COURT FILE NO.: CV-17-584869

DATE: 20191008

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

GARY MAH

Plaintiff

– and –

ARJ INVESTMENTS LTD.

Defendant

David A.S. Mills and Zachary Silverberg, counsels for the Plaintiff

Derrick M. Fulton, counsel for the Defendant

HEARD: August 19, 2019

G. DOW, J.

REASONS FOR DECISION

[1] The plaintiff seeks summary judgment arising from the ending of his employment with the defendant on September 5, 2017.

Background

[2] The plaintiff, now age 56, began working for the defendant on April 1, 2013 as the company’s Chief Accounting Officer. The letter detailing the terms of employment provided for a salary of $140,000.00 per year with an annual review. It also noted the company’s intention to implement a discretionary bonus plan commencing in 2013. If the plaintiff resigned, he was to give thirty days notice.

[3] No bonus was paid in 2013 but $35,000.00 was paid for each of the years 2014, 2015 and 2016. The plaintiff reported directly to the Chief Executive Officer, Ahmed Jibril. The plaintiff also received four weeks’ vacation and a health benefits package, the latter which was terminated by letter to Great West Life on September 8, 2017 effective October 5, 2017.

[4] The defendant maintains that the plaintiff resigned. The defendant points to the plaintiff’s involvement with his wife in a real estate business purchasing, renting and selling residential properties in the United States as the reason. The defendant claims, through Mr. Jibril, that in early 2017, the plaintiff asked to reduce his employment to part-time. The plaintiff denies this occurred. There is no independent record of this request.

[5] There are some records of the events of September 5, 2017. A meeting was held at or about 9:15 am. The corporate minutes makes no reference to the resignation or termination of the plaintiff. The employer relies on this in support of resignation. The plaintiff made its own handwritten notes of the events of the day of which were transcribed to indicate Mr. Jibril requested his resignation. The corporate minutes and the parties do not dispute the meeting was attended by four other employees, none of whom tendered evidence to support the employer’s position.

[6] The plaintiff’s notes detail a separate subsequent meeting with Mr. Jibril at 10:30 am where the request for the plaintiff’s resignation was repeated. In the hours that followed, the plaintiff authored and signed letters resigning his signing authority with the defendant and its related companies. The defendant relied on the use of the word “resignation” in those letters. The plaintiff submits only the letter addressed to the defendant is relevant and the plaintiff only resigns as a signing officer and not as an employee. To the contrary, the letter to the health benefits insurer of September 8, 2017 authored by Mr. Jibril uses the phrase “we initiated termination”.

[7] The defendant prepared a letter “Re: Termination of Employment” stating the plaintiff had resigned and proposed to pay him the balance of his vacation due (four days / $1,555.56) plus one month’s salary ($11,666.67). The letter is not signed by Mr. Jibril. His evidence is that the plaintiff asked to review the letter and return it the next day. The plaintiff maintained he refused to sign the letter given it described a resignation. The plaintiff did not return the next day. When Mr. Jibril followed-up, he did not receive a response until sometime later. The response was a letter from plaintiff’s counsel.

[8] The defendant also relied on an email the plaintiff sent out to the defendant’s bank and accountant which includes a statement he would be “pursuing real estate full time”. The plaintiff’s explanation for this was to conceal embarrassment at being terminated.

[9] Finally, the defendant relies on the “Employee Exit Form” dated September 5, 2017 which lists various items required to be returned which is initialed by the defendant’s representative, Mariam Ahmed (who was one of the four others identified as present in the corporate minute book and Mr. Jibril’s niece). It is also initialed by the plaintiff except for the items “Termination of Health Benefits” and “Letter of Resignation”.

Issue 1 – Resignation or Termination

[10] This motion was scheduled on the basis it involved determination of only the appropriate notice period. I confronted the defendant’s counsel with this when he made the submission that determination of whether the plaintiff resigned or was terminated involved making findings of credibility which ordinarily requires a trial. However, counsel agreed this should be framed as a submission that the appropriate notice period was zero. Further, there was sufficient other evidence to be relied on, as described above, to determine this issue. In addition, Rule 20.04(2.1) and the decision in Hryniak v Mauldin, 2014 SCC 7 (at paragraph 49) provides for determination of this issue on a motion for summary judgment.

[11] To that end, I am satisfied there exists sufficient evidence to conclude the plaintiff was terminated. He made notes detailing same. He refused to sign the employer’s termination letter confirming resignation. He refused to initial the Employee Exit Form where this issue was potentially raised. I rely on and accept his explanation for what was said in the emails to the bank and the accounting firm. An adverse inference can be drawn from the absence of any evidence from any of the other four individuals at the meeting on September 5, 2017, particularly Mariam Ahmed. To the extent this conflicts with the evidence of Ahmed Jibril, I do not accept that evidence.

