Persaud v. Telus Corporation, 2016 ONSC 1577

CITATION: Persaud v. Telus Corporation, 2016 ONSC 1577

COURT FILE NO.: 05-CV-300435PD3

DATE: 20160405

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

JAN PERSAUD and NATPAK ENTERPRISES INC.

Plaintiffs

– and –

TELUS CORPORATION, TELE-MOBILE COMPANY, and TELUS ENTERPRISE SOLUTIONS INC.

Defendants

Karen Zvulony, for the Plaintiffs

Todd Weisberg, for the Defendants

HEARD: February 22-26, 29, and March 1 and 3, 2016

GLUSTEIN J.:

Nature of action and overview

[1] In the present action, the plaintiffs, Jan Persaud (“Persaud”) and Natpak Enterprises Inc. (“Natpak”) bring an action against the defendants with respect to three separate claims:

(i) a constructive dismissal claim in relation to Persaud’s employment at Telus[^1] which terminated on May 19, 2004 (the “Constructive Dismissal Claim”),

(ii) a claim for bad faith termination, intentional infliction of mental suffering, and aggravated and punitive damages in relation to Telus’ report dated August 6, 2004 (the “Report”) on billing malfunctions in the “IP Biller” program which ran on the “Collector” application on the “TINMAN” server (the “Report Claim”), and

(iii) a claim for inducing breach of contract in relation to an alleged contract in February 2005 between Natpak (a company created by Persaud for the purposes of providing consulting services) and “TekSystems”[^2], an information technology staffing firm (the “Tek Claim”).

[2] The plaintiffs seek damages as follows:

(i) For the Constructive Dismissal Claim, Persaud claims $74,512.50 for 10 months’ notice plus $1,786.64 of vacation pay.[^3] Persaud does not claim special damages in relation to the Constructive Dismissal Claim;[^4]

(ii) For the Report Claim, Persaud claims damages of $125,000 for bad faith termination and $100,000 for intentional infliction of mental distress[^5], as well as $2 million for aggravated and punitive damages;[^6]and,

(iii) For the Tek Claim, the plaintiffs seek damages of $100,000 for inducing breach of contract.

[3] For the reasons that follow, I dismiss the action. In brief, I find:

(i) On the Constructive Dismissal Claim, I find that Persaud resigned because she was dissatisfied with the management style at Telus and in particular, the treatment of Navaid Mufti (“Mufti”), her long-time friend and superior. Mufti left Telus two days prior to Persaud’s resignation because of his dissatisfaction with the management style of his direct superior, Robert Blumenthal (“Blumenthal”).

Consequently, even if Persaud could establish that (i) there was a significant increase in her working hours; or (ii) she suffered a poisoned work environment, I accept Telus’ submission that Persaud did not leave for those reasons. On this basis, the Constructive Dismissal Claim must fail.

Further, even if Persaud could establish that (i) there was a significant increase in her working hours or there was a poisoned work environment; and (ii) the reason for her resignation was based on such factors, the Constructive Dismissal Claim would still fail because Persaud, based on her own evidence (if accepted), would have “acquiesced in” or “condoned” such conduct.

(ii) On the Report Claim, I find that even if the claim of “bad faith termination” could be extended to the preparation of the Report in relation to Persaud’s alleged conduct after she left Telus, neither this claim nor the claim for intentional infliction of mental distress can succeed. The conduct of Telus was not (i) in “bad faith”, “unfair”, “flagrant and outrageous”, or (ii) “calculated to produce harm”.

Telus was faced with a serious breach of its IP Biller program causing the loss of hundreds of thousands of dollars in revenues. Telus formed a team of individuals (collectively, the “Investigation Team”) comprised of Robert Walker (“Walker”) (a member of Telus’ security team), Francisco Franco (“Franco”) (a Telus Unix systems administrator) and Santhalingam Jeyagaran (“Jey”),[^7] an individual hired before Persaud’s resignation to work with Persaud on the Telus “IP Biller” (or “Collector”) program because of his expertise with Java software, and who assumed Persaud’s responsibilities after her resignation.

The Investigation Team had the knowledge and expertise required to investigate the billing malfunctions and undertook the investigation (the “Investigation”) to find out what had caused the billing malfunctions, without any preconceptions of who might be responsible. The evidence does not support a finding that the conclusions reached by the Investigation Team and provided to the Toronto Police were “flagrant and outrageous” and “calculated to cause harm”, or made in “bad faith” or in an “unfair” manner.

(iii) With respect to the Tek Claim, I find that the evidence does not support a claim of inducing breach of contract.

The evidence does not support a finding that there was a contract between Natpak and TekSystems. To the contrary, the evidence supports a finding that TekSystems “attached, what I think will be the final contract” effective February 22, 2005, which Persaud then modified, signed and sent back to TekSystems. TekSystems was then to provide a signed agreement only upon Persaud’s intended first day of work at Telus in Edmonton on February 22, 2005. TekSystems did not do so as Telus decided not to engage Persaud. Consequently, there was no contract between Natpak and TekSystems, and as such, there can be no claim against Telus for inducing breach of contract.

The plaintiffs did not bring a claim against TekSystems. Also, the plaintiffs did not call any witness from TekSystems or Telus at trial.

Further, even if Natpak could establish a contract with TekSystems, the evidence does not establish that Telus knew of the alleged contract or that Telus intended to cause TekSystems to breach the contract. Consequently, Natpak did not establish these “knowledge” and “intent” requirements of a claim for inducing breach of contract.

I also accept Telus’ submission that even if the Tek Claim could be established, damages would be significantly limited. In particular, Persaud found other employment as a consultant starting within a month of the alleged TekSystems contract and her out-of-pocket expenses related only to airfare for travel to and from Edmonton for a limited period of time.

[4] Consequently, I dismiss the action.

Causes of action relied upon by the plaintiffs

[5] In her closing submissions, plaintiffs’ counsel confirmed that Persaud was not pursuing a “bad faith termination” claim for improper conduct in the manner in which Persaud’s purported termination took place in May 2004, but rather that the bad faith termination claim related to the Report, as summarized above. Consequently, the Constructive Dismissal Claim is based only on the principles governing constructive dismissal.

[6] In the Claim, the Report Claim was also based on the doctrine of negligent infliction of mental distress. Plaintiffs’ counsel advised the court in her closing submissions that the plaintiffs were not pursuing this legal argument.

[7] In the Claim, the Tek Claim was also based on the doctrine of breach of contract between Natpak and Telus. In her closing submissions, plaintiffs’ counsel advised the court that the plaintiffs were not pursuing this legal argument and were relying on the doctrine of inducing breach of contract for the claim against Telus.

[8] Consequently, in these Reasons, I consider only the causes of action relied upon by the plaintiffs.

A note on the issues which I do not address in these Reasons

[9] At trial, and in closing submissions, counsel raised many other factual and legal issues arising out of the Constructive Dismissal Claim. Those issues include:

(i) the factual issue of whether Persaud worked the hours she claimed or alternatively, whether the nature of her position as a Java developer required such working hours (if she in fact worked the longer hours claimed),

(ii) the legal issue of whether Persaud is entitled to any notice because of Telus’ submission that if there was a constructive dismissal, Persaud was required to work during the reasonable notice period,

(iii) if reasonable notice is available, the factual and legal issues of the appropriate notice period,

(iv) the factual and legal issues of whether Persaud reasonably mitigated her damages, and,

(v) the legal question of whether the court should include in compensation for benefits a general percentage of salary or only award $14.04 as damages, given the evidence that Persaud made only one claim on her husband’s group benefit plan during the period which Telus submits would have been the reasonable notice period (if a reasonable notice period was available).

[10] I do not decide the above legal and factual issues as they are irrelevant to my conclusion.

[11] Further, in these Reasons, I make no finding as to whether Persaud engaged in the conduct described in the Report. Much time at trial was spent by the plaintiffs to demonstrate that Persaud could not have engaged in the conduct, while Telus led evidence as to the reasons why Persaud could have engaged in the conduct. No expert evidence was led on the issue. For the purpose of these Reasons, I consider Telus’ conduct with respect to the Investigation and Report, and the basis for its conclusions, not whether Persaud engaged in the conduct described in the Report.

[12] Persaud also claimed damages for mental distress as a result of the delivery of the Report to the Toronto Police and their subsequent investigation. Telus’ counsel acknowledged that medical evidence was not required in law for such a claim, but submitted that since medical evidence from Persaud’s family doctor could have been called, the claim for mental distress could not stand. I do not address this legal issue (nor the factual issue of whether Persaud suffered mental distress) given my conclusion on the Report Claim summarized above.

Analysis

[13] I address each of the claims below. I consider the applicable legal principles and relevant evidence and then apply those principles to my factual findings.

[14] However, given that many of my factual findings depend on the credibility of the evidence provided by the witnesses, I first address this issue.

Credibility of the witnesses

[15] For the reasons that follow, I do not find Persaud to be a credible witness. I rely on the legal analysis of credibility set out by Stinson J. in Davies v. Canadian Satellite Radio Inc., 2010 ONSC 5628 (SCJ) (“Davies”) and then apply the principles to Persaud’s evidence in this case.

A. The decision in Davies

[16] In Davies, Stinson J. considered a claim of constructive dismissal and held that the plaintiff Davies had been constructively dismissed when (i) he was advised that his salary would be reduced by $100,000; (ii) his position was converted from full-time to part-time; and (iii) he was required to report to a lower-ranking executive (Davies, at paras. 54-55).

[17] Stinson J. noted the importance of credibility and stated that “The case largely turns on credibility and findings of fact” (Davies, at para. 2).

[18] Stinson J. made the following comments on the credibility of the witnesses (Davies, at paras. 31-33):

I found Davies to be a very impressive witness. His evidence was internally consistent, made sense, and had a "ring of truth". I also found his recollection of detail to be impressive. Where there were frailties in his recollection he conceded them, but on the important facts his evidence was clear. In cross-examination, his evidence was not shaken. He was not impeached on any occasion with reference to his discovery transcript or a document. His answers to questions on cross-examination were responsive and direct. When challenged on a point, his spontaneous explanations made sense and were logical. I have no reason to doubt the accuracy of the material parts of his testimony.

By contrast, Lyons was a most unimpressive witness. On frequent occasions, his testimony was vague and nonspecific. He often resorted to the use of "I would have" or "I believe" to preface statements of fact, leaving me with the impression that he was attempting to reconstruct information that he was unable to recall or simply did not know. On numerous occasions he gave nonresponsive answers to questions on cross-examination, sometimes to the point where he seemed evasive. He often provided additional information, not requested by the questioner, where he perceived it would explain or be helpful to the defendant's position in the lawsuit. Several times he was forced to concede (sometimes reluctantly) that his testimony was at odds with documents authored at the time. On other occasions, he was contradicted by his own discovery testimony. In addition, he often stepped out of the role of witness and into that of advocate, either arguing with counsel over the premise of the question or explaining why a certain proposition put to him did not have the effect that counsel sought to give it.

