



COURT OF APPEAL FOR ONTARIO

CITATION: Hampton Securities Limited v. Dean, 2018 ONCA 216

DATE: 20180302

DOCKET: M48840 (C64908)

Fairburn J.A. (Motions Judge)

BETWEEN

Hampton Securities Limited

Appellant (Moving Party)

and

Christina Nicole Dean

Respondent (Responding Party)

Sara J. Erskine and David Barbaree, for the moving party

Christopher J. Somerville and Daphne Hooper, for the
    responding party

Heard: February 27, 2018

ENDORSEMENT


OVERVIEW

[1]

The applicant is a registered investment firm. The respondent was employed
    at the firm as a trader. Her employment ended in 2009. The applicant maintains
    that the respondent was terminated with cause. The respondent maintains that
    she was constructively dismissed.

[2]

On the day following the events leading to the respondents termination,
    the applicant filed a Notice of Termination (NOT) on the National Research
    Database (NRD). The NRD is maintained by the Investment Industry Regulatory
    Organization of Canada (IIROC). The NOT states:

Dismissed for cause.

No unresolved client complaints.

Failed to follow trading desk policies & procedures 
    unauthorized trading resulting in losses.

[3]

The applicant commenced an action against the respondent, claiming
    damages from losses she incurred as a trader. The respondent defended the action
    and counterclaimed for constructive dismissal and defamation.

[4]

The trial judge found that the respondent had been constructively
    dismissed and defamed by the applicant. The applicant was ordered to pay the
    respondent the equivalent of six months salary plus 4% vacation pay in lieu of
    notice, damages for defamation, and punitive damages. The applicant was also
    ordered to correct the NOT filed with IIROC in a manner consistent with the
    trial judges findings of fact.

[5]

The applicant appeals from the trial judges decision on a number of
    grounds, including that he erred by finding that the NOT was defamatory and/or
    was not within the defence of qualified privilege. The applicant also maintains
    that the trial judge exceeded his jurisdiction by making a mandatory order
    requiring the applicant to file a notice of correction with IIROC.

[6]

Pursuant to rule 63.01(1), the monetary award against the applicant is
    automatically stayed pending resolution of the appeal. This motion relates to
    the applicants request under rule 63.02(1), that the trial judges order to
    amend the NOT be stayed pending disposition of the appeal.

GENERAL FACTS

[7]

The respondent was required to have a reserve fund when she commenced
    her work as a trader with the applicant. For purposes of this motion, it is
    unnecessary to get into all of the details surrounding the reserve fund.

[8]

During a meeting on April 2, 2009, the respondent was told that she had
    to increase her reserve by $50,000 because her losses exceeded her reserve (a
    suggestion that the trial judge found was not true). The respondent was told
    that she could not trade until she increased her reserve by the stipulated
    amount. The respondent said that she wanted to think about it. Within 24 hours of
    that conversation, her employment was terminated. The applicant then submitted
    the NOT to IIROC and it was made available to other regulators and those in the
    trading industry to see.

[9]

The trial judge found that: (a) the applicant had no contractual right
    to demand $50,000; (b) there was no basis on which to conclude that [the
    respondent] failed to follow trading policies or engaged in unauthorized
    trading; and (c) the respondents termination had nothing to do with what was
    stated in the NOT, namely, failing to follow trading desk policies &
    procedures  unauthorized trading resulting in losses. The trial judge found
    that this statement was false and defamatory. He found that qualified privilege
    did not apply.

[10]

The
    applicant was ordered to correct the NOT in a form satisfactory to both
    parties. The parties later came to an agreement about the wording that should
    be used. The agreed upon wording is found in the trial judges endorsement of
    February 7, 2018:

Completely and permanently delete and replace the words i)
    Dismissed for cause and ii) Failed to follow trading desk policies &
    procedures  unauthorized trading resulting in losses under Termination
    Details  with iv) Resigned in good standing and ii) No internal discipline
    matters, respectively.

[11]

Although
    the parties reached an agreement on this wording, the applicant seeks to stay the
    order requiring that the NOT be changed until after the disposition of the
    appeal.

