



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Pakozdi v. B & B Heavy Civil Construction Ltd.,









2018 BCCA 23




Date: 20180119

Docket: CA43758

Between:

David Pakozdi

Respondent/
Appellant on Cross Appeal

(Plaintiff)

And

B & B Heavy
Civil Construction Ltd.

Appellant/
Respondent on Cross Appeal

(Defendant)






Before:



The Honourable Madam Justice Stromberg-Stein

The Honourable Mr. Justice Savage

The Honourable Mr. Justice Hunter




On appeal from:  An
order of the Supreme Court of British Columbia, dated June 3, 2016 (
Pakozdi
v. B & B Heavy Civil Construction Ltd.
, 2016 BCSC 992, Vancouver Docket
S151128).




Counsel for the Appellant:



M. Pierce





Counsel for the Respondent:



R.B. Johnson





Place and Date of Hearing:



Vancouver, British
  Columbia

November 7, 2017





Place and Date of Judgment:



Vancouver, British
  Columbia

January 19, 2018









Written Reasons by:





The Honourable Mr. Justice Hunter





Concurred in by:





The Honourable Madam Justice Stromberg-Stein

The Honourable Mr. Justice Savage








Summary:

The employer in a wrongful
dismissal suit appeals the damage award on the basis that the employee suffered
no loss from the termination because he had earned increased consulting income
during the notice period. The employer also appeals the length of the notice
period. The employee cross-appeals on the failure to award any damages for the
loss of a matching program for RRSP payments. Held: Appeal and cross-appeal
allowed in part. The trial judge erred in excluding all post-termination income
from the calculation of damages and erred by awarding damages based on an eight
month notice period for a 12 month employee. The employee is entitled to an
award for the loss of the opportunity to participate in the matching program.

Reasons for Judgment of the Honourable
Mr. Justice Hunter:

[1]

An employee of indefinite duration who is discharged with inadequate
notice is entitled to damages for breach of contract for losses arising from
the breach that were not avoidable through reasonable mitigation and were not actually
avoided through the employees mitigation efforts.

[2]

The respondent David Pakozdi was employed by the appellant for about a
year, during which he also generated independent consulting income with the
knowledge and consent of the appellant. After his termination, Mr. Pakozdi
continued to receive consulting income, but increased his earnings considerably
during the notice period.

[3]

The trial judge held that the post-termination earnings should be
disregarded when calculating damages arising from the inadequate notice Mr. Pakozdi
received. Whether that was an error of law is the central question in this
appeal.

[4]

In addition to the mitigation question, the appellant challenges the
notice period assessed by the trial judge, and Mr. Pakozdi cross-appeals
on one head of damage denied to him.

Background

[5]

Mr. Pakozdi is an experienced bid estimator and construction professional.
As an estimator he prepares competitive tenders and competes for projects on
behalf of construction firms. He worked for various firms until July 2013, when
he decided to set up his own business as a private consultant. At the time of
trial, he was 55 years of age.

[6]

In November 2013, he contacted the appellant, B & B Heavy Civil
Construction Ltd. (B & B) to offer his services at a time when B & B
was looking for a bid estimator to join the firm. At that time Mr. Pakozdi
expressed a preference for working on a contract basis as a consultant and the
parties proceeded on that basis for a month or so.

[7]

In mid-December, B & B again raised the subject of Mr. Pakozdi
joining the firm as an employee and this time Mr. Pakozdi expressed
interest. This culminated in an employment agreement in early January 2014.

[8]

The term of the employment contract was an issue at trial, but the trial
judge concluded that the employment had no fixed term and was a contract of
indefinite duration. That conclusion is not challenged in this appeal.

[9]

When he commenced employment, Mr. Pakozdi advised B & B that he
wished to continue to provide consulting services to some of his clients,
particularly a client named Mainroad. B & B acceded to that request. At the
time, B & B had a policy that employees could pursue outside employment,
including self-employment, provided such employment did not unduly interfere
with the employees regular duties with B & B or create a conflict of
interest.

