COURT FILE NO.: CV-18-77102
DATE: 2019/01/31
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
ANTHONY SAIKALY
Plaintiff
– and –
AKMAN CONSTRUCTION LTD.
Defendant
David Contant, for the Plaintiff
No one appearing for the Defendant
HEARD: January 25, 2019
REASONS FOR JUDGMENT
Corthorn J.
Overview
[1] Anthony Saikaly brings this motion for default judgment; he seeks damages for wrongful dismissal.
[2] Mr. Saikaly began working for the defendant on March 6, 2006. He continued to work for the defendant for 12 years. By the spring of 2018, Mr. Saikaly held the position of Office Manager.
[3] In May 2018, Mr. Saikaly’s employment was terminated. The defendant informed Mr. Saikaly that the termination of his employment was for cause. The defendant alleged wrongdoing on Mr. Saikaly’s part. The Record of Employment (“ROE”) completed by the defendant includes the following comment: “He was terminated with cause and there is currently an on going (sic) court case.”
[4] Mr. Saikaly denies the allegation of wrongdoing. He alleges that the termination of his employment was entirely without cause.
[5] A statement of defence was never delivered and the defendant was noted in default. In the fall of 2018, the motion for default judgment was scheduled for January 2019. The motion was originally returned on January 8, 2019. It was adjourned to January 25, 2019 so that the motion record could be served on the lawyer of record for the defendant. Service of the motion record was effected. The defendant did not deliver any materials in response to the motion for summary judgment.
[6] Mr. Saikaly’s motion for default judgment was heard on January 25, 2019. No one appeared on behalf of the defendant on the return of the motion.
Procedural History
[7] The procedural history of the action is as follows:
July 10, 2018 - Statement of claim is issued
July 16, 2018 - Statement of claim is served on the defendant
July 30, 2018 - Notice of intent to defend (dated July 9, 2018) is served on the plaintiff.
[8] Communication between counsel for Mr. Saikaly and counsel for the defendant continues for a number of months subsequent to July 2018. That communication includes requests from counsel for Mr. Saikaly that a statement of defence be delivered. A deadline for the delivery of the statement of defence, beyond the number of days allowed in the Rules of Civil Procedure, is ultimately set (R.R.O. 1990, Reg. 194,). A pleading is never delivered on behalf of the defendant.
[9] The defendant is noted in default in early September 2018. Counsel for Mr. Saikaly makes counsel for the defendant aware that step was taken. In response, counsel for the defendant advises that he hopes to complete the defendant’s pleading over the upcoming weekend. The defendant’s pleading is not delivered.
[10] In mid-October 2018, counsel for Mr. Saikaly informs counsel for the defendant that the defendant was noted in default in September 2018. In addition, counsel for the defendant is advised that Mr. Saikaly intends to proceed with a motion for default judgment scheduled for January 2019.
[11] The motion for default judgment was returned before me on January 8, 2019. The motion record had not been served on counsel for the defendant. I adjourned the motion to January 25, 2019 and ordered that the motion record be served on counsel for the defendant (Elekta Ltd. v. Rodkin, 2012 ONSC 2062).
[12] The defendant was given a reasonable opportunity to deliver a pleading, was well-aware of the motion for judgment, and had a reasonable opportunity to take steps to have the noting in default set aside. The defendant chose to do nothing.
[13] On January 14, 2019, a supplementary motion record was served on the defendant. The supplementary motion record includes (a) a fresh as amended notice of motion, (b) the affidavit of Mr. Saikaly sworn in November 2018, (b) the affidavit of an administrative assistant at the office of plaintiffs’ counsel, and (c) copies of the statement of claim and notice of intent to defend. No materials were served in response to the supplementary motion record. No one appeared on behalf of the defendant on the return of the motion on January 25, 2019.
The Issues
[14] The issues to be determined on this motion are:
Was Mr. Saikaly wrongfully dismissed from his employment with the defendant?
If so, to what damages is Mr. Saikaly entitled (a) as compensation in lieu of notice, (b) for vacation pay, and (c) for employee benefits?
If so, is Mr. Saikaly entitled to declaratory relief with respect to the wording of the Record of Employment issued by the defendant?
Issue No. 1 - Dismissal without Cause
[15] Having been noted in default, the defendant “is deemed to admit the truth of all allegations of fact made in the statement of claim” (r. 19.02(1)(a)).
