



COURT OF APPEAL FOR ONTARIO

CITATION: Antunes v. Limen Structures Ltd.,
    2016 ONCA 61

DATE: 20160120

DOCKET: M45653 (C60563)

Lauwers J.A. (In Chambers)

BETWEEN

John Antunes

Respondent/Moving Party

and

Limen Structures Ltd.

Appellant/Respondent Party

Jamie J. VanWiechen, for the moving party

Arnold B. Schwisberg, for the responding party

Heard:  January 13, 2015

ENDORSEMENT

[1]

Mr. Antunes successfully sued Limen Structures Ltd. for wrongful
    dismissal. Justice C. Brown rendered judgment on June 2, 2015 awarding him
    wrongful dismissal damages in the amount of $105,228.54, plus pre-judgment
    interest of $3,504.25 and costs in the amount of $37,500, for reasons reported
    at 2015 ONSC 2163.

[2]

The trial judge found Mr. Antunes was entitled under his employment
    contract to 5% of the Limen Structures shares, and awarded other damages in
    the amount of $500,000, representing the value of the shares.

[3]

On June 8, 2015, the appellant filed a notice of appeal
    asking the judgment to be varied by setting aside the award of damages for
    $500,000, but did not appeal the award of wrongful dismissal damages, pre-judgment
    interest or costs. The effect of the notice of appeal
was an automatic stay of the judgment pending appeal
    under
rule 63.01(1) of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194.

[4]

Mr. Antunes brought this notice of motion, dated October 5, 2015, under
    rule 63.01(5) of the
Rules of Civil Procedure
to lift the stay in
    respect of the wrongful dismissal damages, pre-judgment interest and the costs
    award, since these were not appealed.

[5]

In response, Limen Structures filed a supplementary notice of appeal
    challenging the amount of wrongful dismissal damages awarded by the trial
    judge, which was equivalent to eight months salary. Although the supplementary
    notice of appeal would have been months out of time if it had been the original
    notice of appeal, rule 68.08 entitles an appellant to amend a notice of appeal
    without leave before leave is perfected.

[6]

Mr. Antunes argues that the court should exercise its discretion under
    rule 63.01(5) to lift the stay in respect of the wrongful dismissal damages,
    interest and costs despite the supplementary notice of appeal, which he argues
    has no merit and was served solely for the purposes of buttressing Limen
    Structures claim to a stay as a way to stave off payment.

[7]

Mr. Antunes notes that the financial condition of the company has
    deteriorated and continues to deteriorate. He worries that by the time the
    appeal is argued the company will be insolvent and its assets dissipated to the
    principals of Limen Structures and related entities.

[8]

In his affidavit, Mr. Antunes advises that his counsel has told him that
    the appellants counsel has stated on several occasions that the Appellant
    does not have the financial ability to pay the judgment herein.  Mr. Antunes
    then states I am extremely concerned that any delay in my ability to enforce
    the Judgment will make it more difficult to collect the amount owed pursuant to
    the Judgment.

[9]

This is not an unreasonable fear, considering the appellants own
    evidence. The appellant filed the affidavit of Verne Pritchard, Controller and
    Chief Financial Officer of the Limen Group of Companies which includes Limen
    Structures.  This affidavit discloses that before the pretrial in this action,
    counsel for Limen Structures provided counsel for Mr. Antunes financial
    statements as of August 31, 2013, showing an operating loss in excess of $5
    million, and an accumulated deficit of $2.9 million and secured loans to
    related parties of greater than $3.4 million.  Mr. Pritchard adds that on March
    12, 2015, before the trial of this action, the lawyer for Limen Structures secured
    creditors provided counsel for Mr. Antunes with a statement regarding the
    claimed indebtedness, a
Personal Property Security Act
Report, and a
    copy of the creditors notice of intention to enforce under the
Bankruptcy
    and Insolvency Act
, R.S.C. 1985, c.
    B-3
. The appellants counsel asserted in argument that Limen
    Structures is insolvent.

[10]

Moreover,
    Mr. Antunes doubts the honesty of Limen Structures and its principals, and
    relies on the trial judges findings, at para. 66: Based on all of the
    evidence before me, I am satisfied that the defendant failed to act honestly in
    its contractual performance
vis-à-vis
the plaintiff, both in
    negotiations entering into the contract of employment and at the time of
    termination.