[10]

During the latter part of 2014, Mr. Pakozdi provided services to
Mainroad without objection by B & B. He also suffered some health setbacks
arising from old injuries but the evidence was that B & B accommodated him
when he needed time off work as a result of these injuries.

[11]

In January 2015, B & B terminated Mr. Pakozdis employment and provided
him with severance of $5,000, which equates to about two weeks notice. No
cause was alleged. Mr. Pakozdi sued for wrongful dismissal.

[12]

At the time of his dismissal, Mr. Pakozdi was earning $130,000 per
year, or $10,833 per month, from his employment with B & B, and had earned
additional revenues from Mainroad in the five months prior to his dismissal.
The earnings from Mainroad varied from month to month. The most productive
month was October 2014, when Mr. Pakozdi worked 96 hours and generated
$9,600 from his consulting work for Mainroad.

The Trial Judgment

[13]

The principal issue for the trial judge was whether the employment
contract was a five-year term contract as Mr. Pakozdi alleged or a contract
of indefinite duration as asserted by B & B. The trial judge concluded that
the evidence did not support a five-year term contract.

[14]

The trial judge then turned to the proper length of notice for
termination. After reviewing the circumstances and authorities, she initially
concluded as follows:

[72]      In my
view, in light of his experience, age and length of employment, the applicable
notice period is five months. However, the plaintiff emphasizes that he was
vulnerable at the time of his firing, and that should be taken into account to
lengthen the reasonable notice

[15]

The trial judge gave effect to this submission. Citing
Ostrow
v. Abacus Management Corporation Mergers and Acquisitions
, 2014 BCSC 938,
the judge increased the period of notice by an additional three months to eight
months in total on the basis that Mr. Pakozdis physical and medical
condition would make it more difficult for him to obtain new employment and
accordingly, he was in a position of vulnerability that was known to his
employer.

[16]

The trial judge then turned to the mitigation issue and the argument of
B & B that Mr. Pakozdi had mitigated his loss to the extent that he
was not entitled to any damages. She summarized the positions of the parties in
this way:

[77]      The defendant alleges that the
plaintiff has mitigated his loss to the extent that he is not entitled to any
damages. The defendant submits Mr. Pakozdi earned more after termination
in three months than he would have at B & B, and therefore he is not
entitled to any compensation, or only a nominal amount:
Strauss v. Albrico
Services (1982) Ltd.
, 2008 BCCA 173;
Davidson v. Tahtsa Timber Ltd.
,
2010 BCCA 528.

[78]      The plaintiff agrees he has a duty to
mitigate, but emphasizes the burden of proof is on the defendant to show he has
not done so:
Szczypiorkowski v. Coast Capital Savings Credit Union
, 2011
BCSC 1376.

[79]      The plaintiff says his physical and
mental condition is a relevant consideration:
Systad v. Ray-Mont Logistics
Canada Inc
., 2011 BCSC 1202. In that case, even though the plaintiff made
only minimal efforts to find employment, it was not found that he failed to
mitigate. The plaintiff was recovering from a knee operation and the court said
it was reasonable to take that and the possibility of future surgeries into account.

[80]      I find
this reasoning applies to Mr. Pakozdi and the difficulty he now faces from
his physical injuries and his medication, which exacerbates his difficulties in
finding other employment.

[17]

She then cited
Redds Roadhouse Restaurants Ltd. v.
Randall
, 2014 BCSC 1464, for the proposition that
where the employer was aware that the employee would be working at two jobs it
was proper to exclude from the calculation of damages the post-termination income
from the second job. Accordingly, she made no deduction for the
post-termination consulting earnings of Mr. Pakozdi.