In light of any assessment of the credibility of these two witnesses, to the extent there is any conflict between the testimony of Davies and that of Lyons on any material point, I unhesitatingly prefer and accept the testimony of Davies and reject that of Lyons.

[19] I now apply the factors considered by Stinson J. to the evidence before me.

B. Credibility of Persaud and the other witnesses

[20] In the present action, many of the factors that Stinson J. relied upon in Davies with respect to the “unimpressive witness”[^8] Lyons apply to Persaud. In the course of Persaud’s testimony, there were repeated instances where:

(i) Persaud “gave nonresponsive answers to questions on cross-examination, sometimes to the point where [she] seemed evasive”;

(ii) Persaud “often provided additional information, not requested by the questioner, where [she] perceived it would explain or be helpful to [her] position in the lawsuit”;

(iii) “Several times [Persaud] was forced to concede (sometimes reluctantly) that [her] testimony was at odds with documents authored at the time”;

(iv) “On other occasions, [Persaud] was contradicted by [her] own discovery testimony”; and

(v) “In addition, [she] often stepped out of the role of witness and into that of advocate, either arguing with counsel over the premise of the question or explaining why a certain proposition put to [her] did not have the effect that counsel sought to give it”.

[21] Further, both in examination-in-chief and cross-examination, Persaud frequently attempted to underplay or misrepresent facts which she considered to be unhelpful to her case. Her conduct was often demonstrated not only by the documentary evidence before the court, but from the testimony of her two other witnesses, who were Mufti and her husband, Michel DeCoste (“DeCoste”).

[22] As for Blumenthal and Jey, the defendants’ two witnesses, I find that[^9]:

(i) Their evidence was internally consistent, made sense, and had a "ring of truth";

(ii) “Where there were frailties in [their] recollection [they] conceded them, but on the important facts [their] evidence was clear. In cross-examination, [their] evidence was not shaken”;

(iii) “[Their] answers to questions on cross-examination were responsive and direct”; and

(iv) “When challenged on a point, [their] spontaneous explanations made sense and were logical”.

[23] There were some credibility issues arising from the evidence given by Mufti and Blumenthal as to the dealings between them. However, those issues are largely irrelevant to these Reasons, as Mufti and Blumenthal agree on the material fact that Mufti had serious concerns about Blumenthal’s management style which led to his departure from Telus.

[24] Consequently, as in Davies, I find that in light of my assessment of the credibility of Persaud and the Telus witnesses, to the extent there is any conflict between the testimony of Persaud and the testimony of either Persaud’s other witnesses or Telus’ witnesses on any material point, I prefer and accept the testimony of those witnesses and reject that of Persaud (paraphrasing Stinson J. in Davies, at para. 33).

[25] I will address particular examples relevant to Persaud’s credibility in my analysis of the evidence for each of the claims discussed below.

Issue 1: The Constructive Dismissal Claim

[26] I review the applicable law and relevant evidence below.

A. The applicable law

1. The two branches of constructive dismissal under Potter

[27] In Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 12, [2015] SCJ 12 (“Potter”), the court held that there are two distinct branches of constructive dismissal: (i) a unilateral change to an essential term of employment, and (ii) a series of acts evidencing an intention to no longer be bound by the terms of the contract (Potter, at paras. 32-33).

[28] The first branch of the test consists of two parts. First, the employer must have breached the employment contract by making a unilateral change to the terms of the contract. Second, it must be shown that the change substantially altered an essential term of the contract. The latter part of the test is met by asking whether, “at the time the [breach occurred], a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed” (Potter, at paras. 34 and 39).

[29] A breach that is minor in nature, in that it does not substantially change an essential term of employment, does not amount to a constructive dismissal (Potter, at paras. 37 and 39).

[30] Under the second branch of the Potter test, the court considers whether there has been a series of acts that demonstrate the employer no longer intends to be bound by the employment contract. Under this branch, constructive dismissal occurs when conduct, viewed in light of all the circumstances, would lead a reasonable person to conclude that the employer no longer intends to be bound by such terms (Potter, at para. 42).

2. Whether a breach of the employment contract under Potter is sufficient to establish a claim for damages in constructive dismissal if the reason for resignation is not related to the breach

[31] In her written and oral closing submissions, plaintiffs’ counsel submitted that the reason for Persaud’s resignation was irrelevant. The plaintiffs submit that as long as they can establish a breach of the contract under either the first branch of the Potter test (through unilateral increased hours) or the second branch of the test (through a series of acts that created a poisoned work environment), then a cause of action arises under Potter. I do not agree.

[32] Under general principles of contract law, damages cannot be awarded unless there is a causal link between the breach and the damages. A breach in a vacuum does not suffice. Prof. Fridman, in The Law of Contract in Canada, 6^th Edition (Carswell: Toronto, 2011), sets out the general principle (at p. 683):

Before damage is properly treated as recoverable under Hadley v. Baxendale, it must have been the direct, physical result or consequence of the breach of contract that is in question. The question of causation must be separated from the question of loss. ‘Direct damage,’ it has been said, ‘is that which flows naturally from the breach without other intervening cause, and independently of special circumstances, while indirect damage does not so flow’. [Footnotes omitted]

[33] Similarly, Swan and Adamski state in Canadian Contract Law, 3^rd Edition (LexisNexis: Markham, 2012), at para. 6.218, p. 471:

It is a truism that a defendant will only be liable for the losses caused by its breach of contract. … [I]t is clear that the plaintiff bears the burden of proving on a balance of probabilities that the defendant’s breach caused its loss. [Footnotes omitted]

[34] In employment law, damages for dismissal are compensation for the notice required because of termination (whether through wrongful or constructive dismissal). The award for damages is for the loss of income during the notice period. In The Law of Dismissal in Canada, 3^rd Edition (Canada Law Book: Toronto, October 2015, looseleaf), Levitt states (at para. 9.10, p. 9-1):

Contrary to popular belief, an action for wrongful dismissal is not a suit based on the fact of the dismissal. It is, rather, for the fact of dismissal without adequate notice or payment in lieu of notice.

[35] Consequently, an employee cannot claim damages for constructive dismissal when there is no causal link to the reason for resignation, even if there has been a unilateral change to an essential term of the contract.

[36] By way of example, an employee who obtains an inheritance and decides to leave for that reason cannot establish a causal link between an increase in hours (the breach) and reasonable notice (the damages). To permit otherwise would obviate the requirements that (i) there be a causal connection between damages and breach of contract; and (ii) damages for the dismissal in the form of reasonable notice must be tied to the breach.

[37] The decision in Potter does not change the requirements for causation discussed above. The court in Potter reviewed the law of constructive dismissal to set out the situations in which constructive dismissal would occur. The court did not address the issue of causation as the issue before it was whether Potter’s suspension (which the court found to be unauthorized) constituted a constructive dismissal. There was no issue of whether Potter left his employment for another reason.

[38] For those reasons, I reject the plaintiffs’ submission that it is only necessary to find a breach under the first or second branches of the Potter test, without having to establish that the reason for resignation was related to the breach.

3. Acquiescence, consent, or condonation does not constitute constructive dismissal

[39] In Potter, the court held that under the first branch of the test, “if the employee consents to or acquiesces in [the unilateral change to an essential term], the change is not a unilateral act and therefore will not constitute a breach. If so, it does not amount to a constructive dismissal” (Potter, at para. 37).

[40] The duty to make a timely election and the doctrine of condonation apply to constructive dismissal law. If an employee condones a breach of the employment contract, no claim in constructive dismissal can arise. The applicable principles were set out by Echlin (later Echlin J.) and Fantini in Quitting for Good Reason: The Law of Constructive Dismissal in Canada (Canada Law Book, Aurora, 2001) (“Quitting for Good Reason”), at pp. 48-49:

An employment contract is not terminated simply by an employer’s wrongful breach of the contract. Rather, the employee is required to ‘accept’ the employer’s repudiation in order to bring the employment relationship to an end and recover wrongful dismissal damages. … Thus, the employee faced with a unilateral variation of a fundamental nature has a positive obligation to signal his or her rejection of the new terms in a timely fashion, or else risk being viewed as condoning the changes. … In this sense, the employee is faced with a choice to ‘elect’ whether to accept or repudiate the new terms imposed by the employer. [Footnotes omitted]

[41] The timing of acceptance or repudiation is a critical factor in determining whether condonation has taken place. Echlin and Fantini state (Quitting for Good Reason, at pp. 49-50):

The point at which an employee is deemed to accept the employer’s repudiation may be critical to determining whether he or she is able to recover damages for constructive dismissal. … The date upon which an employee accepts an alleged repudiation is a question of fact for the court to determine. While, in some instances, it may be clear when acceptance or repudiation has occurred, in many cases a specific event will not materialize.

[I]n many cases a court will be unable to point to a specific event which confirms the employee’s acceptance or rejection of modified terms of employment. Usually, it will be a matter of assessing the employee’s conduct in light of the circumstances and acceptance will be deemed to have occurred simply by the passage of a significant period of time. [Footnotes omitted]

[42] Relevant factors to determine whether an employee has condoned the imposition of new terms include (i) how long the employee remained in the altered position without protest, (ii) how clearly the employee protested the variation, and (iii) the state of the job market (Quitting for Good Reason, at pp. 50-51).

[43] An employee is entitled to a reasonable period of time to assess his or her circumstances and make an election. However, a considerably extended period of time will preclude an action for constructive dismissal. In most circumstances, courts will view an employee’s willingness to remain in the altered position for a significant period of time as acceptance of the new terms, absent other mitigating factors (Quitting for Good Reason, at pp. 52-53).

4. Constructive dismissal case law addressing the factors raised by Persaud

[44] I now consider the law addressing particular issues arising under these general principles.

[45] Under the first branch of the Potter test, a unilateral change in hours (either to significantly decrease or increase the hours) can constitute a change to an essential term of the employment contract, even if the changes are imposed by the employer in good faith to address business concerns (Hilton v. Norampac Inc., [2003] OJ 3229 (CA), at para. 17; Corey v. Dell Chemists (1975) Ltd., [2006] OJ 2302 (SCJ), at paras. 42-44).

[46] An excessive workload or high pressure will not meet the standard of a constructive dismissal if no change in workload has occurred (Grant v. Oracle Corp. Canada, 1993 CarswellMan 302 (QB), at para. 61; affirmed 1995 CarswellMan 20 (CA) (“Grant CA”), at paras. 23-24).