The Test for Lifting a Stay

[11]

I
    accept that the stay of execution imposed by rule 63.01 is intended to offer
    some protection to an appellant against payments which it might not eventually
    be obligated to make, thus putting it to the uncertainties of recovery.  In
Stein
    v. Sandwich West (Township)
(1994), 16 O.R. (3d) 321 (C.A.), at pp. 322-3,
    Carthy J.A. observed:

If I make an order in this case, there will be a risk to the
    appellants and the only measure of that risk likes in an assessment of the
    merits of the appeal on liability. It is not necessary to find the appeal
    frivolous if I can be satisfied that on the basis of what is presented to me,
    at this stage of the proceedings, the chances of success are so modest that
    they are overwhelmed by the hardship to the applicants.

[12]

Justice
    Carthy found nothing in the wording of rule 63.01(3) [now rule 63.01(5)] to
    prevent the exercise of the courts discretion under any circumstances,
    including where the risk is imposed on the appellants.

[13]

These
    cases require the court to consider a number of contextual factors, including:
the grounds of appeal; the parties position at trial;
    what has happened since the trial; the general circumstances of the case,
    including the trial judges reasons; and the probable delay between trial and
    appeal that cannot be controlled by the parties, as noted
in
Todd Archibald, Gordon Killeen & James C. Morton,

Ontario Superior Court Practice, 2015

(Markham,
    Ont.: LexisNexis, 2014), at p. 1740.

[14]

This
    court described the test for lifting the stay in
SA Horeca Financial
    Services v. Light
, 2014 ONCA 811 (
per

Weiler J.A.
    (In Chambers)), at para. 13:

Rule 63.01(5) gives an appellate
    court judge discretion to lift a stay imposed by rule 63.01(1) on such terms
    as are just. In considering whether to lift a stay, the court should have
    regard to three principal factors: i) financial hardship to the respondent if
    the stay is not lifted; ii) the ability of the respondent to repay or provide
    security for the amount paid; and iii) the merits of the appeal.

[15]

In
Keays v. Honda Canada Inc
., 2007 ONCA 564, Armstrong J.A. (In
    Chambers) considered lifting the stay in a wrongful dismissal action pending
    appeal to the Supreme Court of Canada. He partially lifted the stay on the
    basis that the respondent had made out a significant case for financial
    hardship if the stay were not lifted.  He recognized that it was very unlikely
    that the respondent would be able to repay or provide security for any amount
    paid to him.

[16]

While
    Armstrong J.A. expressed difficulty in assessing the merits of the appeal in
Keays
,
    because he was not provided with a list of the grounds, he noted, at para. 23, that
    the decision on liability for wrongful dismissal is based on findings of fact
    made by the trial judge which were subject to appellate review on the basis of
    palpable and overriding error  a very difficult standard to meet.

[17]

In
Keays
, Armstrong J.A. lifted the stay to the extent of $60,000 while
    the appeal proceeded in the Supreme Court of Canada. (I note in passing that Armstrong
    J.A.s assessment was vindicated when the Supreme Court allowed Hondas appeal,
    but only in relation to the damages award for the conduct of the dismissal and
    the award of punitive damages. The wrongful dismissal damages were upheld:
Keays
    v. Honda Canada Inc
., [2008] 2 S.C.R. 362.)

The Test Applied

[18]

I
    now consider the elements in the test for lifting a stay, applied to the
    wrongful dismissal aspect of the judgment.

[19]

The
    supplementary notice of appeal sets out the following grounds:

(1)     The trial judge expressly found that the Plaintiff
    failed to prove that he was induced from secure long-term employment as he had
    claimed. Therefore, the finding that in law the Plaintiff was entitled to pay
    in lieu of notice at the top end of the scale for an employee of a five month
    short-service period, was made in error.

(2)     Although the Plaintiff was found to have had no
    evidence explaining his inconsistent testimony about the duration of the
    computer virus that affected his ability to prove mitigation, no weight was
    given to these inconsistencies, causing a palpable error in fact and law, which
    was ignored in the judgment, in favour of the applicable period for pay in lieu
    of notice without due consideration of the failure of the plaintiff to prove
    any mitigation.