[18]

The final issue addressed by the trial judge that is relevant to this
appeal was whether Mr. Pakozdi was entitled to 5% of his wages through the
companys RRSP matching program. The trial judge concluded that he was not
entitled to this head of damage because there was no evidence that Mr. Pakozdi
was making RRSP contributions during the notice period.

Issues on Appeal

[19]

There are three issues contested by the parties on this appeal:

(i)       B & B says that the
trial judge erred in awarding Mr. Pakozdi damages based on an eight month
notice period when he was only employed for 12 months;

(ii)      B & B says that the
trial judge erred in not deducting all or part of Mr. Pakozdis
post-termination earnings on the basis that they were replacement earnings and
constituted at law avoided loss; and

(iii)      Mr. Pakozdi says on
cross-appeal that the trial judge erred by not awarding any damages for the
loss of the opportunity to participate in the RRSP matching program during the
notice period.

The Notice Period

[20]

The trial judge determined the proper notice period in two steps. First
she considered Mr. Pakozdis length of service and the other circumstances
of the case and concluded at para. 72 of her judgment that the applicable
notice period is five months. She then added three months for what was
characterized as Mr. Pakozdis vulnerability, making a total of eight
months for a 12 month employee.

[21]

In the absence of an error of law or principle, the standard of review
of an award of damages is reasonableness:
Lau v. Royal Bank of Canada
,
2017 BCCA 253 at para. 36.

[22]

The leading judgment on what constitutes reasonable notice of
termination is Chief Justice McRuers statement of principles in
Bardal v.
Globe & Mail Ltd.
(1960), 24 D.L.R. (2d) 140 at 145 (Ont. H.C.):

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.

[23]

The trial judge gave consideration to these factors in her initial
decision that the applicable notice period was five months, but then added
three months to the notice period because of what she characterized as Mr. Pakozdis
vulnerability.

[24]

Two issues arise from this approach: whether a notice period of eight
months is within the range of reasonableness for an employee of 12 months in
the circumstances of this case, and whether the approach of adding on an amount
in respect of the respondents medical condition is supportable.

[25]

The appellants position is that for a short-term employee of a year or
less, a notice period of two to three months is the range of reasonableness
that has been established in this jurisdiction. There is support for that
position in the jurisprudence.

[26]

In
Saalfeld v. Absolute Software Corporation
, 2009 BCCA 18, a
nine month employee was awarded damages based on five months notice. This
court reviewed the recent jurisprudence in this province and made the following
comment:

[15]       Absent
inducement, evidence of a specialized or otherwise difficult employment market,
bad faith conduct or some other reason for extending the notice period, the
B.C. precedents suggest a range of two to three months for a nine-month
employee in the shoes of the respondent when adjusted for age, length of
service and job responsibility

[27]

Notwithstanding this comment, the five month notice period was upheld,
primarily as the employee had required nine months to find employment after her
termination. This Court regarded the notice period as on the very high end of
an acceptable range but not unreasonable (at para. 18).

[28]

The two or three month range was applied by this Court in
Hall v.
Quicksilver Resources Canada Inc.
, 2015 BCCA 291, in which a seven month
notice period for a nine month employee was reduced to three months.

[29]

More recently, a 14 month employee who had been awarded damages based on
a six month notice period had the period reduced to four months in
Cabott v.
Urban Systems Ltd.,
2016 YKCA 4. The Court commented that:

[18]       Accepting
the description of the range of notice for specialized employees in short term
positions as two to three months as observed in
Saalfeld
and
Hall,
the
character of this employment would justify an award modestly beyond that range.

[30]

In my view, the initial assessment by the trial judge that the
applicable notice period is five months is within the range of reasonableness
having regard to this jurisprudence, though perhaps on the high side. Adding
three months for the respondents vulnerability takes the notice period outside
the range of reasonableness unless there are very special circumstances that
could support this assessment.