[12] I am reinforced in this conclusion by the Court of Appeal’s statement in Kieran v. Ingram Micro Inc., 2004 4852 (ON CA), [2004] O.J. No. 3118, (at paragraph 27) “that a resignation must be clear and unequivocal. To be clear and unequivocal, the resignation must objectively reflect an intention to resign, or conduct evidencing such an intention”. I conclude Mr. Mah’s conduct did not approach meeting that legal test.

Issue 2 – Length of Notice

[13] Having concluded the plaintiff was terminated, the next issue to address is the appropriate length of notice. In this regard, the plaintiff sought 12 months. This is particularly relevant as there is evidence of the plaintiff’s efforts to find alternative employment, that culminated with an offer of employment on October 13, 2018 or more than 13 months after his termination. It was at a somewhat lower salary. It was declined. In addition the defendant submitted the notice period should be reduced as a result of the plaintiff’s failure to mitigate and tender evidence to confirm the list of places he sent his application to as well as not retaining an employment search firm until after he turned down the offer of employment in October, 2018.

[14] I agree with the jurisprudence accurately summarized in Summerfield v. Staples Canada Inc., 2016 ONSC 3656 (at paragraphs 20 to 22) that the onus is on the employer to demonstrate failure to mitigate and the efforts of the plaintiff need only be reasonable and not perfect. To that end, I conclude no deduction should be made from or to the appropriate notice period.

[15] The determination of the appropriate notice period must consider the factors set out in Bardal v The Globe and Mail, 1960 294 (ON SC), [1960] O.J. No. 149 being:

(a) the character of the employment;

(b) the length of service of the employee;

(c) the age of the employee; and

(d) the availability of similar employment, having regard to the experience, training and qualifications of the employee.

[16] Both sides submitted decisions supporting their position where the former employee was of a similar age, had similar years of service, was at a similar income level and had alternative employment prospects. In this regard, the defendant’s submitted the appropriate range was seven to eight months in response to the plaintiff’s submission of twelve months. Having considered and reflected on the proper application of the requisite factors to the factual matrix before me, I have concluded the appropriate notice period is nine months or $105,000.03.

Issue 3 – Entitlement to Bonus

[17] Having worked for the defendant for the first eight months of 2017, the plaintiff seeks payment of the $35,000.00 bonus paid the previous three years. The plaintiff also sought payment of the pro rata share for what I have decided to be five months into 2018 as constituting proper notice. The defendant maintains the bonus was discretionary. Further, Mr. Jibril testified no bonuses were paid to employees in 2017 or 2018. No financial records to verify that evidence was tendered.

[18] Subsequent to the hearing of this motion on August 19, 2019, the Court of Appeal released its decision in Andros v. Colliers Macaulay Nicolls Inc., 2019 ONCA 679 on August 30, 2019. Plaintiff’s counsel forwarded the reasons to me on September 9, 2019. The cover letter does not expressly confirm this out of court communication was done with the consent of the defendant which is contrary to Rule 1.09. However, the cover letter from counsel did indicate “We would be pleased to provide submissions, orally or in writing”. I have reviewed the reasons of the Court of Appeal and have concluded this would not be necessary.

[19] The decision addressed the entitlement of the terminated employee to payment of a bonus through the notice period (at paragraphs 41 through 64). This decision holds a common law claim for a bonus exists “where the bonus was such an integral aspect” of the employee’s compensation (at paragraph 49). The second step is to review whether anything disentitles the terminated employee to the payment. I was not directed to any evidence in this regard in submissions nor in my further review of the material filed following receipt of the Court of Appeal’s decision. There was no indication in any statement, written or oral which would disentitle the plaintiff to the payment sought. I conclude it was an integral aspect of the plaintiff’s compensation. The employment contract expressed the intention to begin a discretionary bonus plan in 2013 “based on individual performance and the financial performance of the operating companies” (at paragraph 3 of the employment contract letter of April 1, 2013). The bonus was expected to be in the range of three to four months of salary. This roughly equates with the $35,000.00 bonus paid to the plaintiff for each of the years 2014, 2015 and 2016. In the absence of detailed financial records or statements to confirm no bonus was paid to any other employees in 2017 or 2018, I award the plaintiff the $35,000.00 he expected to receive in 2017. Further, I award the pro rata share of the bonus for the five months I have concluded the appropriate notice period extended into 2018 for an additional $14,500.83.

