COURT FILE NO.: CV-16-550450 DATE: 20230718 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
SUZANNE SEEPERSAUD-SINGH Plaintiff – and – PET SOCIAL INC., MICHAEL SINGH, WAYNE RAWLINS, CLIFTON RAWLINS Defendants
Counsel: Sean Carter, for the Plaintiff Clifton Rawlins, personally and on behalf of Pet Social Inc. No one appearing for the balance of the Defendants
Heard: March 8, 9, November 21, 22, 23, 24 and December 16, 2022
a.p. ramsay j.
A. Overview
[1] This action commenced, judge alone, on March 8, 2022. On March 9, 2022, the trial was adjourned at the request of the plaintiff, who required medical care. The trial continued in November 2022.
[2] The plaintiff’s action arises from investments made in a family business, being the corporate defendant, and all her labour performed in that business. She suggests that she was unwittingly involved in indentured servitude. Her compliance, she explains, was made possible because of her abusive relationship with her common law spouse, who is a party defendant. He is now behind bars. The plaintiff ended her relationship with the defendants in November 2015 and commenced this action soon thereafter.
[3] The defendant, Michael Singh, was the plaintiff’s common law spouse and is a former director of the company. All three individual defendants, Michael Singh, Wayne Rawlins and Clifton Rawlins are brothers. The defendant, Clifton Rawlins was an officer (Treasurer) and director. He and his brother, Wayne Rawlins, each own 50 per cent of the company.
[4] The defendants, Michael Singh and Wayne Rawlins, did not participate at the trial, though notice of the trial was given to them. The defendant, Clifton Rawlins is self-represented and represented his interest as well as those of the corporate defendant. By order of Associate Justice Graham, dated February 12, 2020, Mr. Rawlins was granted leave to represent the corporate defendant, Pet Social Inc., as a non-lawyer. Mr. Rawlins did not testify or call any evidence. He was called by the plaintiff as part of the plaintiff’s case under r. 53.07(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as he had not testified and indicated he would not testify on his own behalf. Mr. Rawlins’ Closing Submissions was replete with information that was not in evidence before the court and is therefore not evidence before the court.
B. Motion(s) to Amend Pleadings
[5] In this action, the pleadings are of particular importance. The statement of claim was issued in April 2016. The plaintiff claims against all defendants, jointly and severally, damages for unpaid wages, including overtime and vacation pay. In the alternative, she seeks a declaration that the defendants have breached their obligations to act in good faith, and an order for unspecified damages to be determined at trial, and further in the alternative, a declaration that she has a constructive trust interest in Pet Social Inc., as well as punitive, aggravated, and/or moral damages in the amount of $150,0000 against the various defendants.
[6] During the plaintiff’s Opening Submissions, claims were mentioned that were not pleaded against the defendants, including negligence, conspiracy, misappropriation of funds and conversion. The plaintiff then brought a motion at trial to add new causes of action and claims potentially affecting non-parties. The motion was opposed by Clifton Rawlins. I dismissed the motion as the proposed amendments were significant and substantial, and as conceded by counsel for the plaintiff, the two-year limitation period, subject to discoverability, would apply.
[7] In her closing submissions, dated December 16, 2022, the plaintiff sought, without notice to the parties, and specifically Michael Singh, monetary relief against Michael Singh for battery and assault, which the plaintiff says is admitted in the plaintiff’s Request to Admit, pursuant to r. 51.03 and by virtue of the evidence at trial. I would dismiss this attempt to mount another motion to amend the pleadings in this fashion. The only statement of defence delivered in the action is with respect to the statement of claim issued in April 2016, while all defendants were represented by counsel. The present pleading does not include any tort claim. Any attempt to amend the pleading (indirectly) seven years after the commencement of the action, without notice to the party affected, and at the end of the trial is unfair and prejudicial to the defendant, Michael Singh. Aside from the undue delay, there is a presumption of prejudice where the limitation period has expired: Frohlick v. Pinkerton Canada Limited, 2008 ONCA 3, 88 O.R. (3d) 401, at para. 22.
