COURT FILE NO.: CV-16-0351-SR
DATE: 2018-06-01
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
GRAHAM MACKENZIE
Mr. W. Mouck, for the Plaintiff
Plaintiff
- and -
1785863 ONTARIO LTD. operating as ALEX WILSON COLDSTREAM LTD.
Ian A. Wilson, who does not appear for the Defendant
Defendant
HEARD: May 31, 2018, at Thunder Bay, Ontario
Madam Justice H.M. Pierce
Reasons For Judgment
[1] The plaintiff claims, pursuant to the Simplified Rules of the Rules of Civil Procedure, for a finding of wrongful dismissal and consequent damages, including exemplary damages.
[2] The defendant is represented by Ian A. Wilson, who is also the controlling mind of the defendant corporation. Although Mr. Wilson filed a statement of defence, an affidavit in the trial record, and participated in the litigation as both counsel and witness, he did not appear at trial. Counsel for the plaintiff tendered at trial Mr. Wilson’s letter dated May 9, 2018, sent to Mr. Mouck, which concludes,
…I do not intend to occupy my time defending Mr. MacKenzie’s action further…. I would ask that you advise the court accordingly.
[3] Mr. Wilson did not apply to be removed as solicitor of record. Given the failure of the defendant’s representative or its counsel to appear at trial, I conclude that the defendant abandoned its defence. I therefore attach no weight to its evidence.
[4] Mr. MacKenzie was employed as a general manager of a printing company located in Dryden, Ontario. He had many years of experience in the printing industry and was recruited by Roy V. Wilson, Ian Wilson’s father, to become the general manager for the defendant corporation. There was no written employment contract.
[5] The defendant employed about 40 – 50 staff and had four lines of work: commercial printing, signs, printing for a Dryden newspaper, and leasing of property. Two of these lines were profitable; two were not. The plaintiff was employed from October 1, 2010 to September 13, 2015, approximately five years.
[6] Mr. Ian Wilson acquired a controlling interest in the defendant’s shares and after his father’s death, he decided to shut the corporation down because he deemed it unprofitable.
[7] Most of the employees were given notice of termination on August 17, 2015. However, the plaintiff was not terminated on that date. Mr. Ian Wilson telephoned Mr. MacKenzie on September 13, 2015 to inform him his employment was terminated. This was confirmed by letter dated September 15, 2015. It is apparent that Ian Wilson blamed the plaintiff for being unable to turn the business around, and complained that his failure to do so had eroded his inheritance. Mr. MacKenzie was not given pay in lieu of notice; nor was he given working notice.
[8] There is no evidence that the plaintiff was terminated for cause. Nor is there any credible evidence that he resigned. I find and declare that he was wrongfully dismissed on September 13, 2015. What, then, is the appropriate notice payable in light of the wrongful dismissal?
[9] Mr. Mackenzie was 65 at the date of termination and had worked in the most senior position in the company for five years supervising 40 – 50 staff. His salary was $65,000.00 per annum. He made efforts to find employment following termination, but was not able to find a job of comparable responsibility or salary in the depressed Dryden area.
[10] The plaintiff took immediate steps to mitigate his damages. He commenced working as a consultant to his wife’s printing company on October 15, 2015 at a salary of $2,000.00 per month and worked until April 15, 2016, a period of six months. On March 1, 2016, he began employment with the Patricia Region Tourist Council, doing promotion, for a salary of $1,500.00 per month. He still works at this job.
[11] I find that the appropriate length of notice at common law is nine months which is equivalent to $48,749.94. See, for example, MacMillan v. Brantpack Distributing Ltd. 2006 CarswellOnt 4203 (Ont. Sup. Ct.) in which the plaintiff worked 5.5 years in upper management with an annual salary of $57,720.00 and was terminated at age 61. The plaintiff in the MacMillan case was awarded nine months’ notice.
[12] Should the income the plaintiff earned to mitigate his loss of employment after termination be deducted from his notice? The Court of Appeal considered this question in Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402. At para. 157, the court held that there is a duty on a dismissed employee to take reasonable and best efforts to find a position comparable in responsibility and salary to that from which he or she was dismissed. Those earning are deducted from damages.
[13] However, the court held that an employee is entitled to refuse employment that is not comparable in salary or responsibility without being penalized for failing to mitigate. At para. 158, the court stated:
It follows, in my view, that where a wrongfully dismissed employee is effectively forced to accept a much inferior position because no comparable position is available, the amount she earns in that position is not mitigation of damages and need not be deducted from the amount the employer must pay.
[14] Such is the case here. Mr. MacKenzie was obliged to take positions that were inferior in responsibility and salary after his termination. Accordingly, I find that the income earned should not be deducted from the notice period awarded.
[15] Is the plaintiff entitled to exemplary damages arising from the manner of his dismissal? The plaintiff points to Ian Wilson’s allegations made after the plaintiff sued for wrongful dismissal that he “suckered our Dad,” and to other unfounded attacks on Mr. Mackenzie’s character. In particular, there is evidence that Mr. Ian Wilson complaining widely that his inheritance was dwindling, and for this, he blamed the plaintiff. This was unfair, because the defendant corporation struggled financially when it was under the management of Mr. Wilson’s father, Roy Wilson, who invested large amounts of capital on an on-going basis to keep the defendant corporation solvent.
[16] I infer that these attacks were aimed at justifying the defendant’s failure to pay severance, once this claim was started.
[17] As the Supreme Court of Canada set out in Honda Canada Inc. v. Keays, 2008 SCC 39, [2008] 2 S.C.R. 362 at para. 62, a breach of a duty of good faith can qualify as an independent wrong when considering a claim for punitive damages.
[18] In this case, the conduct of the defendant in blackening the plaintiff’s character in his small community after Mr. Ian Wilson made the decision to close the defendant corporation, constitutes a breach of a duty of good faith. Therefore exemplary damages are warranted. They shall be awarded in the amount of $7,500. 00.
[19] In summary, the plaintiff shall have judgment as follows:
a) nine months’ notice: $48,749.94;
b) exemplary damages: $7,500.00;
Total judgment $56,249.94.
[20] The plaintiff is also entitled to pre-judgment interest in accordance with the Courts of Justice Act.
[21] The plaintiff also seeks his costs of this claim, payable by the defendant solicitor, Ian Wilson, personally. In that regard, counsel has filed his bill of costs. In accordance with the Rules of Civil Procedure, Mr. Wilson is given notice of the plaintiff’s intention to seek costs against him personally.
[22] The plaintiff shall serve and file written submissions on costs, not to exceed 5 pages, in addition to any offers to settle, within 15 days of the release of these reasons for judgment. The defendant and Mr. Ian Wilson, shall file any response to the plaintiff’s submissions within 15 days of receiving them, also not to exceed five pages, exclusive of any offers to settle, failing which the court will proceed without the defendant’s or Mr. Wilson’s submissions.
_______“original signed by” ___
The Hon. Madam Justice H.M. Pierce
Released: June 1, 2018
COURT FILE NO.: CV-16-0351-SR
DATE: 2018-06-01
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
GRAHAM MACKENZIE
Plaintiff
- and -
1785863 ONTARIO LTD. operating as ALEX WILSON COLDSTREAM LTD.
Defendant
REASONS FOR JUDGMENT
Pierce J.
Released: June 1, 2018
/sab