



COURT OF APPEAL FOR ONTARIO

CITATION: Colistro v. Tbaytel, 2019 ONCA 197

DATE: 20190313

DOCKET: C64072

Hoy A.C.J.O., Simmons and Pardu JJ.A.

BETWEEN

Linda Colistro

Plaintiff (Appellant)

and

Tbaytel
,
The Corporation of the
    City of Thunder Bay
,

and Steve Benoit

Defendants (
Respondents
)

Michael Cupello and Luke Ruberto, for the appellant

Bradley A. Smith and Jonathon Clark, for the respondents

Heard: January 31, 2019

On appeal from the judgment of Justice John S. Fregeau of
    the Superior Court of Justice, dated June 16, 2017, with reasons reported at 2017
    ONSC 2731, 40 C.C.E.L. (4th) 51.

Hoy A.C.J.O.:

[1]

This appeal considers the consequences that flow from a companys decision
    to place its business interests above the expectations and concerns of a
    valued, long-time employee by rehiring an executive dismissed in part due to
    allegations of harassment of that same employee and others a decade earlier. It
    raises two main questions: (1) whether this decision constituted intentional
    infliction of mental suffering on the appellant, Linda Colistro; and (2)
    whether it resulted in her constructive dismissal.

I.        OVERVIEW

[2]

The appellant worked for the respondent, Tbaytel, and its predecessor,
    The Corporation of the City of Thunder Bay (the City), for nearly twenty
    years. On January 29, 2007, Tbaytel announced the hiring of Steve Benoit as Vice-President
    of Business Consumer Markets.

[3]

The appellant was shocked and upset by the announcement. Some eleven
    years earlier, before Tbaytel had assumed management and provision of the
    Citys telecommunications services, Mr. Benoit had been her immediate
    supervisor in the Citys telephone department. At the time of the announcement,
    the appellant was the executive assistant of Ken Esau, Executive Vice-President
    of Operations. After the announcement, she advised Mr. Esau that she was not
    feeling well and went home.

[4]

That evening, the appellant and her husband met with Mr. Esau and
    Tbaytels Vice-President of Human Resources, Christine Seeley, and told them
    that the City had terminated Mr. Benoits employment in early 1996 for sexually
    harassing the appellant and others.

[5]

In a February 1, 2007 email to Mr. Esau, the appellant advised that she
    was not eating or sleeping, was vomiting and on the verge of a nervous
    breakdown. She saw her doctor, who provided a note advising that she would be
    off work due to stress until March 1, 2007.

[6]

Tbaytel made inquiries. Mr. Benoit had not been interviewed by the City
    when it conducted its investigation into the allegations of sexual harassment
    and had not been terminated by the City for cause. Nonetheless, the complaints
    of sexual harassment were part of the reason for his termination.

[7]

Tbaytel had hired Mr. Benoit effective February 19, 2007, subject to a
    12- month probationary term. Tbaytel could have chosen not to proceed with
    hiring Mr. Benoit without consequences. Instead, by letter dated February 6,
    2007, Peter Diedrich, Tbaytels President and Chief Executive Officer, advised
    the appellant that he had decided to go forward with hiring Mr. Benoit. He
    indicated that he took her accusations of 11 odd years ago seriously and will
    discuss appropriate behaviour with Mr. Benoit. Tbaytel offered to accommodate the
    appellant by transferring her to an equivalent position in an adjacent
    building. But the appellant would accept nothing less than Tbaytel not
    proceeding with the hiring of Mr. Benoit.

[8]

The appellant did not return to work. Ultimately, she was diagnosed with
    Post Traumatic Stress Disorder (PTSD) and depression. In June 2008, the
    appellant commenced this action against Tbaytel and the City, claiming damages
    for intentional infliction of mental suffering and wrongful dismissal. The City
    accepted that it was vicariously liable for any compensatory damages awarded against
    the respondent, Tbaytel, a Municipal Services Board created under s. 197(1) of
    the
Municipal Act, 2001
, S.O. 2001, c. 25.

