sun Life 2006 SCC 30, [2006] 2 SCR 3, the Supreme Court of Canada held that the reasonable contemplation or foreseeability principle applies [at the time the contract was made] to determine the availability of damages for breach of contract. At that time, there would not ordinarily be contemplation of psychological damage resulting from dismissal. Normal distress and hurt feelings resulting from dismissal are usually not compensable damages.

[29] Damages resulting from the manner of dismissal are only available if, during the course of dismissal, there is conduct that is “unfair, or in bad faith, for example the making of untruthful or misleading statements or accusations or conduct that is unduly insensitive.

[30] The amount of damages for mental distress is to be fixed according to the same principles and in the same manner as all other cases dealing with moral damages.

[31] Here, the Plaintiff was terminated suddenly and unexpectedly, in his home without adequate explanation, at a time when he had consistently been receiving positive feedback and when his income had been improving. I accept he felt blindsided. I accept he felt he had been vaguely accused of dishonesty without having been given sufficient or any substantive particulars and without being given any opportunity to refute the vague and unsubstantiated insinuation of dishonesty. I am of the view that the facts here support a finding of undue insensitivity and unfair statements that caused the Plaintiff considerable mental distress as outlined by Dr. Alton in her affidavit.

[32] I award damages for mental distress of $7500, plus $1650, the cost of psychotherapy sessions for which he paid a total under this heading of $9150.

DISPOSITION

[33] Judgment shall go for $69,399.09 plus $9150=$78549.09 plus prejudgment interest under the Courts of Justice Act.

[34] Parties may make written submissions on costs on or before August 25, 2015.

M.A. Sanderson J.

Released: July 27, 2015

COURT FILE NO.: 07-CV-335012PD3

DATE: 20150727

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Andrew Osadca

Plaintiff

– and –

Recyclenet Corporation, Recyclenet International Inc. and Inter-Continental Recycling Inc.

Defendants

REASONS FOR JUDGMENT

Sanderson J.

Released: July 27, 2015