Court File and Parties
Oshawa Court File No.: CV-15-94077 Date: 2017-02-16 Ontario Superior Court of Justice
Between: Kurt Kirner, Plaintiff – and – Critical Freight Solutions Inc., Defendant
Counsel: William F. Kelly, for the Plaintiff George Limberis, for the Defendant
Heard: January 25, 2017
Reasons for Decision
Introduction
1This motion for summary judgment is brought by the plaintiff, Kurt Kirner (Kirner), for damages for breach of contract in relation to the termination of his employment by the defendant company Critical Freight Solutions Inc. (CFS). The plaintiff alleges that when he was hired his contract of employment guaranteed that he would receive 180 days’ notice or pay in lieu if he were terminated. He seeks judgment in the amount of $45,019.16, representing his salary and benefits for 180 days.
2The defendant denies that any such termination/severance term was agreed to in the plaintiff’s contract of employment. The defendant takes the position that the contract relied upon by the plaintiff is in fact a forgery. The employer states that the contract of employment guaranteed severance pay in accordance with the terms of the Canada Labour Code (CLC), and that, in accordance with the CLC the plaintiff was paid for 3 weeks in lieu of notice when he was terminated.
3This motion raises three issues:
(a) Can the court determine the terms of the contract of employment on this motion for summary judgment, or do the factual disputes between the parties require the trial of an issue?
(b) If the court can determine the terms of the contract of employment on this motion for summary judgment, the second issue is whether the terms of the contract of employment stipulate a fixed period of notice.
(c) If the terms of the contract do stipulate a fixed notice period, does this fix liquidated damages in accordance with the Ontario Court of Appeal’s decision in Bowes v. Goss Power Products Ltd., 2012 ONCA 425?
4I will begin my analysis by first setting out the undisputed facts and then identify the relevant disputed facts.
Undisputed Facts
First Contract
5Kirner was first employed by CFS on April 9, 2012 as a router/dispatcher. Kirner was hired by Doug Malcolm (Malcolm) who, at that time, was the Managing Director of CFS.
6Kirner’s job was terminated without cause only eight months later on December 2, 2013. The termination came as a complete surprise to Kirner. The December 2, 2013 letter of dismissal, which is signed by Malcolm, confirmed that Kirner would be “provided with two (2) weeks’ pay in lieu of notice which constitutes your entitlement under your employment agreement dated March 20, 2012.” The letter states that Kirner was being terminated “without cause” because “the Company had decided to move forward in a different direction”.
Second Contract
7A few days after the termination letter, Kirner was contacted by Malcolm who advised that CFS wished to re-employ him in the position of Key Account Manager.
8Kirner’s affidavit indicates that he was hesitant to accept another job with CFS given his unexpected termination and small severance a few days earlier.
9After some discussion Malcolm sent Kirner an email dated December 6, 2013, from Malcolm’s CFS email address, setting out proposed terms of employment for the position of Key Account Manager. There is no mention of severance in this email, but the email stated:
I don’t think I have missed anything, if I have please shoot me back an email.
Trust, this is important to me. I will work to earn this back and thank you for your candor in communicating to me, this is a failure point that I must correct. If you have any questions please give me a call. Hopefully we can come to an agreement.
10Kirner responded by email to Malcolm a few minutes later stating:
One thing I would like to have added to the contract with respect to the whole regaining trust issues is some sort of assurance that I will have job security with CFS. I would like to see a line in the contract that states a buyout clause. For example, if CFS is looking to replace or remove me than I would like to be paid out 180 business days from notice. If you can agree to add this to the existing contract than I can agree to rejoin CFS effective Monday December 9th 2013. Let me know what time Monday you would like to meet and we can finalize this agreement.
11Malcolm responded later that day:
Kurt, this is great news. I am going to send Amanda (head of hr) all details. I will re group with her first thing, 9 am Monday morning to get this written up. I can meet you at oneil and hand off to you by noon Monday.
As for the 180 days, we will get this written and into the contract.
12The “Amanda (head of hr)” referred to in Malcolm’s email is Amanda Harrison, the Human Resources Manager of CFS. She has sworn three affidavits that were filed by the defendant in this case.
13Kirner rejoined CFS on Monday, December 9, 2013 in the position of Key Account Manager.