[47] Under the second branch of the Potter test, a poisoned work environment can lead to a claim of constructive dismissal. A plaintiff must establish serious wrongful behaviour that creates a hostile or intolerable work environment. Unless there is a particularly egregious stand-alone incident, the behaviour must be persistent or repeated (General Motors of Canada Ltd. v. Johnson, 2013 ONCA 502, [2013] OJ 3467 (CA) (“Johnson”), at paras. 66-67, 91).

[48] A workplace becomes poisoned only where serious wrongful behaviour is demonstrated. The employee bears the onus of establishing a claim of a poisoned work environment. The test is an objective one, as an employee’s subjective feelings or genuinely-held beliefs are insufficient to prove a poisoned work environment (Johnson, at paras. 66-67).

[49] The above test has been applied to dismiss constructive dismissal actions when there are single or limited instances of either disparaging remarks, inappropriate name-calling, or an aggressive employer (Ata-Ayi v. Pepsi Bottling Group (Canada), Co., 2006 CanLII 37418 (ON SC), [2006] OJ 4440 (SCJ) (“Ata-Ayi”), at para. 28; Houtz v. 772910 Ontario Inc. (cob McFee’s Tavern), [2002] OJ 475 (SCJ), at paras. 43 and 45).

[50] A high-pressured and tense office environment is insufficient to establish a claim for constructive dismissal. This is especially true in high-pressured industries when the employee is aware of the highly competitive environment (Grant (CA), at paras. 23-24).

5. The failure to advance a complaint

[51] The failure to advance a complaint can be considered by the court in determining whether impugned conduct constitutes constructive dismissal (Ata-Ayi, at para. 28). Further, management’s inadequate response to a single or limited workplace complaint is not so fundamental to the employment relationship to demonstrate an intention not to be bound by the employment contract (Sobeys Inc. v. Mills, [2000] NSJ 244 (CA), at paras. 17 and 21).

B. The relevant evidence

[52] I agree with Telus’ submission that the reason for Persaud’s resignation was her dissatisfaction with Telus’ management style in the product development team in which she worked, and in particular, with the treatment and departure of her close family friend and superior, Mufti. I review the relevant evidence below.

1. Persaud’s employment history with Telus

[53] I adopt the following summary of Persaud’s employment history with Telus from Telus’ written submissions, which was supported by the documentary evidence before the court:

On or about January 13, 1997, the plaintiff commenced employment with Clearnet PCS, predecessor in interest to TELUS[^10], as a co-op student in a contract position ending June 27, 1997.

On or about March 2, 1998, the plaintiff commenced full-time employment with Clearnet PCS in the role of Programmer Analyst, Network Development, earning $37,500.00 per annum.

On January 17, 2001, Persaud was transferred to the position of mCommerce Developer on the Product Development Team.

On April 23, 2003, Persaud received a promotion to the position of Java Developer on the Product Development Team.

Persaud remained in the position of Java Developer until the date of her resignation. At the time of her resignation, Persaud was earning $67,000.00 per annum.

During her employment, Persaud regularly received raises that were appropriate with her seniority, experience and responsibilities. [Footnotes omitted]

2. Persaud’s role at Telus with the IP Biller program

[54] Persaud’s principal role at Telus in the “product development” team was as a “Java Developer”. In that capacity, her primary role was to develop code and provide support (using Java software skills) for Telus’ “Collector” application (frequently referred to during the trial as the “IP Biller” program, as “IP Biller” was the name of the generic “user” of the Collector application).

[55] Prior to text and data services, Telus’ cell phone revenue was generated from “voice” services. In August of 2000, Mufti moved from his prior roles in Telus’ information technology (“IT”) group to an executive position on the “product development” side as Director of Data Services. Blumenthal was Vice-President of Products and Services and Mufti’s superior.

[56] As Telus moved into the data services market, it required a process to collect and identify data “events” from cell phone users (including text, Java games, picture messaging, or internet browsing) and to process the events for billing. The “IP Biller” (or Collector application) ran on Telus’ “TINMAN” server and communicated the information for billing purposes.

[57] In effect, the Collector application/IP Biller collects the data “event”, identifies the customer, and sends information to the billing system so that the billing department at Telus can charge customers at the end of the billing cycle.

[58] Data services grew at a phenomenal rate in the early 2000s. When Mufti first started as Director of Data Services, revenues from data services were approximately $50,000. By the time of his departure in May 2004, revenues from data services were approximately $72 million.

3. Evidence relevant to the reasons for Persaud’s departure from Telus

[59] I review below the evidence relevant to the reason for Persaud’s departure from Telus.

i. Persaud’s friendship with Mufti

[60] On this issue, Persaud consistently sought to demonstrate through her evidence that she did not have a close friendship with Mufti. Persaud’s evidence on this issue was shown to be not credible, not only in her cross-examination, but also from the testimony of her own witnesses (Mufti and her husband, DeCoste).

[61] Persaud’s attempts at distancing herself from Mufti ranged from minor to severe. When asked if Mufti was the director of the product development team, Persaud’s answer was “as far as I knew” until asked again, when she confirmed that she knew he held that position.

[62] At first, Persaud refused to agree that Mufti helped her find jobs. She stated on cross-examination that he was only a reference. As I discuss below, Mufti helped her find jobs on numerous occasions.

[63] When pressed on cross-examination, Persaud attempted to limit Mufti’s involvement. Persaud stated that Mufti would pass on opportunities to her, just as she would do for him. However, the evidence from Mufti’s cross-examination (in which he fairly and candidly answered questions about his friendship with Persaud and his involvement in her career), was that Mufti took an active role in Persaud’s employment both at Telus and after her departure.

[64] When Persaud was asked whether Mufti was “heavily involved” in supporting her career at Telus, Persaud stated that she did not understand the question. When pressed on cross-examination, Persaud said that Mufti “just liked” her work. Again, the evidence I discuss below establishes that Mufti was heavily involved in Persaud’s career at Telus.

[65] Persaud denied on several occasions that she spent time with Mufti on the weekends. That evidence was contradicted directly by Mufti in his examination-in-chief and in his cross-examination. Mufti described himself as a “close friend” of Persaud, who spent time together on the weekends, was invited to Persaud’s annual Christmas party, and would get together with Persaud once every three or four months.

[66] Mufti’s evidence as to the friendship was confirmed by Persaud’s husband, DeCoste, who agreed on his cross-examination that Mufti’s family had been to the DeCoste/Persaud family home.

[67] Further, the uncontroverted evidence is that Mufti and Persaud carpooled together, travelling from one to one and a half hours each way on their commute. They would go for lunch at Telus, sometimes alone and sometimes with others, with lunches taking at least an hour. While Persaud’s evidence is that there were times when she would have to stay late and she would not carpool to return home, the amount of time Persaud and Mufti spent together over the seven years from when Persaud joined Telus as a co-op student, just from the carpool and lunches, would be in the thousands of hours.

[68] The relationship between Persaud and Mufti was so well known that when Mufti hired Persaud into the product development group, Blumenthal had a conversation with Mufti to remind Mufti that he could not show any preferential treatment to Persaud because of their friendship.

[69] Consequently, I find that Mufti and Persaud were close friends. Persaud’s attempts on this issue to avoid questions, her false responses, and the repeated need on cross-examination for Telus’ counsel to take Persaud back to documents just to get a simple answer raise serious flaws in her credibility as a witness.

ii. Mufti’s role as a mentor to Persaud

[70] Persaud also repeatedly refused to answer whether Mufti was her mentor (at first saying that she did not understand the term and that she simply “liked the way he worked”). When Telus’ counsel put forward a definition of a mentor as someone who takes a person under their wing, leads that person through their career, and teaches that person the skills necessary for the job, Persaud still refused to answer the question and said that she and Mufti were just people who liked to work together and she was just part of a team of people who would move together because they worked well. Again, Persaud’s evidence is not credible.

[71] First, Mufti’s own evidence in his examination-in-chief was that he was a “mentor” to Persaud. He used the term to describe their relationship.

[72] Second, the evidence surrounding Mufti’s involvement with Persaud’s career (which Mufti fairly acknowledged on cross-examination) can only lead to the conclusion that he was Persaud’s mentor from the time they met when Mufti was teaching a computer class in December 1996 and offered Persaud a co-op position at Telus (then Clearnet). I adopt the following summary from Telus’ written submissions as accurate, establishing that Mufti was Persaud’s mentor:

Furthermore, the evidence clearly shows that Mufti was heavily involved in Persaud’s career. Specifically, the evidence shows the following:

i) that Mufti was Persaud’s teacher prior to commencing employment with TELUS;

ii) that Mufti hired Persaud as a co-op student;

iii) that Mufti hired Persaud as a full-time employee;

iv) that Mufti transferred her to the Product Development team following his promotion;

v) that Mufti was Persaud’s boss or her bosses boss for nearly the entirety of her tenure at TELUS;

vi) that Mufti was involved in helping Persaud obtain employment at Sprint, Global Telecom, 724 Solutions and Disney;

vii) that Mufti acted as Chief Consultant for her business, Guiding Light Solutions;

viii) that Persaud and Mufti worked at Sprint and at Disney at the same time; and

ix) that Mufti had requested that Persaud move to the U.S. with him to pursue further employment opportunities. [Footnotes omitted]

iii. Mufti’s departure from Telus

[73] Mufti’s departure from Telus was the result of a disagreement between himself and his direct supervisor, Blumenthal.

[74] The issue with Blumenthal started as a disagreement between how performance assessments were graded, specifically on a subjective versus objective assessment. The disagreement led to Mufti holding a meeting with Telus’ Executive Vice President of Human Resources, David Wells (“Wells”). During that meeting Mufti informed Wells of the conflict with Blumenthal, including the difference in opinion regarding grading of performance reviews, Blumenthal’s micromanagement of his team, and the fact that Mufti felt he was being forced out of Telus.

[75] Following that meeting, Mufti was offered and accepted a significant termination package to leave Telus.

[76] Mufti left Telus on May 17, 2004. One week earlier, at a group barbeque, Mufti advised the members of his product development team that he was leaving Telus.

iv. Persaud knew about Mufti’s departure before Mufti told the product development team

[77] In her cross-examination, Persaud was adamant that she only learned of Mufti’s departure when he told the product development team, which was approximately May 10, 2004, one week prior to Mufti’s departure on May 17, 2004. I do not accept her evidence.

[78] Mufti’s evidence was that he told Persaud he was leaving before he told the rest of the team, because Persaud would need to make alternative carpool arrangements. In cross-examination, Mufti fairly acknowledged that when he told Persaud that he was leaving, he had a general discussion with her in which he advised Persaud (i) about his reasons for leaving, which were that he had a disagreement with Blumenthal about the way the company was operating, and in particular the way that Blumenthal was operating and (ii) that he was leaving as a result of that disagreement. Mufti stated that he “could” have told Persuad that he felt he was being “forced out” of Telus.