[9]

On June 16, 2017, the trial judge dismissed the appellants claim for
    intentional infliction of mental suffering and assessed her damages in the
    event that he erred in doing so. However, the trial judge found that the
    appellant had been constructively dismissed on February 6, 2007. He ordered
    Tbaytel and the City to jointly and severally pay the appellant damages equal
    to pay in lieu of 12 months notice, less the short-term salary continuance and
    long-term disability benefits she had received over that period,
[1]
leaving a net award of $14,082, plus
Honda
damages in the amount of
    $100,000, and prejudgment interest.

[10]

The
    trial judge held that Tbaytel and the City were the substantially successful
    parties to the litigation. By order dated January 26, 2018, he ordered the
    appellant to pay costs to Tbaytel in the amount of $150,000 and to the City in
    the amount of $50,000.

[11]

The
    appellant appeals the trial judges dismissal of her claim for intentional
    infliction of mental suffering and argues that he erred in his assessment of
    her damages flowing from the tort. She also seeks leave to appeal the trial
    judges costs order.

[12]

Tbaytel
    and the City cross-appeal, arguing that the trial judge erred in finding that
    Tbaytel had constructively dismissed the appellant and, in any event, erred in
    awarding
Honda
damages. In the cross-appeal, they also argue that the
    trial judge erred in finding that the first element of the tort of intentional
    infliction of mental suffering was made out.

[13]

For
    the following reasons, I would dismiss the appellants appeal of the dismissal
    of her claim for intentional infliction of mental suffering and Tbaytel and the
    Citys cross-appeal from the trial judges declaration that the appellant was
    constructively dismissed by Tbaytel on February 6, 2007. I would deny the
    appellant leave to appeal the costs award.

II.       INTENTIONAL INFLICTION OF MENTAL SUFFERING

The trial judges reasons

[14]

The
    trial judge correctly summarized the three elements of the tort of intentional
    infliction of mental suffering:

1.

Flagrant or outrageous conduct;

2.

Calculated to produce harm; and

3.

Resulting in a visible and provable illness.

[15]

He
    noted, again correctly, that the first and third branches of the test are
    objective, and the second is subjective. Citing this court in
Prinzo v.
    Baycrest Centre for Geriatric Care
(2002)
,
    60 O.R. (3d) 474 (C.A.), at para. 45, he wrote that the calculated to produce
    harm element is established where the actor desires to produce the
    consequences that follow from the act, or if the consequences are known to be
    substantially certain to follow. He referred to
Piresferreira v. Ayotte,

2010 ONCA 384
,
    319 D.L.R. (4th) 665, at paras. 78-79, leave to appeal refused, [2010] S.C.C.A.
    No. 283, and instructed himself that the second element is not satisfied by
    evidence of foreseeability or reckless disregard: Foreseeability, which
    indicates only that a result may follow, is much less than knowledge that a
    result is substantially certain to follow. He also cited
Piresferreira
for the principle that while the extent of the harm suffered need not be
    anticipated, the
kind
of harm must have been
    intended or known to be substantially certain to follow.

[16]

The
    trial judge found that the first element of the test was satisfied. In his
    view, Tbaytels conduct in deciding to proceed with hiring Mr. Benoit was
    objectively viewed and in all the circumstances, flagrant and outrageous
    conduct: para. 280. He found that, as a result of Tbaytels investigations, it
    knew that Mr. Benoit had sexually harassed the appellant in 1995 and had been
    terminated in 1996 because of this behaviour.

[17]

He
    wrote, at paras. 283 and 284:

Possessed with this knowledge, Tbaytel chose to finalize the
    hiring of Mr. Benoit, the person that [Peter] Diedrich, [Tbaytels President
    and Chief Executive Officer,] wanted for the vacant position of VP Business
    Consumer Markets, while at the same time hoping to put [the appellants]
    concerns to rest by shuffling her to another building. This decision minimized
    and invalidated the sexual harassment complaints of [the appellant], a 20 year
    valued and respected current employee of the company.

Tbaytels conduct in this regard exceeds insensitivity or poor
    management

[18]

The
    trial judge also found that the third element of the test was met. He was
    satisfied that the hiring of Mr. Benoit resulted in the appellant suffering
    visible and provable illnesses: PTSD and depression. Tbaytel and the City do
    not challenge this finding.

[19]

However,
    the trial judge concluded that the second element of the test had not been met.
    The appellant did not allege that Tbaytel intended to cause her harm.
    Therefore, the trial judge held the appellant was required to prove that
    Tbaytel knew that the kind of harm suffered by the [appellant] (PTSD and a
    major depressive disorder) was substantially certain to follow from their
    hiring of Mr. Benoit.