14Kirner was provided with a written Employment Agreement signed by Malcolm but undated. There is a dispute regarding the date of this agreement and whether “Schedule A” to the agreement is a forgery. I will return to this dispute later in these reasons.
15By agreement Kirner’s employment was backdated to December 2, 2013 so that his past service with CFS from April 9, 2012 would be recognized and there would be no interruption in his employment with CFS.
16There is also no dispute that this second Employment Agreement includes the following clauses regarding termination:
- Following the completion of your [90 day] probationary period…your employment may be terminated as follows:
i. by the Company without notice of termination or pay in lieu thereof, for cause…
ii. by the Company, in its sole discretion and for any reason whatsoever, upon providing you with the notice of employment termination (or pay in lieu thereof or a combination of notice and pay in lieu thereof), severance pay and benefit continuation, if any, that is necessary to meet the minimum requirements of the Canada Labour Code as amended or replaced from time to time. You agree that notice (or pay in lieu thereof) in accordance with the minimum requirements of the Canada Labour Code…constitutes reasonable notice.”
17Kirner continued with CFS until October 2, 2015, when he was terminated without cause again. The letter of termination dated October 2, 2015 states:
This will confirm our discussion today, during which we advised you that Critical Freight Solutions Inc…. has decided to move forward in a different direction, and your employment is being terminated on a without cause basis effective immediately.
18This termination letter was signed by Mark Russell, who had replaced Doug Malcolm as Managing Director of CFS.
19Kirner was not, however offered 180 days severance pay. The termination letter of October 2, 2015 offers only 3 weeks’ severance pay, stating:
[O]n a strictly without prejudice and gratuitous basis, and without admission of an obligation to do so, to assist you in your transition to alternate employment, the Company is prepared to provide you with three (3) weeks’ gratuitous pay and benefit continuation to November 14, 2015, in return for your execution of the attached release.
Facts in Dispute
20Kirner refused to accept this offer of severance pay, and took the position that under the terms of his contract of employment he was entitled to 180 days severance pay.
21CFS took the position that Kirner’s contract of employment did not include a 180 day severance term, and that the copy of the agreement relied upon by Kirner was a forged document. CFS took the position that Kirner was entitled to one week’s notice for every year of service, for a total of three week’s' notice.
22In his first affidavit, Kirner stated the employment agreement was executed before he returned to work on Monday, December 9, 2013. He states:
Following the execution of the Employment Agreement, I returned to work with Critical and continued my employment with that company until October 2, 2015…
23Kirner also swore that the employment agreement provided by Malcolm included a “Schedule A” on a separate page. This Schedule confirmed his agreement with Malcolm regarding severance pay, and stated:
Schedule ‘A’
3.2 Termination
The Company may terminate your employment at any time by providing you with 180 days written notice of termination (the “Notice Period”), or 180 days salary in lieu of the Notice Period, or any combination of notice period and salary in Lieu thereof.
3.3 The Company may terminate your employment at any time, without notice or any obligation to provide pay in lieu thereof, for just cause.
24The Schedule ‘A’ appended to the Employment Agreement raises a number of red flags:
(a) It is undated and unsigned.
(b) The Employment Agreement itself, which was signed by Malcolm, makes no reference to a “Schedule A”.
(c) The company letterhead at the top of Schedule A is different than the letterhead at the top of the Employment Agreement. The letterhead at the top of each of the three pages of the agreement has the company’s logo “cfs” centered at the top of the page. The letterhead at the top of Schedule A has the “cfs” logo on the extreme right hand side of the page.
(d) The agreement itself has no “footer” at the bottom of the page, while Schedule A includes a block footer with the CFS address across the bottom of the page.
(e) The clauses in Schedule A are numbered 3.2 and 3.3, but there is no 3.1, and they are unrelated to clause 3 in the Employment Agreement.
(f) Finally, the terms set out in clause 3.2 of the Schedule (180 days notice) are inconsistent with the terms set out in clause 8 of the Employment Agreement (notice in accordance with the CLC).
25As indicated above, the defendant has filed the affidavit of Amanda Harrison (Harrison), the Human Resources Manager of CFS. She was responsible for drafting and sending out the Employment Agreement to Kirner. CFS does not dispute the authenticity of the December 6, 2013 email exchange between Malcolm and Kirner, but Harrison states that at no time did Malcolm speak to her or anyone else at CFS about the 180 day notice period or ask her to include a 180 day notice period in Kirner’s Employment Agreement. The only agreement that she printed and sent to Kirner was the three-page agreement that does not include or make reference to any schedule, and in particular did not include or make reference to the impugned Schedule A.