Issue 4 – Health Benefits

[20] Having determining the plaintiff is entitled to paid from September 7, 2017 to June 5, 2018, it follows he is also entitled to be compensated for expenses that would have been paid by the defendant’s health benefits plan until that date. The parties agreed those expenses were set out chronologically in Exhibit “G” to Mr. Mah’s affidavit sworn August 7, 2018 in the Motion Record. It totaled $1,753.41 but the last expense is dated June 15, 2018 in the amount of $110.00 which reduces the amount the plaintiff shall recover under this head of damage to $1,643.41.

Issue 5 – Punitive Damages

[21] Plaintiff’s counsel submitted the conduct of the defendant, as an employer, was deserving of sanction in the form of punitive damages. The plaintiff relied on the test and principles set out in Whiten v. Pilot Insurance Co., 2002 SCC 18.

[22] The intention of making such an award here was to serve as a warning to employers not to “bully” its employees or demand that they resign. I raised my concern while the Whiten v. Pilot Insurance Co., supra accurately sets out the legal test, its factual underpinnings were very different. In that matter, the claim arose out of the defendant’s conduct arising from a contract of insurance (being a contract of good faith) and that the conduct was protracted following the fire giving rise to the loss and the claim. That decision identified 11 objectives or principles to be considered in a balanced way (at paragraph 94) in addressing such a claim. The plaintiff relied on the seventh principle of deterring the defendant and others from similar misconduct as well as the eighth principle that they be awarded only when compensatory damages are insufficient to accomplish these objectives. I raised my concern referring to the first and second principles, that punitive damages, being its own cause of action, are “very much the exception rather than the rule”. Further, I raised that they are “imposed only if there has been high-handed, malicious, arbitrary or highly represent reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour”. While the conduct of the defendant may have been high-handed, malicious or even arbitrary, the evidence was that it occurred only on September 5, 2017. I raised, for comparative purposes, the comments of the Court of Appeal in Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520 where the court reviewed the parameters and emphasized the statement made in Keays v. Honda Canada Inc., 2008 SCC 39, [2008] 2 S.C.R. 362 that punitive damages are restricted to “advertent wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own” (at paragraph 112). I have concluded that while the conduct which occurred cannot be condoned, it did not amount to the exceptional case where the compensatory damages awarded are insufficient or at the requisite level to require a separate assessment and award. That claim is dismissed.

Conclusion

[23] In summary, the plaintiff is awarded the following amounts (assuming not already paid):

a) Unpaid Vacation Pay

$1,555.56

b) Reasonable Notice Period (Nine months at $11,666.67 per month)

$105,000.03

c) 2017 Bonus

$35,000.00

d) 2018 Bonus (pro rata share)

$14,583.33

e) Health Benefits / Expenses Incurred to end of notice period

$1,643.41

TOTAL:

$157,782.33

Pre-Judgment Interest

[24] To assist the parties, I have reviewed the issue of and calculation for pre-judgment issue. I considered:

a) the applicable rate from Section 128 of the Courts of Justice Act, R.O. 1990, c.C.43 (which would appear to be 1% per annum given the Statement of Claim was issued in the last quarter of 2017);

b) the accumulating nature of the award over the time frame of September 5, 2017 to June 5, 2018; and

c) the discretion afforded to me under Section 130 of the Courts of Justice Act, supra.

[25] To that end, I award the sum of $2,000.00 for pre-judgement interest.

Costs

[26] The plaintiff tendered a costs outline seeking $30,736.64 for partial indemnity costs or $41,424.43 for substantial indemnity costs. The defendant submitted a costs outline seeking $21,295.12 for partial indemnity or $27,903.16 for substantial indemnity costs. I was apprised of a Rule 49 Offer to Settle made by the defendant but not of its content.

[27] Unless the defendant’s offer exceeded the quantum of $159,782.33 (inclusive of pre-judgment interest) I have awarded, I would allow the plaintiff his partial indemnity costs fixed in the amount of $27,500.00, inclusive of fees, HST and disbursements.

[28] If the defendant wishes to alter this tentative award of costs based on its Rule 49 Offer to Settle, written submissions not exceeding three pages, double spaced in a readable font may be submitted to my attention within the next 30 days followed by responding submissions from the plaintiff, identically limited within 15 days after forwarding and receipt by me of the submissions of the defendants. Such submissions should be addressed to my attention and filed at Judges Administration, Room 140, 361 University Avenue, Toronto, Ontario.

Mr. Justice G. Dow

Released: October 8, 2019

COURT FILE NO.: CV-17-584869

DATE: 20191008

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

GARY MAH

Plaintiff

– and –

ARJ INVESTMENTS LTD.

Defendants

REASONS FOR DECISION

Mr. Justice G. Dow

Released: October 8, 2019