Court File and Parties

COURT FILE NO.: DC-20-00000002-00 / SC-18-115693-00 DATE: 2021-06-23 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Janna Pekker Appellant/Plaintiff

– and –

Bravo Logistics Corporation Respondent/Defendant

COUNSEL: Walter Yoo and Andrew Monkhouse, Counsel for the Appellant/Plaintiff Wade Morris and Beth De Yoe, for the Respondent/Defendant

HEARD: June 18, 2021

REASONS FOR DECISION ON APPEAL

VALLEE J.

[1] This is an appeal of the decision of Deputy Judge A. Davis set out in his Reasons for Judgment dated September 9, 2019 and his Supplementary Reasons dated October 15, 2019.

Background

[2] The matter concerns the appellant’s termination in 2017 from a job that she held for seven years, working for the respondent. The facts set out in this paragraph were uncontested at trial. There was no written employment contract. The appellant was an accounting assistant and was paid minimum wage. New computer software that the respondent purchased made her job redundant. On October 23, 2017, the respondent gave her seven weeks’ notice of termination. At a meeting between the appellant and management on October 25, 2017, the appellant stated that she wanted working notice and an additional three weeks so that she could continue until the end of the year. She testified that she preferred to work and be on the payroll rather than receive a lump sum payment. The respondent agreed to her request, making the working notice ten weeks (the “ten week agreement”). The respondent sent the appellant a letter dated October 25, 2017 confirming the agreement.

[3] At this point, the evidence diverged. The appellant stated that in the October 25, 2017 meeting, she told the respondent that she had two weeks of pre-scheduled vacation and would take it shortly. The respondent denied that she had two weeks of pre-scheduled vacation and that she advised that she would be taking the vacation time. The appellant was not at work for two weeks starting on November 21, 2017. The respondent concluded that she had abandoned her job. It sent her another letter dated November 21, 2017 stating this and that she was not to return to work owing to her unethical behaviour. At this point, five weeks of working notice had been paid.

[4] The appellant commenced an action claiming, among other things, common law notice. The trial judge determined that the parties had reached an agreement on ten weeks of working notice. The respondent breached that agreement when it told the appellant not to return to work. The trial judge determined that the appellant was entitled to be paid the balance of the ten week agreement, being the additional five weeks of working notice, and awarded her that amount.

Grounds of Appeal

[5] The appellant states that the trial judge erred in concluding that the parties reached an agreement for ten weeks’ working notice because he did not correctly apply the test for a contract. He failed to address the issue of lack of consideration. If there was an agreement, the trial judge correctly determined that the employer had breached it when it told the appellant not to return to work; however, he erred in concluding that the contract had been repudiated. The breach constituted a rescission. The trial judge also erred in assessing damages. The contract was rescinded; therefore, the appellant was entitled to common law notice.

Standard of Review

[6] The appellant states that the trial judge erred questions of mixed fact and law. The standard of review is palpable and overriding error.

Issues to be Determined

[7] Did the trial judge err by improperly applying the correct legal test when he concluded that the parties reached an agreement that the working notice period was ten weeks?

[8] If there was an agreement, did the trial judge err by improperly applying the correct legal test when he concluded that the respondent’s conduct in breaching the agreement constituted repudiation rather than recission?

Did the trial judge err by improperly applying the correct legal test when he concluded that the parties reached an agreement that the notice period was ten weeks?

[9] Most employment law cases turn on their facts. The appellant provided a number of cases on this appeal; however, most of them can be easily distinguished. For example, some concerned employment where there was an agreement at the outset that contained termination provisions. Some concerned termination of executives with longer service records. Others concerned employees with fixed term contracts. Yet others concerned employees who were terminated in harsh circumstances. None of those issues arose in the appellant’s circumstances. These cases did not provide much assistance.

[10] The appellant stated that the respondent did not plead that the parties reached an agreement on the issue of the amount of notice. Therefore, the trial judge was outside of the scope of the pleadings when he found that there was a ten week agreement. I do not accept this argument. In paragraph 26 of the amended statement of defence, the respondent pleaded that the parties entered into an agreement regarding ten weeks of working notice. Accordingly, the issue was properly before the trial judge.

[11] The appellant states that the trial judge failed to address the issue of consideration. She states that there was no “fresh consideration” for the ten week agreement. Therefore, the agreement was not binding. The appellant did not plead lack of consideration. Even if she had, I do not accept this argument. There was a quid pro quo. While the appellant was entitled to seven weeks of statutory notice, she asked for an additional three weeks of working notice. The employer had no need to continue her employment. It agreed to allow her to work for the three weeks and of course pay her. The trial judge does not specifically state that there was consideration for the ten weeks agreement. Nevertheless, there was evidence of consideration before the trial judge.

[12] The appellant states that even if there was a binding agreement, it was unconscionable. This issue also was not pleaded. Therefore, the trial judge made no error by not considering it.

[13] The appellant referred to the ten week agreement as a settlement; however, that term is more appropriately used to describe the resolution of litigation. The ten week agreement did not resolve litigation.

[14] According to Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158, at para. 40, an agreement to displace an employee’s common law notice entitlement does not require any specific phrase as long as the meaning can be “readily gleaned” from the language agreed to by the parties.

[15] I find that the trial judge made no error in concluding that the ten week agreement was valid, enforceable and rebutted the presumption of common law reasonable notice. The evidentiary record before him supported these findings.

If there was an agreement, did the trial judge err by improperly applying the correct legal test when he concluded that the respondent’s conduct in breaching the agreement constituted repudiation rather than recission?

[16] Both parties agreed that the respondent breached the ten week agreement when it directed the appellant to not return to work because she abandoned her employment. The appellant argues that the breach meant that the agreement was at an end and resulted in her entitlement to common law severance, although recission was not pleaded. Even if it was, I do not accept this argument. An agreement is rescinded when the conduct of the breaching party deprives the other party of substantially the whole benefit of the agreement. The respondent had paid the appellant for five of ten weeks of working notice at the time of the breach. She had received half the benefit of the agreement. The breach did not deprive her of substantially the whole benefit of the agreement. The trial judge correctly viewed the respondent’s breach as a repudiation of the agreement. The appellant was entitled to be put back into the position she would have been in but for the breach. The trial judge did that by awarding her the remaining five weeks of pay, the balance of the ten weeks. The remedy flowed directly from the parties’ evidence.

Conclusion

[17] I find that the trial judge made no error in his factual findings or the application of the law to them. The appeal is dismissed.

Costs

[18] Respondent’s counsel undertook this appeal on a very modest flat fee of $2,950 plus HST, totaling $3,333.50. Appellant’s counsel agreed that this would be an appropriate amount of costs to pay if the appellant were unsuccessful. Accordingly, the appellant shall pay to the respondent $3,333.50 for costs.

Justice M.E. Vallee

Released: June 23, 2021