Date: 20011031
Docket No.: CA 170827
NOVA SCOTIA COURT OF APPEAL
[Cite as: Levesque Beaubien Geoffrion Inc. v. Barakett, 2001 NSCA 157]
Glube, C.J.N.S.; Freeman and Cromwell, JJ.A.
BETWEEN:
LEVESQUE BEAUBIEN GEOFFRION INC.
Appellant
- and -
ALLAN T. BARAKETT
Respondent
__________________________________________________________________
REASONS FOR JUDGMENT
__________________________________________________________________
Counsel: Jonathan C.K. Stobie, Q.C. and Rebecca Saturley for the appellant
David S. Green and Victor J. Goldberg for the respondent
Appeal Heard: October 3, 2001
Judgment Delivered: October 31, 2001
THE COURT: Appeal dismissed per reasons for judgment of Freeman, J.A.; Glube, C.J.N.S. concurring; and Cromwell, J.A. concurring by separate reasons.
FREEMAN, J.A.:
[1] The respondent Allan T. Barakett was a preferred share specialist in a brokerage house when he was displaced upon the merger of his employer, Levesque Beaubien Geoffrion Inc. with his former employer, First Marathon Securities Limited, both of which became part of National Bank Financial. Mr. Barakett refused the offer of a severance package including four months’ pay in lieu of notice and sued for wrongful dismissal.
[2] The Supreme Court of Nova Scotia found there was unfairness in the manner of his dismissal and awarded him 17 months’ notice. The employer has appealed.
[3] The parties agreed that Mr. Barakett had been employed by Levesque Beaubien Geoffrion from July 24, 1995, until August 16, 1999, when he was terminated without just cause or near cause. The appellant acknowledged that he was a hard worker and a dedicated employee. Mr. Barakett had created the role of preferred share specialist at Levesque Beaubien Geoffrion and the working capital at his disposal was increased from $1,000,000. to $5,000,000. over which he had leverage discretion that could effectively triple that amount. He managed the firm’s own $25,000,000. preferred share portfolio. He was paid by commission only and his reported commission income ranged from $58,000. in 1995 to $458,000. in 1997, averaging $35,278.50 per month.
[4] In the fall of 1998 he was told he was being considered for promotion to vice-president. In April, 1999, Mr. Barakett met with Luc Paiement, a senior executive vice-president of the appellant. They discussed Mr. Barakett’s level of compensation, but it remained unchanged at 40 to 50 per cent of the profits he earned, depending on the type of transaction. A discussion of his future with the company led to the purchase of new computer equipment for his use. In mid-1999 Mr. Paiement denied rumours of a merger with First Marathon, although Mr. Barakett acknowledged that he was aware of the merger some two months before his dismissal. Mr. Paiement and his wife had intended to visit Mr. Barakett socially, while on vacation in Nova Scotia in early August, but that visit was cancelled. On August 5 or 6 Mr. Paiement and a Mr. Gruneleger, of First Marathon, came to Halifax for an interview with Mr. Barakett and his counterpart and former boss at First Marathon, Robert Dunn.
[5] There are limited employment opportunities in the investment brokerage industry for preferred share specialists; only eight or nine in Canada. Mr. Barakett knew there was only room for one at Levesque Beaubien Geoffrion/National Bank Financial after the merger but he was confident he would be chosen. Several days later, on August 16, 1999, he called Mr. Paiement and was told that Mr. Dunn would replace him. He found this devastating.
[6] On August 19 Mr. Paiement came to Halifax to deliver the letter of termination, effective August 16. Mr. Barakett was offered severance pay of $141,114. representing four months’ income, plus vacation pay and employee benefits for four weeks. If the arrangements were acceptable he was to sign a release form appended to the letter and return it to the company. He did not accept and has not received any part of the compensation. He was promised but did not receive a letter of recommendation. He did not receive the balance of the commissions he was owed on time and had to phone Mr. Paiement to get it. Mr. Paiement declined his requests for a meeting to discuss the rationale of his termination. Mr. Barakett was left to speculate that this involved his unwillingness to accept a reduced commission.
[7] In determining that 17 months was a reasonable notice period, Justice Gruchy, the trial judge, relied upon the judgment of Iacobucci, J. in Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, in which the Supreme Court of Canada, noting evidence of bad faith or unfair dealings by the employer, restored a trial judge’s award of 24 months’ salary in lieu of notice, which had been reduced to 15 months’ by an appeal court.