[79] Further, Persaud maintained her position despite the medical record from her family doctor[^11]in which the family doctor recorded, from Persaud’s April 19, 2004 visit, “Stress @ work # of issues – V.P. & manager. Been @ work 7 years – lots of conflict & now co-worker leaving which will affect her”.

[80] Consequently, Persaud’s evidence is not credible. I find that by April 19, 2004, Persaud knew of Mufti’s intention to leave Telus, as well as Mufti’s disagreement with Blumenthal’s management style and the direction of the company.

v. The May 12^th meeting between Persaud and Lori Tippler

[81] On May 12, 2004, approximately two days after Mufti advised the product development team that he was leaving Telus, Persaud attended at a meeting with Lori Tippler (“Tippler”), an employee in Telus’ Human Resources department (the “May 12^th Meeting”).

[82] During the course of her examination-in-chief, plaintiffs’ counsel took considerable time to review the notes taken by Tippler (the “Tippler Notes”) at the May 12^th Meeting, which was understandable given their importance to the reasons for Persaud’s dissatisfaction with her job. Counsel agreed that the Tippler Notes were not admissible on their own of what took place at the May 12^th Meeting, but that instead, Persaud would be examined on the Tippler Notes and asked if she agreed on their contents, as evidence of what took place at the May 12^th Meeting.

[83] On four separate occasions, plaintiffs’ counsel asked Persaud to review the Tippler Notes, and to ensure that she identified all areas of disagreement with them. Persaud was also asked to confirm if there was anything missing from the Tippler Notes. Persaud confirmed, after a detailed review of the Tippler Notes, that only four specific notes were inaccurate, in that Persaud testified that she did not say (i) the word “admiration” when speaking about Mufti; (ii) “3-4 years on-call 24x7”, (iii) that she had “stopped keeping [her] phone on after hours”, and (iv) that she “no longer want[ed] to move”.

[84] Consequently, on cross-examination, Persaud was taken to other comments in the Tippler Notes, and in particular, passages which recorded that Persaud said she:

(i) felt that “what she believed in was gone”,

(ii) was aware of a conflict between Mufti and Blumenthal,

(iii) disagreed with this conflict,

(iv) felt Mufti was being forced out,

(v) did not agree with the way Mufti was being treated or decisions Telus was making, and

(vi) was concerned about (a) Blumenthal’s micromanagement and (b) the manner in which her performance assessments were being conducted.

[85] The Tippler Notes further recorded that Persaud’s goal of the May 12^th Meeting was to receive a termination package because she did not agree with the decisions Telus was making.

[86] When presented on cross-examination with the above statements in the Tippler Notes, Persaud stated that she “didn’t really look” at the Tippler Notes, despite being asked four times by her counsel if she had reviewed them for all inaccuracies.

[87] Further, Persaud was adamant that Tippler had incorrectly misinterpreted Persaud’s position with respect to a severance package. Persaud’s evidence was that she had asked Tippler for her “options”, but Persaud had misinterpreted the request as seeking a goal of a severance package – even though the “goal” was clearly set out in the Tippler Notes which Persaud reviewed at length.

[88] On cross-examination, Persaud also sought to add new evidence that she raised a concern with Tippler about additional work hours that Persaud might have because of Mufti’s departure. Persaud was then taken to her examination for discovery, and before being shown the transcript, modified her answer to say that she did not discuss with Tippler any additional workload that would arise from Mufti’s departure, and only told Tippler that Persaud had a heavy workload.

[89] Consequently, Persaud’s evidence on the Tippler Notes is not credible. Except for the four particular issues raised by Persaud (on which I make no finding), I find that the Tippler Notes accurately set out the nature of the discussion between Tippler and Persaud.

vi. Persaud’s remaining steps before resignation

[90] Persaud followed the May 12^th Meeting with a meeting with Wells. Wells informed Persaud that the matter was in Human Resources’ hands.

[91] Persaud spoke with Tippler following her meeting with Wells. Tippler informed Persaud that Telus could not do anything for her.

vii. Persaud resigns from Telus

[92] On May 19, 2004, one week after the May 12^th Meeting and two days after Mufti left Telus, Persaud resigned. In her brief letter to her direct manager, Dan Kajioka (“Kajioka”) (the “Resignation Letter”), Persaud stated:

Please be advised that this constitutes my formal letter of resignation from TELUS Mobility. My last day of employment will be June 2^nd, 2004. I find it difficult to demonstrate any sense of loyalty and dedication to an organization that does not value loyalty and dedication but rather rank.

[93] When presented with notes of Sandra Marchand written on an e-mail dated May 20, 2004 (the “Marchand Notes”) that stated Persaud “indicated [she] decided to leave on principal [sic], stands by that”, Persaud’s evidence was that she “could have” said it.

[94] Persaud acknowledged on cross-examination that when she resigned, she did not know what steps Telus planned to take to respond to Mufti’s departure and agreed with Telus’ counsel that she did not “stick around to find out”.

4. Evidence related to condonation and acquiescence

[95] As I discuss above, I do not make evidentiary findings as to whether Persaud had a significant increase in her working hours due to the growth of data services in the product development team (based on her evidence and that of Mufti and DeCoste) or whether Persaud either (i) is misrepresenting the hours she worked or (ii) worked more hours than required for the position (based on the evidence of Jey)[^12]. For the purposes of the issue of whether Persaud acquiesced or condoned such a change (if it took place), the relevant evidence addresses Persaud’s perception of her workload and work environment and the complaints that she raised.

[96] Persaud’s perception of her work is relevant to the condonation or acquiescence argument raised by Telus. Telus submits that regardless of whether Persaud actually (i) had increased hours or (ii) worked in a poisoned environment, she acquiesced in or condoned such a change in her working conditions and as such was not constructively dismissed.

i. Persaud’s perception of her workload

[97] As I discuss above, I make no findings of fact as to whether Persaud’s perception was correct, as even if her evidence is accepted, it establishes condonation. In this subsection of my Reasons, I only set out Persaud’s evidence as to her perception of her workload.

[98] Persaud’s evidence is that her hours “spiked” when she transferred to the product development team in 2001, becoming so difficult that she had child care issues.

[99] Persaud’s evidence is that by 2002, she was working 65-75 hours per week, including almost every evening, weekends, and frequently overnight, all to address billing issues arising on IP Biller.

[100] Persaud’s evidence was that those hours remained “static” from 2002 onwards, a period of more than two years until her departure in May 2004.

[101] When cross-examined on this issue, Persaud twice responded that she did not understand extra hours to be part of her functions, but then said “not entirely”. She added that she did not expect such working hours to be static from 2002 onwards.

[102] In the spring of 2003, Persaud’s co-worker Patricia Hallam (“Hallam”) left Telus. Persaud’s evidence is that she (i) lost Hallam’s support assistance and (ii) became responsible for Hallam’s work on the product development team, both of which resulted in even more work.

[103] Jey was hired in September 2003, specifically to work as a Java developer with Persaud and to provide support in a similar manner that Hallam had done. Persaud’s evidence is that she cross-trained Jey upon his hiring as a Java developer, for the purpose of Jey providing support to Persaud. Persaud’s evidence is that this “knowledge training” was complete by November or December 2003. Persaud’s evidence is (i) this additional training workload increased her hours; and (ii) after the training, Jey did not provide the support to reduce her working hours[^13], which continued unabated until her departure.

ii. Persaud’s complaints regarding workload and work environment

[104] Persaud’s first complaint about her workload was before the summer of 2003[^14], to Kajioka. Persaud raised those complaints at team meetings (monthly and weekly). Kajioka said that he was working on addressing her concerns.

[105] In the summer of 2003, Kajioka refused to give Persaud an extra day of holiday after she returned early from a camping trip to address issues arising from the blackout. In her cross-examination, Persaud’s evidence was that she complained to Mufti about (i) Kajioka’s decision to refuse an extra day of holiday, and (ii) the manner in which he addressed the issue, by allegedly raising his voice.

[106] In cross-examination, Persaud was taken to her discovery transcript, in which she was specifically asked whether she had complained about the manner in which Kajioka communicated with her. At her discovery, Persaud stated that her complaint was only that she could not get the day back. Persaud’s explanation at trial that she was not “focused” on the distinction at examination for discovery is not credible, as the question was clearly posed. I accept the discovery evidence that Persaud did not raise a complaint to Mufti about the manner in which Kajioka had dealt with her complaint.

[107] After the blackout and the meeting between Persaud and Kajioka described above, Persaud’s dealings with Kajioka became more tense. Persaud then approached Kajioka’s superior, Mufti, to seek his direct involvement in addressing her workload concerns. As did Kajioka, Mufti informed Persaud that he was looking into the issue.

[108] In the summer of 2003, Persaud also raised the issue of her workload with Wells, during a meeting with him to review workplace environment issues.

[109] At the end of 2003, Persaud asked Mufti for a transfer to the IT group after a meeting with Blumenthal and the product development team in which Blumenthal raised his voice. Persaud’s evidence is that she made the request because (i) “nothing was changing” with respect to her work hours despite Jey’s hiring and (ii) Kajioka allegedly failed to respond to her requests to address workload issues.

[110] By January 2004, Mufti advised Persaud that a transfer to the IT group was not possible.

[111] There is no evidence that Persaud raised any further concern about her workload or environment until May 12, 2004.

iii. Other evidence relevant to condonation and acquiescence

[112] Persaud’s evidence was that she “would have stayed” if Mufti had not left and otherwise “gone to IT” if that “wasn’t an option”.

[113] Persaud’s evidence in cross-examination on this question changed each time she was asked. She first said she would have stayed if Mufti had stayed, because her concerns of additional workload would not have arisen. When asked to confirm that she would have stayed if Mufti had stayed, she answered “absolutely”, but then paused and added that she would have wanted a transfer to the “IT Group”.

[114] Further, the uncontested evidence is that there were many job opportunities for Persaud during the 2002-04 period, as Telus employees were leaving for competitors such as Rogers and Bell due to higher salaries. The evidence is unchallenged that a study was done by Telus’ Human Resources group to address the salary issue, and Telus provided salary increases.

C. Application of the law to the evidence and factual findings

1. Constructive dismissal under either branch of the Potter test is not established

[115] On the basis of the above evidence, I find that Persaud resigned because she was dissatisfied with the management of Telus, unhappy with the direction the company was taking, critical of the performance evaluation structure, and particularly unhappy with Telus’ treatment of Mufti, her friend and mentor. She did not resign because of increased hours or a poisoned work atmosphere.

