CANADIAN CASES on EMPLOYMENT LAW Third Series/Troisi`Eme S´Erie Recueil De Jurisprudence Canadienne En Droit Du Travail

CANADIAN CASES ON EMPLOYMENT LAW Third Series/Troisi`eme s´erie Recueil de jurisprudence canadienne en droit du travail

VOLUME 89 (Cited 89 C.C.E.L. (3d))

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[Indexed as: Bou Malhab c. Diffusion Métromédia CMR inc.] Farès Bou Malhab (Appellant) and Diffusion Métromédia CMR inc. and André Arthur (Respondents) and Conseil National des Citoyens et Citoyennes d’origine Ha¨ıtienne, Canadian Broadcasting Corporation, Canadian Civil Liberties Association, Canadian Newspaper Association, Ad IDEM/Canadian Media lawyers Association and Canadian Association of Journalists (Interveners) Supreme Court of Canada McLachlin C.J.C., Binnie, LeBel, Deschamps, Abella, Charron, Rothstein JJ. Heard: December 15, 2009 Judgment: February 17, 2011* Docket: 32931, 2011 SCC 9 Jean El Masri, Eric´ Dugal, for Appellant David Stolow, Nicholas Rodrigo, Marie-Eve` Gingras, for Respondents Stefan Martin, Mélisa Thibault, for Intervener, Conseil National des Citoyens, Citoyennes d’origine ha¨ıtienne Guy J. Pratte, Jean-Pierre Michaud, for Intervener, Canadian Broadcasting Corporation Christian Leblanc, Marc-André Nadon, for Intervener, Canadian Civil Liberties Association Ryder Gilliland, for Interveners, Canadian Newspaper Association, Ad IDEM/Canadian Media lawyers Association, Canadian Association of Journalists Torts –––– Defamation — Nature of defamation — Showing reference is to plaintiff — Defamation of class –––– While on air, radio host made defamatory remarks about Montreal taxi drivers — Taxi driver instituted class action before Superior Court, seeking