The issues on appeal
[8] The appellant has raised five grounds of appeal, whether the learned trial judge erred:
1. . . . by finding that the appellant’s conduct in relation to the dismissal was an “aggravating factor”;
2. . . . by failing to correctly interpret and apply the decision of the Supreme Court of Canada in Wallace v. United Grain Growers Limited . . . ;
3. . . . by finding in the absence of probative evidence, that the manner of dismissal, the existence of the lawsuit, and the failure to provide a reference letter impacted on the ability of the respondent to find alternative employment;
4 . . . by finding that the respondent was entitled to a period of notice that was unreasonably long having regard to the relevant circumstances and to the relevant authorities;
5. . . . by finding that there was no failure on the part of the respondent to mitigate his damages.
The Standard of Review
[9] This court has frequently, consistently and on impeccable authority, reiterated its stance of deference toward findings of fact and credibility by a trial judge. This was concisely expressed by Bateman, J.A. in Keddy v. Western Regional Health Board (1999), 180 N.S.R. (2d) 288 at p. 291:
Errors of law ought to be corrected on appeal but findings of fact and evidentiary conclusions drawn from such findings are viewed more deferentially . . .
She added citing Toneguzzo-Norvell et al. v. Savein and Burnaby Hospital, [1994] 1 S.C.R. 114 at p. 121:
The finding of facts and the drawing of evidentiary conclusions from facts is the province of the trial judge, not the Court of Appeal.
[10] One of the best known statements of the principle occurs in the judgment of McLachlin, J. as she then was, in Toneguzzo-Norvell et al. v. Savein and Burnaby Hospital, supra, cited by Flinn, J.A. in Parker v. Parsons (1997), 160 N.S.R. (2d) 321 at p. 333 § 18:
It is by now well established that a Court of Appeal must not interfere with a trial judge’s conclusions on matters of fact unless there is palpable or overriding error. In principle, a Court of Appeal will only intervene if the judge has made a manifest error, has ignored conclusive or relevant evidence, has misunderstood the evidence, or has drawn erroneous conclusions from it: see P.(D.) v. S. (C.), [1993] 4 S.C.R. 141, at pp. 188-89 (per L’Heureux-Dubé), and all cases cited therein, as well as Geffen v. Goodman Estate, [1991] 2 S.C.R. 353, at pp. 388-89 (per Wilson, J.,), and Stein v. The Ship “Kathy K”, [1976] 2 S.C.R. 802, at pp. 806-8 (per Ritchie, J.). A Court of Appeal is clearly not entitled to interfere merely because it takes a different view of the evidence. The finding of facts and the drawing of evidentiary conclusions from facts is the province of the trial judge, not the Court of Appeal. . . .
[11] This principle applies with particular effect when findings of fact result from the trial judge’s assessment of the credibility of witnesses. Roscoe, J.A. restated the test in Re Cole Estate (1994), 131 N.S.R. (2d) 296 at p. 300 § 11:
The test respecting a trial judge’s findings of credibility was stated by Macdonald, J.A. in Travelers Indemnity Co. v. Kehoe (1985), 66 N.S.R. (2d) 434; 152 A.P.R. 434 (C.A.), where he said, at p. 437:
This and other appellate courts have said time after time that the credibility of witnesses is a matter peculiarly within the province of the trial judge. He has the distinct advantage, denied appeal court judges, of seeing and hearing the witnesses; of observing their demeanour and conduct, hearing their nuances of speech and subtlety of expression and generally is presented with those intangibles that so often must be weighed in determining whether or not a witness is truthful. These are the matters that are not capable of reflection in the written record and it is because of such factors that save strong and cogent reasons appellate tribunals are not justified in reversing a finding of credibility made by a trial judge. Particularly is that so where, as here, the case was heard by an experienced trial judge.
[12] In B. & G. Groceries Ltd. v. Economical Mutual Insurance Co. (1993), 116 N.S.R. (2d) 308 at p. 309 Matthews, J.A. referred to the heavy burden on an appellant and stated:
Further, findings of fact based on the credibility of witnesses should not be reversed unless the trial judge made some palpable and overriding error.
[13] The judgment of Viscount Simon in the 50-year-old Privy Council case of Nance v. British Columbia Electric Railway Co., [1951] 3 D.L.R. 705 at p. 713 continues to be cited as authority for according a similar deference to the assessment of damages by trial judges:
The principles which apply under this head are not in doubt. Whether the assessment of damages be by a Judge or a jury, the Appellate Court is not justified in substituting a figure of its own for that awarded below simply because it would have awarded a different figure if it had tried the case at first instance. Even if the tribunal of first instance was a Judge sitting alone, then, before the Appellate Court can properly intervene, it must be satisfied either that the Judge, in assessing the damages, applied a wrong principle of law (as by taking into account some irrelevant factor or leaving out of account some relevant one); or, short of this, that the amount awarded is either so inordinately low or so inordinately high that it must be a wholly erroneous estimate of the damage . . . .