C. Background
[8] The plaintiff dropped out of school in grade nine, leaving home at the age of 13. At the age of 16, she met the co-defendant, Michael Singh. He and the other individual defendants are brothers. She had three children in quick succession with Mr. Singh. She was a stay-at-home mom on social assistance. She started a dog breeding business in her home, Morkie and Morkie Poo. She claimed it was very successful and she made a lot of money. All the money made from the business was handed over to Michael Singh. She testified that this was the impetus for starting Pet Social Inc., as Michael Singh and the others saw how much money could be made.
[9] Pet Social Inc. is a retailer of pet supplies and pet grooming services. She testified that the company was incorporated in April 2012. The statement of claim alleges the company was incorporated in October 2011, which is the start of the plaintiff’s claim for damages. She claimed she understood that she was one of the owners of Pet Social Inc. She alleges that she invested money and labour into Pet Social Inc. from conception, launching and managing it, and received no remuneration in return.
D. Issues to be determined
[10] The following issues are to be determined on this trial:
i. Was the plaintiff an employee of Pet Social Inc.? ii. Was the plaintiff an owner of Pet Social Inc.? iii. Is the plaintiff entitled to damages for unjust enrichment? iv. Can the corporate veil be pierced to find the directors personally liable for the plaintiff’s damages? v. What are the plaintiff’s damages for unpaid wages? vi. Is the plaintiff entitled to aggravated and/or punitive damages?
C. Analysis
i. Was the plaintiff an employee of Pet Social Inc.?
[11] The plaintiff pleads that she was an employee of Pet Social Inc. or, in the alternative, was a contractor dependent upon Pet Social Inc. She maintains that she was not paid for her work and her overtime hours. Her evidence is that she worked for the company between October 2011 to November 11, 2015. At the trial, when asked whether she entered into any employment agreement, her evidence was that she did not because she understood that she was an owner. On cross examination, she stated she never signed an employment contract because she was the owner. She never recorded her hours as a business owner.
[12] The defendants admit in their statement of defence that the plaintiff was an employee of Pet Social Inc. for a four-year period from October 2011 to December 2015. The defendants plead that her job duties included sales, daycare, and grooming. The plaintiff’s evidence is that she was an owner and performed managerial duties.
[13] She was involved in a lot of the leg work that occurred before the business was up and running. The plaintiff testified, in some detail, with regard to the roles that she assumed working at Pet Social Inc. She carried out a great deal of leg work before the business was launched including finding the realtor. She testified that she worked between 13- 16 hours a day. She testified that she worked in the in the retail part of the store, performed managerial functions, and was the public face of the company. Her evidence that she performed managerial duties was not seriously undermined at trial. She was challenged on the number of hours worked, and whether she was in fact an owner.
[14] The business was extremely successful and there was a lot of media attention. Pet Social Inc. was the first non-franchise operation catering to pet supplies to open a second location within two years. She set up a PR event before the opening, with Toronto Animal Services Inc., which brought a lot of people and donations. She did a TV spot on dealing with some exclusive sales at the store. She went on a lot of media interviews and held herself out as the owner of Pet Social Inc. The defendants never raised her holding herself out as the owner. The defendants asked her to change her name so that their names could be represented with all the media events that she was doing. She was presented with an award by an MPP for her work initiative, through Pet Social Inc., to adopt out feral cats. She made deals and was “on the BIA as a business owner”. She also served on the Resident’s Association to promote the business.
[15] The defendant, Clifton Rawlins, was called by the plaintiff to testify at the trial. The plaintiff had testified that Pet Social did so well that within 18 months, they opened another store. He did not challenge the plaintiff’s evidence that he never worked at Pet Social Inc., except for being there in the beginning taking measurements, or the plaintiff’s evidence that Wayne Rawlins was only at the store once. She stated that it was always her, or Michael Singh, or another owner. She would open the store and stay until close. In the first year, she worked seven days a week, 14- 16 hours a day. By the third year, she was working the same number of days, but less hours, but was there every single day as she was the only one who could manage the operations. She did not document her time because she was an owner, and she trusted the defendants.