*Corrections issued by the court on March 14, 2011 have been incorporated herein. 2 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d) damages for injury to reputation — Trial judge concluded that only taxi drivers who had heard impugned comments could claim compensation, which only 20 of them had done — Trial judge made up for this by using collective recovery mechanism and ordered radio host and broadcasting company to pay $220,000 to professional organization representing taxi drivers — Radio host and broadcasting company appealed — Court of Ap- peal allowed appeal, concluding that remarks made by radio host had been diluted by size of group concerned, leaving intact personal reputation of drivers — According to Court, broadening concept of defamation by ignoring need to establish existence of personal injury would weaken freedom of expression in unacceptable manner — Taxi driver appealed before Supreme Court of Canada — Appeal dismissed — Action in defamation can succeed only if personal injury has actually been sustained by plaintiff or plaintiffs — Here, relevant group was of considerable size and it was well known that group was heterogeneous — Further, assertions made by radio host were general and vague — Members of relevant group might have been hurt by contemptuous comments of radio host, but this was subjective perception — Defamatory nature of comments must be assessed objectively and it was Court’s view that ordinary person would not have believed that radio host’s comments had damaged reputation of each member of that group, with result that each of them sustained personal injury — Therefore, Court was of view that members of group had not sustained compensable injury. Torts –––– Defamation — Publication — Publication in mass media — Broadcast- ing — Defamation in live broadcasts –––– While on air, radio host made defamatory remarks about Montreal taxi drivers — Taxi driver instituted class action before Superior Court, seeking damages for injury to reputation — Trial judge concluded that only taxi drivers who had heard impugned comments could claim compensation, which only 20 of them had done — Trial judge made up for this by using collective recovery mechanism and ordered radio host and broadcasting company to pay $220,000 to professional organization representing taxi drivers — Radio host and broadcasting company appealed — Court of Appeal allowed appeal, concluding that remarks made by radio host had been diluted by size of group concerned, leaving intact personal reputation of drivers — Ac- cording to Court, broadening concept of defamation by ignoring need to establish existence of personal injury would weaken freedom of expression in unacceptable manner — Taxi driver appealed before Supreme Court of Canada — Appeal dismissed — Action in defamation can succeed only if personal injury has actually been sustained by plaintiff or plaintiffs — Here, relevant group was of considerable size and it was well known that group was heterogeneous — Further, assertions made by radio host were general and vague — Members of relevant group might have been hurt by contemptuous comments of radio host, but this was subjective perception — Defamatory nature of comments must be assessed objectively and it was Court’s view that ordinary person would not have believed that radio host’s comments had damaged reputation of each member of that group, with result that each of them sustained personal injury — Therefore, Court was of view that members of group had not sustained compensable injury. Délits civils –––– Diffamation — Nature de la diffamation — Démontrant que référ- ence est faite au demandeur — Diffamation a` l’endroit d’un groupe –––– Alors qu’il etait´ en ondes, un animateur de radio a fait des commentaires diffamatoires a` l’égard des chauffeurs de taxi de Montréal — Chauffeur de taxi a déposé un recours collectif devant Bou Malhab c. Diffusion Métromédia CMR inc. 3 la Cour supérieure, visant a` obtenir des dommages-intérêts pour atteinte a` la réputation — Juge de première instance a conclu qu’un chauffeur de taxi ne pouvait prétendre a` une indemnisation que s’il avait entendu les propos, ce qui n’était le cas que d’une vingtaine de chauffeurs — Pour pallier a` cette lacune, le juge de première instance a utilisé le mé- canisme du recouvrement collectif et condamné l’animateur de radio et la compagnie de radiodiffusion a` payer la somme de 220 000 $ a` une association professionnelle représentant les chauffeurs de taxi — Animateur de radio et la compagnie de radiodiffusion ont interjeté appel — Cour d’appel a accueilli l’appel en concluant que les propos de l’animateur s’étaient dilués dans la foule, en raison de la taille du groupe visé, laissant intacte la réputation personnelle des chauffeurs — Selon la Cour, elargir´ le concept de la diffamation en faisant fi de la nécessité d’établir l’existence d’un préjudice personnel etiolerait´ la liberté d’expression d’une manière inacceptable — Chauffeur de taxi a formé un pourvoi devant la Cour suprême du Canada — Pourvoi rejeté — Recours en diffamation ne peut réussir que si le ou les demandeurs ont dans les faits subi un préjudice personnel — En l’espèce, la collectivité visée etait´ d’une taille considérable et notoirement hétérogène — De plus, les propos de l’animateur de radio etaient´ vagues et généraux — Bien que les membres du groupe visé aient pu se sentir blessés par les propos méprisants de l’animateur de radio, il s’agissait là d’une perception subjective — Or, le caractère diffamatoire des propos se mesure objectivement, et la Cour etait´ d’avis qu’un citoyen ordinaire n’aurait pas cru que les propos de l’animateur de radio avaient porté atteinte a` la réputation de chacun des membres du groupe visé, de telle sorte que chacun aurait subi un préjudice personnel — Par conséquent, la Cour etait´ d’avis que les membres du groupe n’avaient pas subi de préjudice susceptible de réparation. Délits civils –––– Diffamation — Publication — Publication dans les médias de masse — Radiodiffusion — Diffamation lors d’une diffusion en direct –––– Alors qu’il etait´ en ondes, un animateur de radio a fait des commentaires diffamatoires a` l’égard des chauffeurs de taxi de Montréal — Chauffeur de taxi a déposé un recours collectif devant la Cour supérieure, visant a` obtenir des dommages-intérêts pour atteinte a` la répu- tation — Juge de première instance a conclu qu’un chauffeur de taxi ne pouvait prétendre a` une indemnisation que s’il avait entendu les propos, ce qui n’était le cas que d’une vingtaine de chauffeurs — Pour pallier a` cette lacune, le juge de première instance a utilisé le mécanisme du recouvrement collectif et condamné l’animateur de radio et la compagnie de radiodiffusion a` payer la somme de 220 000 $ a` une association professionnelle représentant les chauffeurs de taxi — Animateur de radio et la compagnie de radiodiffusion ont interjeté appel — Cour d’appel a accueilli l’appel en concluant que les propos de l’animateur s’étaient dilués dans la foule, en raison de la taille du groupe visé, laissant intacte la réputation personnelle des chauffeurs — Selon la Cour, elargir´ le concept de la diffamation en faisant fi de la nécessité d’établir l’existence d’un préjudice personnel etiolerait´ la liberté d’expression d’une manière inacceptable — Chauffeur de taxi a formé un pourvoi devant la Cour suprême du Canada — Pourvoi rejeté — Recours en diffamation ne peut réussir que si le ou les demandeurs ont dans les faits subi un préjudice personnel — En l’espèce, la collectivité visée etait´ d’une taille considérable et notoirement hétérogène — De plus, les propos de l’animateur de radio etaient´ vagues et généraux — Bien que les membres du groupe visé aient pu se sentir blessés par les propos méprisants de l’animateur de radio, il s’agissait là d’une perception subjective — Or, le caractère diffamatoire des propos se mesure objectivement, et la Cour etait´ d’avis 4 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d) qu’un citoyen ordinaire n’aurait pas cru que les propos de l’animateur de radio avaient porté atteinte a` la réputation de chacun des membres du groupe visé, de telle sorte que chacun aurait subi un préjudice personnel — Par conséquent, la Cour etait´ d’avis que les membres du groupe n’avaient pas subi de préjudice susceptible de réparation. A radio host made on-air remarks about the taxi industry in Montréal, stating that the drivers were incompetent people who spoke “nigger” and did not take care of their cars. A taxi driver instituted a class action before the Superior Court, seeking damages for injury to reputation. The trial judge concluded that the radio host’s comments were defamatory but that only a taxi driver who had heard the impugned comments could claim compensation, which only 20 drivers had done. The trial judge made up for this by using the collective recovery mechanism and ordered the radio host and the broadcasting company to pay $220,000 to a professional organization representing the taxi drivers. The radio host and the broadcasting company appealed. The Court of Appeal allowed the appeal, concluding that the remarks made by the radio host had been diluted by the size of the group concerned, leaving intact the personal reputation of the drivers. According to the Court, broadening the concept of defamation by ignoring the need to establish the existence of a personal injury would weaken freedom of expression in an unacceptable manner. The taxi driver appealed before the Su- preme Court of Canada. Held: The appeal was dismissed. Per Deschamps J. (McLachlin C.J.C., Binnie, LeBel, Charron, Rothstein JJ. concurring): An action in defamation can succeed only if personal injury has actually been sustained by the plaintiff or plaintiffs. This requirement also applies where the defamatory comments are made about a group. However, a group without juridical personality does not have the necessary capacity to be a party to an action. Also, a person does not, simply as a member of a group, have a sufficient interest to bring an action in damages. An interest will not be sufficient unless it is direct and personal. This is confirmed by the scheme of the Quebec Charter of Human Rights and Freedoms and by the rules of civil liability in the Civil Code of Quebec. The law of defamation applies in its entirety in the class action context. Thus, the use of a class action does not mean that the plaintiff does not have to prove personal injury. A class action is merely a procedural vehicle and its use does not have the effect of changing the substantive rules applicable to individual actions. It is not until the existence of personal injury sustained by each member of the group has been proved that the judge will focus on assessing the extent of the injury and choosing the appropriate recovery method. In other words, the recovery method cannot make up for the absence of personal injury. The judge must take into consideration certain factors to determine whether personal injury has been sustained, including the size of the group, the nature of the group, the plaintiff’s relationship with the group, the real target of the defamation, the seriousness or extravagance of the allegations as well as the plausibility of the comments and the tendency to be accepted. Here, the relevant group was of considerable size and it was well known that the group was heterogeneous. Further, the assertions made by the radio host Bou Malhab c. Diffusion Métromédia CMR inc. 5 were general and vague. The members of the relevant group might have been hurt by the contemptuous comments of the radio host, but this was a subjective perception. The defamatory nature of comments must be assessed objectively and it was the Court’s view that an ordinary person would not have believed that the radio host’s comments had damaged the reputation of each member of that group, with the result that each of them sustained personal injury. Considering the kind of radio show in question and the extreme, irrational and sensationalist nature of the remarks made on air, an ordinary person would not have formed a less favourable opinion of each taxi driver, considered individually, after having heard the comments. Therefore, the Court was of the view that the conclusion of the majority of the Court of Appeal that the members of the group did not sustain compensable injury should be upheld. Per Abella J. (dissenting): The comments made by the radio host undermined the very core of our fundamental values; these were highly stigmatizing remarks attacking members of vulnerable communities. While the group targeted by the statements in this case was large, it was not so diffuse as to be indeterminate. The group was defined with sufficient precision and the statements specific enough to be harmful to the reputations of each of its members. Further, the radio host’s defamatory comments raised, objectively, the clear possibility not only of harm to reputation, but also of harmful economic consequences from customers who may have decided to avoid taxis driven by members of the group, members who were easily identified and who stood accused not only of incompetence, but of having used corruption. Therefore, the appeal should be allowed and the award of damages made by the trial judge should be restored. Alors qu’il etait´ en ondes, un animateur de radio a fait des commentaires au sujet de l’industrie du taxi a` Montréal, affirmant que les chauffeurs etaient´ des incompétents qui s’exprimaient en « ti-nègre » et qui n’entretenaient pas leur véhicule. Un chauffeur de taxi a déposé un recours collectif devant la Cour supérieure visant a` obtenir des dommages-intérêts pour atteinte a` la réputation. Le juge de première instance a conclu que les propos de l’animateur de radio etaient´ diffamatoires mais qu’un chauffeur de taxi ne pouvait prétendre a` une indemnisation que s’il les avait entendus, ce qui n’était le cas que d’une vingtaine de chauffeurs. Pour pallier a` cette lacune, le juge de première instance a utilisé le mécanisme du recouvrement collectif et condamné l’animateur de radio et la compagnie de radiodiffusion a` payer la somme de 220 000 $ a` une association professionnelle représentant les chauffeurs de taxi. L’animateur de radio et la compagnie de radiodiffusion ont interjeté appel. La Cour d’appel a accueilli l’appel en concluant que les propos de l’animateur s’étaient dilués dans la foule, en raison de la taille du groupe visé, laissant intacte la réputation personnelle des chauffeurs. Selon la Cour, elargir´ le concept de la diffamation en faisant fi de la nécessité d’établir l’existence d’un préjudice personnel etiolerait´ la liberté d’expression d’une manière inacceptable. Le chauffeur de taxi a formé un pourvoi devant la Cour suprême du Canada. Arrêt: Le pourvoi a et´´ e rejeté. Deschamps, J. (McLachlin, J.C.C., Binnie, LeBel, Charron, Rothstein, JJ., souscrivant a` son opinion) : Un recours en diffamation ne peut réussir que si le ou les demandeurs ont dans les faits subi un préjudice personnel. Cette exigence s’applique tout autant lorsque 6 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d) les propos diffamatoires sont tenus a` l’endroit d’un groupe. Toutefois, un groupe sans personnalité juridique n’a pas la capacité requise pour ester en justice. Aussi, une personne ne possède pas l’intérêt suffisant pour exercer un recours en dommages-intérêts simplement du fait de son appartenance a` un groupe. Pour etreˆ suffisant, l’intérêt doit etreˆ direct et personnel. Ceci est confirmé par l’économie de la Charte québécoise des droits et libertés de la personne ainsi que par les règles de la responsabilité civile prévues au Code civil du Québec. Le droit de la diffamation s’applique intégralement dans le contexte d’un recours collectif. Ainsi, l’utilisation du recours collectif ne dispense pas le demandeur de faire la preuve d’un préjudice personnel. Le recours collectif ne constitue qu’un moyen procédural et son utilisation n’a pas pour effet de modifier les règles de fond applicables au recours in- dividuel. Ce n’est qu’une fois prouvée l’existence d’un préjudice personnel chez chacun des membres du groupe que le juge s’attarde a` evaluer´ l’étendue du préjudice et a` choisir le mode de recouvrement approprié. En d’autres mots, le mode de recouvrement ne permet pas de suppléer a` l’absence de préjudice personnel. Afin de déterminer l’existence d’un préjudice personnel, le juge doit tenir compte d’un certain nombre de facteurs, y compris la taille du groupe, la nature du groupe, le lien du demandeur avec le groupe, l’objet réel de la diffamation, la gravité ou l’extravagance des allégations ainsi que la vraisemblance des propos et la propension a` emporter l’adhésion. En l’espèce, la collectivité visée etait´ d’une taille considérable et notoirement hétérogène. De plus, les propos de l’animateur de radio etaient´ vagues et généraux. Bien que les membres du groupe visé aient pu se sentir blessés par les propos méprisants de l’animateur de radio, il s’agissait là d’une perception subjective. Or, le caractère diffamatoire des propos se mesure objectivement, et la Cour etait´ d’avis qu’un citoyen ordinaire n’aurait pas cru que les propos de l’animateur de radio avaient porté atteinte a` la réputation de chacun des membres du groupe visé, de telle sorte que chacun aurait subi un préjudice personnel. Compte tenu du style d’émission de radio en question et du caractère outrancier, irrationnel et sensationnaliste des propos tenus en ondes, le citoyen ordinaire n’aurait pas entretenu une opinion moins favorable a` l’égard de chacun des chauffeurs de taxi considérés individuellement après avoir entendu les propos. Par consé- quent, la Cour etait´ d’avis que la conclusion de la majorité de la Cour d’appel selon laquelle les membres du groupe n’avaient pas subi de préjudice susceptible de réparation devrait etreˆ confirmée. Abella, J. (dissidente) : Les propos tenus par l’animateur de radio ebranlaient´ le fonde- ment même de nos valeurs fondamentales et stigmatisaient fortement des membres de communautés vulnérables. Bien que le groupe visé par les propos en l’espèce fût large, il n’était pas vague au point d’être indéterminé. Le groupe etait´ assez bien défini et les déclarations assez précises pour que la réputation de chacun de ses membres soit ternie. De plus, les propos diffamatoires de l’animateur de radio risquaient manifestement, d’un point de vue objectif, non seulement de nuire a` la réputation, mais aussi d’entraˆıner des conséquences economiques´ préjudiciables si des clients décidaient d’éviter les taxis con- duits par des membres du groupe, facilement identifiables et accusés non seulement d’incompétence, mais de corruption. Par conséquent, le pourvoi devrait etreˆ accueilli et la décision du juge de première instance d’accorder des dommages-intérêts rétablie. Bou Malhab c. Diffusion Métromédia CMR inc. 7