[20]

The
    contextual factors must be taken into account. I observe that Mr. Antunes
    testified and was found by the trial judge to be credible. By contrast, the
    appellant called no evidence at trial. The trial judge was critical of the
    appellants failure to call the president, Tony Lima, with whom
    Mr. Antunes negotiated the employment contract. As a consequence, she
    accepted Mr. Antunes version of the events on which Mr. Antunes was
    extensively cross-examined.

[21]

On
    the issue of hardship, Mr. Antunes states in his affidavit that he was unable
    to secure employment from the date of termination on November 9, 2012 and until
    March 2014. That employment terminated in August 2015 and Mr. Antunes says
    that he has since only found short-term consulting work and no permanent
    opportunity. Mr. Antunes notes that throughout the 17 months without
    employment, I had to support my wife and two kids, and pay the legal bills for
    the within action. This caused me a great deal of financial stress and
    hardship, and required me to incur extensive debts. I see no reason to doubt
    this evidence.

[22]

Mr.
    Antunes factum admits that he likely does not have the ability to repay any
    substantial amount collected from the Appellant. His counsel undertakes as an
    alternative to outright payment to Mr. Antunes, to hold and trust any proceeds
    realized from lifting the stay pending the appeals outcome on his behalf.

[23]

At
    all times, Limen Structures has asserted its inability to pay. The appellant
    has managed its affairs in such a way as to minimize its financial exposure to Mr.
    Antunes. I accept that businesses can find themselves in financial difficulty
    for many reasons having nothing to do with the wrongful dismissal claim of a
    former employee. But I take into account the scorched earth trial and appeal
    tactics taken by the appellant.

[24]

With
    respect to the merits of the wrongful dismissal appeal, the first ground
    alleges that the trial judge erred in law in finding that the respondent was
    entitled to pay in lieu of notice at the top end of the scale for an employee
    of a five month short-service period. The trial judges error, says the appellant,
    was in failing to take into account her finding that Mr. Antunes failed to
    prove that he was recruited away from secure long-term employment by Limen
    Structures.

[25]

To
    the contrary, in applying the
Bardal
factors (derived from
Bardal
    v. Globe & Mail Ltd
. (1960), 24 D.L.R (2d) 140, at p. 145), the trial
    judge referred to and rejected Mr. Antunes inducement argument, at paras. 79-80:

I do not find that the plaintiff was induced to leave other
    secure, long-term employment. I do find, however, that there was a breach of
    the duty to contract in good faith, and that misrepresentations were made in
    the context of employment negotiations with the plaintiff.

Taking into account the
Bardal
factors as set out
    above, I find that the plaintiff would have been entitled to a reasonable
    notice period of eight months. In so finding, and while cognizant of his short
    tenure with the defendant, I have also considered his senior position, his
    supervisory duties, his age and the availability of similar employment, as well
    as the defendant's misrepresentations and the defendant corporation's failure
    to abide by the rules of contractual conduct as set out in
Bhasin v. Hrynew
.

[26]

The
    appellants challenge is not therefore one of law, but of the weight that the
    trial judge accorded to the
Bardal
factors. To succeed on this ground,
    the appellant must demonstrate that the trial judge made a palpable and
    overriding error.

[27]

With
    respect to the second ground in the supplementary notice of appeal, concerning
    mitigation, contrary to the appellants assertion, the trial judge accepted Mr.
    Antunes evidence regarding his mitigation efforts. She accepted his
    explanation that the virus that destroyed his computer hard drive including any
    records did so in January 2013, and that he had mistakenly said it happened in
    January 2014.

[28]

All
    of these findings can only be displaced if it is ultimately found that the
    trial judge made a palpable and overriding error. As Armstrong J.A. noted in
Keays
,
    this is a very difficult standard to meet.

Disposition

[29]

The
    merits of the wrongful dismissal appeal are weak, as the appellant implicitly
    acknowledged by only belatedly amending its notice of appeal to add the
    wrongful dismissal appeal in response to this motion. Mr. Antunes has
    demonstrated financial hardship. While he might not be able to repay any
    amounts paid to him by the appellant, the interests of justice in the case favour
    the exercise of my discretion. I do not require his counsel to maintain any
    payment in trust for Mr. Antunes.

[30]

In
    the result, pursuant to 63.01(5) of the
Rules of Civil Procedure,
I
    lift the stay in respect of the award of wrongful dismissal damages,
    pre-judgment interest and the costs. The costs of this motion are reserved to
    the panel hearing the appeal.

P.
    Lauwers J.A.