[16] The plaintiff’s evidence about the extent to which she worked and the duties she assumed, at least in the first year, was corroborated by her mother. The plaintiff’s mother, Leslie Horwood Jones, testified that she is a pet stylist, an occupation she has engaged in, off and on for 35 years. She worked at Pet Social Inc. in the first year, on commission, doing dog grooming. She was paid largely in dog food, and cash. She claimed her daughter was always there. She later learned the store belonged to the two brothers who were never there. Whenever someone came to store and asked for the owner or manager, the staff always directed the person to her daughter. Her daughter was always referred to as the owner and the manager. She observed a baseball player came in and CP24, and each time, the person or persons was directed to her daughter. Her daughter came up with the idea to help out the animals when Hurricane Sandy hit.
[17] Ms. Horwood Jones testified that her daughter was there seven days a week, 13 hours a day, and most of the time, she was there too. Part time people were hired much later, but nobody was hired on a full-time basis to help her out. She was proud of the operations. She stopped working those hours once things got underway with the grooming, but her daughter did not. On cross examination, the plaintiff testified that she would have to be at the store before it opened and as well, after the store closed. She had the opportunity to observe what went on at the store while she worked there.
[18] She was involved in the negotiations for contract employees. She claimed the defendants did not like dogs but were interested in the money that the business made. They did not appreciate that grooming was a significant part of their business. They did not understand the compensation structure for groomers. She was involved in the negotiation for the groomer, who had been a competitor, that she asked to come on board. I find the plaintiff’s evidence that she had managerial responsibilities to be very credible, and it was not seriously challenged by Mr. Rawlins. He himself offered no explanation as to who would be responsible for managing and supervising the store, if not the plaintiff, nor did he advance the names of anyone else who was managing the store during the four-year period.
[19] As for being remunerated for her service, the plaintiff testified that she never received any money at time while she worked at Pet Social Inc. She testified that she was never allowed to have money at home or at work. She was told by the defendant, Clifton Rawlins, that it was degrading for a woman to be asking for money. (Mr. Rawlins did not deny this though he was at the trial). She testified: “Clifton said to me specifically, it is really degrading for a woman to ever be asking for money”. Mr. Rawlins did not deny this at trial. She testified that: “I was given everything that I needed to exist, of course, that was the example that was given – a roof over my head. It is not a woman’s place to be dealing with money – asking questions for money.” Unwittingly, Mr. Rawlins’ own cross examination of the plaintiff and of her mother proved the plaintiff’s assertions, focusing, as it did, on the fact that one of her sons was in private school, and that his brother, Michael Singh, paid her bills and took care of her financial needs.
[20] On the evidence, I find that the plaintiff was a manager at Pet Social Inc.
[21] There is some uncertainty about the number of hours that the plaintiff worked and her overtime. While I accept that in those early days, she may have worked 13 or 14 hour days, especially to see the new store find its footing, both she and her mother testified that part time help was hired sometime after that first year. Her hours would have lessened, in my view, after she started to use the Point-of-Sale program which she herself noted performed many functions that she used to do by hand and could keep track of inventory and more. While the lack of records makes it difficult to determine, with any degree of specificity, the hours worked by the plaintiff, an average of 55 hours a week for the first year and, 50 hours a week for the remaining three years is not unreasonable, based on the evidence.
[22] As for remuneration, the plaintiff was not challenged on her evidence that she was never paid any salary, a portion of the profits or any other remuneration. She was told she had a roof over her head and was told “this is a family”. She testified that she was mocked by the defendant, Clifton Rawlins as to why she did not get a bank account. Mr. Rawlins did not cross examine her on this evidence although it involved him directly. Her evidence was not challenged by Mr. Rawlins.
[23] The defendants called no evidence to prove that the plaintiff was compensated for any of the years that they admit (in the statement of defence) that she worked at Pet Social Inc. The plaintiff indicted that she was told on numerous occasions that her work was in furtherance of the financial success of Pet Social Inc., of which she had an interest. The plaintiff’s mother testified that “it was a family thing”, even the kids would come in, but towards the end of her time there, they no longer did. She heard her daughter asking for permission to take money from the till to get food. If she purchased food for her daughter, and did not bring back a receipt, her daughter would get upset. She herself was paid, primarily, in dog food.
[24] The defendants have proffered no evidence to show that the plaintiff was compensated for her services except the suggestion, through questioning by Mr. Rawlins, that she was paid by virtue of the fact that her financial needs were taken care of by Michael Singh.
