



COURT OF APPEAL FOR ONTARIO

CITATION: Arnone v. Best Theratronics Ltd., 2015 ONCA 63

DATE: 20150202

DOCKET: C59181

Strathy C.J.O., Laskin and Brown JJ.A.

BETWEEN

Matthew Arnone

Plaintiff (Respondent)

and

Best Theratronics Ltd.

Defendant (Appellant)

Frank Cesario and Siobhan OBrien, for the appellant

Christopher Rootham, for the respondent

Heard: January 9, 2015

On appeal from the order of Justice Martin S. James of
    the Superior Court of Justice, dated July 14, 2014, with reasons reported at
    2014 ONSC 4216.

Brown J.A.:

Overview

[1]

On November 26, 2012, the appellant, Best Theratronics Ltd., terminated
    without cause the employment of the respondent, Matthew Arnone, who had worked with
    the company and its predecessor for about 31 years.  Arnone was 53 years old at
    the time.

[2]

Arnone commenced a wrongful dismissal action and moved for summary
    judgment.  By order dated July 14, 2014 (the Order), the motion judge granted
    Arnones motion for summary judgment and ordered Best Theratronics to pay (i)
    damages equal to the gross amount of the salary Arnone would have earned until
    he qualified for an unreduced pension, less payments made to him to satisfy the
    statutory obligations of the employer, (ii) $65,000 representing the present
    value of the loss of an unreduced pension, (iii) a retirement allowance equal
    to 30 weeks pay, and (iv) costs totaling $52,280.09.

[3]

Best Theratronics appeals, seeking to set aside the Order and to secure,
    instead, an order dismissing Arnones claim.  Arnone cross-appeals, seeking to
    increase the damages awarded for wrongful dismissal and to increase costs to a
    substantial indemnity level.

[4]

For the reasons which follow, I would allow the appeal, in part, set
    aside the motion judges calculation of damages for wrongful dismissal and
    require that income earned by Arnone during the notice period be deducted from
    the award of damages for wrongful dismissal.  I would allow the cross-appeal,
    increase the period of reasonable notice for calculating damages for wrongful
    dismissal from 16.8 months to 22 months and remit the issue of costs to the
    motion judge.

Standard of review

[5]

In
Hryniak
v. Mauldin
,
[1]
the Supreme Court of Canada held that absent an error of law, the exercise of
    powers by a motion judge under Rule 20 of the
Rules of Civil Procedure
attracts deference.  Whether a genuine issue requiring a trial exists is a
    question of mixed fact and law.  Where there is no extricable error in
    principle, findings of mixed fact and law should not be overturned, absent
    palpable and overriding error.
[2]

First Issue:  Did the motion judge err in concluding that no genuine
    issue requiring a trial existed regarding the character of the employees
    duties and responsibilities?

[6]

Best Theratronics submitted that the motion judge erred in granting
    summary judgment because a genuine issue requiring a trial existed in respect
    of the character of Arnones employment, one of the factors guiding the
    calculation of the common law reasonable period of notice set out in
Bardal v. The Globe & Mail Ltd
.
[3]
Best Theratronics contended a clear conflict of evidence existed about the role
    performed by Arnone prior to the termination of his employment and argued that
    the motion judge simply had swept aside the conflicting evidence without
    analysis.

[7]

I do not accept that submission.  On the issue of the character of his employment,
    Arnone conceded, for the purpose of the summary judgment motion, that he was a
    supervisor, not a manager.  The motion judge made the following findings of
    fact:

[23]  The plaintiff has spent his entire career working in the
    field of Cobalt 60 industrial and medical equipment.  He has a college level
    designation as a mechanical engineering technologist. He performed at least
    supervisory, if not managerial, functions. He had about eight employees
    reporting to him.

As well, he described the different characterizations
    of Arnones responsibilities advanced by Best Theratronics as subtle
    distinctions which would not affect the employees minimum entitlement to a 17-month
    period of reasonable notice.