[116] Such a conclusion is consistent with the Tippler Notes, the Resignation Letter, and the Marchand Notes. It is consistent with Persaud’s refusal to wait to see how Telus would address Mufti’s departure. It is also consistent with Mufti advising Persaud of the reasons for his departure by at least April 19, 2004.

[117] Persaud submits that she left Telus because of a concern that she would have more work hours because of Mufti’s departure, which she says was the tipping point for her resignation. However, (i) the Tippler Notes reflect no such discussion; (ii) Persaud acknowledged that she never raised that issue with Telus (after changing her evidence on that issue); and, (iii) Persaud never gave Telus the opportunity to address the effects of Mufti’s departure.

[118] Consequently, I find that Persaud left Telus because of her disagreement with Telus’ management style and in particular, Telus’ treatment of Mufti. Persaud left on “principal”, because (i) she believed Telus “does not value loyalty and dedication but rather rank”; (i) she was “not happy” with Telus’ management style; (iii) she believed Mufti was “forced out”; (iv) “what she believed in was gone [in that Persaud] didn’t believe that difference of opinion would cause someone to leave”; and (v) she “didn’t feel valued”. All of these statements, taken from the Marchand Notes, Resignation Letter, and Tippler Notes, demonstrate Persaud’s reasons for leaving Telus.

[119] Further, even if Persaud did not tell Tippler that she “no longer wanted to move to IT”, this does not affect the reason for her decision to leave the project development group at Telus. Persaud may have been prepared to accept a transfer to the IT group, but her reasons for wanting to leave the product development group remained as discussed above, i.e., related to her disagreements with Telus’ management of the product development group. Persaud confirmed that she would have stayed in the product development group if Mufti had stayed.

[120] Further, the evidence does not support a finding that Persaud resigned because there was a series of acts that created a poisoned work environment.

[121] Persaud acknowledged on cross-examination that as a programmer and Java developer, she considered herself to be a professional in the fast-paced, highly-competitive telecommunications industry. Persaud acknowledged that that she was in a high-pressure environment because she was working with brand-new technology which pioneered her team as key people in this area of technology. Persaud agreed that such a responsibility was “rewarding”.

[122] Consequently, the ordinary stress that flowed out of the nature of Persaud’s work cannot be said to be a basis for constructive dismissal. It does not lead a reasonable person to conclude that the employer no longer intends to be bound by contractual terms.

[123] Further, the two occasions of Kajioka and Blumenthal raising their voices at two meetings in 2003 cannot suffice to establish the conduct that would create a poisoned work environment. I adopt the following written submissions of Telus:

Persaud has admitted the single incident with Blumenthal was her only interaction with him. With regard to Kajioka, aside from the single yelling incident, Kajioka and Persaud appear to have had a perfectly amicable relationship. While Persaud did not agree with Kajioka’s evaluation and Kajioka would get frustrated based on his understanding of technological issues, Persaud has not established anything more than a supervisor with whom she did not particularly get along with. This is nowhere near the hostile environment contemplated by the Court of Appeal in Johnson.

Furthermore, while Persaud alleged that initially she brought the issue of Kajioka raising his voice to Mufti, Persaud resiled from that position when presented with the transcript of her examination for discovery. Persaud’s failure to complain about either incident of yelling to TELUS is telling of her own belief about the severity of these incidents. These two (2) incidents of yelling were minor. They have only been raised by Persaud, post resignation, to support an allegation of a poisoned work environment where none existed. [Footnotes omitted]

2. Even if Persaud’s reasons for resignation were related to a breach of the employment contract under either branch of the Potter test, any such change was condoned

[124] Even if (i) there was a unilateral change in work hours or (ii) the two isolated incidents in the summer or fall of 2003 could support a claim for a poisoned work environment, and even if either was a reason for Persaud’s departure from Telus, Persaud “acquiesced in” or “condoned” such changes.

[125] With respect to the issue of increased working hours, the alleged change in Persaud’s working hours began at the latest in 2002 and remained “static” for two years on an ongoing basis. There is no evidence of any complaints by Persaud until after Hallam left, when Persaud submits that the working hours became even worse.

[126] If Persaud’s evidence on the change in work hours is accepted, acquiescence or condonation is the only reasonable inference. Under Persaud’s own evidence-in-chief, (i) she had static hours since 2002 well beyond the hours Persaud says she expected to work; (ii) she had even more hours after the departure of Hallam; and, (iii) Persaud knew by January 2004 that Jey’s arrival had not addressed the workload issue (and to the contrary even increased Persaud’s workload) and that she could not be transferred to the IT group.

[127] Yet, for more than four months after she was told that there was no possibility of transferring to the IT group from the product development team, Persaud did nothing. On this evidence, I find that to the extent any Potter change occurred, Persaud acquiesced in the change.

[128] The above conclusion is also consistent with Persaud’s evidence that she “would have stayed” if Mufti had not left and otherwise “gone to IT” if staying with Mufti “wasn’t an option”. In other words, even if Persaud’s evidence is accepted that she resigned due to concerns about increased work with Mufti’s departure, this evidence demonstrates that Persaud had condoned any existing increase in working hours or alleged hostile working environment until Mufti’s departure, and was prepared to continue on with Mufti on the product development team if he had stayed.

[129] Persaud’s evidence that she was prepared to move to the IT group (and did not tell Tippler otherwise) further supports condonation, as Persaud knew that such a transfer could not be done by January 2004 at the latest but remained with the product development group.

[130] Further, condonation is also consistent with the evidence that there were many job opportunities for Persaud during the 2002-04 period, as Telus employees were leaving for competitors such as Rogers and Bell due to higher salaries. In these circumstances, this ability to easily find other employment is an additional factor supporting condonation (Quitting for Good Reason, at pp. 50-51).

[131] For the above reasons, I dismiss the Constructive Dismissal Claim.

Issue 2: The Report Claim

[132] The Report Claim is based on the legal concepts of bad faith termination, intentional infliction of mental suffering, and aggravated and punitive damages. I address the applicable law on each of these principles below and then consider the relevant evidence and apply it to the law.

A. The applicable law

1. Bad faith termination

[133] The court will award damages if an employer engages in conduct during the course of a dismissal that is “unfair or in bad faith by being, for example, untruthful, misleading or unduly insensitive” (Honda Canada Inc. v. Keays, 2008 SCC 39, [2008] SCJ 40 (“Keays”), at para. 57). Examples include attacking the employee’s reputation by making declarations at the time of dismissal, misrepresentation regarding the reason for the decision, or dismissal meant to deprive the employee of a pension benefit or other right such as permanent status (Keays, at para. 59).

[134] It must be reasonably foreseeable that such conduct would cause mental stress. Employment contracts are subject to cancellation at any time provided cause, notice or pay in lieu of notice is given. As both employer and employee are aware of the possibility of cancellation at any time, it is not reasonably foreseeable that the normal distress and hurt feelings arising from a cancellation would cause mental distress. However, it is reasonably foreseeable that unfair or bad faith conduct would cause mental distress. The mental distress must be caused by the manner of the dismissal, not the fact of the dismissal (Keays, at paras. 56-57).

[135] Damages under the Keays principle are not available if the employer made an honest mistake. As Gillese J.A. held in Mulvihill v. The Corporation of the City of Ottawa (2008), 2008 ONCA 201, 90 OR (3d) 285 (CA), at para. 65, “A mistake is not conduct that can be said to be unfair or in bad faith” (see also Haftbaradaran v. St. Hubertus Estate Winery Ltd., [2011] BCJ 1983 (SC), at para. 76).

[136] The plaintiffs submit that the principle of “bad faith termination” can extend to the Report Claim, as the plaintiffs submit that the Report, prepared more than two months after Persaud’s departure from Telus, arose in the context of events shortly after her termination.

[137] Given my finding of fact below that Telus did not engage in any bad faith or unfair conduct, I make no legal finding as to whether the principle of bad faith termination relates only to the manner in which an employee is terminated as opposed to extending the concept to a claim which addresses alleged conduct by an employee after termination.

2. Intentional infliction of mental suffering

[138] The required elements of the tort of intentional infliction of mental suffering are (i) the conduct was flagrant and outrageous; (ii) the conduct was calculated to cause harm; and (iii) the conduct resulted in a visible and provable illness or injury (Prinzo v. Baycrest Centre for Geriatric Care, 2002 CanLII 45005 (ON CA), [2002] OJ 2712 (CA) (“Prinzo”), at para. 43).

[139] With respect to the second requirement that the conduct is calculated to cause harm, the defendant must intend to cause such harm, or, such harm must be known by the actor to be substantially certain to follow from his or her behaviour. As an intentional tort, this element cannot be satisfied on an objective standard of “reasonable foreseeability” or “recklessness” (Piresferreira v. Ayotte, 2010 ONCA 384, at paras. 72, 76-80; Prinzo, at paras. 45 and 61).

[140] With respect to the third requirement of a “visible and provable illness or injury”, Telus submits that “typically evidence from a qualified physician is required”. Telus submits that the lack of medical evidence is critical in the present case since Persaud had medical evidence available (as shown by the medical records introduced as business records), but failed to call her family doctor as a witness.[^15]

[141] In Prinzo, the court relied on the decision of McLachlin J. (as she then was) in Rahemtulla v. Vanfed Credit Union (1984), 1984 CanLII 689 (BC SC), 29 CCLT 78 (BCSC) (“Rahemtulla”). Weiler J.A. stated that “concerning the requirement of a visible and provable illness it appears that the absence of a medical expert will not necessarily be fatal”, relying on McLachlin J.’s conclusion that “Notwithstanding the absence of expert medical evidence, I am satisfied that the plaintiff suffered depression accompanied by symptoms of physical illness as a result of [her employer’s] accusations” (Prinzo, at para. 46, citing McLachlin J. in Rahemtulla, at para. 56).

[142] I do not address the legal issue as to whether medical evidence is required (or critical) when medical evidence may be available, given my findings that neither of the first two requirements to establish the tort of intentional infliction of mental suffering (i.e., flagrant or outrageous conduct or intention to cause harm) was established on the facts of this case.

[143] The tort of intentional infliction of mental suffering is available in situations when a defendant contacts the police, but all three components of the test must be met (Asagwara v. Money Mart, 2014 ONSC 6974 (SCJ), at para. 66). A plaintiff must establish that the defendant “intentionally falsely accused” the employee of theft (Filice v. Complex Services, Inc., 2012 CarswellOnt 17267 (SCJ), at paras. 21-22).

[144] A poor investigation of an employee’s conduct does not establish liability for an employer. In Elgert v. Home Hardware Stores Ltd., 2011 ABCA 153, [2011] AJ 561 (CA) (“Elgert”), the court held that “an employer cannot be faulted for honestly believing an allegation of wrongdoing and should not be punished simply because an investigation was clumsy” (Elgert, at para. 88). There is no specific standard of investigation that the employer must follow. What is required will depend on the circumstances including the employer, its policies, its sophistication and the workplace. However, the investigation will be subject to judicial scrutiny and an employer will not be permitted to conduct an “inept or unfair investigation or behave in malicious, vindictive, or outrageous ways” (Elgert, at paras. 88-89).

