COURT FILE NO.: 50605/08
DATE: March 8, 2018
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JIM WICKENS
Paul R. Heath, for the Plaintiff
Plaintiff
- and -
CHAMBERS INSURANCE PROFESSIONALS INC.
Frederick Caplan, for the Defendant
Defendant
HEARD: January 15 & 16, 2018
REASONS FOR JUDGMENT
The Honourable Mr. Justice H. S. Arrell
INTRODUCTION:
[1] The plaintiff was employed by the defendant as an insurance broker.
[2] His employment came to an end on June 30th, 2008.
[3] The plaintiff has brought this lawsuit claiming damages as he alleges he was either constructively dismissed or wrongfully dismissed on June 30th, 2008.
[4] The defendant alleges the plaintiff voluntarily retired on June 30th, 2008 and in any event, he was an independent contractor at that time, and therefore no damages would be owing.
FACTS:
[5] The plaintiff who is currently 72 years of age became a registered insurance broker in 1982. He had been in the insurance business since 1975. He started Wickens & Company Insurance Agency in 1995 with his wife and daughter. They, in fact, were the owners and shareholders of that business and Mr. Wickens was the licensed broker.
[6] In March of 2005 the defendant offered to purchase the business from the plaintiff’s wife, Linda Wickens and his daughter, Nicole Christopher. The share purchase agreement listed the plaintiff, who was not a party to this agreement, as an employee. Part of the agreement indicated that the plaintiff would remain as the principal broker of the company as Mr. Chambers, at that time, was not a designated broker. The plaintiff signed an employment agreement with the defendant dated March 7th, 2005. This agreement had a 5 year term and could be renewed thereafter if the parties wished. There was a non-competition clause for 3 years after termination. The plaintiff was to be paid $45,000.00 per year plus commissions on a 55% basis regarding new business. The agreement could not be terminated within the first 5 years without the consent of the parties. The plaintiff was to be a member of the group Health Insurance provided by the defendant to the same degree as provided to any other employee of the defendant.
[7] Mr. Chambers, the owner of the defendant, obtained his independent broker’s license in June of 2007. As of that date, it was no longer necessary for the plaintiff to remain with the company as the principal broker for regulation purposes.
[8] Once the sale of Wickens & Company Insurance Services to the defendant was completed, in March of 2005, the plaintiff, two of his children and his wife, remained working for the new company. Eventually Mr. Wickens’ wife and son parted ways with the defendant. There is some dispute as to the reasons for the parting but those are not relevant for my decision in this case. The plaintiff is unsure when his wife and son were terminated from the business. He was also unsure as to the date that his daughter Nicole was terminated.
[9] The defendant alleges that he and the plaintiff had a luncheon meeting in January 2008, at which time the plaintiff indicated that he wished to retire as of June 30th, 2008. According to the defendant, the plaintiff was seeking his consent to terminate the contract early. Mr. Chambers states in his evidence that he agreed to the early termination of the contract because the plaintiff was not producing very well and he now had his own independent broker’s license.
[10] On May 7th, 2008, the plaintiff sent a letter to the defendant simply stating he planned to fulfill the full terms of the contract to March 31st, 2010. The plaintiff says that this letter was in response to a verbal request from the defendant to know his intentions. The defendant says this letter came out of the blue and clearly reversed the plaintiff’s earlier intention to retire on June 30th, 2008.
[11] The defendant wrote a letter to the plaintiff dated May 29th, 2008 in response to his earlier letter. He referred to the meeting in January 2008 and the plaintiff’s request to retire on June 30th, 2008, to which he agreed. He further stated in that letter that he had approached the plaintiff on May 5th, 2008 and asked if he would like to retire on May 30th, 2008 instead of June 30th, to which the plaintiff allegedly replied that he would. The defendant further indicated, in light of the plaintiff’s changed intentions, that he was agreeable to the plaintiff finishing out his contract to April 1st, 2010 with the conditions in the original employment contract remaining as signed. The plaintiff admits that he never responded to the May 29th letter of the defendant indicating the contents were incorrect about his alleged stated previous intentions to retire on June 30th.
[12] The plaintiff says his daughter Nicole, who had taken maternity leave in 2006 and was back working with the defendant, was fired in May 2008. This termination occurred on May 30th, 2008 by way of a letter being placed on her desk that her services were no longer required. This letter was not produced in evidence. She denies any earlier meeting with Mr. Chambers over this issue. She denies ever telling Mr. Chambers, as a result of getting angry at a meeting in May that she quit. She admits there was a meeting on May 23rd and she was upset but she was back to work on the following Monday. Mr. Chambers testified that she made it clear that she quit and would start her own brokerage.