[25] Pet Social Inc. has a statutory obligation to establish a pay period and provide statements. I agree with the plaintiff that some inference should be drawn from the fact that Pet Social Inc. has produced no records to substantiate that the plaintiff was ever remunerated for her services. The plaintiff testified that at one point, she was asked to sign papers to say that she had been paid. Pursuant to s. 11(1) of the Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”), employers must establish a recurring pay period and pay wages earned during that period to their employees. The provision reads as follows:
11(1) An employer shall establish a recurring pay period and a recurring pay day and shall pay all wages earned during each pay period, other than accruing vacation pay, no later than the pay day for that period.
[26] Pursuant to s. 1 of the ESA, an “employer” includes “an owner, proprietor, manager…”, and an “employee includes “a person, including an officer of a corporation, who performs work for an employer for wages”.
[27] In this case, the defendants have not produced any document whatsoever to prove that the plaintiff ever received any wages while at Pet Social Inc. Section 12(1) of the ESA, provides that employers must provide a statement of wages, on the employee’s pay day. The provision reads: “a written statement to the employee regarding wages, setting out the pay period for the wages, the wage rate, gross amount of wages and how the amount is calculated (unless the information is provided to the employee in some other manner), the amount and purpose of each deduction from wages, any amount regarding room or board deemed to have been paid under section 23(2), and the net amount of wages paid to the employee”. Mr. Rawlins’ line of questioning, which suggested to both the plaintiff and her mother that her children were the beneficiaries of private school and his brother, Michael Singh, her common law spouse, “paid all her bills” merely served to corroborate the plaintiff’s version of events.
[28] On the whole, the plaintiff was a credible witness. In her mind, she was an “owner”, but ultimately, as she said, as her world got bigger, ironically because of the store, she decided to, in her words, “escape” the situation that she was in. The defendant, Clifton Rawlins did not deny or defend his brother’s physical and sexual assaults of the plaintiff or her evidence that she had to seek medical attention because of the violence that occurred during some of those incidents. She ultimately required treatment after leaving and making her escape. The plaintiff’s fear and distress, at times, and her difficulty testifying about the circumstances which led to her working four years without being paid, was palpable, even virtually.
[29] I find that Pet Social Inc. did not establish a pay period, nor did it pay regular earnings during her four years of service. In addition, Pet Social Inc. failed to pay her overtime pay for overtime hours worked, or to compensate her for statutory holidays, not taken, or vacation pay during those four years.
ii. Was the plaintiff an owner of Pet Social?
[30] The plaintiff testified that she made good money and was making a name for herself for training and nutrition but could not overbreed dogs. She testified that Michael Singh took all the money that she earned from breeding dogs. Her clients included prominent individuals. She later found out her business, Morkie and Morkie Poo, was registered in Michael Singh’s sister’s name. The concept of Pet Social Inc. grew out of her idea. The company was initially created as Urban Paws Inc., before Pet Social Inc. She found the real estate agent to secure the location in the summer of 2011. She sought out all the contractors to set the commercial space up and dealt with the various vendors and distributors. She testified that the store was ready to be open on April 25, 2012.
[31] The plaintiff has not established on a balance of probabilities that she had an ownership interest in the Pet Social Inc. store. Her belief is premised upon statements apparently made by the individual defendants and other family member. At times, her evidence suggests that if there was any contribution, it was an investment. Her own mother testified that “she wanted to invest in a store, and Michael was taking care of that”. The plaintiff’s evidence on when she started Morkie and Morkie Poo is not clear, save for that one of her sons, Brandon, was in junior kindergarten. Her breeding enterprise involved a family pet. She ran the breeding business for a few years.
[32] There is no evidence before me as to just how much money was or could have been generated by the Morkie and Morkie Poo dog breeding business, and, even as a guess estimate, how much money was handed over to the defendant, Michael Singh, if the plaintiff’s evidence were to be accepted. The moneys that that plaintiff indicates was invested in Pet Social Inc., would have made its way first into Urban Paws Inc., which was the first company formed. This is a separate company that the plaintiff says existed for a short period before Pet Social Inc. There is no evidence on how much of the plaintiff’s money, if any, then would have been funneled into Urban Paws Inc. before making its way into Pet Social Inc. There were two Business Plans before the court. The plaintiff labelled the version produced by Mr. Rawlins as a fraudulent and fake document. It was not made clear to the court whether the version that she produced was the one used to attract other contracts and agreements. Her version indicates that she would make a $50,000.00 investment into the business. I heard no evidence from the plaintiff that she made such an investment.