[8]

Those findings of fact find ample support in the record.  Although the
    February 13, 2008 letter from Best Theratronics offering employment to Arnone
    described his position as that of a Customer Specialist, about five months
    later the Employers general manager circulated a memo to employees describing
    Arnone as continuing in his role of Customer Service
Manager
 (emphasis added).  The April 2009
    organizational chart for Best Thereatronics described Arnone as Manager
    Customer Service and showed 11 employees reporting to him.  Also, Best
    Theratronics provided Arnone with a business card which described his position
    as Manager, Inside Sales & Customer Support.  While the Director, Resources
    and Payroll, of Best Theratronics testified on cross-examination that the
    managerial title was given to Arnone purely for customer relations purposes,
    the fact remained that it was Best Theratronics which had provided him with
    that title.  The evidence also disclosed that Arnone discussed performance
    issues regarding his direct reports with his own manager, although it was his
    manager who provided the direct reports with their formal performance
    evaluations.  Even though several months prior to his termination Best Theratronics
    changed Arnones role to focus more clearly on customer support and sales, his
    salary remained unchanged.

[9]

Best Theratronics relied heavily on the decision of the Superior Court
    of Justice in
Thorne v. Hudsons Bay Co
.
[4]
for the proposition that in appropriate cases the character of the employees
    employment may give rise to a genuine issue requiring a trial.  The
    circumstances in
Thorne
differed
    materially from those in the present case.  First, in
Thorne
, the motion judge emphasized that
    the affidavit evidence placed before him had not been subjected to
    cross-examination, thereby preventing him from resolving in a fair and accurate
    way the dispute between the parties about the employees duties.  By contrast,
    in the present case the motion judge had before him the cross-examinations of
    the affiants to assist him in determining whether he could make the necessary
    findings of fact, which led him to conclude:

[17]  In this case, the issues can be determined fairly and
    justly without a trial.  The documentary record is both extensive and reliable.
     Several affiants have been cross-examined.  While the parties may not agree on
    all the facts, the material facts necessary to achieve a just result are
    established by the available evidence and form part of the record on this
    motion.  Cases involving the determination of a reasonable notice period are
    well-suited to be dealt with by way of a motion for summary judgment.

[10]

Second,
    while in
Thorne
the employee was
    not prepared to accept the employers characterization of his employment for
    purposes of the summary judgment motion, in the present case Arnone did so.  As
    noted by the motion judge:

[9]  The plaintiff says that he was working as a manager prior
    to his dismissal but because the defendant takes issue with the
    characterization of his job description and duties, the plaintiff is prepared
    to concede for the purposes of this motion to the defendants contention that
    the plaintiffs employment can best be characterized as that of a supervisor
    rather than a manager.  The plaintiff does so in an effort to neutralize the
    defendants argument that the determination of the character of the plaintiffs
    employment requires a trial.

[11]

Also,
    the jurisprudence on the
Bardal
factors not only stresses that no one factor should be given disproportionate
    weight,
[5]
but more recently indicates that the character of employment is a factor of
    declining importance in the
Bardal
analysis.
[6]


[12]

Finally,
    while the appropriateness of bringing a summary judgment motion must be
    assessed in the particular circumstances of each case, a straight-forward claim
    for wrongful dismissal without cause, such as the present one, strikes me as the
    type of case usually amenable to a Rule 20 summary judgment motion.

[13]

In
    sum, the motion judges findings about the character of Arnones employment
    provided ample support for the conclusion that no genuine issue requiring a
    trial existed on the issue of the character of employment.

Second Issue:  Did the motion judge err in his calculation of the
    period of reasonable notice to which Arnone was entitled upon termination
    without cause?

[14]

Although
    the motion judge correctly referred to the
Bardal
factors as the starting point for an assessment of the appropriate period of
    reasonable notice, he calculated the period of reasonable notice by reference
    to the time between the date of termination and the date Arnone would be
    entitled to an unreduced pension upon early retirement under the Best
    Theratronics defined benefit pension plan of which he was a member.

[15]

Best
    Theratronics submits that the motion judge erred by calculating the common law
    period of reasonable notice so as to bridge Arnones notice period to the
    date of his eligibility for an unreduced pension at his early retirement date,
    instead of assessing a reasonable notice period using the
Bardal
factors.  On this appeal, Arnone
    concedes that the motion judge erred in applying a bridging approach to the
    determination of the reasonable period of notice.