Cases considered by Deschamps J.: A.U.P.E. v. Edmonton Sun (1986), 1986 CarswellAlta 269, 49 Alta. L.R. (2d) 141, 39 C.C.L.T. 143, 75 A.R. 253, [1986] A.J. No. 1147 (Alta. Q.B.) — considered Adams v. WFTV, Inc. (1997), 691 So. 2d 557, 22 Fla. L. Weekly D939, 25 Media L. Rep. 2242 (U.S. Fla. Ct. App. Dist.) — referred to Algarin v. Wallkill (Town) (2005), 421 F.3d 137, 23 I. Eq. R. 652 (U.S. C.A. 2nd Cir.) — considered Arcand v. Evening Call Publishing Co. (1977), 567 F.2d 1163, 3 Media L. Rep. 1748 (U.S. C.A. 1st Cir.) — considered Assoc. des policiers de Sherbrooke c. Delorme (1997), [1997] R.J.Q. 2826, [1997] R.R.A. 1140, 1997 CarswellQue 2493 (Que. S.C.) — considered Bai v. Sing Tao Daily Ltd. (2003), 226 D.L.R. (4th) 477, 2003 CarswellOnt 2037, 171 O.A.C. 385, [2003] O.J. No. 1917 (Ont. C.A.) — referred to Barrette c. Ciment du St-Laurent inc. (2008), 2008 SCC 64, 2008 CarswellQue 11070, 2008 CarswellQue 11071, (sub nom. Barrette v. Ciment du St-Laurent Inc.) 299 D.L.R. (4th) 385, 61 C.C.L.T. (3d) 1, 40 C.E.L.R. (3d) 1, (sub nom. Barrette v. St. Lawrence Cement Inc.) 382 N.R. 105, (sub nom. St. Lawrence Cement Inc. v. Bar- rette) [2008] 3 S.C.R. 392, [2008] S.C.J. No. 65, EYB 2008-150682 (S.C.C.) — considered Bisaillon c. Concordia University (2006), 51 C.C.P.B. 163, (sub nom. Bisaillon v. Concordia University) 149 L.A.C. (4th) 225, (sub nom. Bisaillon v. Concordia Uni- versity) 348 N.R. 201, (sub nom. Concordia v. Bisaillon) 2006 C.L.L.C. 220-033, 2006 C.E.B. & P.G.R. 8200, 2006 SCC 19, 2006 CarswellQue 3689, 2006 Carswell- Que 3690, (sub nom. Bisaillon v. Concordia University) 266 D.L.R. (4th) 542, [2006] 1 S.C.R. 666, [2006] S.C.J. No. 19 (S.C.C.) — referred to Booth v. British Columbia Television Broadcasting System Ltd. (1982), 1982 CarswellBC 781, 139 D.L.R. (3d) 88 (B.C. C.A.) — considered Botiuk v. Toronto Free Press Publications Ltd. (1995), 1995 CarswellOnt 801, 1995 CarswellOnt 1049, [1995] 3 S.C.R. 3, 126 D.L.R. (4th) 609, 26 C.C.L.T. (2d) 109, (sub nom. Botiuk v. Bardyn) 186 N.R. 1, (sub nom. Botiuk v. Bardyn) 85 O.A.C. 81, [1995] S.C.J. No. 69, EYB 1995-67440 (S.C.C.) — referred to Bouchard c. Agropur coop´erative (2006), 2006 CarswellQue 9072, 2006 QCCA 1342, [2006] R.J.Q. 2349, EYB 2006-110653, [2006] J.Q. No. 11396 (Que. C.A.) — referred to Butler v. Southam Inc. (2001), 2001 NSCA 121, 2001 CarswellNS 297, 197 N.S.R. (2d) 97, 616 A.P.R. 97, [2001] N.S.J. No. 332 (N.S. C.A.) — considered Cabay c. Fafard (1986), 1986 CarswellQue 658, [1986] Q.J. No. 2823, EYB 1986-78511 (Que. S.C.) — considered Cabay c. Fafard (June 14, 1988), Doc. C.A. Montr´eal, 500-09-001473-867, 500-09- 001474-865, EYB 1988-186754, [1988] Q.J. No. 1052 (Que. C.A.) — referred to Cherneskey v. Armadale Publishers Ltd. (1978), [1979] 1 S.C.R. 1067, 1978 Carswell- Sask 103, 24 N.R. 271, [1978] 6 W.W.R. 618, 7 C.C.L.T. 69, 90 D.L.R. (3d) 321, 1978 CarswellSask 133 (S.C.C.) — referred to Chohan v. Cadsky (2009), 2009 ABCA 334, 2009 CarswellAlta 1598, 464 A.R. 57, 467 W.A.C. 57 (Alta. C.A.) — referred to 8 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