[14] To similar effect is Woelk v. Halvorson, [1980] 2 S.C.R. 430 in which McIntyre, J. said that in the absence of error in principle the amount awarded should not be interfered with unless it was “either so inordinately low or so inordinately high that it must be a wholly erroneous estimate of the damage.”
[15] There is no difference in principle whether the damage award is expressed, customarily, as a dollar amount or, as in cases of wrongful dismissal, as the length of a notice period.
The First Two Grounds – Preliminary
[16] The appellant combined its argument on the first two grounds, the employer’s conduct as an aggravating factor and the application of Wallace. It referred to the following findings by the trial judge:
* By reciting the above [after quoting from Wallace] I am not indicating that I find the defendant acted in bad faith. I do find, however, that the defendant’s mode of dismissing Barakett was high-handed and callous. His letter of dismissal, coming as it did - unannounced and without warning - was cold and impersonal. It may well have been necessary from the defendant’s point of view to keep confidential its actions leading to the merger, but in my view that does not excuse its disregard for the humanity involved in its actions.
* I have considered that the manner in which the plaintiff was dismissed and the total lack of forewarning are aggravating factors. In addition, I consider the failure of the defendant to give Mr. Barakett a letter of reference a callous disregard for his future.
* The Plaintiff in Wallace v. United Grain Growers was awarded twenty-four months’ notice. That case, however, dealt with a factual situation when there was clear evidence of bad faith in the dismissal - clearly more serious than the case herein. The dismissal of Barakett, however, showed a lack of good faith on the part of the employer in that it apparently did not consider the overall effect the dismissal would have on Barakett.
* As I have said, I do not find the defendant acted in bad faith, but I do find the decision to dismiss and the manner in which it was accomplished amounted to unfair dealing. The manner in which it was performed was such that it impacted on Barakett’s ability to find replacement employment.
[17] Little appears to turn on any distinction between “bad faith” and “unfair dealing.” Iacobucci , J. consistently separated them with the disjunctive “or”, thus according them equal status. He made clear the kind of behavior the terms encompass.
[18] The appellant asserts:
It is clear that the “aggravating factors” resulted in an augmented notice period under Wallace.
[19] The following passage from the appellant’s factum, further developed at the oral hearing, appears to express the gist of the appellant’s appeal:
The Respondent as the plaintiff at trial did not plead or argue bad faith and unfair dealing, and made no submissions either before or after trial for an augmented notice period under Wallace. There was therefore no case under Wallace for the Appellant to meet at trial. It is not surprising therefore that there was no cross-examination of the Respondent as to the manner of dismissal, that the representatives of the Appellant did not appear to give viva voce evidence (submitting instead their discovery transcripts), and that Appellant’s counsel made no submissions on Wallace either in his pre-trial brief or post-trial oral submission. It appears that the Learned Trial Judge made his findings in this regard on his own initiative and without affording the Respondent an opportunity to be heard.
[20] In response the respondent confirms that he did not argue bad faith:
The thrust of the respondent’s case at trial was that he was a good, valuable, loyal and trusted senior employee who was terminated without just cause or near cause, was treated in a cookie cutter like approach by the employer without regard to his specialized training, and in particular, the scarcity of employment opportunities for someone with his specialized skills. . . .
The respondent sued the appellant because of the unfair treatment severance package offered by the appellant which it deemed to be non-negotiable.
[21] The respondent argues that merely by bringing suit he indicated he had been dealt with unfairly; he sought punitive damages. He asserts that the following points brought out in the discovery examination of two senior officers of the employer, all of which was in evidence before the trial judge, supported his argument as to unfair treatment:
1. Lack of a letter of reference;
2. Failure to explain to the respondent the rationale of his termination;
3. Failure to meet with the respondent at his request to discuss rationale for termination;
4. Failure of the appellant to do any assessment of the prospects of re-employment of the respondent before terminating;
5. Failure of the appellant to take into account the respondent’s specialized senior position and the effect termination of employment would have on his income stream;
6. Recognition by appellant that prospects of re-employment for the respondent were poor in that they acknowledged each investment house usually only had one preferred share specialist;
7. Failure to provide to the respondent his record of employment;
8. Failure to pay the respondent his last pay cheque in a timely manner.
[22] Before further evaluating these opposing points of view it may be useful to consider the case of Wallace v. United Grain Growers in some detail because of its effect on the development of the law of wrongful dismissal in Canada since it was decided in 1997, and its apparent relevance to the present case.
