Court File and Parties

COURT FILE NO.: 14-61172 DATE: 2018/06/28 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Darren Sproule, Plaintiff AND Tony Graham Lexus Toyota, Graham Automotive Sales Inc., Tony Graham Motors (1980) Limited, Tony Graham Kanata Limited, Defendants

BEFORE: Justice R. Ryan Bell

COUNSEL: Andrew Lister for the Plaintiff Jim Anstey for the Defendants

HEARD at Ottawa: May 9, 2018

Endorsement

Overview

[1] Darren Sproule worked for Graham Automotive Sales Inc. for approximately 16 years. He was promoted to the position of General Manager of its Nissan and Infiniti dealership in 2005. Mr. Sproule’s employment with Graham Automotive came to an end in 2014. Mr. Sproule has sued for wrongful dismissal. The defendants deny that Mr. Sproule was dismissed; they say he abandoned his job and they have counterclaimed for inconvenience damages. A jury trial in this matter is scheduled to commence on October 15, 2018.

[2] The defendants move for summary judgment to dismiss Mr. Sproule’s claim. Mr. Sproule seeks to have the defendants’ counterclaim dismissed. For the reasons that follow, I dismiss the defendants’ motion for summary judgment. I also dismiss the defendants’ counterclaim.

Summary Judgment

[3] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that 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.” There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process: (i) allows the judge to make the necessary findings of fact; (ii) allows the judge to apply the law to the facts; and (iii) is a proportionate, more expeditious and less expensive means to achieve a just result (Hryniak v. Mauldin, 2014 SCC 7, at para. 49).

[4] As summarized by Corbett J. in Sweda Farms Ltd. v. Egg Farmers of Ontario, on a motion for summary judgment, the court should undertake the following analysis:

(i) Assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;

(ii) On the basis of this record, decide whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits;

(iii) If the court cannot grant judgment on the motion, the court should (a) decide those issues that can be decided in accordance with the principles described in (ii); (b) identify the additional steps that will be required to complete the record to enable the court to decide any remaining issues; and (c) in the absence of compelling reasons to the contrary, seize itself of the further steps required to bring the matter to a conclusion (2014 ONSC 1200, at paras. 33-34).

[5] A process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. There may be cases where, given the nature of the issues and the evidence required, the judge cannot make the necessary findings of fact, or apply the legal principles to reach a just and fair determination (Hryniak, at paras. 50-51). The summary judgment rules permit the fact-finding process to be “staged”, but only where that “will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole” (Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, at para. 32, citing Hryniak, at para. 66).

Factual Background

[6] For the purposes only of the motion for summary judgment, the factual background is as follows. As will appear from my account, there are a number of factual matters in dispute.

[7] The defendants operate various automotive dealerships under the umbrella of the Graham family holding company. In the spring of 2005, Graham Automotive promoted Mr. Sproule to the position of General Manager of its Nissan and Infiniti dealership.

[8] Between 2013 and June 2014, Graham Automotive was in negotiations to sell its Nissan and Infiniti dealership. The negotiations failed and revived several times.

[9] As part of the possible sale, the Graham family, as vendor, wanted to retain certain key employees. In December 2013, a preliminary list of employees that the potential purchaser would be permitted to hire was circulated. Mr. Sproule’s name was not included on the list.

[10] In January 2014, Mr. Sproule and two of his colleagues were called to a meeting by Ms. Graham. What was said at that meeting is in dispute. Ms. Graham says she advised Mr. Sproule and his colleagues that there might be opportunities for them to remain working with the defendants at their other dealerships; she did not make any promises.

[11] Mr. Sproule recalls that Ms. Graham told the three employees they were on a protected list of employees and would not be transferred to the new employer; they would be kept in the Graham family organization. Ms. Graham told Mr. Sproule that he would become the General Manager of the Lexus Toyota dealership and eventually replace the current General Manager upon the latter’s retirement.

[12] At the motion, the defendants took the position that it was irrelevant whether there was, or was not, a promise of alternative employment made by Ms. Graham to Mr. Sproule at the January 2014 meeting. Defendants’ counsel was not prepared to concede that, for purposes of the motion, a promise of alternative employment was made to Mr. Sproule in January 2014.

[13] Different versions of the list of employees that the potential purchaser would be permitted to hire were circulated over the next few months. Mr. Sproule’s name was not included on most versions; however, his name was included at least once.

[14] At some point after the January 2014 meeting, negotiations with the potential purchaser broke off.

[15] In March 2014, Mr. Sproule and a colleague expressed an interest in purchasing the defendants’ Nissan and Infiniti dealership. Ultimately, they decided not to pursue the idea.