3. Aggravated damages

[145] While plaintiffs’ counsel submitted in closing argument that she was relying on the doctrine of “aggravated damages”, she fairly set out in her written submissions that the concept of aggravated damages in employment law is derived from the Keays analysis. In other words, if the manner of the dismissal is in bad faith or unfair (under the concept of “bad faith termination” discussed above), damages can be awarded (Keays, at para. 59).

4. Punitive damages

[146] I adopt the summary of the law governing punitive damages as set out in Telus’ submissions, which is not contested:

To establish entitlement to punitive damages, an employee must show that:

i) the employer’s conduct was reprehensible in that it was ‘malicious, oppressive and high-handed’ and ‘a marked departure from ordinary standards of decent behaviour’;

ii) an award of punitive damages, when added to an award of aggravated damages, is rationally required to punish the employer, to meet the objectives of retribution, deterrence and denunciation;

iii) the employer committed an actionable wrong, independent of the underlying claim for damages for breach of contract.

Punitive damages should only be awarded in exceptional cases. The discretion to award such damages should be exercised cautiously. [Footnotes omitted]

(See Keays, at paras. 62 and 68 and Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419, at paras. 79-82).

B. The relevant evidence

1. The evidence is limited to Telus’ conduct with respect to the Report

[147] In her closing submissions, plaintiffs’ counsel did not pursue any of the above causes of action with respect to the manner in which Telus treated Persaud on her departure in May of 2004. Rather, the plaintiffs submitted that the time frame of Persaud’s departure should be extended under the doctrine of “bad faith termination” to consider the Report (an issue I do not decide as set out at para. 137 above).

[148] I agree with the summary of the evidence on Telus’ treatment of Persaud on her resignation as set out in Telus’ written submissions:

The evidence also shows that TELUS treated Persaud kindly with respect to her resignation. Persaud indicated that she wanted to work as minimal as possible. In response, Kajioka informed her that she did not have to work her two (2) week notice period. Despite Persaud not having to work for this period, TELUS paid her for these two (2) weeks. This is not the type of conduct that gives rise to bad faith damages. [Footnotes omitted]

[149] Consequently, I limit my consideration of the relevant evidence for these causes of action to the Investigation and the Report.

2. Evidence relevant to the Investigation and the Report

i. A comment on the credibility of Jey

[150] The only witness with evidence as to the Investigation and Report was Jey. The plaintiffs submit that his evidence was “coached” and not believable. I do not agree. I find that, as in Davies (at para. 31):

His evidence was internally consistent, made sense, and had a "ring of truth". I also found his recollection of detail to be impressive. Where there were frailties in his recollection he conceded them, but on the important facts his evidence was clear. In cross-examination, his evidence was not shaken. He was not impeached on any occasion with reference to his discovery transcript or a document. His answers to questions on cross-examination were responsive and direct. When challenged on a point, his spontaneous explanations made sense and were logical. I have no reason to doubt the accuracy of the material parts of his testimony.

[151] Consequently, I accept Jey’s evidence as to the steps taken with respect to the Investigation and Report, which I review below.

ii. Jey’s background and knowledge of Java software

[152] Jey is an electrical engineer. He graduated from the University of Toronto in 1996 with a bachelor’s degree in applied sciences and engineering. Prior to being employed full-time by Telus in 2003, he worked for external consultants providing services including Java software development.

[153] In particular, Jey worked as a consultant both at Clearnet and Telus before he was hired on a full-time basis in September of 2003. He developed the “myTelusMobility” web portal which enabled Telus Mobility customers to access account information. He had experience in coding in Java technology, including writing Java code at Telus. Jey had experience with “Java xml” which was used by Clearnet.

[154] Jey had also written “95%” of the code for a prior project as a consultant for Allstate Insurance Company so that customers could access information.

[155] Consequently, Jey was well-known to Telus as an experienced Java developer before he joined Telus on a full-time basis in September 2003.

[156] Jey was recruited by both Kajioka and Mufti for the full-time position at Telus. Mufti fairly acknowledged in his cross-examination that he was involved in recruiting Jey for Telus and knew of his work as a consultant working as a Java developer on the web portal. Mufti understood that Jey had accomplished the job he was hired to do as a consultant.

[157] When Jey commenced employment, Persaud was required to conduct a knowledge transfer in order for Jey to support her in the product development team. The knowledge transfer was completed in November or December 2003.

[158] After Persaud left Telus, Jey took over IP Biller on his own, providing both system and vendor support.

iii. Access to the TINMAN server

[159] The billing malfunctions that led to the Investigation and Report took place in the IP Biller (or “Collector”) program, which was located on Telus’ TINMAN server. At the hearing, the plaintiffs led evidence that there were only a limited number of ways that a Telus employee could have authorized access to the TINMAN server, and that none of those ways were available to Persaud after she left.

[160] Since Persaud had given her laptop computer to Telus upon her departure, she no longer could have used the “virtual private network” (“VPN”) access into the system. Further, Persaud did not return to the Telus premises after May 20, 2004, and as such no longer could have accessed the TINMAN server in that manner. Finally, Persaud could not have accessed the system through a “Secure ID” or “fob” since she had returned it several months before her departure.

[161] However, the focus on “authorized” access is not the basis for the Report. As I discuss below, the Investigation Team determined, based on the evidence it considered, that Persaud could have accessed the system outside the “authorized” process, by using either the “Telnet” system available for Telus employees to log into the Telus network, or through some other outside application.

[162] I do not decide the factual issue of whether Persaud could have accessed the TINMAN server outside the authorized process. The relevant issue is whether Telus could reasonably have concluded that such access was possible. However, I review the evidence on unauthorized access as it is relevant to the basis for Telus’ conclusion.

[163] No expert evidence was led on whether, or how, someone could obtain access to the TINMAN server.

[164] Mufti acknowledged in his cross-examination that if “front-line” access was deactivated, access could still be obtained if the system were “hacked”, and that “systems get hacked all the time”, i.e accessed through an unauthorized manner. Mufti’s evidence was that if the TINMAN server were accessed through unauthorized means, Persaud could have used the TINMAN server if “she had permission from the security level at Telus Mobility and they had opened a port for her to use”, and that “as far as” Mufti knew, nobody would have such access at Telus because then “anyone” could gain access to the server which controlled the critical billing function.

[165] Mufti was not called as an independent expert on the operation of, or access to, the TINMAN server. Further, he was not a “participant” witness under Westerhof as he did not take part in the Investigation or the Report. Mufti could only give evidence as to his understanding of firewalls and security based on his knowledge of the IP Biller system.

[166] Jey fairly acknowledged that he was not a security expert and had not conducted an investigation into computer security breaches prior to the Investigation. However, Jey’s evidence was based on (i) his knowledge of the Collector system, and (ii) the knowledge and conclusions reached by the Investigation Team. Jey was a “participant” (under Westerhof) in the Investigation and the Report. The Investigation Team included Walker and Franco, who had expertise in computer security, and UNIX systems respectively at Telus.

[167] Jey’s evidence was that (i) Persaud could have obtained access to the Telus computer network and (ii) if so, Persaud could have obtained access through the firewall to the TINMAN server.

[168] In the face of extensive cross-examination, Jey fairly acknowledged that the TINMAN server had firewall systems in place to prevent unauthorized access and that such firewalls were necessary because unauthorized access to the TINMAN server could result in significant damage to Telus’ revenue, as it would not be able to collect information on data use and bill customers.

[169] However, Jey’s unshaken evidence was that at the time of Persaud’s departure, the firewall on the TINMAN server was “flexible”, so that those individuals who worked directly on coding for the IP Biller/ Collector application could make rapid changes to the system to address billing issues. Access through the firewall was not “general” (which addressed the concern raised by Mufti), but rather limited to Mufti, Persaud, and Jey (outside the systems administrators), who could make changes directly. In that sense, the firewall was not as secure as for other production systems at Telus.

[170] Consequently, Jey’s evidence was that if a person in the limited group of individuals who could make changes directly to the TINMAN server used “Telnet” or a “putty” tool to access the network, the “holes” in the server designed to permit specific users to get onto the system would permit those people to make changes to the code. Access would only be possible if the person knew the IP address of the TINMAN server, which was kept confidential and known only to a limited group who worked with the server, comprised of the systems administrators and Persaud, Mufti, and Jey.

[171] Jey was cross-examined as to why he did not mention in the Report that access was obtained through Telnet. Jey fairly acknowledged that he did not know whether access was obtained through Telnet or by some other means. Jey maintained his position that outside access was possible, a conclusion similar to that reached by Mufti that “hacking” could be used to get into the Telus network.

[172] The conclusion of the Investigation Team that Persaud could access the TINMAN server was also challenged on the basis that the Report indicated that the user who had access was “still logged in” at the time of the Report. Persaud gave evidence that whenever she accessed the system remotely, whether through fob or VPN, her session would be timed out and she would have to log out and back in to the system.

[173] Mufti’s evidence was that the VPN access had a 12-hour time-out period, but if a person was “internally” on the system, there would be no time out and that a log in could exist “for months”.

[174] Jey’s evidence was that if an application was run, and was not explicitly logged off, the user would be recorded as “still logged in” to the TINMAN server.

[175] Persaud challenged the conclusion that she could access the system since Persaud gave evidence that the internet addresses referred to in the Report were not in proper technical form. Persaud called no expert evidence on the issue.

[176] However, Jey’s evidence was that Persaud’s opinion was unfounded. Jey explained that the internet addresses as set out in the Report (i) referred to the additional information that access to Telus’ system had been by “dsl” (digital subscriber line), and (ii) may have reflected additional information which was sometimes provided by internet service providers. Jey’s evidence was unshaken that the internet addresses in the Report were in proper form and set out, at a minimum, the information expected in an internet address.

[177] Further, Persaud led evidence that she had her internet account with “WinTel”, producing and referring to her monthly statements in her testimony. The clear implication Persaud sought to have drawn from that evidence is that she could not been the person to access IP Biller because the internet address of the user referred to in the Report was from Primus.

[178] However, Persaud later acknowledged, when referring to emails that she sent during the relevant time, that despite her account being from WinTel, her email address was a Primus email address. I find that Persaud’s evidence on this issue before the court was misleading.

[179] Jey understood that Persaud used Primus as her internet provider since she had told him.

[180] Persaud sought to establish that Jey had her password, as Persaud claimed that she was asked to give her password to Jey because Blumenthal wanted Jey to have immediate access to the system. Persaud’s evidence is that she did not give the password directly to Jey because she thought it would be a breach of security, but she did give it to Kajioka.