Wallace
[23] The judgment of Iacobucci, J., writing for a majority of the Supreme Court consisting of Lamer, C.J. and Sopinka, Gonthier, Cory, and Major JJ., reviewed the law of wrongful dismissal in the context of the manner of dismissal by the employer. It developed bad faith or unfair treatment on the part of the employer as factors additional to those traditionally considered in determining reasonable notice in claims for damages for breach of contract when employment is terminated without cause.
[24] Iacobucci , J. confirmed that Vorvis v. Insurance Corporation of British Columbia, [1989] 1 S.C.R.1085 correctly stated the principle that any award of damages beyond compensation for breach of contract for failure to give reasonable notice “must be founded on a separately actionable course of conduct.”
[25] He stated at § 73:
. . . absent an independently actionable wrong, the foreseeability of mental distress or the fact that the parties contemplated its occurrence is of no consequence, subject to what I say on employer conduct below.
[26] He agreed with the court of appeal that there was insufficient evidence in Wallace “to support a finding that the actions of UGG constituted a separate actionable wrong either in tort or in contract.” He stated at § 74:
I note, however, that in circumstances where the manner of dismissal has caused mental distress but falls short of an independent actionable wrong, the employee is not without recourse. Rather, the trial judge has discretion in these circumstances to extend the period of reasonable notice to which an employee is entitled. Thus, although recovery for mental distress might not be available under a separate head of damages, the possibility of recovery still remains. I will be returning to this point in my discussion of reasonable notice below.
[27] Iacobucci, J. then rejected Wallace’s claim that he could sue either in contract or tort for “bad faith discharge.” In § 75 he said the law has long recognized the right of both employers and employees to terminate an employment contract at any time provided there are no express provisions to the contrary, provided that, citing Farber v. Royal Trust Co., [1997] 1 S.C.R. 846 at p. 858:
If an employer dismisses an employee without cause, the employer must give the employee reasonable notice that the contract is about to be terminated or compensation in lieu thereof.
[28] In discussing the court’s reasons for restoring the trial judge’s award of 24 months’ notice in Wallace under the heading of “Reasonable Notice”, at § 81 Iacobucci, J. said the courts have generally applied the principles articulated by McRuer C.J.H.C. in Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.) at p. 145:
There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant, and the availability of similar employment, having regard to the experience, training and qualifications of the servant.
[29] These factors were not exhaustive and courts have added to the Bardal list, depending on the circumstances of particular cases. They include whether an employee has been induced to leave a secure position, and whether job security has been promised. Such factors could, in a judge’s discretion, affect the length of the notice period. They were material in Wallace, but not in the present case.
[30] Referring again to the appellant’s assertion of a right to sue in contract or tort for “bad faith discharge,” Iacobucci, J. stated at § 88:
Although I have rejected both as avenues for recovery, by no means do I condone the behavior of employers who subject employees to callous and insensitive treatment in their dismissal, showing no regard for their welfare. Rather, I believe that such bad faith conduct in the manner of dismissal is another factor that is properly compensated for by addition to the notice period.
[31] He distinguished earlier cases which held that claims relating to the manner in which the discharge took place are not properly considered in an action for damages for breach of contract at § 89:
Rather, it is said, damages are limited to injuries that flow from the breach itself, which in the employment context is the failure to give reasonable notice. The manner of dismissal was found not to affect these damages.
And at § 90:
Although these decisions are grounded in general principles of contract law, I believe, with respect, that they have all failed to take into account the unique characteristics of the particular type of contract with which they were concerned, namely, a contract of employment. Similarly, there was not an appropriate recognition of the special relationship which these contracts govern. In my view, both are relevant considerations.
[32] Iacobucci, J. then discussed the power imbalance between employers and the isolated employee, referred to Machtinger [Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986] and at § 92 cited Dickson, C.J. quoting from an academic authority in Slaight Communications Inc. v. Davidson, [1989] 1 S.C.R. 1038 at pp. 1051-52:
[T]he relation between an employer and an isolated employee or worker is typically a relation between a bearer of power and one who is not a bearer of power. In its inception it is an act of submission, in its operation it is a condition of subordination.
[33] At § 93 Iacobucci, J. again cited Dickson, C.J. in Reference Re Public Service Employee Relations Act (Alta.), [1987] 1. S.C.R. 313 at p. 368:
Work is one of the most fundamental aspects in a person’s life, providing the individual with a means of financial support and, as importantly, a contributory role in society. A person’s employment is an essential component of his or her sense of identity, self-worth and emotional well-being.