[13] The hours of the plaintiff in June were sporadic at best and showed very little time in the office. As a result, the defendant had his counsel write a letter to the plaintiff’s counsel, dated June 27th, indicating the plaintiff had not been fulfilling the terms of his contract and that he had only been in the office approximately 25% of the time that month. The letter further indicated that it was expected that he would work 9:00 – 5:00 and that the security code to the building had been changed so that entry could only occur between 9:00 - 5:00 p.m. on business days. The letter also indicated that as a result of his poor attendance in June, his pay was to be cut 50% for that month. There was no indication in this letter that his services were not to continue.
[14] On July 4th, counsel for the plaintiff, wrote to the defendant’s counsel indicating that they considered that the plaintiff had been constructively dismissed and that a claim for wrongful dismissal would be issued.
[15] David Chambers gave evidence on behalf of the defendant. He stated that after the purchase of Wickens Insurance, he fired the plaintiff’s son Jason for lying on an application to an insurance company in November of 2006. That evidence has not been challenged.
[16] The Defendant indicated that the volume of business generated by the plaintiff started to decline in 2007 and continued into 2008. He confirmed a luncheon meeting in January 2008 with the plaintiff who indicated he wanted to retire as of June 30th, 2008, to which the defendant agreed.
[17] On May 5th, 2008, the business being generated by the plaintiff was very low and Mr. Chambers stated he inquired as to whether he would like to move up the retirement date, and the plaintiff agreed. A further meeting took place on May 8th, 2008, when according to Mr. Chambers, the plaintiff came to him and said “what about being paid out on the contract?” The defendant indicated he replied “what about it?” That was the end of that discussion.
[18] According to Mr. Chambers on May 23rd, the plaintiff and his daughter Nicole came to see him to talk about the plaintiff being bought out of his contract. Mr. Chambers indicated to him that a buyout was not possible but Mr. Wickens could stay and continue working if he wished. He also stated that if that was the plaintiff’s wish he could not also afford to keep Nicole, and she would have to go part time. Upon hearing that, both the plaintiff and Nicole stormed out of his office according to Mr. Chambers. After the May 23rd meeting, the plaintiff was not present in the office for over a week. Mr. Chambers stated that Nicole was quite upset when she left his office and had threatened that she was going to start her own brokerage. It was based upon this threat that he decided it would be best to change the code so no one could be in the office other than from 9:00 – 5:00 when he would be present. That alarm code was not changed until June 25th. The plaintiff worked very little during June.
[19] Mr. Chambers agreed that he changed the benefit package first as of 2007 when he sent a letter to all employees requiring a co-payment of 25%. He sent a further letter on June 27th, 2008, again to all employees, indicating that as business was slow, the company could no longer provide any benefits. At that time, there were four employees including the plaintiff.
[20] The evidence would indicate that the plaintiff did not attend work from May 30th – June 5th.
[21] The defendant indicated that in general, prior to this incident, Mr. Wickens would be in the office more than 50% of the time. When he was not in the office, he would advise Mr. Chambers who he was meeting and where he was going. The evidence of the plaintiff was that he was maybe in the office 20% of the time and the rest of the time he was out meeting new clients. He further indicated that much of the time that he was in the office, was before regular office hours or after. Mr. Chambers had the alarm system print out for the year prior to June 30th, which indicated the plaintiff had activated the alarm early on only 20 occasions, which would appear to show that “often” being in the office in the prior year during non-office hours was somewhat of an exaggeration.
[22] The defendant called Veronica Blanchard-Livotte as a witness. The essence of her evidence was that she was in an intimate relationship with the plaintiff from September 2005 to August 2008. She had known him from the early 90s when she lived in the area. She came back in the mid-2000s and got a job at a local bank near to the plaintiff’s office. The plaintiff attended the bank and recognized Ms. Blanchard, and the relationship blossomed from there. Ms. Blanchard stated that she was advised by the plaintiff that his wife Linda was very ill and that he was soon to be a widow and he wanted someone to share his life with once that happened. She states the plaintiff paid the rent for her apartment, they took several trips to Florida together, he would attend at her apartment 3 or 4 times a week, and she would be with him after hours and on weekends at the office on some occasions.
[23] Ms. Blanchard recalls the plaintiff telling her when they were Florida in January or February of 2007 that it was his intention to retire the following year at the end of June. He talked to her several times about retiring at the end of June 2008 and they talked about their future together thereafter.
