Court File and Parties

COURT FILE NO.: CV-20-647785

MOTION HEARD: 20210804

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Gaitri Awdhan, Plaintiff

AND:

Thrifty’s Inc. (2005), Defendant

BEFORE: Master Jolley

COUNSEL: Jean-Alexandre de Bousquet, Counsel for the Moving Party Plaintiff

Joshua Suttner, Counsel for the Responding Party Defendant

HEARD: 4 August 2021

REASONS FOR DECISION

[1] The plaintiff brings this motion for production of certain financial records of the defendant. She also sought production of the signed and dated versions of the warning letters and improvement plans, which the defendant has agreed to make best efforts to produce. If they are no longer available, they are to be listed in schedule C of the defendant’s affidavit of documents so that the plaintiff knows whether or not they ever existed. Counsel have settled all other production issues that were contained in the plaintiff’s motion record.

[2] The defendant brings a cross motion for an order striking the provision of the statement of claim that references its financial performance and for an order that the plaintiff produce her employment insurance documentation. Counsel have settled all other issues that were contained in the defendant’s cross motion record.

The Plaintiff’s Motion

[3] The plaintiff seeks production of the defendant’s 2019 and 2020 financial statements, its quarterly profit and loss statements for 2020, quarterly income statements for 2020 and monthly and/or quarterly payroll statements for 2020 (the “financial records”).

[4] She takes the position that the financial records are relevant to her wrongful dismissal claim and her claim for bad faith damages. She relies on the underlined portion of paragraph 30 of her amended statement of claim which reads as follows:

30. The Plaintiff further alleges that the Defendant knew or ought to have known that it did not have cause to terminate the Plaintiff’s employment. The Plaintiff alleges that the Defendant fabricated reasons for her termination as part of cost-saving measures to offset financial losses incurred during the global COVID-19 Pandemic.

[5] She seeks punitive, aggravated or bad faith damages as a result of this alleged conduct.

[6] The defendant has stated in its factum and on this motion that “it has not denied that COVID caused a negative impact financially. That matter is not “at issue” in this action.” It indicated it is prepared to amend its statement of defence to formally make this admission and is hereby directed to do so. But no party should be taken by surprise by the admission that a clothing retailer in a large shopping centre was negatively impacted financially by the pandemic. The plaintiff’s own affidavit notes that the store was shut down due to COVID-19 from 26 March 2020 to 23 June 2020.

[7] While the test for productions is relatively low, the moving party must still demonstrate that the financial records would be relevant to an issue in the proceeding. In my view, it is not enough to demonstrate that the defendant’s financial performance is raised in the pleading. What must be demonstrated is that the financial records would be relevant to the allegation that the defendant disguised the plaintiff’s termination as being for cause because of its admitted financial difficulties. I cannot find that the financial records would enable the plaintiff to advance her case on that point or to damage the defendant’s case or lead to a train of inquiry per se that would have either of those consequences (Apotex Inc. v. Richter Gedeon Vegyeszeti Gyar RT 2010 ONSC 4070 at paragraphs 70 and 117).

[8] I find there is an insufficient causal connection between the financial records requested and the plaintiff’s allegation. Even if they show a steep loss, which is quite likely, it does not assist the plaintiff in proving the matter in issue, which is whether the employer decided to allege cause it knew it did not have when it terminated the plaintiff as part of its cost saving measures.

[9] The defendant points to the fact that it was advertising to hire for the same position that the plaintiff occupied the day after her termination, which militates against the termination being driven to save costs. This may be relevant to defend the allegation at trial but I have not relied on that in determining the relevance of the financial records on this motion.

[10] What might be relevant is whether the defendant had a plan or policy to pare down the workforce in light of the pandemic. The plaintiff has asked the defendant if there were any “statements, reports, memoranda, correspondence, communications and other material which came into existence for the purpose of exploring and/or discussing employee layoffs and/or terminations as cost-saving measures to offset financial losses incurred during the global COVID-19 Pandemic”. This might demonstrate a plan to terminate employees, or at least the plaintiff, without providing termination pay and thereby link the defendant’s financial situation to its position that the plaintiff was terminated for cause. In response to the plaintiff’s inquiries, the defendant advised that there were no such documents.

[11] If the plaintiff believes the defendant carried out mass terminations due to the pandemic, she is free to ask about those but the financial records will not of themselves demonstrate whether there was any such terminations or plans for such terminations.