Iacobucci, J. continued at § 94:
Thus, for most people, work is one of the defining features of their lives. Accordingly, any change in a person’s employment status is bound to have far-reaching repercussions. . . . “[w]hen this change is involuntary, the extent of our ‘personal dislocation’ is even greater.”
And at § 95:
The point at which the employment relationship ruptures is the time when the employee is most vulnerable and hence, most in need of protection. In recognition of this need, the law ought to encourage conduct that minimizes the damage and dislocation (both economic and personal) that result from dismissal. In Machtinger [Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986)] it was noted that the manner in which employment can be terminated is equally important to an individual’s identity as the work itself (at p. 1002). By way of expanding upon this statement, I note that the loss of one’s job is always a traumatic event. However, when termination is accompanied by acts of bad faith in the manner of discharge, the results can be especially devastating. In my opinion, to ensure that the employees receive adequate protection, employers ought to be held to an obligation of good faith and fair dealing in the manner of dismissal, the breach of which will be compensated for by adding to the length of the notice period.
[34] After reference to authorities Iacobucci, J. explained what was meant by good faith and fair dealing at § 98:
The obligation of good faith and fair dealing is incapable of precise definition. However, at a minimum, I believe that in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive. . . .
[35] He cited several examples of bad faith or unfair dealing in the manner of dismissal that were “by no means exhaustive”, but illustrated conduct that ought to merit compensation by way of an addition to the notice period. At § 101:
I note that, depending upon the circumstances of the individual case, not all acts of bad faith or unfair dealing will be equally injurious and thus, the amount by which the notice period is extended will vary. Furthermore, I do not intend to advocate anything akin to an automatic claim for damages under this heading in every case of dismissal. In each case, the trial judge must examine the nature of the bad faith conduct and its impact in the circumstances.
And at § 102:
The Court of Appeal in the instant case recognized the relevance of manner of dismissal in the determination of the appropriate period of reasonable notice. However, . . . the court found that this factor could only be considered “where it impacts on the future employment prospects of the dismissed employee” . . . With respect, I believe that this is an overly restrictive view. In my opinion, the law must recognize a more expansive list of injuries which may flow from unfair treatment or bad faith in the manner of dismissal.
And at § 103:
It has long been accepted that a dismissed employee is not entitled to compensation for injuries flowing from the fact of dismissal itself: see e.g. Addis, supra [Addis Gramophone Co., [1909] A.C. 488.]. Thus, although the loss of a job is very often the cause of injured feelings and emotional upset, the law does not recognize these as compensable losses. However, where an employee can establish that an employer engaged in bad faith conduct or unfair dealing in the course of dismissal, injuries such as humiliation, embarrassment and damage to one’s sense of self-worth and self-esteem might all be worthy of compensation depending on the circumstances of the case. In these situations, compensation does not flow from the fact of dismissal itself, but rather from the manner in which the dismissal was effected by the employer.
And at § 104:
Often the intangible injuries caused by bad faith conduct or unfair dealing on dismissal will lead to difficulties in finding alternative employment, a tangible loss which the Court of Appeal rightly recognized as warranting an addition to the notice period. It is likely that the more unfair or in bad faith the manner of dismissal is the more this will have an effect on the ability of the dismissed employee to find new employment. However, in my view the intangible injuries are sufficient to merit compensation in and of themselves. I recognize that bad faith conduct which affects employment prospects may be worthy of considerably more compensation than that which does not, but in both cases damage has resulted that should be compensable.
[36] Iacobucci, J. referred to remarks on the kind of injuries that led to damages for defamation in the judgment of Pearson, L.J. in McCarey v. Associated Newspapers Ltd. (No.2), [1965] 2 Q.B. 86 C.A. which had been cited with approval by this court in the judgment of MacKeigan, C.J.N.S. in Barltrop v. Canadian Broadcasting Corp. (1978), 25 N.S.R. (2d) 637 at pp. 661-62 and continued at § 107:
In my view, there is no valid reason why the scope of compensable injuries in defamation situations should not be equally recognized in the context of wrongful dismissal from employment. The law should be mindful of the acute vulnerability of terminated employees and ensure their protection by encouraging proper conduct and preventing all injurious losses which might flow from acts of bad faith or unfair dealing on dismissal, both tangible and intangible. I note that there may be those who would say that this approach imposes an onerous obligation on employers. I would respond simply by saying that I fail to see how it can be onerous to treat people fairly, reasonably, and decently at a time of trauma and despair. In my view, the reasonable person would expect such treatment. So should the law.