26Harrison has done a complete review of her emails, Kirner’s emails and Malcolm’s emails and could not find the version of the Employment Agreement with a Schedule A.
27Harrison points to several irregularities in the Schedule A appended to Kirner’s affidavit. She points out that the copy provided by the plaintiff is not signed on behalf of CFS and that the Employment Agreement does not mention any schedule or attachment. She also notes that it is numbered “3.2 Termination” although it is the only section in the Schedule and there is no 3.1 in the Agreement.
28Following the receipt of Harrison’s affidavit, Kirner swore a supplementary affidavit in August 2016, stating that he conducted “a further search of my records” and “discovered further emails dated December 10, 2013 and January 13, 2014”. These emails, like the December 6, 2013 emails, appear to be from Malcolm’s CFS email address.
29The first email, dated December 10, 2013, states:
Kurt, can you please review tonight and let me know your thoughts. The below clauses will complete the termination section.
30Following that paragraph are two clauses numbered 3.1 and 3.2. Clause 3.1 is identical to clause 3.3 in Schedule A, and clause 3.2 is similar to clause 3.2 in Schedule A, but not identical. While 3.2 in Schedule A refers to “180 days written notice” and “180 days salary”, clause 3.2 in the email refers to “six (6) months written notice” and “six (6) months salary”.
31The second email is dated Monday January 13, 2014 and appears to attach the December 10, 2013 email, and states:
Kurt, are you still in agreement with this below, if so I will see to get dealt with after my 1 pm with sevan. And see you around 3.
32There are no reply emails from Kirner.
33Following the receipt of Kirner’s supplementary affidavit, Harrison swore a supplementary affidavit on November 30, 2016 indicating that CFS changed its letterhead in early 2014, and that the letterhead on the Employment Agreement (with the company’s logo “cfs” centered at the top of the page) was the letterhead when Kirner commenced his employment in December 2013. Harrison confirmed that she personally prepared Kirner’s employment offer in late 2013. She states:
[T]he employment offer was drafted and printed on CFS’ old letterhead, whereas Schedule “A” provided by Kurt uses the new letterhead which CFS did not use until at (sic) a later date, in early 2014 and remained the letterhead in existence when Kurt’s employment was terminated in 2015.
34This gave rise to a second supplementary affidavit from Kirner served just two days before the motion was heard, in which he repeats that his first day of re-employment was December 9, 2013. He states that after receiving Malcolm’s email dated January 13, 2014:
I responded to Mr. Malcolm confirming that the proposed wording was acceptable. I do not have access to my work computer and as such no longer have access to all of the emails exchanged between Mr. Malcolm and I with respect to this matter.
35Finally, Kirner states “Mr. Malcolm and I executed the employment agreement, including Schedule “A” while in his car within 1 week of his January 13, 2014 email”.
36This gave rise to a second supplementary affidavit from Harrison, served the morning the motion for summary judgment was heard, in which she attaches a copy of the invoice from the commercial printers which confirms that CFS’s new letterhead was not ordered until February 20, 2014, and that the new letterhead was received by CFS on February 24, 2014. She reaffirms that she prepared Kirner’s employment offer in December 2013 on the old letterhead, and that the new letterhead was not even available until February 24, 2014, approximately one month after Kirner states he signed the agreement.
37Harrison also states that the emails purporting to be from Malcolm’s CFS email address and dated December 10, 2013 and January 13, 2014 seem irregular. Accordingly, her counsel wrote to Kirner’s counsel on November 29, 2016, requesting an electronic copy of these emails. A copy of that correspondence is appended to her affidavit. No response was obtained from Kirner’s counsel and an electronic copy of these emails has not been provided.
38At the hearing of the motion Kirner’s counsel takes the position that he does “not recall” receiving this request for the electronic copies of the emails.
39None of the affiants have been cross-examined.
Analysis – Motions for Summary Judgment
40Rule 20.01 of the Rules of Civil Procedure provides:
The court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.
41Rule 20.04(2.1) sets out the powers of the court on a motion for summary judgment:
In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
42These powers have been extensively reviewed by the Supreme Court of Canada in the case of Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87.