[16]

In
    my view, that was an appropriate concession to make.  Damages for wrongful
    dismissal operate to compensate an employee for the employers breach of the
    implied obligation in the employment contract to give reasonable notice of an
    intention to terminate the relationship in the absence of just cause.  Damages
    are confined to the loss suffered as a result of the employers failure to give
    proper notice, measured by the loss of wages and salary, and other benefits,
    that would have been earned during the reasonable notice period.
[7]
The
Bardal
analysis remains the approach courts must apply to
    determine what constitutes reasonable notice of termination,
[8]
an approach which has not included a consideration of the time between the date
    of dismissal and the point at which the employee would be eligible for a full
    pension.  In the present case, calculating the period of reasonable notice by
    reference to the amount of time required to bridge the dismissed employee to
    his date of eligibility for a full pension did not accord with the
Bardal
analysis.  Consequently, the motion judge erred in setting the period of
    reasonable notice to which Arnone was entitled at 16.8 months, the period of
    time needed to bridge his entitlement to a full pension.

[17]

Nevertheless,
    the motion judge did go on to make an alternative finding that a reasonable
    notice period otherwise would amount to 22 months.  In
Minott v. O'Shanter Development Co.
,
[9]
this court described the appropriate standard of appellate review for the issue
    of the period of reasonable notice in wrongful dismissal cases:

This submission must be judged against the standard of
    appellate review of wrongful dismissal awards.  Determining the period of
    reasonable notice is an art not a science.  In each case trial judges must
    weigh and balance a catalogue of relevant factors.  No two cases are identical;
    and, ordinarily, there is no one right figure for reasonable notice.  Instead,
    most cases yield a range of reasonableness.  Therefore, a trial judge's
    determination of the period of reasonable notice is entitled to deference from
    an appellate court.  An appeal court is not justified in interfering unless the
    figure arrived at by the trial judge is outside an acceptable range or unless,
    in arriving at the figure, the trial judge erred in principle or made an
    unreasonable finding of fact.  If the trial judge erred in principle, an
    appellate court may substitute its own figure.  But it should do so sparingly
    if the trial judge's award is within an acceptable range despite the error in
    principle.
[10]

[18]

Arnone
    submitted that the 22-month notice period assessed by the motion judge fell
    within an acceptable range set by the case law for an employee in his
    position.  Best Theratronics contended 14.4 weeks constituted a reasonable
    notice period in the circumstances.  Arnone supported his submission by
    pointing to numerous cases establishing a range of 19 to 28 months as the
    period of reasonable notice for supervisors

of a similar age and
    length of service.  By contrast, Best Theratronics did not refer to any case
    law in support of its position.

[19]

In
    my view, the 22-month notice period, as found by the motion judge, fell within
    an acceptable range of notice periods for employees in circumstances similar to
    those of Arnone.  Consequently, I see no basis upon which to interfere with
    that conclusion.

Third Issue:  Did the motion judge err by failing to deduct
    the income earned by Arnone from his new employment from the damage award?

[20]

As
    a result of taking a bridging-until-retirement approach to calculating the
    period of reasonable notice, the motion judge did not deduct from his award of
    damages for wrongful dismissal the income earned by Arnone from his new
    employment during the claimed notice period.  The parties agreed that the
    motion judge erred in law by failing to deduct that income from the wrongful
    dismissal damages award.  I would accept that agreement and vary the Order
    accordingly.

Fourth Issue:  Did the motion judge err in awarding Arnone a
    retirement allowance?

[21]

Arnone
    also claimed payment of a retirement bonus or allowance.  Arnone deposed:

It is customary for employees to receive a significant
    retirement bonus equivalent to one week of salary for each year of service. 
    Had I continued employment with Theratronics, I would have reasonably expected
    receiving this retirement bonus.

Poonam Sharma, the Director, Human Resources and
    Payroll at Best Theratronics, deposed:

Best Theratronics provides a retirement allowance of one week
    per year of service to a maximum of 30 weeks to employees who retire.  The
    Plaintiff was not eligible for this allowance as he was terminated due to
    restructuring.

That was the extent of the evidence in the record about
    the terms of the Best Theratronics retirement allowance.  Neither affiant was
    cross-examined on the point.