Color Your World Corp. v. Canadian Broadcasting Corp. (1998), 106 O.A.C. 279, 38 O.R. (3d) 97, 1998 CarswellOnt 535, 156 D.L.R. (4th) 27, 41 C.C.L.T. (2d) 11, [1998] O.J. No. 510 (Ont. C.A.) — considered Color Your World Corp. v. Canadian Broadcasting Corp. (1998), 119 O.A.C. 397 (note), [1998] S.C.C.A. No. 170, [1998] 2 S.C.R. ix (S.C.C.) — referred to De Montigny c. Brossard (Succession) (2010), 78 C.C.L.T. (3d) 1, (sub nom. de Montigny v. Brossard (Succession)) 408 N.R. 80, 2010 SCC 51, 2010 CarswellQue 11312, 2010 CarswellQue 11313 (S.C.C.) — referred to Eastwood v. Holmes (1858), 1858 1 F. & F. 347, 175 E.R. 758 (Eng. C.P.) — considered F.E.E.S.P. c. Béliveau St-Jacques (1996), 1996 CarswellQue 624, 1996 CarswellQue 625, (sub nom. St-Jacques v. F.E.E.S.P.) 198 N.R. 1, (sub nom. St-Jacques v. F.E.E.S.P.) 36 C.R.R. (2d) 189, (sub nom. Béliveau St-Jacques v. F.E.E.S.P.) 136 D.L.R. (4th) 129, (sub nom. Béliveau St-Jacques v. F.E.E.S.P.) 96 C.L.L.C. 230-034, (sub nom. Béliveau St-Jacques v. F.E.E.S.P.) [1996] 2 S.C.R. 345, (sub nom. Béliveau St-Jacques v. F.E.E.S.P.) [1996] R.R.A. 537, EYB 1996-67901 (S.C.C.) — referred to Farrell v. Triangle Publications, Inc. (1960), 399 Pa. 102, 159 A.2d 734 (U.S. Pa. S.C.) — considered Fawcett Publications, Inc. v. Morris (1962), 377 P.2d 42, 1962 OK 183 (U.S. Sup. Ct.) — considered Gauthier v. Toronto Star Daily Newspapers Ltd. (2003), 2003 CarswellOnt 2538, 228 D.L.R. (4th) 748, 37 C.P.C. (5th) 154, [2003] O.J. No. 2622 (Ont. S.C.J.) — considered Gauthier v. Toronto Star Daily Newspapers Ltd. (2004), 50 C.P.C. (5th) 36, 2004 Cars- wellOnt 2629, 188 O.A.C. 211, 245 D.L.R. (4th) 169 (Ont. C.A.) — considered Gauthier v. Toronto Star Daily Newspapers Ltd. (2005), 2005 CarswellOnt 274, 2005 CarswellOnt 275, 337 N.R. 192 (note), 204 O.A.C. 400 (note), [2005] 1 S.C.R. ix (S.C.C.) — referred to Gilles E. Néron Communication Marketing inc. c. Chambre des notaires du Québec (2004), 26 C.C.L.T. (3d) 161, 241 D.L.R. (4th) 577, (sub nom. Néron (Gilles E.) Communication Marketing Inc. v. Société Radio-Canada) 324 N.R. 98, [2004] R.R.A. 715, [2004] 3 S.C.R. 95, 2004 CarswellQue 1742, 2004 CarswellQue 1743, 2004 SCC 53, REJB 2004-68721 (S.C.C.) — followed Grant v. Torstar Corp. (2009), 204 C.R.R. (2d) 1, [2009] 3 S.C.R. 640, 397 N.R. 1, 258 O.A.C. 285, 72 C.C.L.T. (3d) 1, 314 D.L.R. (4th) 1, 2009 CarswellOnt 7956, 2009 CarswellOnt 7957, 2009 SCC 61, 79 C.P.R. (4th) 407, EYB 2009-167615, [2009] S.J. No. 61 (S.C.C.) — referred to Gross v. Cantor (1936), 200 N.E. 592, 270 N.Y. 93 (U.S. N.Y. Ct. App.) — considered Hervieux-Payette c. Société St-Jean-Baptiste de Montréal (1997), [1998] R.R.A. 221, 1997 CarswellQue 3077, [1998] R.J.Q. 131, REJB 1997-03422 (Que. S.C.) — considered Hervieux-Payette c. Société St-Jean-Baptiste de Montréal (2002), 2002 CarswellQue 1170, [2002] R.J.Q. 1669, (sub nom. Société Saint-Jean-Baptiste de Montréal c. Hervieux-Payette) [2002] R.R.A. 727, 2002 CarswellQue 3608, [2002] J.Q. No. 1607, REJB 2002-32254 (Que. C.A.) — referred to Bou Malhab c. Diffusion Métromédia CMR inc. 9