[20]

The
    trial judge was not convinced that Tbaytel had the necessary subjective
    knowledge. He wrote, at para. 286:

Tbaytel knew the [appellant] was very upset. They were aware
    that the [appellant] was unable to work. They were aware of the [appellants]
    statement that she was vomiting and on the verge of a nervous breakdown. I find
    that Tbaytel also had Dr. Raos note as of February 6, 2007, which merely
    stated that the [appellant] would be off work due to stress. In my opinion,
    however, this evidence cannot bear the weight the [appellant] suggests­­that
    Tbaytel knew it was substantially certain that their conduct would precipitate
    the [appellants] PTSD and depression.

Analysis

[21]

The
    appellant argues that in concluding that the second element of the test was not
    met, the trial judge erred in law by imposing a requirement that Tbaytel had to
    know that the
exact
kind of harm that she suffered
    was substantially certain to follow, down to her specific diagnoses. Tbaytel
    and the City argue that the trial judge correctly interpreted and applied
Piresferreira
,
    which directs that the defendant must have subjective knowledge that the kind
    of harm that resulted was substantially certain to follow.

[22]

In
Boucher v. Wal-Mart Canada Corp.
,
2014 ONCA 419, 120 O.R. (3d) 481, at para. 44, Laskin J.A. ,
    citing
Piresferreira
, summarized the relevant principle:

The plaintiff cannot establish intentional infliction of mental
    suffering by showing only that the defendant ought to have known that harm
    would occur. The defendant must have intended to produce the kind of harm that
    occurred or have known that it was almost certain to occur.

[23]

In
    my view,

Piresferreira
does not require that the defendant must
    have intended to produce a particular, recognized psychiatric illness or have
    known that it was substantially certain to follow. The confusion arises from para.
    79 of
Piresferreira
,
where Juriansz J.A. commented that the
    evidence did not support the inference that the defendant intended or knew that
    it was substantially certain to follow that the plaintiff would suffer post-traumatic
    stress disorder or a major depressive disorder. However, subsequent passages in
    para. 79 indicate that Juriansz J.A. accepted that the requisite kind of harm
    in that case was the more general category of
serious
    psychological injury
. He wrote that, at most, the trial judge found that
    serious psychological injury was foreseeable and, [f]oreseeability, which
    indicates only that a result may follow, is much less than knowledge that a
    result is substantially certain to follow. The second element of the test was
    not satisfied in
Piresferreira
because the trial judge had wrongly
    applied a test of reckless disregard or reasonable foreseeability, not because
    the harm that was foreseeable was not of the right kind.

[24]

I
    agree with the appellant that the trial judge erred in law to the extent he
    required Tbaytel to have known of the
exact
kind
    of harm that resulted, down to the particular psychiatric illness that was
    subsequently diagnosed. In this case, medical evidence confirmed that the
    appellant was suffering from visible and provable illnesses that satisfied the
    third element of the tort. And in this case, as in
Piresferreira
, the
    kind of harm that occurred was serious psychological injury. A finding that
    Tbaytel knew its February 6, 2007 letter was substantially certain to cause the
    appellant serious psychological injury would have sufficed to satisfy the
    second element.

[25]

However,
    I agree with the trial judge that the second element of the test was not made
    out.

[26]

As
    the trial judge noted, the second element of the test is subjective. Further,
    as Juriansz J.A. stressed in
Piresferreira
, where, as in this case, a
    plaintiff relies on the substantially certain to follow branch of the second
    element of the test, more than evidence of foreseeability or reckless disregard
    is required:
Piresferreira
,
at paras.77-79;
Boucher
,
at paras. 43-44. The bar is necessarily high where a defendant is to be
    liable for all of the consequences of an intentional wrongful act.