[33] Although she claimed that the money for Pet Social Inc. came from money made from Morkie and Morkie Poo’s, there is no evidence before me of how much income was generated from Morkie and Morkie Poo, and how much was invested in Pet Social Inc. I note that the plaintiff was a stay-at-home mother on social assistance, and she has not filed at this trial any income tax returns for the years that she was running the business showing business income. The income taxes in evidence for the years of 2013 and 2014 show no income earned or other income.
[34] The plaintiff testified that she dealt with the real estate agent. She did not indicate that she signed the first or second lease for the store. I can only presume that the lease would have had to been signed by someone with income and possibly assets. A noted above, the plaintiff was on social assistance. Her mother testified that she was a stay-at-home mom. The plaintiff has produced no income tax return showing any income at any time. On cross examination, the plaintiff admitted that Pet Social Inc. did not engage in breeding, which is distinct from her at home breeding enterprise.
[35] There is no evidence before me as to what contribution, if any, made by the plaintiff, made its way through Morkie and Morkie Poo, or Urban Paws Inc., a separate corporate entity, and into Pet Social Inc.
[36] I cannot find, on the evidence, that the plaintiff was an owner of Pet Social Inc. Urban Paws Inc. pre-dated Pet Social Inc. and although the plaintiff alleges that Pet Social Inc. originally operated under the name Urban Paws Inc., these are two distinct companies.
[37] Since the relief sought for a declaration that the plaintiff had a constructive trust interest in Pet Social Inc. was framed in the alternative to a claim for unpaid wages based on unjust enrichment, the issue perhaps, need not be determined by the court given my conclusion that she was an employee of Pet Social Inc. and has not been remunerated for her services.
iii. Is the plaintiff entitled to damages for unjust enrichment?
[38] The plaintiff’s claim for unjust enrichment is pleaded in the alternative to her claim for damages for unpaid wages and overtime. Given my conclusion that the plaintiff was an employee of Pet Social Inc., as admitted by the defendants, in my view I need not address the alternative relief for damages representing the claim for unpaid wages.
iv. Can the corporate veil be pierced to find the directors personally liable for the plaintiff’s damages?
[39] When asked if Pet Social Inc. had been wound up, Mr. Rawlins testified that after the lawsuit commenced, they took steps to close the business in 2016 or 2017. He indicated, at trial, that he only became a director on March 14, 2019, because Michael Singh was incarcerated.
[40] The claim before me is for damages and various declaratory relief against the corporate defendant and its directors. It is not a proceeding to enforce any rights the plaintiff may have directly against the directors under the ESA.
[41] The plaintiff relies on the common law or s. 81 of the Employment Standards Act, 2000, R.S.O. 2000, c. 41, s. 35.2, Schedule “B” to fix the individual defendants with personal liability for wages. I do not agree that either has any application in this case.
[42] Starting with the common law, a corporation is separate legal entity, and any obligations are its own. To find the directors personally liable in this case, the corporate veil would have to be lifted.
[43] The statement of claim does not allege fraud or wrongdoing on the part of the directors which may support the plaintiff’s implicit request that the corporate veil be pierced. The corporate veil will only be pierced when a corporation used by those who control it as an instrument of fraud or for some other improper purpose akin to fraud.
[44] Corporations can only operate through the directing mind of the corporation, but as the Ontario Court of Appeal stated in ScotiaMcLeod Inc. v. People’s Jewellers Inc. (1995), 26 O.R. (3d) 481 (C.A.) at p. 490-91, this does not mean that personal liability will follow. The Court stated:
A corporation may be liable for contracts that its directors or officers have caused it to sign, or for representations those officers or directors have made in its name, but this is because a corporation can only operate through human agency, that is, through its so- called "directing mind". Considering that a corporation is an inanimate piece of legal machinery incapable of thought or action, the court can only determine its legal liability by assessing the conduct of those who caused the company to act in the way that it did. This does not mean, however, that if the actions of the directing minds are found wanting, that personal liability will flow through the corporation to those who caused it to act as it did. To hold the directors of Peoples personally liable, there must be some activity on their part that takes them out of the role of directing minds of the corporation. In this case, there are no such allegations.