[31]

The trial judge explained the basis for the additional three months
notice period in these terms:

[75]      The
vulnerability comes from the fact that B & B was aware and accommodating of
Mr. Pakozdis condition. When he searches for new employment, he needs to
be candid with employers about his now worsened medical condition, and I agree
with his position that it will make him less attractive as a candidate. In my
view, this justifies lengthening his period of notice.

[32]

I cannot agree that an employees worsened medical condition provides
a basis for increasing the notice period beyond the period assessed by
reference to the
Bardal
factors, particularly in circumstances where the
employee was able to and did in fact work full-time during the notice period
and beyond.

[33]

Justice Goepel dealt with a similar argument in
Waterman v. IBM
Canada Limited
, 2010 BCSC 376, affd on other grounds 2013 SCC 70:

[23]      Mr. Watermans
health is not a factor to increase the notice period. In that regard, I adopt
the comments of McLachlin J. (as she then was) in
Nicholls v. Richmond
(Township)

(1984),
52 B.C.L.R. 302 (S.C.)
at
309-10
in which she held that the employee was not entitled to an
increased notice period due to ill health.

[34]

It may be that in an appropriate case an employees health could be
relevant to the assessment of reasonable notice (as opposed to an independent
factor increasing the notice period), but I can see no basis on which it would be
a relevant consideration in this case. Mr. Pakozdi was working throughout
his notice period and was not required to search for new employment. When Mr. Pakozdi
was hired by B & B, he had a consulting business on the side. He continued
to work in his consulting business while employed with B & B, and after his
dismissal he carried on his consulting business on an accelerated basis.

[35]

In my opinion, Mr. Pakozdis medical condition was not a proper
basis on which to extend the five month notice period to eight months, which is
outside the range of reasonableness for an employee in Mr. Pakozdis
circumstances. I would allow the appeal on this ground to the extent of
reducing the notice period to five months, as the trial judge initially
determined.

The Mitigation Issue

[36]

In the assessment of damages for breach of contract, mitigation can
arise in one of two ways. First, it can be argued that the claimant could have
reduced the loss by taking reasonable steps to replace the lost income through
new employment. This is somewhat awkwardly referred to as the duty to
mitigate but would be more accurately expressed as the principle that the
party not in breach cannot recover for avoidable loss.

[37]

Avoidable loss is not an issue in this case.

[38]

The second way in which principles of mitigation can lead to a reduction
in damages for breach of contract arises when the party not in breach does in
fact reduce the loss by replacing the income with new income that would not
have been earned if the employment relationship had continued. This is termed
avoided loss and is the issue raised by B & B in this appeal.

[39]

B & Bs argument is that after his dismissal, Mr. Pakozdi
ramped up his consulting business and replaced the employment income he would
have earned with B & B during the notice period with consulting income. If Mr. Pakozdi
has effectively avoided the loss, he cannot recover from B & B.

[40]

To support this argument, B & B relies on the evidence of the
increased consulting work Mr. Pakozdi did after termination of his
employment with B & B.

[41]

The evidence was that prior to his dismissal, Mr. Pakozdi worked
the following hours and generated the following income from Mainroad:




Month



Hours worked for Mainroad



Fees billed to Mainroad





August 2014



39.0



$3,900





September 2014



68.5



$6,850





October 2014



96.0



$9,600





November 2014



88.0



$8,800





December 2014



17.5



$1,750




[42]

Following his dismissal, the evidence was that Mr. Pakozdi worked
the following hours and generated the following income from Mainroad:




Month



Hours worked for Mainroad



Fees billed to Mainroad





January 2015



46.0



$4,600





February 2015



156.0



$15,600





March 2015



177.0



$17,700





April 2015



153.0



$15,300





May 2015



196.0



$19,600





June 2015



189.0



$18,900




[43]

The trial judge did not give effect to this argument. She took the view
that the judgment of my colleague Justice Savage in
Redds Roadhouse
Restaurants Ltd. v. Randall
, 2014 BCSC 1464 established the principle that
when an employee had, to the knowledge of the employer, been working at two
jobs prior to the dismissal and continued working at the second job after
dismissal, it was proper to exclude the earnings from the second job from the
calculation of damages for wrongful dismissal from the first job.