[27]

The
    requirement that the defendant have intended to produce the harm that occurred,
    or known that the harm was substantially certain to follow as a result of his
    or her conduct, is an important limiting element of the tort and distinguishes it
    from actions in negligence. It is now well established that a plaintiff can
    recover in negligence for psychological injury.  A plaintiff seeking recovery
    in negligence for mental injury must show that: (1) the defendant owed a duty
    of care to the claimant to avoid the kind of loss alleged; (2) the defendant
    breached that duty by failing to observe the applicable standard of care; (3)
    the claimant sustained damage; and (4) such damage was caused, in fact and in
    law, by the defendants breach:

Saadati v. Moorhead
, 2017 SCC 28, [2017] 1 S.C.R. 543, at para. 13;
Mustapha
    v. Culligan of Canada
, 2008 SCC 27, [2008] 2 S.C.R. 114,
    at paras. 8-9.

Frequently, the issue will be
    whether it is reasonably foreseeable that a person of ordinary fortitude would
    suffer the mental injury incurred as a consequence of the defendants allegedly
    negligent behaviour. However, in
Piresferreira
,
this court held,
    at paras. 50-63, that an employee cannot pursue a claim for negligent
    infliction of mental suffering in the employment context.

[28]

It
    was not alleged that Tbaytel actually intended to cause the appellant harm.
    Tbaytel sought to accommodate the appellant in its February 6, 2007 letter.
It was
open to
    accommodating the appellant ostensibly for the purpose of
avoiding
the
    imposition of mental suffering upon her.
Individuals subjected
to
    harassment of any kind respond in different ways. While Tbaytels offer of
    accommodation was not acceptable to the appellant, it could have been
    acceptable to others. In light of that offer of accommodation, a finding that
    Tbaytel had
subjective
knowledge that serious
    psychological injury was
substantially certain
to
    follow from its February 6, 2007 decision and offer to accommodate was not
    reasonably available on the evidence. The evidence might support an inference
    that serious psychological injury was reasonably foreseeable, but that is not
    sufficient to ground an intentional tort. The evidence does not support the
    inference that Tbaytel subjectively knew that the serious psychological injury
    which ensued was substantially certain to occur.

[29]

Because
    I agree with the trial judge that the second element of the test was not made
    out, it is unnecessary to address Tbaytels arguments that the trial judge
    erred in finding that its conduct was flagrant and outrageous. Nor is it
    necessary to address the appellants argument that the trial judge erred in his
    calculation of damages for intentional infliction of mental suffering.
    Accordingly, I turn to Tbaytels cross-appeal from the trial judges
    declaration that the appellant was constructively dismissed by Tbaytel on
    February 6, 2007.

III.      CONSTRUCTIVE DISMISSAL

The trial judges reasons

[30]

The
    trial judge found, at para. 310, that Tbaytels actions between January 29,
    2007 and February 6, 2007 and their treatment of [the appellant] made her
    continued employment with Tbaytel intolerable such that she was constructively
    dismissed on February 6, 2007.

[31]

He
    explained, at paras. 315 and 316:

It was impossible for Tbaytel to employ the [appellant] and Mr.
    Benoit without the two of them potentially coming into contact with one
    another. [The appellant] found this unacceptable. It was not just that she was
    unable to tolerate even incidental contact with Mr. Benoit. Tbaytel had been
    her employer for approximately 20 years. Their position on this issue
    re-victimized the [appellant] and minimized the past conduct of Mr. Benoit in
    the eyes of the [appellant] and other Tbaytel employees.

In my opinion, Tbaytels position, as enunciated in Mr.
    Diedrichs February 6, 2007 letter to the [appellant], was demeaning and
    dismissive: I have come to the decision that there is no legal or other reason
    not to go forward with hiring Mr. BenoitYou may find that you are unable to
    accept my decision and, in that case, you will have to proceed as you see fit.
    The issues raised by [the appellant] were not accusations, as suggested by
    Mr. Diedrich. Tbaytel chose to proceed with the hiring of an individual whom
    they knew had previously sexually assaulted one of their apparently valuable
    employees, who had an unblemished 20 year history with the company and who was
    objecting vehemently to her abuser being hired. I find this to have been a
    blatant disregard for the interests of [the appellant].

[32]

He
    also noted, at para. 313, that Tbaytel was aware that the hiring of Mr. Benoit
    prompted a very significant negative reaction from the [appellant]. The trial
    judge concluded, at para. 317, that an objective reasonable bystander, aware
    of all the facts, would find that [the appellants] continued employment with
    Tbaytel in these circumstances was intolerable.