[45] Refusal to pay a debt because it is not seen as due and payable, or for some other business or even perverse reason, does not constitute a basis for piercing the corporate veil: see, Northwood Mortgage Ltd. v. Gensol Solutions Inc. (2005), 3 B.L.R. (4th) 322 (Ont. C.A.). In Kosmopoulos v. Constitution Insurance Co. of Canada, [1987] 1 S.C.R. 2, at para. 12, the Supreme Court of Canada explained the circumstances under which the veil could be lifted. The Court stated that:
As a general rule a corporation is a legal entity distinct from its shareholders: Salomon v. Salomon & Co., [1897] A.C. 22 (H.L.). The law on when a court may disregard this principle by “lifting the corporate veil” and regarding the company as a mere “agent” or “puppet” of its controlling shareholder or parent corporation follows no consistent principle. The best that can be said is that the “separate entities” principle is not enforced when it would yield a result “too flagrantly opposed to justice, convenience or the interests of the Revenue”: L.C.B. Gower, Modern Company Law (4th ed. 1979) at p. 112. I have no doubt that theoretically the veil could be lifted in this case to do justice, as was done in American Indemnity Co. v. Southern Missionary College, supra, cited by the Court of Appeal of Ontario. But a number of factors lead me to think it would be unwise to do so. [Emphasis added.]
[46] Since Kosmopoulos, the courts in Ontario have consistently looked to such factors as whether the corporation was incorporated for an illegal purpose, or where it is being used as a shield for improper or fraudulent conduct: Shoppers Drug Mart Inc. v. 6470360 Canada Inc., 2014 ONCA 85, 372 D.L.R. (4th) 90, at para. 43; Mitchell v. Lewis, 2016 ONCA 903, 372 D.L.R. (4th) 90, at para. 18, In 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 (C.A.), Laskin J.A. stated, at para. 68, as follows:
Typically, the corporate veil is pierced when the company is incorporated for an illegal, fraudulent or improper purpose. But it can also be pierced if when incorporated “those in control expressly direct a wrongful thing to be done”: Clarkson Co. v. Zhelka at p. 578. Sharpe J. set out a useful statement of the guiding principle in Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 (Ont. Ct. (Gen. Div.)), aff’d [1997] O.J. No. 3754 (C.A.): “the courts will disregard the separate legal personality of a corporate entity where it is completely dominated and controlled and being used as a shield for fraudulent or improper conduct.”
[47] As for the application of the ESA, s. 81(1) establishes certain circumstances where a director of a corporation will be liable for unpaid wages. The plaintiff relies on s. 81(1)(a) on the basis that the employer is insolvent. However, the provision is not applicable as it requires evidence that the employer Pet Social Inc. is insolvent and it also requires the employee has filed a claim for unpaid wages directly with the court-appointed receiver or trustee, and the claim remains unpaid. Section 81(1)(a) reads:
81 (1) The directors of an employer are jointly and severally liable for wages as provided in this Part if,
a) the employer is insolvent, the employee has caused a claim for unpaid wages to be filed with the receiver appointed by a court with respect to the employer or with the employer’s trustee in bankruptcy and the claim has not been paid;
[48] Mr. Rawlins did not understand the concept of winding up but on the evidence, they took steps to close the business but if one were to search, it still exists. It is not clear to me that means that the business is insolvent. He did indicate that a search would still disclose the company. His evidence is that he became a director in 2019 which suggests the business still exits. Upon the dissolution of the corporation, the corporation’s property escheats to the Crown in Right of Ontario: see s. 241 of the Business Corporations Act, R.S.O. 1990, c.B.16 ("OBCA"). In addition, the ESA provision relied upon by the plaintiff requires that a claim be filed and that the wages remain unpaid.
[49] I note that the plaintiff has not relied upon the ESA in her pleading. Of course, the defendants, particularly Mr. Rawlins who was present at the trial had no opportunity to address this issue. The same can be said of reference to s. 131 of the OBCA, only raised in closing, and not pleaded, in an attempt to attach personal liability against the defendant. It is highly prejudicial to all three individual defendants.
v. What are the plaintiff’s damages for unpaid wages?