The First and Second Grounds – Conclusion
[37] The appellant argues that the trial judge should not have considered Wallace because neither that case itself nor allegations of bad faith and unfair dealings were pleaded nor argued, nor was an augmented notice period claimed. The appellant says it was taken by surprise.
[38] The respondent asserts the appellant should not have been surprised because the points raised in the discovery of the appellant’s officers and listed above made it clear that the manner of dismissal was in issue.
[39] In Mr. Barakett’s statement of claim he says he was terminated without just cause and without notice, and that the severance he was offered was “totally inadequate considering all of the circumstances.” The listed circumstances included his “very senior specialized position”, the unlikelihood of his finding a similar position, lack of notice, his age and experience, and the appellant’s unwillingness to provide him with a letter of recommendation or to extend health and medical coverage beyond a period of four weeks. He claimed, inter alia, punitive, general and special damages, expenses, remuneration and reimbursement as well as generally for “such further and other relief as this Honourable Court deems just.”
[40] I agree with the appellant that the pleading is not unduly informative, but in my view it clearly frames the case as a claim for reasonable notice for breach of contract resulting from wrongful dismissal, requiring consideration by the court of all factors that are included in such a claim. These factors include the traditional ones listed in Bardal and the additional ones, such as the manner of dismissal, explained in Wallace. If the appellant had any real doubt as to the case it was to meet, a demand for particulars could have been made pursuant to Rule 14.24.
[41] As to whether the elements identified as important in Wallace can be applied in a case in which they were not pleaded, both Squires v. Corner Brook Pulp and Paper Ltd., [1999] N.J. 146 (Q.L.) and Noseworthy v. Riverside Pontiac-Buick Ltd. et al. (1998), 116 O.A.C. 265 were decided at trial prior to Wallace, but came on for appeal after Wallace was decided. Neither appeal court had any hesitation in applying the principles of Wallace to the facts disclosed at trial. In Noseworthy the Ontario Court of Appeal set aside an award of punitive damages in favour of an augmented period of notice.
[42] In my view Justice Gruchy committed no error in finding that the manner of Mr. Barakett’s dismissal was unfair nor in applying the principles of Wallace to his findings of fact. I agree there was no evidentiary basis for a finding of punitive damages, and there was no cross-appeal on that issue.
The Third Ground of Appeal
[43] This ground raises the question of whether Justice Gruchy erred in finding in the absence of probative evidence that the manner of dismissal, the existence of the lawsuit, and the failure to provide a reference letter impacted on the ability of the respondent to find alternative employment.
[44] Given the finding that the manner of dismissal reflects unfair treatment, the following passage at § 104 from Wallace, cited above, has direct application to this ground of appeal:
Often the intangible injuries caused by bad faith conduct or unfair dealing on dismissal will lead to difficulties in finding alternative employment, a tangible loss which the Court of Appeal rightly recognized as warranting an addition to the notice period. It is likely that the more unfair or in bad faith the manner of dismissal is the more this will have an effect on the ability of the dismissed employee to find new employment. However, in my view the intangible injuries are sufficient to merit compensation in and of themselves. I recognize that bad faith conduct which affects employment prospects may be worthy of considerably more compensation than that which does not, but in both cases damage has resulted that should be compensable.
[45] Justice Gruchy found that after Mr. Paiement delivered the “cold and impersonal” letter of dismissal and refused to have lunch with Mr. Barakett or to meet with him:
Barakett was devastated by his dismissal. I will deal below more fully with the effect it had upon him. He wrote twice to the defendant indicating that the proposed severance and conditions of separation were not acceptable, but the defendant informed him the terms were not negotiable. It is noteworthy that the defendant at no time offered either to meet Mr. Barakett to discuss the matter with him or to pay him the four months’ severance allowance on a without prejudice basis so as to mitigate the potential damages to either party. No explanation was given to Mr. Barakett as to the method used to determine the amount of pay offered in lieu of notice. A list of the severance packages offered to various employees exhibited during trial, together with submissions by defence counsel, seem to indicate the defendant used a “rule of thumb” (perhaps an unfortunate simile) of one month notice for each year of service. There is no reference to any consideration of the personal aspects of the employees, and in particular of Mr. Barakett. No consideration was apparently given to any potential difficulty which might be experienced by Barakett by virtue of the scarcity of similar positions in Canada.