[33]

As
    noted above, he ordered Tbaytel and the City to jointly and severally pay the
    appellant damages for wrongful dismissal equal to pay in lieu of 12 months
    notice, less the short-term salary continuance and long-term disability
    benefits she had received over that period, leaving a net award of $14,082.

[34]

Further,
    the trial judge concluded that the appellant was entitled to
Honda
damages in the amount of $100,000 due to the manner of her dismissal. At para.
    325, he explained why:

In the tort claim, I found that Tbaytels conduct toward [the
    appellant] was flagrant and outrageous. I also find that Tbaytels treatment of
    [the appellant] was grossly unfair, unduly insensitive and in blatant disregard
    of her interests. The Court has the benefit of extensive expert medical
    evidence which establishes that [the appellant] has suffered actual damages as
    a direct result of the way in which she was treated by Tbaytel at the time of
    her dismissal.

Tbaytels position on the issue of constructive dismissal

[35]

Tbaytel
    advances three main arguments:

1.  Although Tbaytel acknowledges that a court
    may find that an employee has been constructively dismissed if the employers
    treatment of the employee made continued employment intolerable, it argues that
    constructive dismissal on this basis cannot be founded on a single act by the
    employer. While the trial judge referred to Tbaytels actions between January
    29, 2007 and February 6, 2007, Tbaytel submits that the trial judges finding
    effectively rests on a single act: Tbaytels communication to the appellant on
    February 6, 2007 of its decision to proceed with the hiring of Mr. Benoit. In Tbaytels
    view, the persistent or repeated conduct required to found constructive
    dismissal was not present.

2. It argues that the trial judge erred by
    concluding that the appellants employment was intolerable based on the
    subjective feelings of the appellant, rather than on an objective standard, as
    the law requires.

3. It argues that the trial judge erred in
    awarding
Honda
damages.

Analysis

[36]

I
    am not persuaded that there is a basis for this court to interfere with the
    trial judges finding that the appellant was constructively dismissed or his
    award of
Honda
damages. Below, I address the appellants arguments, in
    turn.

(1)

A single incident can ground a finding that continued employment was intolerable

[37]

In
    addressing Tbaytels first argument, it is helpful to begin by briefly
    reviewing the Supreme Courts summary of the guiding principles in
Potter
    v. New Brunswick Legal Aid Services
, 2015 SCC 10,
[2015]
    1 S.C.R. 500
.

[38]

Constructive
    dismissal arises when an employers conduct evinces an intention to no longer
    be bound by the employment contract. The courts have taken a flexible approach
    in determining whether an employers conduct evinced an intention to no longer
    be bound by the contract:
Potter
,
at para. 32.

[39]

Two
    approaches have emerged. In the first, the court identifies an express or
    implied term that has been breached and then determines whether the breach was
    sufficiently serious to constitute constructive dismissal:
Potter
,
at
    para. 32. In the second, the court considers whether the employers conduct
    more generally shows that the employer intended not to be bound by the
    contract. The second approach permits the court to find that an employee has
    been constructively dismissed without identifying a specific fundamental term
    of the employment contract that has been breached where the employers
    treatment of the employee makes continued employment intolerable:
Potter
,
at para. 33.

[40]

In
    this case, the trial judge employed the second approach described in
Potter
.
    The second approach requires consideration of the cumulative effect of past
    acts by the employer and the determination of whether those acts evinced an
    intention no longer to be bound by the contract:
Potter
, at para. 33.

[41]

Tbaytel
    grounds its argument that a single act by Tbaytel cannot constitute
    constructive dismissal under the second approach on this reference in
Potter
to the cumulative effect of past acts. It argues that cumulative and acts
    make clear that more than a single act is required.

[42]

I
    reject Tbaytels argument that a single act by an employer cannot evince an
    intention not to be bound by the contract. As Wagner J. (as he then was) noted
    at para. 32 of
Potte
r
, courts have properly taken a flexible
    approach in determining whether the employers conduct evinced an intention to
    no longer be bound by the contract. The rigid approach argued for by Tbaytel is
    contrary to
Potter
. In my view, a stand-alone incident can render an
    employees continued employment intolerable. Whether it does so will depend on
    all the circumstances.