[16] In early May 2014, negotiations with the first potential purchaser were revived. On May 9, 2014, there was a meeting attended by senior managers, including Mr. Sproule, to discuss the renewed negotiations and the July 2, 2014 provisional closing date for the sale of the dealerships. What transpired at the May 9, 2014 meeting and thereafter is in dispute. Mr. Sproule says that he asked for assurances with respect to the offer of continued employment made to him in January and that Ms. Graham told him that he would not be transferred to the position of General Manager of the Lexus Toyota dealership or to any other Graham family business. Mr. Sproule considered himself to have been dismissed.

[17] Ms. Graham says that she advised Mr. Sproule that the defendants would not have a position for him after the sale closed – in other words, that the status of Mr. Sproule’s continued employment with the company was dependent on the sale of the dealership. Ms. Graham says that she intended to speak with Mr. Sproule as soon as she had a clear understanding of whether the sale would, in fact, proceed and whether the purchaser could find a place for him. Mr. Sproule says that he met with the purchaser who advised that he was not able to offer Mr. Sproule a position.

[18] The relationship between the parties unravelled after May 9, 2014. Mr. Sproule says that he was undermined in his position. In his affidavit, he describes the atmosphere as “toxic”. The defendants dispute Mr. Sproule’s allegations.

[19] On June 12, 2014, the sale of the dealership fell through.

[20] Mr. Sproule maintains that he started to empty his office “right away” after the May 9, 2014 meeting. Ms. Graham’s evidence is that she did not learn of Mr. Sproule’s belief that he had been terminated until July 17, 2014. She emailed Mr. Sproule and told him he had a job after July 2, 2014.

[21] On July 18, 2014, Mr. Sproule served his statement of claim.

[22] Ms. Graham requested that Mr. Sproule return to work in his position as General Manager. Mr. Sproule did not believe her offer was sincere and did not return. The defendants attribute Mr. Sproule’s behaviour to their dismissal of Mr. Sproule’s father-in-law and their failure to find him another position within the Graham family business.

[23] The defendants claim that Graham Automotive was the subject of an investigation by the Ontario Motor Vehicle Industry Council due to Mr. Sproule’s failure to address a marketing discrepancy. The investigation resulted in a fine against Graham Automotive. Mr. Sproule’s evidence is that another employee was responsible for the issue and that he, Mr. Sproule, took immediate steps to correct the employee’s error.

[24] In the action, affidavits of documents have been exchanged. Examinations for discovery were held in June 2017. The action was set down for trial in June 2017. A pre-trial conference is scheduled for September 2018 and the trial is scheduled to commence on October 15, 2018.

[25] Ms. Graham and two employees who attended the January 2014 meeting filed affidavits in support of the defendants’ motion. Mr. Sproule and Frances Lazar, who was employed by the defendants as a consultant, filed affidavits in response. The deponents were not cross-examined. The transcripts of Ms. Graham’s examination for discovery and Mr. Sproule’s examination for discovery were filed on the motion.

There Are Genuine Issues Requiring a Trial

[26] In my view, based on the evidence before the court, the following are genuine issues requiring a trial:

(i) Was Mr. Sproule dismissed on May 9, 2014? (ii) Was Mr. Sproule required to remain in or return to his position with Graham Automotive in mitigation of his damages?

[27] Having identified these issues, I move to determine if the need for a trial can be avoided by using the powers under Rules 20.04(2.1) and (2.2). In my opinion, using these resources would not lead to a fair and just result that would serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[28] The defendants rely on the decision in Beatty v. Best Theratronics Ltd. in support of their argument that wrongful dismissal cases may be determined on a motion for summary judgment (2014 ONSC 3376, aff’d 2015 ONCA 247). In Beatty, the employer had admitted that the employee was dismissed without cause; the issues to be determined were the length of notice and mitigation.

[29] The appropriateness of summary judgment must be decided taking into account the specific circumstances of an individual case. As the Court of Appeal stated in Beatty, at para. 15:

This is a case where it was manifestly fair and just for the motion judge to determine the issues he did in a summary manner. The motion judge had a full evidentiary record. The parties filed affidavits, and the respondent was cross-examined. There were no real credibility or even factual issues relevant to the period of reasonable notice and mitigation.

[30] In this case, there are material facts in dispute. Those disputed facts include where the January 2014 meeting was held, who was in attendance and what was said at that meeting. What was said at the May 9, 2014 meeting is also in dispute.