43Even with these extended powers, a motion for summary judgment is appropriate only if the material provided on the motion “gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute” Hryniak supra, at para. 50. In Hryniak the Supreme Court held (at para. 49) that there will be no genuine issue for trial when the summary judgment process “(1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.”
44In order to defeat a motion for summary judgment, the responding party must put forward some evidence to show that there is a genuine issue requiring a trial. A responding party may not rest on mere allegations or denials of the party’s pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial.
45The motion judge is entitled to assume that the record contains all of the evidence that would be introduced by both parties at trial. A summary judgment motion cannot be defeated by vague references as to what may be adduced if the matter is allowed to proceed to trial.
46Pursuant to Rule 20.02(1) the court may, if appropriate, draw an adverse inference from the failure of a party to provide the evidence of any person having personal knowledge of contested facts.
47Where summary judgment is refused or is granted only in part, Rule 20.05 provides “the court may make an order specifying what material facts are not in dispute and defining the issues to be tried and order that the action proceed to trial expeditiously” and to give directions or impose such terms as are just.
48It is now well settled that “both parties on a summary judgment motion have an obligation to put their best foot forward” Mazza v. Ornge Corporate Services Inc., 2016 ONCA 753, at para. 9. Given the onus placed on the moving party to provide supporting affidavit or other evidence under Rule 20.01, “it is not just the responding party who has an obligation to ‘lead trump or risk losing’” Ipex Inc. v Lubrizol Advanced Materials Canada, 2015 ONSC 6580, at para. 28.
49A plaintiff bringing a motion for summary judgment does not thereby reverse the onus of proof or alleviate his onus to prove the elements of the breach of contract alleged or damages claimed. See for example, Sanzone v. Schechter, 2016 ONCA 566, at paras. 30-32, which confirms the initial evidentiary obligation borne by the moving party (in that case the defendant) on a summary judgment motion.
50While Rule 20.04 provides the court hearing a summary judgment motion with “enhanced forensic tools” to deal with conflicting evidence on factual matters, the court should employ these tools and decide a motion for summary judgment only if it can do so fairly. Perell J. summarized this admonition in Eastwood Square Kitchener Inc. v Value Village Stores, Inc., 2017 ONSC 832, at paras. 4-6:
In Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 and Trotter v. Trotter, 2014 ONCA 841, the Court of Appeal stated that when conflicting evidence is presented on factual matters, a motions judge is required to articulate the specific findings that support a conclusion that a trial is not required.
[C]ourts have held that although a court on a summary judgment motion is empowered to make credibility findings, the court should be cautious in exercising that power to ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all: Abuajina v. Haval, 2015 ONSC 7938, at paras. 25-34; Gino L Arnone Professional Corp. v. Hacio, 2015 ONSC 5266; Trotter v. Trotter, supra.
In 1615540 Ontario Inc. (c.o.b. Healing Hands Massage Therapy Clinic) v. Simon, 2016 ONCA 966, the Court of Appeal stated that where the evidence in the record establishes a clear conflict, it is incumbent on a summary judgment motions judge to consider expressly whether the powers provided under the summary judgment rules are to be deployed in resolving the conflict. Judges deciding summary judgment motions must provide meaningful reasons capable of appellate review explaining their decision and providing some insight into how the legal conclusion was reached and what facts were relied upon in reaching that conclusion: Read Jones Christoffersen Ltd. v. Neilas Inc., 2016 ONCA 321.
Analysis
51In this case the parties have chosen not to cross-examine the deponent of the affidavits of the party adverse in interest, although each had the right to cross-examine under Rule 39.02(1). The plaintiff has proceeded with this motion for summary judgment notwithstanding his decision to not cross-examine the defendant’s affiant. The plaintiff takes the position that any issues of credibility can be resolved using the court’s powers under Rule 20.04(2.1).
52Likewise the defendant chose not to exercise the right to cross-examine on the plaintiff’s affidavits. Faced with a motion for summary judgment, a respondent cannot argue that there is a genuine issue requiring a trial because it chose not to cross-examine the opposing side’s affidavit.
53Neither party sought an adjournment of the motion on the basis that the adverse party’s affidavits were served on the eve or morning of the hearing.