[43]

This
    court recognized, albeit in
obiter
and before
Potter
, that a
    single egregious act could make continued employment intolerable in
General
    Motors of Canada Limited v. Johnson
, 2013 ONCA 502, 116 O.R. (3d) 457, at
    para. 67.

[44]

In
General Motors
, an employees constructive dismissal claim, based on
    racism in the workplace, was founded on a single incident. On appeal, Cronk
    J.A., writing for the court, held that the trial judges conclusion that that
    there was racism in the workplace was unreasonable and not supported by the
    evidence and, accordingly, the trial judges holding of constructive dismissal
    could not stand. The racism complaint arose from a single employees refusal to
    attend a single training session conducted by the plaintiff. On the evidentiary
    record, it was unreasonable for the trial judge to have held that the
    employees absence was solely racially motivated.

[45]

Cronk
    J.A. went on to comment, in
obiter
, that even if the employees
    absence were racially motivated, it would not have supported a finding that the
    workplace was poisoned by racism, warranting a finding of constructive
    dismissal. The incident in question was but one incident over an eight-year working
    relationship. In this context, Cronk J.A. cautioned, at para. 67, that except
    for particularly egregious, stand-alone incidents, a poisoned workplace is not
    created, as a matter of law, unless serious wrongful behaviour sufficient to
    create a hostile or intolerable work environment is persistent or repeated.

[46]

The
    facts in this case are very different from those in
General Motors
.
    Here, the trial judges holding of constructive dismissal is rooted in a series
    of key factual findings that were made following a thirteen-day trial:

·

Mr. Benoit had sexually harassed the appellant in 1995, when both
    were employed by the City telephone department, and Mr. Benoit was the
    appellants immediate supervisor;

·

By February 6, 2007, Tbaytel knew that Mr. Benoit had been the
    subject of sexual harassment complaints in 1995, that the appellant was one of
    several complainants, and that her complaint was one of the reasons for Mr.
    Benoits 1996 termination, but proceeded to hire him;

·

The appellant was a valued employee with an unblemished 20-year
    history with the company; and

·

Tbaytel knew that the appellant was shocked and very upset by its
    hiring of Mr. Benoit and vehemently opposed to his continued employment.

[47]

These
    findings were amply supported by the evidence and are not challenged on appeal.

[48]

The
    trial judge evaluated Tbaytels February 6, 2007 letter communicating to the
    appellant its decision to proceed with the hiring of Mr. Benoit in light of Tbaytels
    knowledge of the sexual harassment the appellant and others had experienced in
    1995. As the trial judge highlighted, Tbaytel referred to the sexual harassment
    that led to Mr. Benoits dismissal as the appellants accusations of 11 odd
    years ago. Mr. Diedrich concluded that there is no legal
or other reason
to not go forward with hiring Mr.
    Benoit (emphasis added). However, it is clear that Tbaytel knew the
    appellants harassment complaint was more than an allegation. The trial judges
    finding that Tbaytels position, as reflected in this letter, was demeaning,
    dismissive and 
re-victimized the
    plaintiff and minimized the past conduct of Mr. Benoit in the eyes of the
    plaintiff and other Tbaytel employees
was well-founded.

[49]

Although
    Tbaytel frames its February 6, 2007 letter as a single act, as found by the trial
    judge, the letter took its significance from the sexual harassment and ensuing
    investigation that led to Mr. Benoits termination in 1996. Whether the letter
    communicating Tbaytels decision to re-instate Mr. Benoit despite his past
    conduct is viewed as a particularly egregious, stand-alone incident or the last
    in a series of past acts with cumulative effect is of no consequence. I am not
    convinced that the trial judge committed a palpable and overriding error in
    concluding that a reasonable person would see the appellants continued
    employment as intolerable under such circumstances and I defer to his finding.

[50]

Further,
    I would add this. While the trial judge employed the second approach to
    constructive dismissal described in
Potter
, there is overlap between the
    two approaches
Potter
describes. Some courts have found constructive
    dismissal based on the breach of an implied term or duty that the employer will
    treat the employee with civility, decency, respect and dignity (
Piresferreira
;
Sweeting v. Mok
, 2015 ONSC 4154, 27 C.C.E.L. (4th) 161, affd 2017
    ONCA 203, 37 C.C.E.L. (4th) 1) or that the work atmosphere be conducive to the
    well-being of its employees (
Stamos v. Annuity Research & Marketing
    Service Ltd.
(2002)
, 18
    C.C.E.L. (3d) 117 (Ont. S.C.)). The trial judge could have approached his task
    by considering whether there was a similar implied term in the appellants
    contract and a sufficiently serious breach to constitute constructive
    dismissal. Tbaytel does not suggest that under the first approach described in
Potter
a single, serious breach of an implied term cannot give rise to constructive
    dismissal.