[31] The parties also disagree as to relevancy of the January 2014 meeting. The defendants take the position that all of the evidence in the record is consistent with the proposed position being conditional and argue that even if the defendants had promised Mr. Sproule a position, they would have been entitled to change their plans. Counsel on behalf of Mr. Sproule submits that what transpired at the May 9, 2014 meeting must be considered in the context of what was promised at the January 2014 meeting. Counsel points to the conflicting evidence in the record on this issue, and the absence of cross-examinations on any of the affidavits filed. In my view, it will be necessary to hear the evidence of a number of witnesses and to assess their credibility in order to determine these issues.

[32] The parties disagree whether Mr. Sproule was undermined in his position as General Manager. This issue relates directly to the question of mitigation. Mr. Sproule’s position is that because the work environment had become acrimonious, he was not required to return or remain at work during the notice period. The defendants assert that Mr. Sproule was always treated with the utmost respect during his employment. The determination of this issue will require testimony from several witnesses. Their reliability and credibility will need to be assessed.

[33] The defendants’ position is that there is sufficient information for the court to fairly determine these issues. I disagree. There are inconsistencies in the evidence that, in my view, should be determined based on viva voce evidence. To do otherwise would “presume that the written word: the statements, the notes and the transcripts provide enough to divine the preferable view” (Yusuf (Litigation guardian of) v. Cooley, 2014 ONSC 6501, at para. 21).

[34] As the Court of Appeal observed in Baywood Homes, at para. 44:

What happened here illustrates one of the problems that can arise with a staged summary judgment process in an action where credibility is important. Evidence by affidavit, prepared by a party’s legal counsel, which may include voluminous exhibits, can obscure the affiant’s authentic voice. This makes the motion judge’s task of assessing credibility and reliability especially difficult in a summary judgment and mini-trial context. Great care must be taken by the motion judge 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.

[35] Mr. Sproule has advanced a claim for damages for bad faith based on the defendants’ treatment of him including their termination of his employment after promising him continued employment past the date of sale. What transpired at the January 2014 meeting is also relevant to this issue. In Lewis v. Lavern Heideman & Sons Ltd., bad faith and mitigation were live issues that the court determined would require viva voce evidence from multiple witnesses in order to assess and determine credibility (2015 ONSC 3752). I have reached the same conclusion in this case. I find that in the circumstances of this case, and considering, in particular, the late stage at which the motion for summary judgment was heard, ordering a mini-trial and engaging in the fact-finding powers under Rule 20.04(2.1) would not be a proportionate, more expeditious and less expensive means to achieve a just result.

[36] The final factor in my determination that there are genuine issues requiring a trial is the fact that a jury trial in this matter is scheduled for October 2018. In May 2016, the defendants withdrew their request for an order striking the jury notice. The defendants have waited until practically the eve of a jury trial to bring their motion. In addition to the other factors identified, I find that it would not be just, fair, or consistent with the goals of timeliness, affordability and proportionality to deny Mr. Sproule access to that forum.

The Defendants’ Entitlement to Inconvenience Damages Does Not Require a Trial

[37] I have reached a different conclusion with respect to the defendants’ counterclaim for inconvenience damages. In my view, in relation to this claim, there is no genuine issue requiring a trial.

[38] On a motion for summary judgment, the court may grant judgment in favour of the respondent. A cross-motion by the respondent is not required (Kassburg v. Sun Life Assurance Co. of Canada, 2014 ONCA 992, at paras. 50-52; Landrie v. Congregation of the Most Holy Redeemer, 2014 ONSC 4008, at para. 51).

[39] Hryniak does not displace the “best foot forward” principle; to the contrary, the court is entitled to assume that the parties have placed before it all of the evidence that will be available at trial. The defendants allege that by his departure, Mr. Sproule caused “considerable upheaval” to Graham Automotive and claim that senior management were left in a “desperate situation” that “deserves redress.” I was not directed to any documents or particulars in support of the defendants’ claim, apart from the allegations regarding the marketing investigation. I accept Mr. Sproule’s evidence on this issue. I also note Ms. Graham’s evidence on cross-examination that disciplinary proceedings were not initiated until after Mr. Sproule had left Graham Automotive. I find that the record contains no evidence that would entitle the defendants to recover inconvenience damages.

[40] I therefore grant summary judgment to Mr. Sproule in respect of the defendants’ counterclaim and dismiss the counterclaim.

Disposition

[41] The defendants’ motion for summary judgment is dismissed. The defendants’ counterclaim is also dismissed.

[42] As the successful party on the motion, Mr. Sproule is entitled to his costs. The parties provided me with their costs outlines at the conclusion of the hearing. The parties shall have 14 days from the release of this decision to determine whether they can resolve the issue of costs. If they cannot, they shall arrange a 9:30 a.m. court attendance. Both parties will have ten minutes to argue their position on costs.

Madam Justice R. Ryan Bell Date: June 28, 2018