Hill v. Church of Scientology of Toronto (1995), 25 C.C.L.T. (2d) 89, 184 N.R. 1, (sub nom. Manning v. Hill) 126 D.L.R. (4th) 129, 24 O.R. (3d) 865 (note), 84 O.A.C. 1, [1995] 2 S.C.R. 1130, 1995 CarswellOnt 396, 1995 CarswellOnt 534, (sub nom. Hill v. Church of Scientology) 30 C.R.R. (2d) 189, 1995 SCC 67, EYB 1995-68609, [1995] S.C.J. No. 64 (S.C.C.) — referred to Jackson v. TCN Channel 9 (2001), [2001] NSWCA 108 (Australia C.A.) — considered Jameel v. Wall Street Journal Europe SPRL (No. 3) (2006), [2006] UKHL 44, [2006] 3 W.L.R. 642, 156 N.L.J. 1612, [2007] Bus. L.R. 291, [2007] 1 A.C. 359, [2006] 4 All E.R. 1279, 21 B.H.R.C. 471, [2007] E.M.L.R. 2, 150 S.J.L.B. 1392, 103 L.S.G. 36 (Eng. H.L.) — referred to Jeunes canadiens pour une civilisation chrétienne c. Fondation du théâtre du Nouveau- Monde (1979), 1979 CarswellQue 325, [1979] C.A. 491 (Que. C.A.) — considered Johnson c. Arcand (2006), 38 C.C.L.T. (3d) 29, 2006 CarswellQue 592, 2006 QCCA 132, 2006 QCCA 138, (sub nom. Métromédia C.M.R. Montréal inc. c. Johnson) [2006] R.R.A. 39, [2006] R.J.Q. 395, EYB 2006-100768, [2006] J.Q. No. 775 (Que. C.A.) — referred to Knupffer v. London Express Newspaper Ltd. (1944), [1944] A.C. 116, [1944] 1 All E.R. 495 (U.K. H.L.) — considered Lange v. Atkinson (2000), [2000] 3 N.Z.L.R. 385 (New Zealand C.A.) — referred to Lange v. Australian Broadcasting Corp. (1997), 189 C.L.R. 520, 71 A.L.J.R. 818, 145 A.L.R. 96 (Australia H.C.) — referred to Malhab c. Métromédia CMR Montréal inc. (2003), 2003 CarswellQue 448, (sub nom. Malhab v. Métromédia CMR Montreal Inc.) 226 D.L.R. (4th) 722, [2003] R.J.Q. 1011, 48 C.H.R.R. D/334, REJB 2003-39077, [2003] J.Q. No. 2521 (Que. C.A.) — referred to McCullough v. Cities Service Co. (1984), 10 Media L. Rep. 1411, 676 P.2d 833, 52 A.L.R.4th 609, 1984 OK 1 (U.S. Sup. Ct.) — referred to Neiman-Marcus v. Lait, 13 F.R.D. 311 — considered New York Times Co. v. Sullivan (1964), 84 S.Ct. 710, 376 U.S. 254, 11 L.Ed.2d 686 (U.S. Ala.) — referred to O’Brien v. Williamson Daily News (1990), 18 Media L. Rep. 1037, 60 Ed. Law Rep. 485, 735 F. Supp. 218 (U.S. Dist. Ct.) — considered Ortenberg c. Plamondon (1914), 1914 CarswellQue 40, 24 B.R. 69, 24 B.R. 385 (Que. K.B.) — followed Ouellet v. Cloutier (1947), [1947] S.C.R. 521, 1947 CarswellQue 38 (S.C.C.) — referred to Prud’homme c. Prud’homme (2002), [2002] 4 S.C.R. 663, 2002 SCC 85, 2002 Carswell- Que 2710, 2002 CarswellQue 2711, [2003] R.R.A. 2, 221 D.L.R. (4th) 115, 297 N.R. 331, 37 M.P.L.R. (3d) 1, [2002] S.C.J. No. 86, REJB 2002-36356 (S.C.C.) — followed Québec (Commission des droits de la personne & des droits de la jeunesse) c. Montréal (Communauté urbaine) (2004), 2004 SCC 30, 2004 CarswellQue 1109, 2004 Car- swellQue 1110, (sub nom. Montréal (Communauté urbaine) c. Québec (Commission des droits de la personne & des droits de la jeunesse)) 49 C.H.R.R. D/129, (sub nom. Larocque v. Communauté urbaine de Montréal) 2004 C.L.L.C. 230-029, 36 C.C.E.L. (3d) 1, (sub nom. Commission des droits de la personne & des droits de la jeunesse 10 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

(Québec) v. Montréal (Communauté urbaine)) 319 N.R. 379, 239 D.L.R. (4th) 253, (sub nom. Québec (Commission des droits de la personne & des droits de la jeunesse) v. Communauté urbaine de Montréal) [2004] 1 S.C.R. 789, 18 Admin. L.R. (4th) 90, (sub nom. Québec (Commission des droits de la personne & des droits de la jeunesse) v. Communauté urbaine de Montréal) 122 C.R.R. (2d) 1, [2004] S.C.J. No. 25, REJB 2004-61850 (S.C.C.) — referred to Québec (Curateur public) c. Syndicat national des employés de l’hôpital St-Ferdinand (1996), 1996 CarswellQue 916, 1996 CarswellQue 917, 202 N.R. 321, (sub nom. Quebec (Public Curator) v. Syndicat national des employés de l’hôpital St-Ferdi- nand) 138 D.L.R. (4th) 577, 1 C.P.C. (4th) 183, [1996] 3 S.C.R. 211, EYB 1996- 29281 (S.C.C.) — considered R. v. Butler (1992), [1992] 2 W.W.R. 577, [1992] 1 S.C.R. 452, 11 C.R. (4th) 137, 70 C.C.C. (3d) 129, 134 N.R. 81, 8 C.R.R. (2d) 1, 89 D.L.R. (4th) 449, 78 Man. R. (2d) 1, 16 W.A.C. 1, 1992 CarswellMan 100, 1992 CarswellMan 220, EYB 1992-67139 (S.C.C.) — referred to R. v. Keegstra (1990), 1 C.R. (4th) 129, [1990] 3 S.C.R. 697, 77 Alta. L.R. (2d) 193, 117 N.R. 1, [1991] 2 W.W.R. 1, 114 A.R. 81, 61 C.C.C. (3d) 1, 3 C.R.R. (2d) 193, 1990 CarswellAlta 192, 1990 CarswellAlta 661, EYB 1990-66942, [1990] S.C.J. No. 131 (S.C.C.) — referred to Raymond v. Abel (1946), [1946] C.S. 251, 1946 CarswellQue 133 (Que. S.C.) — referred to Reynolds v. Times Newspapers Ltd. (1999), [1999] 3 W.L.R. 1010, [1999] UKHL 45, [2001] 2 A.C. 127, [1999] 4 All E.R. 609, [1999] H.L.J. No. 45 (U.K. H.L.) — referred to Sarrazin v. Duquette (1935), 41 R. de Jur. 365 — considered Sim v. Stretch (1936), [1936] 2 All E.R. 1237, 52 T.L.R. 669 (U.K. H.L.) — considered Simpson v. Mair (2008), 2008 SCC 40, 80 B.C.L.R. (4th) 1, [2008] 8 W.W.R. 195, 66 C.P.R. (4th) 121, 256 B.C.A.C. 1, 431 W.A.C. 1, (sub nom. WIC Radio Ltd. v. Simp- son) 175 C.R.R. (2d) 145, 293 D.L.R. (4th) 513, 376 N.R. 80, [2008] R.R.A. 515, (sub nom. WIC Radio Ltd. v. Simpson) [2008] 2 S.C.R. 420, 56 C.C.L.T. (3d) 1, 2008 CarswellBC 1311, 2008 CarswellBC 1347, [2008] S.C.J. No. 41 (S.C.C.) — referred to Société Radio-Canada c. Québec (Procureur général) (2011), 2011 SCC 2, 2011 Car- swellQue 43, 2011 CarswellQue 44 (S.C.C.) — referred to Société Radio-Canada c. Radio Sept-Îles inc. (1994), [1994] R.J.Q. 1811, 1994 Carswell- Que 1276, EYB 1994-57842 (Que. C.A.) — referred to Theophanous v. Herald & Weekly Times Ltd. (1994), 124 A.L.R. 1 (Australia H.C.) — referred to Trahan c. Imprimerie Gagné Ltée (1987), 44 C.C.L.T. 33, [1987] R.J.Q. 2417, [1987] R.R.A. 900, 1987 CarswellQue 63, EYB 1987-83368 (Que. S.C.) — considered Union des consommateurs c. Dell Computer Corp. (2007), 2007 CarswellQue 6310, 2007 CarswellQue 6311, 2007 SCC 34, 44 C.P.C. (6th) 205, (sub nom. Dell Computer Corp. v. Union des consommateurs) 284 D.L.R. (4th) 577, (sub nom. Dell Computer Corp. v. Union des consommateurs) [2007] 2 S.C.R. 801, 34 B.L.R. (4th) 155, (sub nom. Dell Computer Corp. v. Union des consommateurs) 366 N.R. 1, [2007] S.C.J. No. 34 (S.C.C.) — referred to Bou Malhab c. Diffusion Métromédia CMR inc. 11