Barakett said he was devastated and shattered by his dismissal. He was never given an explanation for the decision to dismiss him beyond the letter of dismissal. He agreed there really was only room for one preferred share trader in the new company.
Barakett testified that he told Mr. Paiement that he wanted a letter of reference, but he never did receive it.
For several months after the dismissal Barakett secluded himself. His friends and associates were not able to get in touch with him. He had never had a listed phone number, but friends and associates had his cellular number. He simply turned off his phone and did not respond to anybody. He said he played a lot of golf but that was merely a means of escape. He knew there was no market in Canada at that time for the type of position he had held and even if there was a market, he would not be considered a candidate as he had been dismissed, was maintaining a lawsuit against his former employer and did not have a letter of recommendation. Given the circumstances as described to me by Mr. Barakett and other witnesses, I have no doubt his assessment of the situation was accurate.
Other than a telephone call to Mr. Paiement in September when Mr. Barakett was looking for his final pay cheque, there was no further personal contact between him and his former friends and associates in the defendant. The correspondence exhibited to the court during trial clearly indicates that when Barakett rejected the four month proposal and asked for a further offer it was simply referred to the legal department.
I find Barakett’s description of the effect the dismissal had upon him was accurate. His social contacts deteriorated to the point of being nonexistent. Mr. Paiement said that he had tried to reach Barakett but could not reach him by telephone. He did not make any attempt to write to him. Mr. Barakett was so shaken by these events that at one point his friend, Anne Newcombe, whom he had described as his common law wife, called upon him and found him unshaven, unkempt and having lost weight. It is clear from my observation of Ms. Newcombe and of Mr. Barakett that such a condition was totally out of character.
Mr. Barakett did not make many enquiries about a new position. He said that he knew the market well and there was no point in pursuing such a possibility until these matters were behind him.
[46] There was evidence in support of these findings. It cannot be said there was an absence of probative evidence that the manner of Mr. Barakett’s dismissal impacted on his ability to find alternative employment. This is a conclusion that, under Wallace, should be taken into account in assessing the period of reasonable notice.
[47] With respect to the letter of recommendation, the appellant cited Shinn v. TBC Teletheatre B.C., [2001] B.C.J. No. 223 (B.C.C.A.) in which Chief Justice McEachern said “there could be many reasons why an employer may not wish to give a letter of reference.” In the present case there was strong evidence that Mr. Barakett deserved a favourable letter of recommendation, and no evidence why he should not have one. In fact, one had been promised to him by Mr. Paiement. If this was merely inadvertence and not deliberate, as the appellant suggests, it is a further illustration of the appellant’s indifference to Mr. Barakett’s circumstances.
The Fourth Ground of Appeal
[48] This ground involves a consideration of the length of the notice period, which the appellant characterizes as unreasonably long.
[49] In addition to the manner of dismissal discussed above Gruchy, J. referred to Squires v. Ayerst, McKenna & Harrison Inc. (1991), 104 N.S.R. (2d) 124 in which he had listed a number of factors, inclusive of those in Bardal, to be considered in wrongful dismissal cases prior to Wallace. He considered only those he considered pertinent to the present case:
There was no employment available in Canada similar to the position held by Barakett. Such a position had in fact existed and had been available and might have been available to Barakett if the defendant had been forthcoming with him and had informed him of the potential loss of his position. It would have been possible for the defendant to have alerted Barakett of his perilous position when he met Luc Paiement in Toronto in April, 1999. The evidence is clear that while the defendant was considering the possibility of merger another position had been available for which Barakett could have made application. Yet, the defendant gave Barakett no indication that his position might be in jeopardy.
The plaintiff’s age is not a major factor with respect to the period of notice to be considered herein. He is still a relatively young man and I am hopeful he will be able to carve for himself a prosperous future. (Mr. Barakett was 50 years old at the time of the trial.)
The plaintiff had only been employed by the defendant for four years. I do not attach a great deal of significance to the brief term of employment. The brevity of that term is more than counterbalanced by the absence of similar opportunities.
Barakett has demonstrated, and I accept, that he was totally loyal to the defendant. He was in a position of considerable economic trust and he discharged his obligations completely and honestly. He made a contribution to the defendant in creating a specialty in the brokerage business and he performed that position well. He had earned the right to a position where he might reasonably have anticipated a large degree of security. It is fortunate, perhaps, that Barakett is a single man with no immediate family demands or responsibilities.
I have considered that the manner in which the plaintiff was dismissed and the total lack of forewarning are aggravating factors. In addition, I consider the failure of the defendant to give Mr. Barakett a letter of reference a callous disregard for his future.