54The issue for the court is whether I can make the necessary findings of fact on the record in this motion. The failure of either party to cross-examine the other makes this task particularly difficult when confronted with conflicting affidavits of this nature. Taking into account the powers given to the court under Rule 20.04(2.1) I am able to make the following factual findings in relation to the disputed facts.
55The plaintiff argues that pursuant to Rule 20.02(1) I should draw an adverse inference against the defendant because there is no affidavit from Doug Malcolm denying the allegations made by the plaintiff with respect to the attachment of Schedule A to the Employment Agreement or to the date of signing that agreement. Since Malcolm worked for CFS at the relevant time I agree with the plaintiff that the failure of the defendant to provide any evidence from Malcolm, or any evidence to explain why Malcolm was not available to provide his version of the contested facts, gives rise to an adverse inference against the defendant.
56Even with that adverse inference, I am satisfied that the evidence that was provided by the defendant is sufficient to persuade me that Schedule A is a forged document that was not included in the Employment Agreement when Kirner began working on December 9, 2013. The discrepancies identified by the defendant are simply too numerous and significant to explain. I am also concerned that the plaintiff has changed his evidence regarding the signing date of the contract in order to try to explain these inconsistencies.
57Given Harrison’s evidence that the new letterhead was not ordered until February 2014, I am persuaded on the balance of probabilities that Schedule A was not part of the Employment Agreement when Kirner began working on December 9, 2013, and was not agreed to by CFS notwithstanding Malcolm’s promise “to get this written into the contract” on December 6, 2013. At some point after Kirner began work on December 9, 2013, Kirner was provided with a copy of the Employment Agreement that included the termination clause set out in clause 8 of the Employment Agreement, and it did not include Schedule A and it did not include clause 3.2.
58Kirner takes the position that even if that is true, even if Schedule A is a forgery, the terms of the employment agreement are the oral agreement he made with Malcolm on December 6, 2013.
59If that were the end of the matter I would have a sufficient factual basis to decide the legal issues raised in this motion. But the alleged emails of December 10, 2013 and January 13, 2014 raise an additional question. If Kirner is indeed unable to provide electronic copies of Malcolm’s emails from those dates, there may be merit to the defendant’s position that these emails were not really sent by Malcolm, or at least not sent in the form provided by the plaintiff and are, as the defendants claim, “cut and paste jobs”.
60I am, however, concerned that Kirner’s counsel has taken the position that he does not recall receiving the defendant’s counsel’s letter of November 29, 2016 requesting an electronic copy of those emails. It would be unfair to decide this case if the electronic copies of the emails are available but have not been provided through inadvertence or other error.
61If those emails were in fact sent on December 10, 2013 and January 13, 2014 there may be an argument that the terms of the supposed schedule were incorporated into the Employment Agreement at a later date. I do not want to express any opinion on this point until I am satisfied that I have all of the relevant evidence the parties intend to rely upon.
62Given the amount of money at issue I agree that it is in the interests of justice that this case should proceed by way of a summary judgment proceeding under Rule 20.01.
63Accordingly, I am providing the following directions in accordance with Rules 20.04 and 20.05:
The plaintiff will provide the defendant with an affidavit of documents comprised of any electronic copies of emails between Douglas Malcolm and Kurt Kirner from December 6, 2013 to January 30, 2014 in his possession or control within 10 days of the release of these reasons.
The defendant will provide the plaintiff with an affidavit of documents comprised of any copies of emails between:
(i) Douglas Malcolm and Kurt Kirner, and
(ii) Douglas Malcolm and Amanda Harrison relating to Kirner’s employment
from December 6, 2013 to January 30, 2014 in its possession or control within 10 days of the release of these reasons.
Either party may cross-examine the other on their affidavit of documents. Each cross-examination will be limited to two hours and will be completed within 25 days of the release of these reasons.
The parties are directed to contact the Oshawa Trial Coordinator’s Office to schedule a one hour appearance before me on a date between April 3 and April 13, 2017 (but not April 10) at 9:30 a.m. to make final oral submissions.
The parties will file supplementary motion records containing the affidavit of documents and any cross-examination on the affidavit of documents at least 3 days before the motion date.
The parties may also file supplementary written submissions of not more than 5 pages each. The plaintiff’s written submissions will be filed 4 days before the scheduled hearing date and the defendant’s written submissions will be filed 2 days before the scheduled hearing date.