[50] The plaintiff admits in her statement of claim that no written contract was entered into regarding her work at Pet Social Inc. In the absence of a written employment agreement, I agree with the plaintiff that she should be entitled to wages for the duration of the employment period, that is October 2011 to November 11, 2015, based on the statutory minimum wage in the ESA of $10.25 an hour.
[51] The plaintiff damages for wages for regular hours based on working full time at 40 hours a week (8 hours per day, 5 days per week) for 52 weeks per year, would amount to $21,320.00 a year.
[52] The amount for unpaid vacation pay, at a rate of at least 4% of her gross wages, would amount to $852.80 for each year, for a total of $22,172.80 for both unpaid wages and vacation pay per year.
[53] The plaintiff however seeks an amount to reflect the managerial role she assumed at Pet Social Inc. There was no evidence at trial as to what managers earn but there was some evidence that the employees, she supervised, who were hired earned between $30,000.00 and $40,000 a year. This evidence is unchallenged. In my view, the additional $10,000.00 a year above the minimum wage to reflect her role being sought by the plaintiff, as an annual salary, is eminently reasonable. Whether or not she had an ownership interest in the business, she was in fact the face of the business and the duties that she testified to performing were not challenged at trial.
[54] In my view, an annual income of $31,320.00, and vacation pay of $1,252.80 per year, or $32,572.80 is reasonable in the circumstances.
[55] In my view, the plaintiff’s evidence of overtime hours worked, while challenged, withstood cross examination.
[56] I would allow 15 hours a week for overtime in the first year and 10 hours a week in overtime, for years two to four.
vi. Is the plaintiff entitled to aggravated or punitive damages?
[57] The cases being relied upon by the plaintiff to support her claim for aggravated and punitive damages are all contract damages cases in the context of a wrongful dismissal action. Aggravated damages may be awarded against the employer where “the employer engages in conduct during the course of dismissal that is ‘unfair or is in bad faith’”: see Honda Canada Inc. v. Keays, 2008 SCC 39, [2008] 2 S.C.R. 362, at para. 57. However, “the normal distress and hurt feelings resulting from dismissal are not compensable”: see Honda, at para. 56. The plaintiff testified on cross examination that she was not terminated but rather she escaped. I took that to mean she quit. On the evidence before me, even the plaintiff and her mother thought Pet Social Inc. was a family business. The plaintiff was proud of the business and did all she could to make the business a success. The circumstances of her working for Pet Social Inc. are undoubtedly complex and unusual, but on the evidence, she was not terminated in the usual sense, and, in the result, the cases relied upon by the plaintiff to support this aspect of her claim are not applicable to these facts.
E. Disposition
[58] I therefore make the following disposition:
a) The plaintiff was an employee of Pet Social Inc. from October 2011 to November 2015. b) The plaintiff is entitled to damages for unpaid wages, including vacation pay, in the amount of $130,291.20. c) The plaintiff is entitled to overtime hours in accordance with paragraph 56 above, to be calculated. d) The plaintiff is entitled to pre-judgment interest in accordance with the provisions of the Courts of Justice Act, R.S.O. 1990, c. C.43. e) The claims for aggravated damages and punitive damages are dismissed. f) The claims against the defendants, Michael Singh, Wayne Rawlins and Clifton Rawlins, personally, are dismissed.
F. Costs
[59] If the parties are not able to resolve the issue of costs, I set the following schedule: i) the plaintiff shall deliver costs submissions (limited to five pages) and a Bill of Costs and computer-generated dockets within 30 days of the date of these Reasons; ii) The defendants shall deliver any Responding Costs Submissions 30 days thereafter. If the parties wish a conference to settle the terms of the judgment, a conference call may be convened through my assistant.
Justice A.P. Ramsay
Released: July 18, 2023
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
SUZANNE SEEPERSAUD-SINGH Plaintiff – and – PET SOCIAL INC., MICHAEL SINGH, WAYNE RAWLINS, CLIFTON RAWLINS Defendants
REASONS FOR JUDGMENT A.P. Ramsay J.
Released: July 18, 2023