[50] In my view Gruchy, J. proceeded appropriately in considering all factors, those involving the dismissal itself as well as the manner of dismissal, in arriving at an assessment of a reasonable notice period of 17 months, which is clearly within the range considered by courts in such circumstances. In Wallace Iacobucci, J. indicated that a notice period of 24 months, which he did not hesitate to restore, was toward the high end of the range.
[51] Wallace does not mandate a two-step assessment of reasonable notice, that is, an evaluation of reasonable notice without regard to the manner of dismissal followed by an adjustment to the notice period to reflect the manner of dismissal. In Noseworthy, supra, Goudge, J.A. set out the principles to be followed by a trial judge in assessing reasonable notice when employers terminating employees fall short of the standards set by Iacobucci, J. in Wallace. At § 30 he expressed approval for a one-step procedure such as that followed by Gruchy, J. in fixing the notice period within a range:
. . .Within this range, the consequence of Wallace is that where bad faith employer conduct exists, there will be a longer notice period than there would be in the same case if there were no such conduct.
As Iacobucci J. said in Wallace at p. 745 the trial judge in weighing the importance of this factor must examine both the nature of the bad faith conduct and its impact in the circumstances. This is best done as part of a consideration of all the relevant factors in the case rather than as a separate exercise of determining the discrete addition to be made to the notice period because of the employer’s conduct.
[52] Justice Gruchy concluded that, based on his average monthly income over a 17 month notice period, Mr. Barakett was entitled to a severance for lost income in the amount of $599,734.00. In addition he was found entitled to the defendant’s contributions to his life insurance and long term disability insurance totalling $3,596.86 and prejudgment interest of $63,755.26 for the period August 19, 1999 to March 19, 2001 and calculated at eight per cent thereafter. He was awarded costs of $16,000 plus disbursements of $3,898.22.
[53] In my view the notice period determined by Gruchy, J. is not unreasonable and deserves the deference this court has consistently applied to trial court decisions. It is not a conclusion reached without evidence, nor one where the trial judge proceeded upon a mistaken or wrong principle, or where the result is wholly erroneous. Nor is the amount awarded “either so inordinately low or so inordinately high that it must be a wholly erroneous estimate of the damage.” (See Nance, and Woelk v. Halvorson, supra.)
The Fifth Ground of Appeal
[54] The fifth ground relates to the duty of plaintiff to mitigate his damages. After a reference to case law, Gruchy, J. stated:
The burden of proof with respect to the question of lack of mitigation is upon the defendant. I am not satisfied that the defendant has discharged this burden either by the cross-examination of Mr. Barakett or by the production of the evidence given on discovery.
I would defer to this finding.
Disposition
[55] I would dismiss the appeal with costs which I would fix at 40 per cent of the costs awarded at trial, rounded to $6,500, plus disbursements. In doing so I am mindful that the costs at trial were in a reduced amount because the defendant’s co-operation in simplifying the issues had shortened the trial.
Freeman, J.A.
Concurred in:
Glube, J.A.
CROMWELL, J.A.: (Concurring)
[56] I agree with the disposition of this appeal proposed by my colleague Freeman, J.A. but for somewhat different reasons.
[57] Gruchy, J. the trial judge, did not specify the extent to which his finding of unfair dealings by the employer in the manner of dismissal increased the notice period. I agree with Freeman, J.A. that, on this record, the judge was entitled to consider this matter as one aspect of fixing a reasonable period of notice and that it was not necessary (nor in my view desirable) for the judge to set out, in isolation, the effect this consideration had on the length of reasonable notice.
[58] However, in my respectful view, the conduct of this employer relating to the manner of dismissal did not in law justify any significant increase in the period of notice which would otherwise be appropriate. The key question on appeal, therefore, is whether the judge’s award of 17 months’ notice is so excessive that appellate intervention is required. In other words, is the award outside an acceptable range in all of the circumstances?
[59] In my view it is not. While Mr Barakett’s period of employment was relatively brief, he had a senior position of great responsibility and trust. His position was also extremely lucrative and almost unique in that only a handful of similar positions exist in Canada. There was no evidence that more vigourous attempts on his part to find comparable employment would have met with success or indeed that any comparable position was available at any time after his dismissal. In all of the circumstances, I am not persuaded that the trial judge’s award, while undoubtedly at the very top of an acceptable range, was so inordinately high that appellate intervention is justified.
[60] I agree with Freeman, J.A. that the trial judge did not err in finding that the employer had not discharged its burden of proof on the issue of mitigation.
Cromwell, J.A.