[12] Addressing the payroll request in particular, neither a steady payroll nor a drop in payroll will assist the plaintiff in demonstrating that the defendant had an agenda terminate her for cause. First, payroll records may show a global payroll figure but they are unlikely to show the number of people terminated. Second, if the payroll statements disclosed a steady payroll, it could still be that employees were terminated, but were given pay in lieu of notice or working notice. In short, the payroll statements are unlikely to assist in demonstrating either any cost-saving measure or any financial losses. The other financial records will only demonstrate a loss, which the defendant is prepared to formally admit in an amended defence.

[13] The plaintiff argues that she cannot make out her bad faith claim without these documents. I disagree. If there are policies or documents that evidence such a cost savings plan, she may well be able to prove her case.

[14] Further, I note that paragraph 28 of the amended statement of claim alleges that the plaintiff is entitled to bad faith damages from the defendant for, inter alia, maintaining that it had cause to terminate her when it knew no such cause existed. She is free to make this argument without disclosure of the financial records, on the basis of the alleged complaints and the circumstances in which they were obtained.

[15] I find that the financial records are not relevant to the plaintiff’s claim that her termination was disguised as being for cause as part of the defendant’s cost-saving measures to offset financial losses.

[16] The plaintiff’s motion is dismissed.

The defendant’s motion

[17] Leaving aside whether the defendant can bring this motion under Rule 25.11 after having pleaded to the allegation and after having examined the plaintiff on it, the defendant advised that it would withdraw that portion of its motion seeking to strike the second sentence of paragraph 30 of the amended statement of claim reproduced as underlined, above, in the event the plaintiff’s motion was not successful. The impugned provision stands as a result and the plaintiff is free to examine the defendant on that issue.

[18] The defendant pursued its motion for production of the plaintiff’s employment insurance records. (It also initially sought production of any CERB payments, but the plaintiff advised that she did not receive any such payments.) The defendant accepts that the employment insurance records are not relevant in a wrongful dismissal claim, but argues that they are relevant in light of the plaintiff’s pleading that she suffered financial stress due to her for cause termination.

[19] Paragraph 28(d) of the amended claim states:

28(d) The plaintiff suffered severe emotional distress as a result of her wrongful termination. Given that the plaintiff was the sole income earner in her family, the wrongful termination put considerable financial pressure on herself and her family.

[20] To demonstrate the financial pressure she was under, the plaintiff produced hundreds of pages of documents demonstrating her debts (visa statements, collection agency letters, mortgage demands). The defendant argues that a level playing field requires that she provide a full financial picture that includes her funds from all sources including employment insurance.

[21] The plaintiff argues that, not only is employment insurance irrelevant as a matter of law, it is irrelevant as a matter of fact as it is repayable in the event the plaintiff succeeds at trial. It is effectively a government loan.

[22] The plaintiff relies on the dicta of the Supreme Court of Canada in Jack Cewe Ltd. v. Jorgenson 1980 CanLII 177 for the proposition that employment insurance benefits are “a matter between [an employee] and the employment insurance authorities, it does not concern the appellant company.”

[23] I note that quotation was in reference to the employer’s claim for a set off of any employment insurance payment against any wrongful dismissal damages. Here, the defendant does not seek the information to argue set off from any wrongful dismissal damages. It agrees, as to I, that that law is settled.

[24] The defendant seeks the information in order to respond to the plaintiff’s allegation that she suffered emotional distress due to the considerable financial pressure she was under and to respond in some measure to the volume of bills and demands that the plaintiff has produced. Employment insurance is not relevant to the plaintiff’s wrongful dismissal damages but may be relevant to the bad faith/moral damages claim she advances.

[25] In my view, unlike Jack Cewe v. Jorgenson, here the plaintiff has made her ability to pay a matter of concern to the defendant by pleading that she was placed in considerable financial pressure as a result of her termination.

[26] If the plaintiff intends to demonstrate dire financial straits by showing the liability side of her ledger, it seems only fair that she also disclose the asset side of the ledger, including all income received. She may argue at trial that this was a loan, similar to any other loan she may have obtained to pay her bills. It may be that she will demonstrate that she remained under considerable financial pressure, even with the receipt of employment insurance (if she, in fact, received such funds), but having put her ability to pay her bills in issue, I find her income, including any employment insurance, to be relevant. The plaintiff remains free to argue at trial that the employment insurance payments should not be taken into account.

[27] The defendant’s motion is granted.

Costs

[28] Each party has filed a costs outline. If they cannot agree on costs by September 10, they may each file cost submissions no more than three pages in length to my assistant trial co-ordinator Ms. Meditskos at Christine.Meditskos@ontario.ca.

Master Jolley

Date: 12 August 2021