[16] In summary, the allegations of fact relevant to the claim of wrongful dismissal and to which the defendant is deemed to admit the truth are (paragraph numbers identified are from the statement of claim):
As the Office Manager for the defendant, Mr. Saikaly had significant authority. He was responsible for all of the day-to-day management of the corporation with the exception of hiring and firing personnel and project management (at para. 8);
Mr. Saikaly was a dedicated and loyal employee as demonstrated by:
Personal loans made by him to the defendant so that the latter could make payroll; and
The return to the defendant of a portion of Mr. Saikaly’s annual bonus because Mr. Saikaly was aware that the defendant was struggling financially (at para. 11);
In the spring of 2018, the defendant placed Mr. Saikaly on administrative leave while it completed an investigation of alleged wrongdoing on Mr. Saikaly’s part with respect to financial transactions between the defendant and another individual (at paras. 13-16);
Despite inquiries made by Mr. Saikaly’s lawyer, details of the investigation being carried out were not provided, the defendant did not interview Mr. Saikaly as part of the investigation, and Mr. Saikaly was never informed of the outcome of the investigation (at paras. 18-20).
Mr. Saikaly’s employment was terminated, without notice, on May 18, 2018.
The ROE was not prepared until October 2, 2018 and it states that Mr. Saikaly was terminated for cause.
[17] Mr. Saikaly’s evidence is that he was never provided with any particulars of the alleged wrongdoing on his part (Saikaly affidavit, at para. 19). Mr. Saikaly denies any wrongdoing related to financial transactions as alleged by the defendant (Saikaly affidavit, at para. 10).
[18] On the basis of the facts that the defendant is deemed to admit and Mr. Saikaly’s affidavit evidence, the latter which I accept, I find that Mr. Saikaly (a) did not commit the wrongdoing alleged by the defendant, and (b) was terminated without cause from his employment with the defendant.
Issue No. 2 - Damages for Wrongful Dismissal
a) Compensation for the reasonable notice period
[19] By virtue of its default in this action, the defendant is deemed to admit the following allegations of fact relevant to determining the notice period to which Mr. Saikaly is entitled for termination without cause. Each point listed below is set out at para. 30 of the statement of claim:
Mr. Saikaly had worked for the defendant for slightly more than 12 continuous years;
At the date of termination of his employment, Mr. Saikaly was 60 years old;
The position held by Mr. Saikaly as of 2018 was one of considerable responsibility;
Mr. Saikaly fulfilled his role as the Office Manager in a manner that met or exceeded the defendant’s expectations;
Mr. Saikaly was paid a salary and received benefits that he will be unable to replace; and
It will be difficult for Mr. Saikaly to find alternate employment because of his age and the manner in which his employment was terminated.
[20] In his pleading and on the return of the motion, Mr. Saikaly claims entitlement to 24 months’ notice.
[21] Mr. Saikaly emphasizes his age and the difficulties that an individual in their 60’s faces in securing employment. His evidence with respect to the latter is set out at paras. 22-23 of his affidavit and includes:
Mr. Saikaly does not have a formal accounting designation;
The lack of such a designation has made and will continue to make it difficult for him to find a position comparable to the position in which he was employed by the defendant; and
The Ottawa construction industry is one that is tightly knit. That closeness contributes to the difficulties Mr. Saikaly has encountered and will continue to encounter in securing alternate employment.
[22] I accept Mr. Saikaly’s evidence with respect to the factors that have contributed and will continue to contribute to difficulties in securing alternate employment. As of the date on which the motion for default judgment was heard, Mr. Saikaly remained unemployed.
[23] The record includes a copy of Mr. Saikaly’s T4 slip for 2017. His salary in that year was $69,143.40. There is no evidence before the court with respect to any anticipated increase in salary for Mr. Saikaly in 2018 or 2019. The claim for compensation in lieu of notice is therefore based on a full-time annual salary of $69,143.40.
[24] The prayer for relief in the statement of claim includes claims for (a) damages for breach of the defendant’s duty of good faith and fair dealing, and (b) punitive damages. Mr. Saikaly is not advancing those claims on the motion for summary judgment. Mr. Saikaly submits that, although he has abandoned those claims for damages, the court must still consider the defendant’s conduct and the manner in which Mr. Saikaly’s employment was terminated. Mr. Saikaly submits that both factors support a finding that he is entitled to compensation for a notice period that is at the high end of the range for someone in his circumstances.
[25] The applicable law is as set out in the decision of McRuer J. in Bardal v. The Globe and Mail (1960), 1960 CanLII 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.), at p. 145: “The reasonableness of the notice must be decided with reference to each particular case”. In his decision, McRuer J. listed a number of factors to be considered. The list of factors he identified is not exhaustive.