[24] It was sometime later that Ms. Blanchard found out that the plaintiff’s wife was not ill and not going to die. She learned this in the late spring of 2008 and as a result, she drifted apart from the plaintiff by the end of the summer 2008. She does recall early in the year of 2008 that he told her he had announced to Mr. Chambers that he wanted to retire at the end of June 2008 and that Mr. Chambers had agreed. It was sometime later in May or June she believes, that she was told by the plaintiff that Mr. Chambers had locked him out of the office. She again emphasised that the plaintiff had told her on several occasions that he had had enough of working and that he wanted to retire and wanted to do so as of June 30th, 2008.
[25] Mr. Wickens was cross examined about his relationship with Ms. Blanchard and he categorically denied any relationship. He denied ever telling her he wanted to retire. He denied ever being in her apartment. And he denied ever being on trips with her to Florida. He categorically denied ever being intimate with her or paying for her rent. He stated that if she said such things she was lying.
[26] In cross examination Ms. Blanchard indicated that in June 2008 the plaintiff told her he had retired but that he had been locked out of the office when he went back to get his personal belongings.
[27] The plaintiff’s daughter was called in reply and stated she had no knowledge of Ms. Blanchard. She stated that as far as she knew, whenever the plaintiff went to Florida, her mother went with him.
CREDIBILITY:
[28] The memory of the plaintiff was less than one would expect. He was vague about a number of crucial items. He often said he did not remember on issues when pressed. His evidence about his frequency in the office after hours appears contradicted by the alarm company printout. He had no explanations for the various business deductions taken on his income tax returns if he was an employee, indicating simply that his accountant did all that. He never responded to the letter from Mr. Chambers of May 29th which sets out a very different scenario as to what had gone on earlier about his request to retire. He denied ever telling Mr. Chambers that he should be paid out on his contract. He denied having any meeting in May with Mr. Chambers and his daughter contrary to her evidence. He categorically denied ever discussing early retirement with Mr. Chambers prior to the end of May 2008.
[29] More concerning, Mr. Wickens denied ever paying for Ms. Blanchard’s apartment and stated that if she said that, it was a lie. He further denied ever paying for her trips to Florida and if she said that, it was a lie. He also said if Ms. Blanchard indicated they had a relationship or that he spoke with her a number of times about retiring at the end of June 2008, it would be a lie.
[30] Ms. Blanchard was cross examined at length and skillfully. Her evidence was not shaken at all. Her evidence was confirmatory of Mr. Chambers’ evidence and to a certain extent the letters earlier referred to that were filed as exhibits. There was no evidence by the plaintiff’s daughter Nicole that seriously challenged anything said by Ms. Blanchard as she indicates she had never heard of her. It is significant in my view that Mr. Wickens did not call his wife to give evidence.
[31] Mr. Chambers gave his evidence in a straight forward, forthright manner. Much of what he said is confirmed by such things as the alarm company records and confirmatory correspondence which were exhibits. There can be no doubt he was quite happy to have Mr. Wickens announce his early retirement as according to Mr. Chambers, he was not producing, he was simply costing him money and no longer was his brokerage designation required.
[32] I have no hesitation in concluding that Mr. Wickens testimony is extremely suspect. I have no reason to disbelieve Ms. Blanchard, whereas there is certainly good reason for Mr. Wickens to wish to discredit her. Both on the basis of this lawsuit and no doubt, his marriage. I am satisfied that what I heard from Ms. Blanchard is reasonably accurate. It confirms to a great extent the evidence of Mr. Chambers.
[33] I am satisfied based upon the evidence of Mr. Chambers, which I accept, and the evidence of Ms. Blanchard, which I accept, and the various documents filed, that I prefer the evidence of Mr. Chambers over the evidence of Mr. Wickens where it conflicts.
ANALYSIS:
[34] The theory of the defence is quite simple. The plaintiff wanted to retire and asked Mr. Chambers if he would be agreeable for that to occur on June 30th, 2008. Mr. Chambers agreed at their luncheon meeting and he recalls on returning to the office, Mr. Wickens announced to all who were present that he would be retiring on June 30th. The plaintiff’s daughter Nicole does not recall that announcement, but little turns on that evidence. It is confirmed with Ms. Blanchard that the plaintiff had the same discussion with her in and around this time.