[51]

I
    turn now to the appellants argument that the trial judges conclusion was
    improperly based on the subjective feelings of the appellant.

(2)

The trial judges conclusion was not based on the subjective feelings of
    the appellant

[52]

As
    Tbaytel submits, whether an employers treatment of an employee made continued
    employment intolerable is assessed objectively:
General Motors
, at para.
    66;
Potter
, at para. 42. Where a constructive dismissal claim is based
    on the employers work environment or treatment of the employee, the trial
    judge must ask whether a reasonable person, putting herself in the position of
    the claimant, would consider the employer to have evinced an intention to no
    longer be bound by the contract by making the employees continued employment
    intolerable:
Potter
, at paras. 42 and 47;
General Motors
, at
    paras. 69 and 91;
Shah v. Xerox Canada Ltd.
(2000), 49 C.C.E.L. (2d)
    166 (Ont. C.A.),

at paras. 6-9.

[53]

Tbaytel
    argues that the trial judges references to the
appellants
reaction to the hiring (at paras. 313 and 316) and to Tbaytels position having
    re-victimized the appellant and minimized the conduct of Mr. Benoit in the
eyes of the appellant
(at para. 315) demonstrate that he
    improperly based his conclusion on the subjective feelings of the appellant.

[54]

I
    reject this argument.

[55]

It
    is clear that the trial judge directed his mind to the correct legal standard.
    He adverted to the governing legal principles and the objective nature of the
    test before conducting his analysis: see paras. 241-246. He then applied those
    principles to the facts. As indicated above, at para. 317, the trial judge
    specifically concluded that an
objective reasonable bystander
,
    aware of all the facts, would find that [the appellants] continued employment
    with Tbaytel in these circumstances was intolerable (emphasis added). The
    trial judges references to the reactions of the appellant and other Tbaytel
    employees formed an important part of the narrative and the context in which
    Tbaytels actions were objectively assessed.

(3)

The trial judge did not err in
    awarding
Honda
damages

[56]

The
    respondents did not pursue this ground in their oral submissions. Nonetheless,
    I will briefly address it.

[57]

Tbaytel
    acknowledges that the trial judge properly directed his mind to
Honda
    Canada Inc. v. Keays
, 2008 SCC 39, [2008] 2 S.C.R. 362. In that case, the
    Supreme Court reaffirmed that damages in addition to compensatory damages for
    wrongful dismissal can be awarded only if the employer engages in conduct
    during the course of dismissal that is unfair or is in bad faith by being, for
    example, untruthful, misleading or unduly insensitive: at paras. 57 and 59.

[58]

Tbaytel
    essentially makes two arguments in its factum. First, it argues that the trial
    judges findings about Tbaytels conduct that underpinned his award of
Honda
damages amounted to palpable and overriding error. It takes particular
    exception to the finding that its conduct was flagrant and outrageous, and
    satisfied the first element of the tort of intentional infliction of mental
    suffering. Second, it argues that the trial judge did not provide any reasons for
    awarding the sum of $100,000, as opposed to some other amount.

[59]

It
    was not necessary to address Tbaytels argument that the trial judge erred in
    finding that its conduct satisfied the first element of the tort of intentional
    infliction of mental suffering in order to dispose of the appellants appeal of
    the trial judges dismissal of its tort claim. Nor is it necessary to address
    it here. Whether or not Tbaytels conduct was flagrant and outrageous for the
    purposes of the tort analysis, the factual findings underpinning the trial
    judges conclusion that the appellant was constructively dismissed adequately
    support his finding that Tbaytels conduct in the course of dismissal was
    unduly insensitive.

