COURT FILE NO.: CV-19-34
DATE: 2020/09/04
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Carolyn Kaminsky, Plaintiff/Moving Party
AND
Janston Financial Group, Defendant/Responding Party
BEFORE: Madam Justice Liza Sheard
COUNSEL: Dennis Touesnard, Counsel for the Plaintiff/Moving Party
Alycia Riley, Counsel for the Defendant/Responding Party
HEARD: Via ZOOM August 24, 2020
ENDORSEMENT
Overview
[1] This is a wrongful dismissal action. The plaintiff, Carolyn Kaminsky (“Carolyn”) had worked for the defendant, Janston Financial Group (“Janston”) for close to 18 years when her employment was terminated. Carolyn was paid the equivalent of 20 weeks’ salary. In this action, Carolyn claims damages equal to 20 months’ salary, plus $2,500 for lost bonus.
[2] The principal of Janston is Kaminsky’s sister-in-law, Jane Kaminsky (“Jane”).
[3] There were two motions before me. The first motion (“the Pleadings Motion”), which is the subject of this endorsement, was brought by Carolyn for an order striking out paragraphs 10 through 13 of Janston’s statement of defence (“the Defence”). These paragraphs fall under the heading “Performance Concerns” and purport to set out conduct on the part of Carolyn that would provide Janston with cause to terminate her employment. Carolyn asserts that at paragraphs 5 and 14 of the Defence, Janston has admitted that it terminated Carolyn on a “without-cause” basis. That admission was repeated by Jane when she was examined for discovery on behalf of Janston.
[4] The second motion is brought by Janston for an order requiring Carolyn to answer questions refused on her examination for discovery (“the Refusals Motion”).
[5] The two motions are connected: the paragraphs that Carolyn seeks to have struck from the Defence are those containing allegations of “performance concerns” and, for the most part, the questions refused by Carolyn on her discovery relate to the allegations of performance concerns.
[6] In the consolidated confirmation of motion, the parties agreed that the presiding judge would be referred to all the materials filed on both motions. However, in the course of submissions on the Pleadings Motion, the parties agreed that argument on the Refusals Motion should await the outcome of the Pleadings Motion. The Refusals Motion was adjourned accordingly.
Background
[7] Carolyn’s claim is brought under Simplified Procedure. The claim is dated February 15, 2019 and the Defence is dated March 27, 2019. Examinations for discovery of both parties took place on August 12, 2019. Jane was examined first on behalf of Janston, followed by the examination of Carolyn.
[8] When she was examined, Jane acknowledged that Carolyn was terminated without cause as evidenced by the following excerpt from the transcript of Jane’s examination:
- Q. And, she’s terminated without cause?
A. Right
[9] On her examination, Carolyn refused to answer 50 questions, mostly relating to alleged performance concerns, on the basis that they were not relevant because Janston had admitted that Carolyn was not terminated for cause.
[10] On December 9, 2019, Carolyn served a Notice of Readiness for Pre-Trial Conference (the “NOR”), the form by which a plaintiff states that they are ready for a pre-trial and is setting the action down for trial.
[11] After being served with the NOR, counsel for Janston advised Carolyn’s counsel that they had been instructed to bring the Refusals Motion. Those instructions were confirmed by email of January 15, 2020 in which Janston’s counsel advised that Janston would proceed with the Refusals Motion. Counsel also stated that Janston would not agree to set a date for the pre-trial conference or to set the matter down for trial, without Carolyn’s acknowledgement that Janston could thereafter bring the Refusals Motion and, if directed by the court, to conduct a further examination of Carolyn.
Preliminary Issue: Should Carolyn be Granted Leave to Bring the Pleadings Motion?
[12] Janston asserts that the court should not entertain the Pleadings Motion as it was brought by Carolyn after she served the NOR. I address that issue first, before addressing the merits of the Pleadings Motion.
[13] Carolyn acknowledges that she requires leave to bring the Pleadings Motion and that, although the Motion Procedure Form contains the usual clause asking for “such further and other relief as counsel may advise and to this Honourable Court may seem just”, Carolyn did not specifically seek leave to bring the Pleadings Motion prior to the hearing before me.
[14] In oral submissions, Carolyn sought leave to bring the Pleadings Motion. Caroline submits that leave ought to be granted because the Refusals Motion should be considered an “unexpected change in circumstances” such that a refusal to grant leave would be manifestly unjust (see Hill v. Ortho Pharmaceutical (Canada) Ltd. (1992), 11 C.P.C. (3d) 236, at para. 10).
[15] Janston opposes the granting of leave. In its factum and in oral submissions, Janston asserts that by filing the NOR, Carolyn signified that she was prepared to proceed to trial with the Defence, as drafted, and that there have been no substantial or unexpected changes that would justify the granting of leave. In particular, Janston disputes that the Refusals Motion constitutes a substantial or unexpected change.
[16] To better understand Janston’s argument, it is helpful to look at the positions taken by the parties which, Carolyn submits, led her to serve the NOR.