[35] I accept the evidence of Mr. Chambers that once Mr. Wickens decided he was going to retire, his work product deteriorated even more. I accept the evidence of Mr. Chambers that in early May 2008, he inquired as to whether the plaintiff would like to move up his retirement date to May 30th. I also accept the evidence of Mr. Chambers, which is confirmed in his letter of May 29th, that he advised Mr. Wickens all he needed was a letter indicating that he wished to retire at the end of May. In response to that meeting on May the 5th, Mr. Wickens sent a letter dated May the 8th, indicating he wanted to work until the end of the contract. I accept that this was a complete surprise to Mr. Chambers which prompted the meeting on May 23rd, 2008 as confirmed in Mr. Chambers’ letter of May 29th, and by Nicole. I further accept the evidence of Mr. Chambers that at the meeting of May 23rd, Mr. Wickens broached the subject of being paid out of his contract if he retired early. Clearly that was not something Mr. Chambers was prepared to do and that prompted the discussion that if Mr. Wickens stayed on, his daughter could not continue to work fulltime as Mr. Chambers could not afford to pay them both. The relationship totally deteriorated at that point.
[36] The plaintiff states that he was constructively dismissed. He urges me to find that he never planned to retire on June 30th, 2008 and never announced such an intention to anyone. I disbelieve that evidence. He further states that he wanted to continue working to the end of the contract, but instead he was constructively dismissed as a result of the alarm code being changed without his knowledge, the benefit plan being eliminated, and the announcement that he would only be paid 50% for the work he had done in June 2008.
[37] I reject the arguments of the plaintiff. I do not find that he was constructively dismissed. I believe he had every intention of retiring on June 30th, 2008 and at the last minute, as a result of advice from someone, hoped to elicit additional payment on the contract from Mr. Chambers. I find he did indeed retire on June 30, 2008 as he had always intended to do for over a year according to Ms. Blanchard.
[38] The elimination of the employer payment of the benefit package was completely within the rights of Mr. Chambers to do and part of the employment contract signed by the plaintiff. That contract specifically stated that the plaintiff was entitled to whatever benefits the other employees were receiving. The benefits were eliminated for all employees.
[39] The alarm code was not changed until June 25th, 2008. It did not prevent Mr. Wickens from working at the office. It only prevented access before and after normal business hours. In fact by June 25th, Mr. Wickens had stopped coming to the office in any event and in my view, the employee/employer relationship was over.
[40] I accept that the reduction in pay as announced by Mr. Chambers to 50% for the month of June was somewhat arbitrary. But on the other hand, Mr. Wickens had been at the office very little and had produced nothing that month. There is no indication that the terms of the contract would not be fulfilled after June assuming Mr. Wickens fulfilled his obligations.
[41] I conclude there was no constructive dismissal. I conclude that there was no wrongful dismissal as well. I conclude that the plaintiff announced his retirement of June 30th, 2008 to his employer and received his agreement as early as January of 2008 and that it in fact, is exactly what he did.
[42] Counsel raised two other issues at the commencement of the trial that being mitigation of damages by the plaintiff and whether in fact he was an independent contractor. Given my decision both issues are moot, however, should I be incorrect in what I have decided I would conclude that in fact the plaintiff did make some efforts to apply for work in late summer and early fall 2008. The effort was short lived and I think in reality the plaintiff had little intention of seriously looking for work. I conclude that there was little effort at mitigation.
[43] I conclude that the plaintiff was not an independent contractor as suggested by the defendant. The employment contract prepared by the defendant refers to the plaintiff as an employee throughout. He was part of the employee benefit package. He was considered by the defendant to be an employee based on the evidence of Mr. Chambers that he expected to know where he was and who he was meeting with when he was not in the office. Simply because the plaintiff’s accountant took certain deductions on his tax return, without additional evidence, is not sufficient to persuade me that the plaintiff was an independent contractor, especially with the accountant not being called as a witness on that issue.
[44] Finally I have concluded that if I am incorrect, and the plaintiff was constructively dismissed or wrongfully dismissed, then he would be entitled to damages based on what he would be owed for the balance of his employment contract. I would assess his commission income from the contract based on his average monthly commission income for the 24 months prior to June 30, 2008.
CONCLUSION:
[45] The plaintiff’s action is dismissed.
[46] If the parties are unable to agree on costs, they may make written submissions of no more then 3 – 4 pages double spaced in addition to any offers, and draft bills of costs, to my office on or before March 30th, 2018.
ARRELL, J.
Released: March 8, 2018
COURT FILE NO.: 50605/08
DATE: March 8, 2018
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JIM WICKENS
Plaintiff
- and -
CHAMBERS INSURANCE PROFESSIONALS INC.
Defendant
REASONS FOR JUDGMENT
HSA
Released: March 8, 2018