[44]

Before us, Mr. Pakozdi supported this approach by reference to the
following passage from a recent Ontario Court of Appeal judgment,
Brake v.
PJ-M2R Restaurant Inc.
, 2017 ONCA 402:

[140]    In a wrongful dismissal action, an
employer is generally entitled to a deduction for income earned by the
dismissed employee from other sources during the common law notice period.
However, as Rand J. explained in
Karas v. Rowlett
,
[1944] S.C.R. 1
, at p. 8
,
for income earned by the plaintiff after a breach of contract to be deductible
from damages, the performance in mitigation and that provided or contemplated
under the original contract must be mutually exclusive, and the mitigation, in
that sense, is a substitute for the other. Therefore, if an employee has
committed herself to full-time employment with one employer, but her employment
contract permits for simultaneous employment with another employer, and the
first employer terminates her without notice, any income from the second
employer
that she could have earned while continuing with the first
is
not deductible from her damages: see S.M. Waddams,
The Law of Damages
,
loose-leaf (Rel. Nov. 2016), 2d ed. (Toronto: Canada Law Book, 1991), at para. 15.780.

[Emphasis added.]

[45]

I have emphasized the qualification in
Brake
that it is post-termination
income from the second employer that
could have been earned while continuing
with the first employer
that is not deductible from her damages, not simply
all earnings from the second employer.

[46]

In my opinion, the principle as stated by the trial judge is too categorical.
It is not
all
income from the second job that is excluded from the
damage calculation, but rather income from the second job that could have been
earned had the employment from the first job continued. In other words, the
question is whether the new income is replacement income regardless of the
source of the income or a continuation of supplementary income being earned
prior to the dismissal. I do not see the judgment in
Redds Roadhouse
as
inconsistent with this principle.

[47]

The Ontario Court of Appeal in
Brake
was alive to this
distinction, pointing out that:

[145]
Whether Ms. Brakes
Sobeys income exceeded an amount that could reasonably be considered as
supplementary and, therefore, not in substitution for her employment income
was not argued. On the facts of this case, the amounts received from Sobeys do
not rise to such a level that her work at Sobeys can be seen as a substitute
for her work at PJ-M2R. I leave for another day the question as to when
supplementary employment income rises to a level that it (or a portion of it)
should be considered as a substitute for the amounts that would have been
earned under the original contract and, accordingly, be treated as deductible
mitigation income.

[48]

B & B argues that the question left for another day in
Brake
arises squarely in the case at bar. The argument is that because in each of the
months following the month of dismissal, Mr. Pakozdi earned more from his
consulting job than he would have earned with B & B, he has successfully avoided
the loss arising from termination and is not entitled to any damages from B
& B.

[49]

That proposition also is too categorical because it fails to take into
account the fact that at least some of the consulting income earned
post-termination could have been earned if the respondents employment with B
& B had continued, and therefore is not properly characterized as
replacement income.

[50]

Mr. Pakozdi was dismissed in mid-January 2015. His earnings from
his consulting work over the next five months was approximately $80,000. The
task then is to make an assessment of how much of this post-termination income
is to be considered replacement or substitute income, and therefore deductible
from his damage claim, and how much is to be considered supplementary income
that he could have earned if his employment with B & B had continued, and
therefore not deductible from his damage claim.

[51]

I will address this assessment later in my judgment.

The RRSP Matching Program

[52]

The final issue is raised by Mr. Pakozdis cross-appeal concerning
the companys RRSP matching program. Under this program, Mr. Pakozdi was
entitled to join the B & B Group Registered Retirement Savings Plan after
one year of employment, which was approximately the date of his dismissal. The
benefit under the matching program is described in the Employee Guidebook:

Each pay period your employer
will match your contributions by 100% up to a maximum of 5% of your salary.

