Court File and Parties
COURT FILE NO.: CV-17-575985 DATE: 20180627 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Barbara Thurston, Plaintiff AND: Her Majesty the Queen in Right of Ontario as represented by the Office of the Children’s Lawyer (Ontario), Defendant
BEFORE: Pollak J.
COUNSEL: Tina K. Lee, for the Plaintiff Caroline Cohen, for the Defendant
HEARD: March 28, 2018
Endorsement
[1] The Defendant, the Office of the Children’s Lawyer (Ontario) (“OCL”), brings this motion for summary judgment to dismiss the Plaintiff’s claim on the ground that she was not entitled to notice or payment in lieu of notice upon the expiry of her last contract.
[2] The OCL contracts with lawyers in private practice to represent the rights of children in custody, access, and child protection matters (panel lawyers). They provide legal services on an as-needed basis.
[3] The parties agree that addressing the following issues on this motion may resolve the entire action:
- Was the Plaintiff a dependent or independent contractor? She admits that she was not an employee.
- If she was a dependent contractor, was she entitled to reasonable notice or payment in lieu of reasonable notice even if the “retainer agreement” was for a fixed term?
[4] Both parties agree that a summary judgment motion will be successful if there is no genuine issue requiring a trial. There will be no genuine issue requiring a trial if I am able to reach a fair and just determination on the merits of the issues outlined above. To satisfy this requirement, I must be able to make the necessary findings of fact, apply the law to the facts, and the process should be a proportionate, more expeditious, and less expensive means to achieve a just result: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para 49.
[5] The OCL submits that the Plaintiff is not a dependent contractor as she cannot satisfy the test of dependency and exclusivity. Alternatively, it submits that even if the Plaintiff was a dependent contractor, because her contract was for a fixed-term, she was not entitled to notice on the expiry of her contract. She had signed a series of fixed-term contracts, which were not automatically renewed at the end of their term. The Plaintiff does not bring a cross-motion for summary judgment on her claim.
[6] Both parties rely on a chart summarizing the evidence on the Plaintiff’s OCL work as a percentage of her law practice:
| Fiscal Year (April 1st – March 31st) | Total Billings ($) | Non-OCL Billings | % Non-OCL | % OCL |
|---|---|---|---|---|
| 2002-2003 | 135,629.48 | 115,578.18 | 85.2 | 14.8 |
| 2003-2004 | 154,551.35 | 113,499.54 | 73.4 | 26.6 |
| 2004-2005 | 142,699.62 | 89,259.61 | 62.6 | 37.4 |
| 2005-2006 | 188,541.22 | 124,369.22 | 66.0 | 34.0 |
| 2006-2007 | 152,928.72 | 88,142.86 | 57.6 | 42.4 |
| 2007-2008 | 181,979.78 | 101,602.56 | 55.8 | 44.2 |
| 2008-2009 | 183,868.19 | 114,693.56 | 62.4 | 37.6 |
| 2009-2010 | 192,527.44 | 132,443.35 | 68.8 | 31.2 |
| 2010-2011 | 154,997.99 | 86,472.16 | 55.8 | 44.2 |
| 2011-2012 | 161,613.46 | 86,942.54 | 53.8 | 46.2 |
| 2012-2013 | 148,130.51 | 55,605.78 | 37.4 | 62.6 |
| 2013-2014 | 186,845.12 | 98,074.71 | 52.5 | 47.5 |
| 2014-2015 | 168,406.61 | 84,070.82 | 49.9 | 50.1 |
| Average | 175,150.87 | 108,832.05 | 60.09 | 39.9 |
[7] The OCL’s position is that our Court of Appeal held, in Keenan v. Canac Kitchens Ltd., 2016 ONCA 79, that a very high level of dependency and exclusivity is needed to establish a dependent contractor relationship:
This appeal depends upon the answer to two questions. The first question relates to exclusivity. Exclusivity is a significant factor in determining whether a person is a dependent or independent contractor. Is exclusivity to be determined at, or about, the time of termination of the business/employment relationship? The second question relates to reasonable notice. Were there exceptional circumstances in the present case which support an award for a period in excess of 24 months?