[17] Carolyn’s position is that in the Defence and when Janston’s representative was examined for discovery on August 12, 2019, Janston admitted that it had not terminated Carolyn for cause. Carolyn stated her position when she was examined for discovery, as seen in the following excerpt from the transcript of Carol’s examination for discovery (emphasis added):
[Ms. Riley] 349 Q. Did you relay any of this information to Janston upon discovery, and that you still retained confidential information of the business?
[Carolyn] A. No
350 Q. Why not?
MR. TOUSENARD: Don’t answer that. It’s not relevant.
MS. RILEY: It’s absolutely relevant.
MS. BURGESS[^1]: It is relevant.
MR. TOUSENARD: Well, what pleading have you made that this is at all relevant to, counsel? It’s a without-cause termination.
MS. BURGESS: Would you like us to amend our pleading?
MR. TOUSENARD: If you’re going to ask – I would like you to ask questions within the scope of your pleadings. That’s what I would like you to do.
MS. BURGESS: Well, we can –
MR. TOUSENARD: So would the Rules.
MS. BURGESS: We can always amend our pleading and then require your client to come back.
MR. TOUSENARD: And I’ll seek costs against you for doing it at the time you’ve chosen to do it as opposed to ahead of the examinations that you scheduled. It’s up to you, but you’re not asking questions that you didn’t plead. That’s ridiculous.
MS. BURGESS: Carry on. She’s already admitted that she has confidential information.
MS. RILEY: I’ll move past my next few questions.
[18] Despite the position taken above, Janston did not amend the Defence nor did Jansen bring the Refusals Motion until January of this year. Also, Janston never changed or expanded upon the evidence given by Jane, on behalf of Janston (referenced above), that Janston had terminated Carolyn without cause. Janston disclosed its intention to bring the Refusals Motion only after Carolyn served the NOR.
[19] Given Jane’s discovery evidence; the position taken by Carolyn on her examination for discovery that Janston had not pleaded cause; and the position taken by Janston’s counsel on Carolyn’s examination that Janston could always amend its pleading, I find that the Refusals Motion - brought only after Carolyn had filed her Notice of Readiness - was an unexpected and substantial change that it would be manifestly unjust to refuse to grant Carolyn leave to bring her motion.
Disposition on Leave to Bring Motion
[20] For the reasons set out above, I grant Carolyn leave to bring her motion to strike out portions of Janston’s Defence.
Motion to Strike
[21] As stated above, Carolyn asserts that paragraphs 10 through 13 of the Defence should be struck because Janston has admitted that Carolyn was terminated without cause.
[22] Paragraph 5 of the Defence reads as follows:
- Carolyn commenced employment with Janston Financial on or around November 18, 2000, in an administrative/clerical role and continued in this role until her employment was terminated without cause on or around November 6, 2018.
[23] I do not reproduce paragraphs 10, 11 and 12 of the Defence which, summarized briefly, allege that Carolyn: failed to carry out her employment duties in a loyal and diligent manner; was working for another business while on Janston time; and took advantage of Jane’s absence from work (due to health reasons) to further her misconduct, which resulted “in Jane performing many of Carolyn’s duties and subsequently to the elimination of Carolyn’s role within Janston Financial.”
[24] Paragraphs 13 and 14 of the Defence refer to the allegations set out in paragraphs 10, 11, and 12, and read as follows:
Carolyn’s conduct as outlined above was tantamount to wilful misconduct, and wilful neglect of duty that was neither trivial nor condoned by Janston Financial. As a result, Janston Financial had just cause to terminate Carolyn’s employment without reasonable notice, and Carolyn further forfeited her entitlement to notice of termination and any related entitlements pursuant to the Employment Standards Act, 2000 (the “ESA”).
Notwithstanding the above, Janston Financial terminated Carolyn’s employment on a without cause basis, due entirely to the fact that Carolyn is a family member and Jane was attempting to maintain familial harmony. In any event, Carolyn received all amounts earned and payable to her up to the date of termination of employment. Carolyn was also provided with salary continuation for a period of 20 weeks, which is equivalent to $21,398.85 and is in excess of her minimum statutory entitlements pursuant to the ESA. This was provided to Carolyn without any requirement to execute a release of claims, and again in keeping with the fact that Carolyn is a family member.
[25] Janston submits in its factum that, in paragraphs 10 through 13 of the Defence, “Janston plainly stated its intent to rely upon Carolyn’s conduct as cause for termination.” Janston further states that Carolyn “did not raise the issue of striking the Impugned Paragraphs until after oral examinations for discovery had taken place, and after Janston advised it would bring” the Refusals Motion. Janston asserts, therefore, that by her conduct, Carolyn concedes that the impugned paragraphs were not unduly prejudicial to her position or would result in an excessively long trial.
[26] Janston also submits that it is proper to plead the facts learned after termination, that would have entitled Janston to terminate Carolyn for cause. Further, that employers are not precluded from pleading cause because they have made a “goodwill” payment to the employee upon termination.