[181] I find that Jey did not have Persaud’s password. His evidence was never shaken that he did not receive the password. Further, both his evidence and that of Blumenthal is that access to the necessary systems for Jey would be easily and rapidly available, and that all that would be required would be for Telus to open a new account for Jey. I accept Blumenthal’s evidence that sharing a password would be a serious breach of security at Telus.

[182] Plaintiffs’ counsel sought to suggest that Jey had an ulterior motive in concluding that Persaud and Mufti were involved with the billing malfunctions, since the malfunctions at issue were significant and Jey could otherwise have been blamed for them. There is no evidence before the court that Jey caused the billing malfunctions.

[183] It was not contested that the TINMAN server was hosted on the UNIX system, and that Franco was part of the Investigation Team because of his expertise on that subject.

[184] It was also not contested that after the billing malfunctions and a meeting with members of the Investigation Team, the TINMAN server was moved to a more secure location (a “demilitarized zone”) to prevent access through the firewall.

[185] For the purposes of these Reasons, I do not need to determine whether access to the TINMAN server was possible outside the authorized manner which would have applied if Persaud had been with Telus. I do not need to determine whether Persaud accessed the TINMAN server after her departure or engaged in the conduct alleged.

[186] The only issue is whether Telus acted in bad faith or unfairly by concluding that Persaud could have accessed the TINMAN server once she left Telus. I find that on the basis of the above evidence, Telus’ conclusion was reached in good faith.

iv. The Investigation and Report

[187] Jey gave detailed evidence as to the billing malfunctions discovered after Persaud left Telus.

[188] The first billing malfunction occurred on or about May 21, 2004, when Jey was “bombarded” with error messages from the IP Biller/Collector system related to the Java xml (extended mark-up language) format. Jey was not overly concerned about those messages as (i) the errors related to a specific server for a limited set of devices which initially did not have text message capability but were later adapted by Telus to have such texting capability; and (ii) the errors were in regard to postpaid users so there was no concern about not collecting revenue from prepaid users. Jey fixed the problem on his own by May 25, 2004.

[189] The second billing malfunction was very serious and arose after Jey fixed the first billing malfunction. In particular, Jey noticed when reviewing the revenue data that Telus’ text revenue was being shown as zero under the IP Biller/Collector system, which was causing a significant revenue loss.

[190] At that point, Jey escalated the matter. The Investigation Team was put together with Walker (a member of Telus’ security team and a former UNIX systems administrator) and Franco, a Telus UNIX systems administrator (as the TINMAN server was located on a UNIX server). Jey started reading the Java code in detail. He did not know whether anything had been done to the system, but wanted to focus on what was happening, to “stop the bleeding”.

[191] As set out below, Jey found the Java code error and fixed the problem while the UNIX systems and security teams investigated the cause of the second billing malfunction.

[192] The UNIX systems and security teams then determined that an intrusion had taken place on the system. Jey fairly stated that he did not have the UNIX systems expertise required for that conclusion.

[193] In particular, the Investigation Team used an “etrust” tool to find the activity tracking log. Walker and Franco advised Jey that someone with Persaud’s user code had used a Primus account to remotely access the TINMAN server to make changes to the programming code on May 20 and 21, 2004.

[194] The Investigation Team found that the user had applied a “bin touch” command to backdate changes to the file, and that the use of the command was intentional, rather than an error. Jey’s evidence was based on his role as a participant in the Investigation.

[195] Further, the Investigation Team found that the text revenue loss was caused by a change in the configuration code for IP Biller, with the deletion of one line of code so that text messages were not recognized. Jey found the code problem and fixed it while the other members of the Investigation Team focused on what was happening to the system.

[196] A third billing malfunction took place on June 8, 2004. In the IP Biller system, there was a vendor revenue program designed to track only non-Telus Mobility usage in order to capture the information required to revenue share. The effect of the billing malfunction was that the Telus texts (which constituted 90% of events) were not excluded from the vendor revenue program, so that the program could not handle the load and caused the system to fail, resulting in revenue sharing loss for Telus.

[197] The Investigation Team concluded that Persaud’s account was the only account logged in at the time the changes were made that caused these billing malfunctions.

[198] The Investigation Team concluded that the three billing malfunctions were caused by sabotage, and that Persaud and Mufti were the only possible candidates. The Investigation Team concluded that the perpetrator would need a thorough knowledge of the programming and there was no one at Telus at the time with such knowledge (until Jey learned the code, studied it, and fixed the billing malfunctions). Further, given that the user on the system had Persaud’s user id and accessed the TINMAN server through a Primus account, the Investigation Team concluded that Persaud (and possibly Mufti) accessed the TINMAN server after she left Telus.

[199] The Investigation Team did not send the Report to anyone except those Telus employees and executives listed on the Report.

[200] Blumenthal made the decision to call the Toronto Police and Robert Finta of Telus called the Toronto Police and followed up with correspondence.

[201] Persaud and Mufti were investigated by the Toronto Police but not charged.

v. No evidence of disclosure of the Report or the conclusions

[202] While Persaud and her husband gave evidence as to the mental distress she suffered while being investigated by the Toronto Police, the evidence did not demonstrate that the Report or its conclusions were disclosed to anyone outside Telus.

[203] I accept the following written submissions of Telus as setting out the facts:

In this regard, Persaud has admitted the following:

i) that she is unsure if anyone outside of TELUS was aware of the malfunction incident or the allegations made by TELUS against her;

ii) that she never went to an interview where anyone had mentioned the malfunction;

iii) that, with the exception of one former TELUS employee, none of her subsequent employers were aware of the allegations; and

iv) that not a single recruiter or potential employer ever told her that the reason she was not offered employment was because of the billing malfunction.

On the contrary, the evidence establishes an employee who found it easy to find employment. Specifically, once Persaud started looking for a job she found one and remained employed continuously in the telecommunications industry. Persaud’s evidence establishes that her move from Sprint, to Group Telecom, to 724 Solutions, to Disney, were in no way related to a loss of reputation. [Footnotes omitted]

C. Application of the above facts to the law

[204] On the above facts, there is no basis to find that Telus acted in “bad faith” or in an “unfair” manner, or engaged in any conduct that was “flagrant and outrageous”. Consequently, even if the bad faith termination claim could include the Report, a claim based on such cause of action, or any of the other causes of action in relation to the Investigation and the Report, cannot succeed.

[205] Telus was faced with a serious breach of its IP Biller/Collector system causing the loss of significant revenue. Telus undertook the Investigation to find out what had caused the billing malfunctions, without any preconceptions of who might be responsible.

[206] The Toronto Police were notified on the basis of the conclusions reached after the Investigation Team at Telus with expertise in security, UNIX systems, and Java software considered all of the evidence. Such conduct does not meet the test for bad faith termination, intentional infliction of mental suffering, or punitive damages.

[207] Telus had a good faith basis to conclude that Persaud was the author of the sabotage. The Investigation Team was comprised of people at Telus with appropriate knowledge to consider the issue. The Investigation Team based their conclusions on information relevant to the billing malfunctions including information that (i) Persaud was the only user on the TINMAN server at the time of the coding resulting in the billing malfunctions; (ii) Persaud’s login was used to access the IP Biller system; (iii) Persaud’s login was accessed using a Primus IP address; and (iv) a very limited number of people at Telus would have known the IP address of the TINMAN server and as such been able to breach the flexible firewall which only allowed access to the same limited group at Telus.

[208] I do not accept the plaintiffs’ submission that the Report can be said to be in bad faith or outrageous simply because Telus did not seek external consultants or did not contact Persaud before preparing the Report. The Investigation Team consisted of people at Telus with the abilities relevant to the Investigation, and Persaud led no evidence to suggest that anything she said at trial (i.e. that she had given back her laptop and secure id/fob and left Telus’ premises by May 20, 2004) would have altered the conclusions in the Report, as those conclusions were based on the factors summarized in the above paragraph.

[209] Even if the conclusions in the Report were wrong (an issue I do not decide), the conduct by Telus would be, at worst, an “honest mistake”.

[210] For the above reasons, I dismiss the Report Claim.

Issue 3: The Tek Claim

[211] Persaud bases the Tek Claim on the law of inducing breach of contract. I review the applicable law and evidence below.

A. The applicable law

[212] I adopt the written submissions of Telus as setting out the applicable law on inducing breach of contract:

In Ontario law, the tort of inducing breach of contract is said to have four (4) elements:

i) The defendant had knowledge of the contract between the plaintiff and the third party;

ii) The defendant’s conduct was intended to cause the third party to breach the contract;

iii) The defendant’s conduct caused the third party to breach the contract; and

iv) The plaintiff suffered damages as a result of the breach. [Footnotes omitted]

(See Correia v. Canac Kitchens, a division of Kohler Ltd., 2006 ONCA 506 (“Correia”), at para. 99; and, 1670002 Ontario Ltd. v. Redtree Contract Carriers Ltd., 2014 ONCA 501 (“Redtree”), at para. 14).

[213] In order to establish liability under the tort of inducing breach of contract, a “valid and enforceable contract” must exist (O’Dwyer v. Ontario Racing Commission, 2008 ONCA 446, at paras. 54-55).

[214] As for the “intentionality” requirement, it is not enough that it was foreseeable that the third party would breach the contract with the plaintiff (Correia, at paras. 99, 105). As the court held in Roundtree, citing Lord Hoffman in OBG Ltd. v. Allan, [2007] UKHL 21, at para. 39, “to be liable for inducing breach of contract, you must know that you are inducing a breach of contract” (Redtree, at paras. 14-16).

[215] Negligent conduct is not actionable. Mere knowledge that a breach would follow is not sufficient. There is no liability if defendants, in good faith, pursue their economic interests in accordance with existing contractual rights. This is so even if the defendants have mistaken their rights. So long as the defendant was motivated by a “proper purpose” its actions will be “justified”. The breach must have been the defendant’s desired end, i.e. it must be an end in itself or a means to an end (SAR Petroleum Inc. v. Peace Hills Trust Co., 2010 NBCA 22, at paras. 5, 30, 51-53, 55-57, 73-74).

B. The relevant evidence

[216] In January and February of 2005, Persaud entered into discussions with TekSystems regarding an opportunity to provide services for Telus in Edmonton through her consulting company Natpak.

[217] The work was for a project titled “Imagine” and was “to develop an application to track long distance usage of customers and link the billing information to [Telus’] Amdox system”.

[218] On or about January 26, 2005, Persaud was interviewed by telephone by representatives of Telus in Edmonton. Before the interview, Persaud was not required to sign anything with TekSystems. During the interview, TekSystems was not discussed. After the interview, Persaud did not have any further communication with anyone directly from Telus regarding the position in Edmonton.