[53]

The trial judge declined to make any award for the loss of the
opportunity to benefit from this matching program on the following basis:

[88]       The defendants say
there was no evidence that Mr. Pakozdi was making RRSP contributions
during the notice period and therefore it is not compensable:
Matusiak v.
IBM Canada Ltd.
, 2012 BCSC 1784 at para. 118-119. I agree.

[54]

The trial judge was applying the principle from
Wilks v. Moore Dry
Kiln Co. of Canada
(1981), 32 B.C.L.R. 149 (S.C.), to the effect that a
plaintiff cannot recover for fringe benefits that would have been paid by the
employer unless the employee has in fact incurred the expense during the notice
period. This principle has been applied to expenses such as dental expenses but
does not fit well with benefits such as matching expenses to a group plan,
where the employee cannot make the expenditure that would trigger the employer
match once he has been dismissed.

[55]

Justice Prowse made a similar point in
Steven Shinn v. TBC
Teletheatre B.C. et al.
, 2001 BCCA 83 at para. 37:

The decision of
Madam Justice McLachlin (as she then was) in
Wilks v. Moore Dry Kiln Co. of
Canada

(1981),
32
B.C.L.R. 149 (B.C.S.C.)
, applied by this Court in
Sorel v. Tomenson
Saunders Whitehead Ltd.

(1987),
16 C.C.E.L. 223 [B.C.C.A.]
, does not stand for the
proposition that the amount of an employers contributions to an employees
Canada Pension Plan during the notice period can never be recovered as damages.
Rather, damages will be awarded where the employee can show that he or she has
suffered a loss by virtue of the employers failure to pay the benefits during the
notice period.

[56]

In my opinion, the applicable principle is that damages in a wrongful
dismissal action are to be assessed on the basis of the plaintiffs entitlement
to benefits throughout the period of reasonable notice. A plaintiff is entitled
to compensation for the loss of the opportunity to share in whatever pecuniary
benefits would have flowed from being an employee during the notice period:
Hawkes
v. Levelton Holdings Ltd.
, 2012 BCSC 1219 at para. 309, affd 2013
BCCA 306.

[57]

Chief Justice McEachern explained this principle in
John
Iacobucci v. WIC Radio Ltd. et al.
, 1999 BCCA
753 at para. 24:

Applying the
foregoing to the facts of this case, it is my view that the plaintiff was
entitled to recover damages equivalent to the benefits he would have received
if he had remained as an employee until the expiration of a period of
reasonable notice. It makes no difference, in my view, that he cannot require
WIC Western to accept his attempted exercise of future options. The value of
such a right is a part of the measure of the damages he is entitled to recover
from WIC Radio.

[58]

Justice Saunders made a similar observation in
Gillies
v. Goldman Sachs Canada Inc.
, 2001 BCCA 683 at para. 20:

On the basis of
these authorities and the clear principle that Mr. Gillies is entitled to
be treated, for remedial purposes, as if he were an employee throughout the
notice period, the issue here is whether Mr. Gillies would have been
entitled to participate in the IPO had it been issued during the period of
reasonable notice.

[59]

Mr. Pakozdi is therefore entitled to compensation for the loss of
the opportunity to participate in the RRSP matching program during the five
month notice period.

Assessment of Damages

[60]

I have concluded that the trial judge erred in principle in three respects.
First, the notice period on which damages were based was outside the range of
reasonableness for a 12 month employee and should not have been increased from
the five months initially assessed on the basis of Mr. Pakozdis health
issues, which did not prevent him from earning substantial consulting income
during the notice period.

[61]

Second, she erred in failing to deduct any of the post-termination
income received by Mr. Pakozdi, although I do not agree that
all
of
the post-termination income should be deducted, as urged by the appellant. A
determination must be made as to how much of the post-termination consulting
income should be characterized as replacement income and how much is more
properly regarded as a continuation of the supplementary income he was earning
prior to his dismissal.