[27] While correct in law, Janston’s arguments are not supported by the facts as contained in the materials filed on either motion. In particular, nowhere does Janston claim that it discovered grounds to terminate Carolyn after it had paid her 20 weeks’ salary. Rather, the Defence states that Janston knew it had grounds to terminate Carolyn with cause but chose not do so.
[28] Finally, Janston submits that if court concludes that the Defence cannot be read to include the alternate defence of termination for cause, then Janston asks for leave to amend the Defence, with costs to be paid by Carolyn.
[29] Carolyn’s response to the positions taken by Janston is that hers is not a large claim and that only two issues need to be decided: 1. What notice is Carolyn entitled to receive? and 2. Has Carolyn mitigated her losses. Carolyn submits that to allow Janston to explore Carolyn’s alleged misconduct serves no proper purpose.
[30] Janston asserts that to strike portions of the Defence now prejudices Janston because it would deprive Janston of an affirmative defence, on which it had relied. By contrast, if the impugned paragraphs are not struck and Janston fails to establish that it had just cause to terminate Carolyn, then Carolyn would suffer no prejudice that could not be compensated for by costs. Thus, Janston would suffer a greater prejudice if paragraphs 10 through 13 were struck, than the prejudice suffered by Carolyn if the paragraphs remain.
[31] Carolyn submits that Janston would also require the leave of the court to withdraw the admission made by Jane, on behalf of Janston, that Carolyn was terminated without cause. Carolyn submits that such an order ought not to be granted on the evidence put before the court on the Pleadings Motion, which is that of a law clerk employed by counsel for Janston, whose evidence is based on information and belief.
Analysis and disposition
[32] The Pleadings Motion is brought pursuant to r. 25.11, which allows the court to strike out or expunge all, or part, of a pleading with, or without, leave to amend, on the ground that the pleading may prejudice or delay the fair trial of the action; is scandalous, frivolous or vexatious; or is a an abuse of process.
[33] Portions of a pleading that are irrelevant and inserted merely for colour and constitute “inflammatory attacks on the integrity of a party” should be treated as scandalous and struck out under r. 25.11 (see Rare Charitable Research Reserve v. Chaplin, 2009 CarswellOnt 5530, at para. 22).
[34] I accept the law is as set out in Janston’s factum that
(1) a payment to an employee at the time of termination would not preclude an employer from subsequently asserting termination for cause (see Matheson v. Matheson International Trucks Ltd. (1984), 4 C.C.E.L. 271, at paras 4, 7; and
(2) an employer is entitled to assert after-acquired cause for termination of employment when facts are discovered by the employer after dismissal that were unknown at the time of dismissal (see Lake Ontario Portland Cement Co. v. Groner, 1961 CanLII 1 (SCC), [1961] SCR 553, at pp. 563-64.
[35] What I do not accept is that either of the principles apply to the Defence.
[36] Paragraph 5 of the Defence is unequivocal: Carolyn was terminated without cause.
[37] Paragraph 14 of the Defence is also unequivocal: although Janston believes it was entitled to terminate Carolyn for cause, it did not do so.
[38] The evidence given by Jane when she was examined for discovery on behalf of Janston is entirely consistent with Janston’s pleading and a reasonable interpretation of Janston’s position that Janston did not terminate Carolyn for cause. No evidence was put before me on this motion that Jane either changed or corrected her answer; nor did Jane say that although Carolyn had been terminated without cause, for the purposes of the Defence, Janston was asserting termination for cause.
[39] Similarly, when Carolyn refused to answer questions that appeared to have their focus on “performance concerns”, Janston’s counsel did not say that Carolyn had misread or misunderstood the Defence; rather, Janston’s counsel said that Janston could always amend its pleading.
[40] Janston did not amend its pleading.
[41] Based on the evidence put before me, I conclude that paragraphs 10 through 13 do not relate to the elements of the defence raised by Janston and are, in fact, irrelevant. I therefore grant the relief sought in the Pleadings Motion and strike from the Defence paragraphs 10, 11, 12 and 13.
[42] As there was not proper or sufficient evidence on which to grant the relief sought by Janston that it be permitted to amend the Defence, including that absence of a draft amended Defence, I do not grant that relief here. This order is, however, made without prejudice to the right of Janston to seek to amend the Defence.
The Refusals Motion and Costs
[43] The parties may contact the trial coordinator to schedule a time for oral submissions with respect to the Refusals Motion.
[44] As the Pleadings Motion and the Refusals Motion were intertwined, I reserve any decision on costs of the Pleadings Motion to be determined by me at the conclusion of the Refusals Motion.
Justice L. Sheard
Date: September 4, 2020
COURT FILE NO.: CV-19-34
DATE: 2020/09/04
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Carolyn Kaminsky, Plaintiff/Moving Party
AND
Janston Financial Group, Defendant/Responding Party
BEFORE: Madam Justice Liza Sheard
COUNSEL: Dennis Touesnard, Counsel for the Plaintiff/Moving Party
Alycia Riley, Counsel for the Defendant/Responding Party
ENDORSEMENT
Sheard J.
Released: September 4, 2020
[^1]: Co-counsel for Janston.