[219] On February 8, 2005, TekSystems requested further information from Persaud “in order to draw up your contract”. Later that day, a customer support associate contacted Persaud by email and stated “Congratulations on your new contract with TEKsystems”.

[220] On February 11, 2005, the same customer support associate forwarded to Persaud, by email, “what I think will be the final contract”. The contract was intended to be between TekSystems and Natpak, under which Natpak would provide services to Telus on behalf of TekSystems.

[221] The agreement was to be effective February 22, 2005, with a signed copy to be given to Persaud on February 22, 2005, upon her arrival at Telus in Edmonton.

[222] On cross-examination, Persaud advocated that she thought she had a written contract with Telus because she received a copy of the Telus “Application Regulations for TELUS Employees and Non-Employees”. However, Persaud acknowledged that she received no documentation directly from Telus. Further, plaintiffs’ counsel advised the court on closing submissions that Natpak was not pursuing a breach of contract claim against Telus.

[223] Upon receipt of the February 11, 2005 email, Persaud hand-wrote a term into the draft contract[^16], signed it, and sent it back to TekSystems.

[224] Persaud then proceeded to arrange travel and accommodations for the initial period of the planned assignment.

[225] There is no evidence that TekSystems signed the proposed agreement.

[226] On or about February 16, 2005, Persaud was contacted by TekSystems and advised that Kevin Salvadori (“Salvadori”) of Telus decided not to engage the services of Persaud for the project in Edmonton.[^17]

[227] Persaud did not bring an action against TekSystems for breach of contract.

C. Application of the facts to the law

[228] On the basis of the above evidence, I find that the plaintiffs have not established any of the essential elements for the tort of inducing breach of contract. The plaintiffs have not established that (i) there was a contract between Natpak and TekSystems; (ii) even if there was a contract between Natpak and TekSystems, Telus knew of that contract; (iii) Telus’ conduct was intended to cause Natpak to breach the contract; or (iv) damages resulted from the breach (except minimal out-of-pocket expenses).

i. Contract between TekSystems and Natpak

[229] The plaintiffs submit that there was a valid and enforceable contract as signed terms were offered and accepted orally. However, the evidence does not support such a conclusion.

[230] Even if TekSystems understood that Telus was going to engage TekSystems for Natpak’s services, that does not mean that TekSystems entered into a contract with Natpak.

[231] TekSystems asked for information “in order to draw up a contract”. The same customer service associate who sent “congratulations on your new contract” sent Persaud an email three days later with what TekSystems “[thought] will be the final contract”. That intended contract would only be signed by TekSystems and provided to Natpak on February 22, 2005, the effective date of the contract. TekSystems never signed a contract before or after Salvadori’s decision not to engage Persaud. On this evidence, there is no contract between Natpak and TekSystems.

[232] A single reference to “congratulations on your new contract” by a customer support associate does not create a contract between Natpak and TekSystems when considered in light of all the above evidence. I find that there was no contract between Natpak and TekSystems.

[233] On this basis alone, the claim for inducing breach of contract cannot succeed.

ii. Knowledge of contract by Telus

[234] Second, even if there was a contract, the evidence does not support a finding that Telus knew of the alleged contract.

[235] The plaintiffs submit that “it can be reasonably inferred that the Defendant knew that the Plaintiff had a valid and enforceable contract with TekSystems”, since TekSystems informed Persaud that Natpak “was approved by the Defendant and offered a contract” and since “it logically follows that TekSystems would not have offered the Plaintiff a contract without confirmation from the Defendant that she was approved”.

[236] The plaintiffs’ submission depends on the premise, as stated in their written submissions, that “once Telus communicated to TekSystems that she was approved, it can be reasonably be inferred that TekSystems would offer her a contract and that the Defendant would know this”, based on “the plaintiff’s unchallenged and reliable testimony … that after her interview with Telus, she was informed by TekSystems that she was approved by the Defendant and offered a contract”. I do not agree.

[237] The plaintiffs chose not to call anyone from TekSystems or Telus. The plaintiffs have the onus of proving that Telus knew of the alleged contract between Natpak and TekSystems and approved it.

[238] Without evidence, there is no way to conclude that Telus knew that TekSystems and Natpak had entered into a contract, even if the existence of a contract could be established. The court cannot infer on hearsay evidence (and double hearsay evidence with respect to any communications from Telus to TekSystems) that TekSystems’ discussion with Persaud after the interview is evidence as to what Telus told TekSystems, what steps Telus may still have required before a contract was confirmed, or whether Telus knew and approved of the alleged contract.

iii. Intention to cause breach of contract

[239] Even if the first two elements of the tort of inducing breach of contract could be established (i.e. there was a contract between Natpak and TekSystems and Telus knew of it), the plaintiffs have not proven that Telus intended to cause the breach of the contract.

[240] The plaintiffs submit that Telus’ conduct was intended to cause the breach of contract “since the terms of the contract were entirely dependent on the Defendant’s agreement to retain the services of the Plaintiff” and “the subject matter of the contract between Tek and the Plaintiff disappears entirely without the ability of the Plaintiff to provide services for the Defendant. No Telus = No work.”

[241] There is no evidence as to why Salvadori made the decision not to engage Persaud in Edmonton. Telus had the right to act for its own proper business purposes. In such circumstances, the breach of the alleged contract between TekSystems and Natpak would not have been Telus’ desired end.

[242] As I discuss above, the lack of any evidence on this issue falls on the plaintiffs. It is not enough to show “No Telus = No work”. Without any evidence as to the reasons for Salvadori’s decision, the mere fact that TekSystems told Natpak that Persaud was to start on February 22, 2005 (and to arrange transportation and accommodation) does not suffice to prove the required intent that Telus sought to breach the contract as the desired end.

iv. Damages

[243] I also accept Telus’ submission that even if the Tek Claim could be established, damages would be significantly limited. In particular, Persaud found other employment as a consultant starting within a month of the alleged TekSystems contract and her out-of-pocket expenses related only to airfare for travel to and from Edmonton for a limited period of time.

[244] For the above reasons, I dismiss the Tek Claim.

Order and costs

[245] For the above reasons, I dismiss the action. If counsel cannot agree on costs, I will consider written costs submissions from each party of no more than three pages (not including a bill of costs), to be delivered by Telus within 14 days of these Reasons, with the plaintiffs to respond within 14 days from receipt of Telus’ submissions. Telus may deliver a reply of no more than two pages to be delivered within 7 days of receipt of the plaintiffs’ costs submissions. All written costs submissions shall be delivered to my assistant.

[246] I thank counsel for their thorough preparation at trial and the assistance provided to the court through their oral and written submissions.

Justice Glustein

DATE: 20160405

CITATION: Persaud v. Telus Corporation, 2016 ONSC 1577

COURT FILE NO.: 05-CV-300435PD3

DATE: 20160405

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

JAN PERSAUD and NATPAK ENTERPRISES INC.

Plaintiffs

– and –

TELUS CORPORATION, TELUS MOBILITY and TELUS ENTERPRISE SOLUTIONS

Defendants

JUDGMENT

GLUSTEIN J.

Released: 20160405

[^1]: The defendant employer operated as “Telus Mobility”. At trial, counsel for the defendants named in the action advised the court that (i) they were not making any corporate distinction between the named defendants (even if no longer operating companies) and (ii) any liability found against any Telus defendant would be accepted as liability on behalf of all of the defendants including the parent Telus Corporation. Consequently, I refer to “Telus” as the defendant in these reasons. [^2]: During the trial, Allegis Group Canada Corp. which operated as “TekSystems” in its dealings with Persaud was generally referred to as “TekSystems”, and I adopt this short form as a defined term in these Reasons. [^3]: In the Fresh as Amended Statement of Claim (the “Claim”), Persaud sought $6,700 for unpaid vacation pay but there was no evidence of any unpaid vacation pay (except for one day when Persaud alleged she was required to return early from a camping holiday). In her closing submissions, plaintiffs’ counsel advised the court that Persaud was not pursuing this claim, and that the plaintiffs accepted Telus’ calculations of $1,786.64 in statutory vacation pay that would be owed for four months if the Constructive Dismissal Claim were established. [^4]: In the Claim, Persaud also sought “special damages in an amount to be determined” and at trial submitted in evidence out-of-pocket expenses incurred by Persaud in relation to benefits claims made under her husband’s benefits plan. However, in her closing submissions, plaintiffs’ counsel advised the court that those claims were subsumed in Persaud’s claim that the monthly compensation calculation included a 10% addition for medical, dental, life insurance and disability benefits. [^5]: These separate damage claims were set out in the Claim. In her closing submissions, plaintiffs’ counsel maintained these claims as distinct heads of damages arising out of the Report Claim. [^6]: The amount is collective with no allocation sought between aggravated or punitive damages. [^7]: “Jey” is the short form used by Mr. Jeyagaran and was how he was referred to (in his own testimony as well) at trial. [^8]: All references in quotations in this paragraph are from the decision of Stinson J. in Davies at para. 32 as cited above. [^9]: All references in quotations in this paragraph are from the decision of Stinson J. in Davies at para. 31 as cited above. [^10]: In its written submissions, Telus uses the stylized block letter reference of “TELUS”. [^11]: The medical records of Persaud’s family doctor and neurologist were admitted as a business records under s. 35 of the Evidence Act, R.S.O. 1990, c. E. 23, as an accurate statement of what was recorded at those sessions, but not as evidence of the truth of their contents nor any diagnoses. [^12]: The issue of whether the position of Java developer required the hours Persaud claims to have worked is an alternative argument of Telus, as Telus first asks the court to find that Persaud did not work the hours she claimed. [^13]: I make no evidentiary findings as to the support provided by Jey. The issue is irrelevant since any increase in working hours (if it took place and was required by Persaud’s employment) was (i) not the reason for Persaud’s resignation, and (ii) in any event, was condoned or acquiesced in by Persaud. For the purposes of the condonation issue, the relevant fact is that Persaud’s perception was that Jey did not provide support. [^14]: The evidence was that a significant power outage (the “blackout”) occurred in the summer of 2003 and much of Persaud’s evidence refers to the timing before and after this blackout. [^15]: (which Telus submits Persaud could have done as the family doctor was a “participant” witness and as such could give evidence under the principles in Westerhof v. Gee Estate, 2015 ONCA 206, [2015] OJ 1472 (CA) (“Westerhof”)) [^16]: When asked whether she had made the handwritten change before she sent the document back to TekSystems, Persaud did not answer the question until the third time it was asked, advocating that she signed it only after there was agreement on the handwritten term which was “part of the negotiation”. I find that Persaud was seeking to advocate for her position rather than respond to the question. [^17]: It is an admitted fact that Salvadori made the decision.