[60]

Assessing
Honda
damages is an imprecise and fact-specific exercise:
Rougemount
    Capital Inc. v. Computer Associates International Inc.
, 2016 ONCA 847, 410
    D.L.R. (4th) 509, at para. 42;
Doyle v. Zochem Inc.
, 2017 ONCA 130, 2017
    C.L.L.C. 210-030, at para. 14. From the trial judges reasons as a whole, it is
    apparent that in his view the appellants conduct warranted an award of damages
    in the amount of $100,000.

[61]

While
    the quantum of damages awarded is necessarily fact-specific, this quantum is not
    dissimilar to amounts recently awarded to other employees mistreated in their
    manner of termination:
Galea v. Wal-Mart Canada Corp.
, 2017 ONSC 245, 44
    C.C.E.L. (4th) 251;
Johnston v. The Corporation of the Municipality of
    Arran-Elderslie
, 2018 ONSC 7616;
Strudwick v. Applied Consumer &
    Clinical Evaluations Inc.
, 2016 ONCA 520, 34 C.C.E.L. (4t h) 235; some of
    which have been affirmed by this court:
Boucher
;
Doyle
.

IV.     THE TRIAL JUDGES COSTS ORDER

[62]

The
    trial judge held that, given the damages sought at trial by the appellant and
    the result achieved after trial, it was obvious that Tbaytel and the City were
    the substantially successful parties to the litigation, and were therefore
    entitled to an award of costs. While the appellants judgment was less
    favourable on its face than the financial terms of Tbaytel and the Citys 2015
    and 2016 offers to settle, the trial judge chose not to invoke the cost
    consequences of r. 49.10(2) of the
Rules of Civil Procedure
. Instead,
    he chose to fix costs in an amount which partially indemnified the defendants
    and which [he found] to be fair and reasonable taking into account all parties
    Bills of Costs, the terms of the 2015 and 2016 offers and other relevant
    factors: costs endorsement, para. 36.

[63]

By
    order dated January 26, 2018, the trial judge ordered the appellant to pay
    costs to Tbaytel in the amount of $150,000 and to the City in the amount of
    $50,000.

[64]

The
    appellant argues that the trial judge erred in the exercise of his discretion
    by not:

·

considering that vindication was important to her, and that a
    settlement without admission of liability would not have vindicated her;

·

comparing the tax consequences of Tbaytel and the Citys
    settlement offers to the tax consequences of the judgment she received after
    trial; and

·

considering her partial indemnity costs to the date of Tbaytel
    and the Citys settlement offers.

[65]

The
    test for leave to appeal an order as to costs is stringent. Leave to appeal
    will not be granted save in obvious cases where the party seeking leave
    convinces the court there are strong grounds upon which the court could find
    that the judge erred in exercising his discretion:
Carroll v. McEwan
,
    2018 ONCA 902, 34 M.V.R. (7th) 1, at paras. 58-59, application for leave to
    appeal to S.C.C. pending, 38514 (February 4, 2019).

[66]

I
    am not persuaded that the appellant has met this stringent test and would deny
    leave to appeal the costs order.

[67]

The
    appellants submissions suggest that the trial judge determined that she was
    entitled to her costs, subject to the application of r. 49.10(2). But he did
    not. He proceeded on the basis that Tbaytel and the City were the substantially
    successful parties and entitled to costs. Further, the record on appeal does
    not contain the settlement offers. The trial judges endorsement on costs
    suggests that Tbaytels second settlement offer did not include a no admission
    of liability clause. Finally, the trial judge acknowledged that the appellant
    argued that some of the amount of the settlement would have been taxable, but
    it is not clear that she quantified or substantiated that assertion and she
    does not do so before us.

V.      DISPOSITION

[68]

For
    these reasons, I would dismiss the appellants appeal of the dismissal of her
    claim for intentional infliction of mental suffering, and Tbaytel and the
    Citys cross-appeal from the trial judges declaration that the appellant was
    constructively dismissed by Tbaytel on February 6, 2007. I would deny the
    appellant leave to appeal the costs award. In light of the parties mixed
    success, I would award no costs of the appeal or the cross-appeal.

Released: AH MAR 13 2019

Alexandra Hoy A.C.J.O.

I agree Janet Simmons J.A.

I agree G. Pardu J.A.





[1]

The appellant conceded at trial that the long-term disability
    benefits were deductible from her damages,
Colistro v. Tbaytel
,
2017 ONSC 2731, 40 C.C.E.L. (4th) 51,
    at para. 299.