[26] Relying on those factors and others, I find as follows with respect to Mr. Saikaly’s employment with the defendant:
Although lacking a formal accounting designation, in the 12 years that he was employed by the defendant, Mr. Saikaly demonstrated the knowledge, skill, and trustworthiness to acquire and remain in the position of Office Manager;
Mr. Saikaly’s 12 years of service (from approximately age 48 to age 60) is deserving of consideration; and
At age 60, and lacking a formal designation, Mr. Saikaly is competing against younger and formally trained or educated individuals for a position equivalent to the one he held with the defendant.
[27] At para. 11 of the 2006 decision in Lowndes v. Summit Ford Sales Ltd. (2006), 2006 CanLII 14 (ON CA), 206 O.A.C. 55, the Ontario Court of Appeal concluded that (a) there is no upper limit for the number of months that constitute reasonable notice, and (b) generally, only in exceptional circumstances will a reasonable notice period exceed 24 months.
[28] For an individual at or over the age of 60, a notice period in excess of 30 months might be reasonable (Abrahim v. Sliwin, 2012 ONSC 6295, 2013 C.L.L.C. 210-004, at para. 25). It is not uncommon for individuals over the age of 62 and/or terminated from senior level positions to be entitled to 24 months’ notice. (See: Dawe v. Equitable Life Insurance Company, 2018 ONSC 3130; and Bovin et al v. Over the Rainbow Packaging Services Inc., 2017 ONSC 1143.)
[29] As the Office Manager of a construction company, Mr. Saikaly did not hold as high a level of position as did some of the plaintiffs in either of the two cases cited immediately above. Mr. Saikaly does not have the length of service that some of the plaintiffs in the cases cited above had. The plaintiff in Dawe was a Senior Vice President with 37 years of service. He was 62 years old when his employment was terminated. In Bovin, one of the plaintiffs was the General Manager-Controller with 20 years of service. She was in her mid-forties when her employment was terminated.
[30] I am satisfied that the nature and longevity of Mr. Saikaly’s employment with the defendant, his dedication to the defendant’s financial well-being, his age, and his lack of formal training support a 24-month notice period.
[31] I find that Mr. Saikaly is entitled to 24 months’ salary as compensation in lieu of notice: $138,286.80 (2 x $69,143.40).
b) Vacation pay
[32] Mr. Saikaly’s evidence, which I accept, is that when employed by the defendant he was entitled to up to five weeks’ vacation per year.
[33] The termination of Mr. Saikaly’s employment occurred in May 2018—prior to the most recent amendments to the Employment Standards Act, 2000, S.O. 2000, c. 41. Mr. Saikaly’s claim for vacation pay is based on the provisions of that statute and is limited to four per cent of his annual salary. Mr. Saikaly acknowledges that the recent amendments to that Act do not govern the calculation of the vacation pay to which he is entitled.
[34] I find that Mr. Saikaly is entitled to four per cent of the compensation payable in lieu of notice: $5,531.47 (4 % x $138,286.80).
c) Employee benefits
[35] Mr. Saikaly’s evidence, which I accept, is that he was entitled to employee benefits. He did not provide the court with a valuation of the benefits package. The only evidence before the court is an email from an insurance broker, sent to Mr. Saikaly, outlining the various forms of benefits provided as part of the defendant’s employee benefits package. That email is an exhibit to an affidavit from the administrative assistant at the office of counsel for Mr. Saikaly.
[36] Mr. Saikaly acknowledges that the evidence provided with respect to the value of the employee benefits is less than ideal. In the statement of claim, a request is made for an award of damages based on employee benefits valued at 15 per cent of Mr. Saikaly’s salary. On the return of the motion, in acknowledgement of the shortcomings in the evidence, Mr. Saikaly requested that the damages for employee benefits be valued at 10 per cent of his salary.
[37] There is no evidence as to the cost to Mr. Saikaly if he were to purchase insurance coverage (life, accidental death and dismemberment, dental, medical, drugs, etc.—as outlined in the aforementioned email) to replace the benefits to which he was entitled as an employee of the defendant.
[38] Employee benefits valued at 15 per cent of an individual’s salary fall at the high end of the range for the value of such benefits. I am satisfied that 10 per cent of Mr. Saikaly’s annual salary is a reasonable estimate of the value of the employee benefits, including on a replacement-cost basis.
[39] I find that Mr. Saikaly is entitled to ten per cent of the compensation payable in lieu of notice: $13,828.68 (10 % x $138,286.80).
d) Summary
[40] The defendant shall pay to Mr. Saikaly damages totalling $157,645, calculated as follows:
Compensation in lieu of notice $ 138,286.80
For employee benefits $ 13,828.68
For vacation pay $ 5,531.47
Total $ 157,646.95
Rounded to $ 157,645.00
Issue No. 3 - Revision of the Record of Employment
[41] Based on the finding made that Mr. Saikaly was terminated without cause, the ROE requires revision. Mr. Saikaly’s entitlement to Employment Insurance Benefits has been negatively affected because of the contents of the ROE in its present form.