Zhang v. Chau (2008), 2008 QCCA 961, [2008] R.R.A. 523, 2008 CarswellQue 3995, 58 C.C.L.T. (3d) 91, EYB 2008-133075 (Que. C.A.) — considered

Cases considered by Abella J.: A.U.P.E. v. Edmonton Sun (1986), 1986 CarswellAlta 269, 49 Alta. L.R. (2d) 141, 39 C.C.L.T. 143, 75 A.R. 253, [1986] A.J. No. 1147 (Alta. Q.B.) — referred to Barrette c. Ciment du St-Laurent inc. (2008), 2008 SCC 64, 2008 CarswellQue 11070, 2008 CarswellQue 11071, (sub nom. Barrette v. Ciment du St-Laurent Inc.) 299 D.L.R. (4th) 385, 61 C.C.L.T. (3d) 1, 40 C.E.L.R. (3d) 1, (sub nom. Barrette v. St. Lawrence Cement Inc.) 382 N.R. 105, (sub nom. St. Lawrence Cement Inc. v. Bar- rette) [2008] 3 S.C.R. 392, [2008] S.C.J. No. 65, EYB 2008-150682 (S.C.C.) — considered Butler v. Southam Inc. (2001), 2001 NSCA 121, 2001 CarswellNS 297, 197 N.S.R. (2d) 97, 616 A.P.R. 97, [2001] N.S.J. No. 332 (N.S. C.A.) — considered Gilles E. Néron Communication Marketing inc. c. Chambre des notaires du Québec (2004), 26 C.C.L.T. (3d) 161, 241 D.L.R. (4th) 577, (sub nom. Néron (Gilles E.) Communication Marketing Inc. v. Société Radio-Canada) 324 N.R. 98, [2004] R.R.A. 715, [2004] 3 S.C.R. 95, 2004 CarswellQue 1742, 2004 CarswellQue 1743, 2004 SCC 53, REJB 2004-68721 (S.C.C.) — considered Grant v. Torstar Corp. (2009), 204 C.R.R. (2d) 1, [2009] 3 S.C.R. 640, 397 N.R. 1, 258 O.A.C. 285, 72 C.C.L.T. (3d) 1, 314 D.L.R. (4th) 1, 2009 CarswellOnt 7956, 2009 CarswellOnt 7957, 2009 SCC 61, 79 C.P.R. (4th) 407, EYB 2009-167615, [2009] S.J. No. 61 (S.C.C.) — considered Knupffer v. London Express Newspaper Ltd. (1944), [1944] A.C. 116, [1944] 1 All E.R. 495 (U.K. H.L.) — considered Ortenberg c. Plamondon (1914), 1914 CarswellQue 40, 24 B.R. 69, 24 B.R. 385 (Que. K.B.) — followed Prud’homme c. Prud’homme (2002), [2002] 4 S.C.R. 663, 2002 SCC 85, 2002 Carswell- Que 2710, 2002 CarswellQue 2711, [2003] R.R.A. 2, 221 D.L.R. (4th) 115, 297 N.R. 331, 37 M.P.L.R. (3d) 1, [2002] S.C.J. No. 86, REJB 2002-36356 (S.C.C.) — considered R. v. Keegstra (1990), 1 C.R. (4th) 129, [1990] 3 S.C.R. 697, 77 Alta. L.R. (2d) 193, 117 N.R. 1, [1991] 2 W.W.R. 1, 114 A.R. 81, 61 C.C.C. (3d) 1, 3 C.R.R. (2d) 193, 1990 CarswellAlta 192, 1990 CarswellAlta 661, EYB 1990-66942, [1990] S.C.J. No. 131 (S.C.C.) — considered Simpson v. Mair (2008), 2008 SCC 40, 80 B.C.L.R. (4th) 1, [2008] 8 W.W.R. 195, 66 C.P.R. (4th) 121, 256 B.C.A.C. 1, 431 W.A.C. 1, (sub nom. WIC Radio Ltd. v. Simp- son) 175 C.R.R. (2d) 145, 293 D.L.R. (4th) 513, 376 N.R. 80, [2008] R.R.A. 515, (sub nom. WIC Radio Ltd. v. Simpson) [2008] 2 S.C.R. 420, 56 C.C.L.T. (3d) 1, 2008 CarswellBC 1311, 2008 CarswellBC 1347, [2008] S.C.J. No. 41 (S.C.C.) — considered Statutes considered by Deschamps J.: Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 Generally — referred to 12 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

s. 2(b) — considered Charte des droits et libertés de la personne, L.R.Q., c. C-12 art. 3 — considered art. 4 — considered art. 49 — considered Code civil, 2000 en général — referred to Code civil du Québec, L.Q. 1991, c. 64 en général — referred to art. 3 — considered art. 35 — considered art. 1457 — referred to art. 1607 — considered art. 1611 — considered Code de procédure civile, L.R.Q., c. C-25 en général — referred to art. 55 — referred to art. 56 al. 1 — referred to art. 59 — referred to art. 67 — referred to art. 1002 — referred to art. 1003 — referred to art. 1028 — referred to art. 1034 — referred to art. 1051 — referred to Presse, Loi sur la, 1881 en général — referred to

Statutes considered by Abella J.: Code civil du Québec, L.Q. 1991, c. 64 en général — referred to Treaties considered by Deschamps J.: American Convention on Human Rights, 1969, O.A.S.T.S. No. 36, 1144 U.N.T.S. 123, 9 I.L.M. 673 Article 11 — referred to Article 13 ¶ 1 — referred to Article 13 ¶ 2 — referred to European Convention for the Protection of Human Rights and Fundamental Freedoms, 213 U.N.T.S. 222; E.T.S. no. 5 Article 10 — referred to International Covenant on Civil and Political Rights, 1966, C.T.S. 1976/47; 999 U.N.T.S. 171; 6 I.L.M. 368 Article 19 ¶ 2 — referred to Bou Malhab c. Diffusion Métromédia CMR inc. Deschamps J. 13

Article 19 ¶ 3 — referred to

APPEAL by representative of group of taxi drivers from judgment reported at Malhab c. Diffusion Métromédia CMR inc. (2008), [2008] R.R.A. 918, [2008] R.J.Q. 2356, 60 C.C.L.T. (3d) 58, 2008 CarswellQue 10002, 2008 QCCA 1938, EYB 2008-148977 (Que. C.A.), reversing judgment reported at Malhab c. Diffusion Métromédia CMR inc. (2006), [2006] R.J.Q. 1145, 2006 CarswellQue 14102, EYB 2006-104096, 2006 CarswellQue 3426, 41 C.C.L.T. (3d) 190, 2006 QCCS 2124, [2006] R.R.A. 435 (Que. S.C.), allowing class action against radio host for defamatory remarks and awarding damages for injury to reputation.