In my view, this observation is not only correct, it is vital to understanding how the question of exclusivity is to be approached. Exclusivity cannot be determined on a “snapshot” approach because it is integrally tied to the question of economic dependency. Therefore, a determination of exclusivity must involve, as was done in the present case, a consideration of the full history of the relationship. It is for the trial judge to determine whether, after examining that history, the worker was economically dependent on the company, due to exclusivity or a high level of exclusivity. [Emphasis added].
[8] In Keenan, the plaintiffs contracted with the defendant for over twenty years, earning approximately 97.5% of their income for that period from the defendant, except in the last two and a half years, where the Defendant accounted for 80%, 66.4%, and 72.6% respectively of the plaintiffs’ income.
[9] The OCL relies on the fact that the Plaintiff’s percentage of billings from OCL ranged from 15% to 62.6%. There were only two years when that percentage was greater than 50%: 2012-2013 at 62.6%, and 2014-2015 at 50.1%. For 11 out of 13 years, the Plaintiff’s OCL work was less than 50% of billings with the average being 39.9%. The OCL argues that these percentages are significantly lower than the cases where our courts have found a dependent contractor.
[10] The OCL also emphasizes that the Plaintiff’s billings from private practice were significant throughout the history of the relationship. Further, her contracts with the defendant did not restrict her ability to work for others and some of the agreements required her practice to include other work. The agreements for fixed-terms were not automatically renewed.
[11] The Defendant submits that on this basis, it is unreasonable to conclude that the Plaintiff was economically dependent on the OCL.
[12] By contrast, the Plaintiff emphasizes the degree of control exercised by the OCL. The Plaintiff had no ability to take risks in order to reap rewards. She was unable to pick her files because the files belonged to the OCL.
[13] The OCL submits that although control is a factor for this Court to consider, exclusivity is the “hallmark” of a dependent contractor status. Consequently, the OCL submits that because the Plaintiff did not meet a high level of exclusivity, the degree of control over the Plaintiff's work becomes less relevant.
[14] The OCL submits that policies and procedures are necessary to manage the practice of law and disputes the examples of “control” relied on by the Plaintiff. The Plaintiff had the discretion to accept or reject cases where there was a conflict of interest or where personal and professional circumstances prevented her from doing so. She could also assign her cases to a third party if her supervising counsel consented.
[15] The Plaintiff emphasizes that she repeatedly entered into contracts as a panel lawyer from 2002 until 2015. Her contracts were renewed every year until the expiry of the last agreement. There is a clear pattern showing that her income from the OCL grew to 50% of her practice. This pattern is evidence that she was economically dependent on the OCL.
[16] The OCL argues that as there was no agreement that the Plaintiff would be provided with any amount of work, there was no expectation or obligation of exclusivity of services: Fisher v. Hirtz, 2016 ONSC 4768. Further, even if there is evidence of economic dependency, this Court should make a finding of independent contractor status if the dependency was self-induced by the Plaintiff.
[17] The Court of Appeal reviewed the distinction between employees and dependent and independent contractors in McKee v. Reid's Heritage Homes Ltd., 2009 ONCA 916, 315 D.L.R. (4th) 129. It held that a court should consider the characterization of a dependent contractor versus independent contractor after determining if the worker is an employee. The Plaintiff admits that she was not an employee but a contractor. Consequently, this court must now determine whether she is an independent or dependent contractor.
[18] In para. 30 of McKee, Justice MacPherson stated:
“I conclude that an intermediate category exists, which consists, at least, of those non-employment work relationships that exhibit a certain minimum economic dependency, which may be demonstrated by complete or near-complete exclusivity. Workers in this category are known as “dependent contractors” and they are owed reasonable notice upon termination. [Emphasis added].”