[22]

From
    that evidence, the motion judge concluded:

[30] Additionally, the plaintiff was entitled to a retirement
    allowance of one week for each year of employment to a maximum of thirty weeks.
     The availability of this allowance ought to have been part of an arrangement
    to bring the employees employment to an end without affecting his pension.

When read as a whole, the reasons of the motion judge
    disclose he sought to put in place a termination arrangement which would
    provide Arnone with all the benefits available to him on retirement.  This
    approach drove his calculation of the period of reasonable notice  in which he
    erred  as well as his determination that Arnone was entitled to the Best
    Theratronics retirement allowance.

[23]

The
    evidence about the retirement allowance, as limited as it was, disclosed that
    entitlement to the retirement allowance arose not under the Best Theratronics pension
    plan but, instead, formed part of the contract of employment between Best Theratronics
    and its employees.  The interpretation of that aspect of Arnones contract of
    employment with Best Theratronics would involve an issue of mixed fact and law
    on which an appellate court should defer to the motion judge, except in cases of
    a palpable and overriding error or where it is possible to identify an
    extricable question of law.
[11]


[24]

However,
    the motion judge did not consider Arnones claim to a retirement allowance as a
    claim under his contract of employment; instead, he approached the issue as one
    involving his pension benefits.  At para. 30 of his reasons, the motion judge
    wrote:  The availability of this allowance ought to have been part of an
    arrangement to bring the employees employment to an end without affecting his
    pension.  In taking such an approach the motion judge misapprehended the
    evidence.  Eligibility for the Best Theratronics retirement allowance was not tied
    to an employees entitlement to a pension, but was a separate contractual
    entitlement based upon an employees length of service, be it one year or 30
    years.  As a result of making that error, the conclusion of the motion judge about
    Arnones entitlement to a retiring allowance is not entitled to deference.

[25]

The
    determination of whether a contract of employment entitles an employee to the
    receipt of a retirement allowance where his employment has been terminated
    without cause is an inherently-fact specific exercise.  In the present case,
    there was no dispute that it was a term of Arnones contract of employment with
    Best Theratronics that he would receive a retirement allowance of one week for
    each year of service up to 30 weeks.  Both parties clearly benefited from that
    term.  From the point of view of Best Theratronics, the term gave employees an
    incentive to remain with the company for a long time.  From an employees point
    of view, the term allowed him to accumulate a monetary benefit which grew as
    his service with Best Theratronics increased over time and which would become
    available to him upon retirement.

[26]

In
    my view, from that operation of the Best Theratronics retirement allowance
    comes an implied term that if an employee is terminated without cause, he would
    be entitled to payment of the accumulated retirement allowance in consideration
    for his long service and fidelity to the company.

[27]

In
    the absence of any written term to the contrary, effect should be given to this
    implied term of the contract of employment.  If Best Theratronics wanted to
    limit an employees entitlement to this benefit, it should have reduced the
    limitation to writing, as was done by the employer in the decision of the
    British Columbia Supreme Court in
Moody v.
    Lafarge Canada Inc.
[12]
In that case, the employee was entitled to receive a retirement allowance at
    your retirement (as defined in our pension plan), but the contract went on to stipulate
    that if your employment with Lafarge is terminated for any other reason, you
    will not be eligible to receive this benefit.
[13]
Lafarge terminated the employment of the employee, leading the court to
    conclude that the employee was not entitled to the retirement allowance.

[28]

No
    such written restriction existed in the contract of employment between Best
    Theratronics and Arnone.  Although Sharma deposed that Arnone was not entitled to
    the retirement allowance upon his termination, that was simply her own view and
    was inconsistent with the implied term of the contract of employment.

[29]

For
    those reasons, I would dismiss the appeal of Best Theratronics on this issue.

Fifth Issue:  Did the motion judge err in awarding Arnone
    compensation to replace the loss of his pension benefits during the notice
    period?

[30]

The
    motion judge awarded Arnone damages in the amount of $65,000 representing the
    present value of the loss of pension benefits to him based on the difference
    between a notice period ending on March 7, 2013 (the 14.4 weeks of notice paid
    by Best Theratronics) and one ending on July 31, 2014 (representing 20 months
    notice).  The amount of damages was based upon a calculation performed by an
    actuary contained in an expert opinion adduced by Arnone.