POURVOI du représentant d’un groupe de chauffeurs de taxi a` l’encontre d’un jugement publié a` Malhab c. Diffusion Métromédia CMR inc. (2008), [2008] R.R.A. 918, [2008] R.J.Q. 2356, 60 C.C.L.T. (3d) 58, 2008 CarswellQue 10002, 2008 QCCA 1938, EYB 2008-148977 (Que. C.A.), ayant infirmé le jugement publié a` Malhab c. Diffusion Métromédia CMR inc. (2006), [2006] R.J.Q. 1145, 2006 CarswellQue 14102, EYB 2006- 104096, 2006 CarswellQue 3426, 41 C.C.L.T. (3d) 190, 2006 QCCS 2124, [2006] R.R.A. 435 (Que. S.C.), ayant accueilli un recours collectif a` l’encontre d’un animateur de radio a` la suite de propos diffamatoires et octroyant des dommages-intérêts pour atteinte a` la réputation.

Deschamps J.:

1 The law of defamation is a tool for protecting personal reputations. The law keeps pace with changes in society and with the importance attached by society to freedom of expression. In Quebec, actions in defamation are governed by the general principles of civil liability. The flexibility of those principles makes it possible to address society’s growing concerns about freedom of expression. In two recent cases, this Court considered the impact of freedom of expression on the element of “fault” in civil liability: Prud’homme c. Prud’homme, 2002 SCC 85, [2002] 4 S.C.R. 663 (S.C.C.), at paras. 38-45; Gilles E. Néron Communication Marketing inc. c. Chambre des notaires du Québec, 2004 SCC 53, [2004] 3 S.C.R. 95 (S.C.C.), at paras. 48-51 and 54-55. In this appeal, it is the element of “injury” that must be examined in light of freedom of expression. The Court must examine the factors to consider when determining whether racist comments made about a group can cause a compensable injury. 2 Through a class action, the appellant sought compensation for the injury allegedly suffered by the members of the group as a result of racist comments made by a radio host concerning Montréal taxi drivers whose mother tongue is Arabic or Creole. The respondents argued, successfully in the Court of Appeal, that the members had not been personally affected and cannot be compensated. I find that there was no personal injury in this case and that the rules of civil liability accordingly do not authorize compensation. I would therefore dismiss the appeal. 14 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

I. Facts 3 On November 17, 1998, André Arthur — a host known for his provocative remarks — was hosting the morning show on the CKVL radio station, which is operated by the respondent Diffusion Métromédia CMR inc. One topic during the show was whether Quebeckers were satisfied with restaurants and hotels, particularly in Montréal. While his co-host was getting ready to present the results of a survey on that topic, Mr. Arthur made, inter alia, the following comments about the taxi industry in Montréal: [TRANSLATION] Why is it that there are so many incompetent people and that the language of work is Creole or Arabic in a city that’s French and English? ... I’m not very good at speaking “nigger”. ... [T]axis have really become the Third World of public transportation in Montreal. ... [M]y suspicion is that the exams, well, they can be bought. You can’t have such incompetent people driving taxis, people who know so little about the city, and think that they took actual exams. ... Taxi drivers in Montreal are really arrogant, especially the Arabs. They’re often rude, you can’t be sure at all that they’re competent and their cars don’t look well maintained. 4 As well, Mr. Arthur tolerated and even encouraged similar remarks made by a listener who phoned in and who said she was a taxi driver. 5 The appellant, Mr. Bou Malhab, is a taxi driver whose mother tongue is Arabic. He applied to the Superior Court for authorization to institute a class action against the respondents.

II. Judicial History A. Judgments on the Application for Authorization to Institute the Class Action 6 Marcelin J. of the Superior Court dismissed the application for authorization to institute the class action (SOQUIJ AZ-01021767). Because of the large size of the group covered by Mr. Arthur’s comments, she was of the opinion that it would be impossible to prove a causal connection between those comments and injury sustained by each member of the group personally. She also found that, even if the group had been small enough for the members’ reputations to have been personally damaged, the members should have used the procedure for join- der of actions (arts. 59 and 67 of the Code of Civil Procedure, R.S.Q., c. C-25 (“C.C.P.”)) rather than the class action mechanism. 7 The Court of Appeal set aside that decision and authorized the appellant to institute the class action on behalf of [TRANSLATION] “[e]very person who had a taxi driver’s licence in the region of the Island of Montréal on November 17, 1998 ... and whose mother tongue is Arabic or Creole” (Malhab c. Métromédia CMR Montréal inc., [2003] R.J.Q. 1011 (Que. C.A.), at para. 8). Rayle J.A., writing for a unanimous court, first found that there was a colour of Bou Malhab c. Diffusion Métromédia CMR inc. Deschamps J. 15

right. While she agreed with the Superior Court that the size of the group covered by wrongful comments might make it difficult to establish individual injury, she found that it would be up to the court to determine [TRANSLATION] “the extent to which the size of the group in question limits or eliminates the individual nature of the damage to reputation, having regard to the nature of the comments made and the circumstances in which the defamation occurred” (para. 51). Second, she acknowledged that moral damages are difficult to assess in a class action context, but she refused to see this as precluding such an action at the outset and suggested that an order to pay damages to a charity could be a way to get around this problem. The matter was referred back to the Superior Court for a hearing on the merits.

B. Judgments on the Merits of the Class Action 8 Guibault J. of the Superior Court was of the view that Mr. Arthur’s comments were defamatory and wrongful (2006 QCCS 2/24, [2006] R.J.Q. 1145 (Que. S.C.)). On the issue of the injury sustained, he noted that only a taxi driver who had heard the impugned comments could claim compensation. The evidence showed that, at most, about 20 of the drivers concerned had listened to the show on November 17, 1998. Guibault J. was therefore of the opinion that the evidence did not show that each member of the group had sustained a personal injury. However, since he considered himself bound by the Court of Appeal’s decision on the application for authorization, he made up for this by using the collective recovery mechanism (arts. 1028 and 1034 C.C.P.). He allowed the class action with costs and ordered the respondents solidarily to pay $220,000 to the Association professionnelle des chauffeurs de taxi, a non-profit organization. He dismissed the claim for punitive damages and refused to consider awarding damages in lieu of compensation for the appellant’s extrajudicial fees. His judgment was appealed. 9 The Court of Appeal set aside the trial judgment (2008 QCCA 1938, [2008] R.J.Q. 2356 (Que. C.A.)). Bich J.A., who wrote the majority’s reasons, began by pointing out that the existence of a fault was no longer contested and that Mr. Arthur and Diffusion M´etrom´edia CMR inc. were instead disputing the existence of personal injury. She noted that an action in defamation presupposes [TRANSLATION] “injury that is individual and personal, in other words, specific and particularized, commensurate with the attack, which is also specific and particularized” (at para. 44). The existence of such injury is determined using an objective test, namely the ordinary person test. According to the judge, three situations are possible where the impugned comments are made about a group: (1) the group is large and the comments become lost in the crowd; (2) certain members of the group are named or can easily be identified; or (3) the group is small enough for the members to be personally affected. There is a right to compensation only in the latter two cases. Bich J.A. found that this case was 16 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

of the first type. She found that an ordinary person would not have believed Mr. Arthur’s comments and would have thought that the offensive accusations had been diluted by the size of the group concerned, leaving intact the personal reputation and dignity of the drivers in question. She noted that broadening the concept of defamation by ignoring the need to establish the existence of a personal injury would weaken freedom of expression in an unacceptable manner. 10 In dissenting reasons, Beauregard J.A. proposed a series of factors for assessing the personal nature of the injury. Applying them to this situation, he concluded that the drivers had sustained an injury for which compensatory damages could be awarded. He would have dismissed the principal appeal but would have allowed the incidental appeal and confirmed the fee agreement between the appellant and his counsel so that those fees might be paid out of the damages.