ANALYSIS

[12]

RJR-MacDonald
    Inc. v. Canada (Attorney General)
,
    [1994] 1 S.C.R. 311
, at para. 48 sets out a
    three-part test for an injunction:

First, a preliminary assessment must be made of the merits of
    the case to ensure that there is a serious question to be tried. Secondly, it
    must be determined whether the applicant would suffer irreparable harm if the
    application were refused. Finally, an assessment must be made as to which of
    the parties would suffer greater harm from the granting or refusal of the
    remedy pending a decision on the merits.

(i)
The
    Strength of the Appeal

[13]

The
    applicant raises numerous grounds of appeal. For purposes of this motion, he
    focusses on the suggestion that the trial judge erred in finding that the NOT
    was defamatory and/or not within the defence of qualified privilege and that
    the trial judge exceeded his jurisdiction by making the mandatory order to
    amend the NOT.

[14]

The
    applicant submits that the trial judge erred by reasoning that because the
    statements in the NOT were untrue (a characterization of the statements that
    the applicant rejects), qualified privilege could offer no defence to the defamation
    claim. I would not necessarily read the impugned paragraphs as the applicant
    suggests. However, the applicants position is not so frivolous or vexatious
    that it cannot meet the first stage of the analysis.

(ii)
No
    Irreparable Harm

[15]

Irreparable
    harm refers to the nature of the harm suffered rather than its magnitude. It
    is harm which either cannot be quantified in monetary terms or which cannot be
    cured, usually because one party cannot collect damages from the other:
RJR,
at para. 64.

[16]

The
    applicant argues that the appeal could be rendered moot if the NOT were to be
    amended now, causing irreparable harm to its interests. The applicant maintains
    that, as the mandatory order to amend the NOT rests on the cause of action in
    defamation, if this cause of action fails to succeed on appeal, then the
    entitlement to the amendment will evaporate. As such, the applicant reasons
    that changing the NOT could have the effect of rendering the appeal moot
    because, as they put it, the entitlement to the remedy is still under appeal.
    I disagree.

[17]

Among
    other authorities, the applicant relies upon
Martin v. Martin,
2012
    ONCA 814.
Martin
is a two paragraph endorsement of this court quashing
    an appeal where the matrimonial home that formed the subject of the appeal had
    been sold between the time of the original order and the appeal. The home was
    gone and there was no means by which to revisit the sale. I see no parallel
    between the result in
Martin
and this case.

[18]

Compliance
    with the order below will not render the appeal moot. If the applicant succeeds
    in the appeal, the NOT can simply be adjusted back to the original wording or
    changed to wording arising from some other remedy that may be imposed. I see
    nothing in this record that would render the appeal moot if the applicant complies
    with the trial judges order.

[19]

The
    applicant further submits that requiring it to amend the NOT will undermine its
    statutory obligations under the
Securities Act
, R.S.O. 1990, CHAPTER
    S.5,

and its contractual obligations with IIROC. I need not decide this
    issue. IIROC has communicated to the parties that once they agree on the changes
    to the NOT, or there is a final decision on the correction, then the change
    will be forwarded for processing. I take from this email exchange that IIROC
    is prepared to make whatever change they are asked to make, provided both
    parties agree or there is a final decision.

[20]

The
    applicant has failed to meet the burden of establishing irreparable harm on
    this motion. If irreparable harm exists, it lies with the respondent. The trial
    judge found that the defamatory statements adversely impacted her professional
    standing. There is also evidence on this motion that the respondents employer
    is taking the comments in the NOT into account in respect to the respondents
    current prospects for job advancement.

[21]

I
    do not find compelling the suggestion that, regardless of whether or not the
    amendment is made, the respondents potential for job advancement may be held
    at bay until completion of the litigation. It seems clear that, at a minimum,
    the removal of the now presumptively defamatory comments from the NOT will at
    least remove one barrier in the respondents way to professional progress.

[22]

Although
    some delay in bringing the litigation to conclusion appears to fall at the feet
    of the respondent, this does not undermine the fact that the statements found
    to be false have had and continue to have an adverse impact on her professional
    standing.  This results in real, present and ongoing harm to the respondent.

[23]

The
    applicant has failed to establish that they will suffer irreparable harm if a
    stay is not imposed.

(iii)
Balance
    of Convenience

[24]

As
    the applicant has failed to show irreparable harm, the balance of convenience
    cannot be in their favour.

CONCLUSION

[25]

The
    motion for a stay of the mandatory order is dismissed. If the parties cannot
    agree upon costs, they may each file two pages of written submissions in the
    next 14 days.

Fairburn J.A.