[42] Mr. Saikaly is entitled to the declaration requested requiring the defendant to revise the ROE to reflect that Mr. Saikaly was terminated without cause. Given that the defendant delayed by over four months in providing Mr. Saikaly with an ROE following the termination of his employment, a deadline is set by which the defendant is to provide Mr. Saikaly with a revised ROE. The defendant shall do so within 20 days of the date on which it is served with the order taken out pursuant to these reasons.
Title of Proceeding
[43] The title of proceeding identifies the defendant as “Akman Construction Ltd.” In the fresh as amended notice of motion, the plaintiff seeks an order that the title of proceeding be amended nunc pro tunc to “Akman Construction Inc.” Mr. Saikaly’s evidence is that he was employed by Akman Construction Inc. The “Employer’s Name and Address” as set out in the ROE identifies the employer as “Akman Construction Inc.”
[44] The notice of intent to defend delivered states, “The Defendant, Ackman (sic) Construction Ltd., intends to defend this Action.” There is nothing in the record to indicate that the misnomer of the defendant caused any confusion, resulted in the wrong party being served with the originating process, etc. I find that there is no prejudice to the defendant if the title of proceeding is amended as requested. The requisite order is reflected below in the Disposition section of these reasons.
Costs
[45] At the conclusion of the motion for default judgment, counsel for Mr. Saikaly filed a costs outline with the court. Mr. Saikaly requests costs of the action on a substantial indemnity basis as follows:
Fees $ 6,850.00
Counsel fee for motion $ 800.00
Sub-total (fees) $ 7,650.00
HST on fees $ 994.50
Disbursements (incl. HST) $ 627.67
Total $ 9,272.17
Rounded to $ 9,270.00
[46] The costs sought do not include costs associated with the motion record filed originally (i.e. for the return of the motion on January 8, 2019). Those costs were not included because the supplementary motion record prepared is more fulsome than was the original motion record. To their credit, the plaintiff and his counsel recognized that it would not be reasonable for the plaintiff to seek costs that include duplication of effort.
[47] The fact that the defendant retained counsel and ultimately chose not to defend the action is not conduct in litigation deserving of an elevated costs award (Bovin at para. 20). I am, however, concerned by the defendant’s conduct in (a) delaying by five months before issuing an ROE, (b) making allegations of wrongdoing that were never particularized, and (c) failing to give Mr. Saikaly an opportunity to address the allegations before the decision was made to terminate his employment. The defendant’s conduct in that regard is not litigation conduct, per se. That conduct, however, left Mr. Saikaly with no option but to proceed with litigation. I find that Mr. Saikaly is entitled to his costs of this action on a substantial indemnity basis.
[48] I find that the quantum of costs claimed is reasonable.
[49] The defendant shall pay Mr. Saikaly his costs of this action, on a substantial indemnity basis, inclusive of fees, disbursements, and applicable HST, in the amount of $9,270.
Disposition
[50] I order as follows:
The title of proceeding shall be amended such that the defendant is named as “Akman Construction Inc.”
The amended title of proceeding shall be used in every document served or delivered in this action subsequent to the date of this order.
The defendant shall pay to the plaintiff damages in the amount of $157,645.00.
The defendant shall, no later than 20 days after being served with a copy of the order taken out pursuant to these reasons:
a) Amend the Record of Employment issued to the plaintiff in October 2018;
i) Deleting from the “Comments” section the sentence, “He was terminated with cause and there is currently an ongoing court case”;
ii) Replacing that sentence with the phrase, “Dismissal without cause”; and
b) Provide the amended ROE to the plaintiff by sending same by courier to the office of counsel for the plaintiff.
- The defendant shall pay to the plaintiff his costs of this action, on a substantial indemnity basis, and in the amount of $9,270.00.
[51] The plaintiff is entitled to pre-judgment interest, as claimed, in accordance with ss. 127 and 128 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The plaintiff is also entitled to post-judgment interest pursuant to sections 127 and 129 of that Act.
Madam Justice Sylvia Corthorn
Released: January 31, 2019
COURT FILE NO.: CV-18-77102
DATE: 2019/01/31
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
ANTHONY SAIKALY
Plaintiff
– and –
AKMAN CONSTRUCTION LTD.
Defendant
REASONS FOR JUDGMENT
Madam Justice Sylvia Corthorn
Released: January 31, 2019