[62]

Finally, I have concluded that the trial judge erred in not providing
any award for the loss of opportunity to participate in the RRSP Matching Program
of the employer. This head of damage will be modest, but there is a loss that
merits some compensation.

[63]

In the ordinary course, I would remit the matter back to the trial judge
for assessment of damages based on these principles. However, under s. 9
of the
Court of Appeal Act
, R.S.B.C. 1996, c. 77, this Court has
the power to make any order that could have been made by the court appealed
from, including an order assessing damages. In my view, given the extent of
reduction that will accompany this judgment, it would not be in the interests
of justice to require the parties to incur the costs of further proceedings in
the Supreme Court: see
Mainstream Canada v. Staniford
, 2013 BCCA 341 at
paras. 52-54. Accordingly, I propose to assess the damages that result from the
principles set out in this judgment.

Damages for Inadequate Notice

[64]

The reduction in the notice period leads to a reduction in damages for
inadequate notice that can be calculated with precision. Five months notice at
Mr. Pakozdis salary would entitle him to $54,165, subject to the issue of
mitigation.

Reduction for Avoided Loss

[65]

The reduction for avoided loss cannot be calculated with precision.
Drawing the line between that portion of earnings in the notice period that is
properly to be regarded as replacement income and that portion that should be
regarded as a continuation of his supplementary income cannot be done in an
exact way.

[66]

Justice Pitfield described this task more generally in
Wilson v. UBS
Securities Canada Inc.
, 2005 BCSC 563 at para. 63:

The computation of damages in a
wrongful dismissal case is not a mathematical calculation but an assessment of
that which would likely have been earned had the proper period of working
notice been provided to the employee.

[67]

I propose to make an assessment on that basis, having regard to the
evidence that was led concerning Mr. Pakozdis consulting income before
and after dismissal.

[68]

The evidence indicates that Mr. Pakozdi was able to engage in
consulting work for as much as 96 hours in October 2014 without apparently
interfering with his duties at B & B. This work generated $9,600 for that
month, in addition to his earnings with B & B. Thus, it seems reasonable to
assume that in the five month notice period, Mr. Pakozdi could have earned
as much as $50,000 in what can be characterized as supplementary income. The
balance of his earnings can reasonably be regarded as replacement income and
thus deductible from his damage claim.

[69]

This analysis suggests that an amount of approximately $30,000 earned by
Mr. Pakozdi during the five month notice period is properly characterized
as replacement income and must be deducted from the damages otherwise payable.

[70]

The result of this assessment is that Mr. Pakozdi is entitled to
$54,165, representing five months of his employment income, less $30,000
representing the portion of his post-employment income that is designated as
replacement income, for a net damage award of $24,165 in respect of his salary.

Damages for Loss of the RRSP Matching Program

[71]

I have concluded that Mr. Pakozdi is entitled to a modest sum in
respect of the loss of the opportunity to participate in the RRSP Matching
Program. This again is a matter for assessment rather than calculation, as it
is not possible to know whether Mr. Pakozdi would in fact have taken
advantage of the program. I would assess damages for this head of damages at
$2,500.

Disposition

[72]

For these reasons, I would allow the appeal and the cross-appeal in part,
and vary the order under appeal in the following respects:

(a)      the notice period for the
calculation of damages is reduced to five months;

(b)      the damage award for the
salary component of the compensation is reduced to $24,165; and

(c)      the damage award is
increased by $2,500 to account for the loss of the opportunity to participate
in the group RRSP matching program.

[73]

The order of the trial judge is varied in accordance with these reasons.
In light of the divided success and subject to any arrangements as to costs
that have not been brought to our attention, I would order that each party bear
their own costs.

The
Honourable Mr. Justice Hunter

I AGREE:

The Honourable
Madam Justice Stromberg-Stein

I AGREE:

The Honourable
Mr. Justice Savage