[19] Justice MacPherson considered these factors to differentiate between dependent and independent contractors:
(a) the exclusivity or a high level of exclusivity of the worker's relationship with the enterprise; (b) the extent to which the worker was economically dependent on the particular working relationship; and (c) the permanency of the working relationship.
[20] The Plaintiff submits that complete exclusivity is not required for a finding of dependent contractor status. She argues that she was dependent on the OCL because the OCL was a significant source of her work and income. Economically, after the termination of the working relationship, her income was cut in half and she had difficulty developing her private family law practice to fill the OCL void.
[21] The permanency of the relationship between the Plaintiff and Defendant is also a factor to be considered. The plaintiff focuses on the fact that the relationship between the parties has lasted uninterruptedly for 13 years. This is a significant period of time.
[22] When I consider the guidance that has been provided to this court by the Supreme Court of Canada and the Ontario Court of Appeal on this motion for summary judgment, I find that there is no genuine issue requiring a trial and that I can make a just and fair decision on the issues in dispute that have been referred to this court.
[23] The OCL argues that the Plaintiff focuses on factors which are relevant in determining if a Plaintiff is an employee. However, I find that all the factors raised by the Plaintiff are also relevant in determining whether she should be characterized as a dependent contractor entitling her to the reasonable notice requirement for wrongful dismissal. In this case, the relationship was continuous for 13 years with no break. The plaintiff performed the integral work of the OCL. The evidence is that the public perceived the Plaintiff to be an employee of the OCL. The OCL had a great deal of control over her work and working conditions. The evidence is that on average, approximately 39% of her work came from the OCL, with it increasing to 50% of her work in her last year of the relationship. These are, in my view, significant factors, that could tip the balance in favour of a finding that the Plaintiff was economically dependent on the OCL and was a dependent contractor. On the one hand, her percentage of work from the OCL although significant, was consistently less than 50%. This counter-balancing factor makes the determination of her status difficult. Nevertheless, I find that the factors I have referred to are, in my view, strong enough to tip the balance in favour of a finding of dependent contractor status. Particularly, the “permanency” of the relationship and the fact that she performed work that is integral to the OCL, with the public perception of her as an OCL lawyer.
[24] Alternatively, the OCL relies on the common law principle that a fixed-term agreement automatically terminates at the end of the term, without any obligation on the employer to provide notice or payment in lieu of notice.
[25] The OCL submits that the Plaintiff is a sophisticated litigant who had an opportunity to review the contract. It should have been clear to her that she would not be entitled to reasonable notice upon the expiry of her contract.
[26] I do not accept this submission. The cases relied on by the OCL to support this argument are distinguishable specifically in light of the fact that this “fixed term contract” was renewed for 13 years, and there was no break in the Plaintiff’s service with the OCL, as well as the other factors set out above.
[27] For all of the above-noted reasons, I dismiss the summary judgment motion.
There is one further practical issue. The Supreme Court of Canada in Hryniak v. Mauldin, et al 2014 SCC 7, [2014] S.C.R. 87 also held, at para. 78, that:
“Where a motion judge dismisses a motion for summary judgment, in the absence of compelling reasons to the contrary, she should also seize herself of the matter as the trial judge.”
In my view, this is an appropriate case for me to follow the Supreme Court's direction. I must, however, qualify this to recognize the practical reality of our court's ability to schedule trials in a timely and expeditious manner. I will not be seized of this trial if the effect of my unavailability would be to delay the hearing of the trial between the parties. If it is possible to do so without adverse delay or consequences to the parties, I seize myself of the trial of this matter as directed by the Supreme Court of Canada.
Costs
[28] Should either party wish to make submissions that such agreement is not applicable because costs should be ordered on a different scale, they should be made as follows:
The Plaintiff’s submissions are to be delivered by 12:00 p.m. on July 6, 2018, and the Defendants submissions are to be delivered by 12:00 p.m. on July 13, 2018. Any reply submissions are to be delivered by 12:00 p.m. on July 18, 2018.
Pollak J. Date: June 27, 2018