[31]

Although
    Best Theratronics contended in its notice of appeal that the motion judge had
    erred in making such an award, it did not pursue the point in its Factum.

[32]

The
    award made by the motion judge was consistent with the principle expressed by
    this court in
Taggart v. Canada Life
    Assurance Co.
: a terminated employee is entitled to claim damages
    for the loss of pension benefits that would have accrued had the employee
    worked until the end of the notice period, unless some contractual term limits
    that right.
[14]
No evidence of any such limit was before the motion judge.  Accordingly, I see
    no basis to interfere with his award on this issue.

Sixth Issue (Cross-appeal):  In assessing costs, did the
    motion judge err by failing to afford the parties an opportunity to disclose
    their respective offers to settle?

[33]

Arnone
    cross-appeals the award of costs, arguing that the motion judge dealt with
    costs without affording him an opportunity to make submissions about the effect
    on costs of his offers to settle the motion.

[34]

As
    noted by the motion judge, at the conclusion of oral argument on the motion the
    parties provided him with copies of their cost outlines.  The motion judge
    reserved his decision on the motion.  In his July 14, 2014 reasons the motion
    judge dealt with the issue of costs.  The next day Arnones counsel wrote to
    the motion judge enclosing two without prejudice offers made to Best
    Theratronics.  Counsel advised that he could not have provided the offers to
    the court until liability had been determined, and he requested an opportunity
    to make brief submissions on the scale of costs awarded.  At the hearing of the
    appeal, counsel advised that a case conference is to be held before the motion
    judge to consider the effect of the offers to settle on the costs awarded, even
    though the Order has been issued and entered.

[35]

Since
    a motion judge should take into account the effect, if any, of offers to settle
    on the ultimate award of costs for the motion, the most appropriate way to
    proceed is to set aside the cost award contained in para. 5 of the Order and
    remit the issue of costs back to the motion judge for his determination.

DISPOSITION

[36]

Accordingly,
    I would allow the appeal, in part, set aside para. 1 of the Order and substitute
    an order that Best Theratronics pay Arnone damages for wrongful dismissal
    calculated on the basis of a reasonable period of notice of 22 months, from
    which shall be deducted the statutory payments of 14.4 weeks already made by
    Best Theratronics and the income earned by Arnone during the notice period.  I
    would allow the cross-appeal, set aside para. 5 of the Order dealing with
    costs, and remit the issue of costs back to the motion judge for his
    determination.

[37]

If
    the parties are unable to agree upon the costs of the appeal and cross-appeal, I
    would permit them to file brief cost submissions, to a maximum of three pages, within
    10 days of the date of the release of these reasons.

Released: February 2, 2015 (GS)

David
    Brown J.A.

I
    agree G.R. Strathy C.J.O.

I
    agree John Laskin J.A.





[1]
2014 SCC 7, [2014] 1 S.C.R. 87.



[2]

Hryniak
, at para. 81.



[3]
(1960), 24 D.L.R. (2d) 140 (Ont. H.C.), at p. 145.



[4]
2011 ONSC 6010, 96 C.C.E.L. (3d) 35 (S.C.).



[5]
Honda Canada Inc. v. Keays
, 2008 SCC 39,
    [2008] 2 S.C.R. 362, at para. 32.



[6]

Di Tomaso v. Crown Metal Packaging Canada
    LP
, 2011 ONCA 469, 282 O.A.C. 134, at para. 27.



[7]

Keays,
at para. 50;
Taggart v. Canada Life Assurance Co.
(2006),
    50 C.C.P.B. 163 (Ont. C.A.), at para. 13.



[8]

Keays,
at paras. 28-29.



[9]
(1999), 42 O.R. (3d) 321 (C.A.).



[10]

Minott
, at pp. 343-344.  [Citations omitted.]



[11]

Sattva Capital Corp. v. Creston Moly Corp.
, 2014 SCC 53, 373 D.L.R.
    (4th) 393, at paras. 50-55;
Housen v. Nikolaisen
, 2002 SCC 33, [2002] 2
    S.C.R. 235, at paras. 30-31; and
Hryniak
, at para. 81.



[12]
2000 BCSC 1847.



[13]

Moody
, at para. 16.



[14]

Taggart
, at paras. 13, 15.