III. Positions of the Parties 11 Mr. Bou Malhab argues that, because of the serious nature of Mr. Arthur’s conduct, the limited size of the group and the identification of the victims through their origins and occupation, the victims were individualized enough for compensable injury to have resulted from Mr. Arthur’s comments. As regards the requirement that each member of the group sustain a personal injury, the court does not have to consider this until it determines the compensation due to individual members, that is, after the respondents are found liable to the group. The appellant also requests that punitive damages be awarded and that his fee agreement be confirmed. 12 The respondents for their part argue that the action can succeed only if Mr. Arthur’s comments were specially directed at each of the drivers and if each of them sustained an injury that was direct, personal and separate from the injury suffered by the group. The respondents submit that these conditions are not met in this case.

IV. Issues 13 The appellants raise issues relating to compensatory damages, punitive damages and the fee agreement. In light of my answer on the first issue, it will not be necessary to deal with the other two. The issue that is determinative of this appeal can therefore be stated as follows: Can racist or discriminatory comments made about a group of individuals form the basis for an action in damages for defamation and, if so, on what conditions?

V. Analysis 14 I will begin by considering the concept of defamation in Quebec civil law. I will then look at its specific characteristics where the allegedly defamatory com- Bou Malhab c. Diffusion M´etrom´edia CMR inc. Deschamps J. 17

ments were made about a group. Finally, I will apply these rules to the facts of this appeal.

A. Defamation in the Civil Law (1) Development of the Law of Defamation 15 Roman law sanctioned the use of the term injuria, which referred to anything said or done to offend someone. That concept was adopted by old French law, which gradually limited its scope to causing offence through speech or writing. France subsequently chose to pass special legislation concerning the de- lict of injury and distinguished it from defamation. The latter necessarily involved an allegation or imputation of fact interfering with honour, while the former referred to an offensive expression, term of contempt or insult. This distinction was not retained in Quebec, where the term defamation was chosen to refer to the injury of old French law (T. Grellet-Dumazeau, Traité de la diffamation, de l’injure et de l’outrage (1847), vol. 1, at pp.-1-10; C. Bissonnette, La diffamation civile en droit québécois, mémoire de maˆıtrise, Université de Mon- tréal (1983), at pp. 11-14). In Quebec civil law, an attack on a person’s reputation can involve allegations of fact or merely offensive and insulting comments. In Quebec civil law, it does not matter whether the assertions are made in writing, orally or through images or gestures or whether they attack another person’s reputation directly or by intimation or innuendo. 16 The concept of defamation requires that the right to the protection of reputation be reconciled with the right to freedom of expression, since that which belongs to the former is generally taken away from the latter. Several international agreements reflect this need to strike a balance between the two rights. For example, the International Covenant on Civil and Political Rights, Can. T.S. 1976, No. 47, Art. 19(2) and (3), to which Canada is a party, makes the exercise of the right to freedom of expression subject to respect for the reputation of others. Similar guarantees are found in the American Convention on Human Rights, 1144 U.N.T.S. 123, Arts. 11, 13(1) and (2), and the Convention for the Protec- tion of Human Rights and Fundamental Freedoms, 213 U.N.T.S. 221, Art. 10, both of which have been widely ratified. 17 Freedom of expression is protected by the Canadian Charter of Rights and Freedoms, s. 2(b), and the Charter of human rights and freedoms, R.S.Q., c. C- 12, s. 3 (“Quebec Charter”). It is one of the pillars of modern democracy. It allows individuals to become emancipated, creative and informed, it encourages the circulation of new ideas, it allows for criticism of government action and it favours the emergence of truth (Société Radio-Canada c. Québec (Procureur général), 2011 SCC 2 (S.C.C.)). Freedom of expression is essential in ensuring that social, economic and political decisions reflect the aspirations of the members of society. It is broad in scope and protects well-prepared speech and wrath- 18 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

provoking comments alike (R. v. Keegstra, [1990] 3 S.C.R. 697 (S.C.C.); R. v. Butler, [1992] 1 S.C.R. 452 (S.C.C.)). However, it is not absolute and can be limited by other rights in a democratic society, including the right to protection of reputation (Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130 (S.C.C.), at paras. 102-106; Prud’homme, at para. 43; Néron, at para. 52). 18 The right to the safeguard of reputation is guaranteed by the Quebec Charter (s. 4) and the Civil Code of Québec, R.S.Q., c. C-1991, arts. 3 and 35). Since good reputation is related to dignity (Hill, at paras. 120-21), it is also tied to the rights protected by the Canadian Charter. Reputation is a fundamental feature of personality that makes it possible for an individual to develop in society. It is therefore essential to do everything possible to safeguard a person’s reputation, since a tarnished reputation can seldom regain its former lustre (Hill, at para. 108). 19 Of course, there is no precise measuring instrument that can determine the point at which a balance is struck between the protection of reputation and freedom of expression. In reconciling these two rights, the principles on which a free and democratic society is based must be respected. The intersection point will change as society changes. What was an acceptable limit on freedom of expression in the 19th century may no longer be acceptable today. Indeed, particularly in recent decades, the law of defamation has evolved to provide more adequate protection for freedom of expression on matters of public interest. In the common law, for example, this Court has reassessed the defence of fair comment (Simpson v. Mair, 2008 SCC 40, [2008] 2 S.C.R. 420 (S.C.C.), at paras. 49 et seq.) and recognized the existence of a defence of responsible communication on matters of public interest (Grant v. Torstar Corp., 2009 SCC 61, [2009] 3 S.C.R. 640 (S.C.C.)). 20 The Canadian approach is part of a trend that can be observed in many democracies, including England (Reynolds v. Times Newspapers Ltd. (1999), [2001] 2 A.C. 127 (U.K. H.L.); Jameel v. Wall Street Journal Europe SPRL (No. 3), [2006] UKHL 44, [2007] 1 A.C. 359 (Eng. H.L.)), Australia (Theophanous v. Herald & Weekly Times Ltd. (1994), 124 A.L.R. 1 (Australia H.C.)); Lange v. Australian Broadcasting Corp. (1997), 189 C.L.R. 520 (Australia H.C.)), New Zealand (Lange v. Atkinson, [2000] 3 N.Z.L.R. 385 (New Zealand C.A.)), the United States (New York Times Co. v. Sullivan (1964), 376 U.S. 254 (U.S. Ala.) (1964)) and Germany (BVerfGE 82, 272, June 26, 1990 (Stern - Strauβ case); BVerfGE 93, 266. October 10, 1995 (soldiers are murderers case)). This phe- nomenon can also be seen in the decisions of the European Court of Human Rights (Bladet Tromsø and Stensaas v. Norway (G.C.), No. 21980/93, ECHR, 1999-III; Colombani v. France, No. 51279/99, ECHR 2002-V). In France, while freedom of expression has been protected by passing a special penal statute, recent cases have recognized that this was a system distinct from the system of Bou Malhab c. Diffusion Métromédia CMR inc. Deschamps J. 19

civil liability found in the French Civil Code (Cass. ass. pl´en., July 12, 2000, bull. civ. No. 8). 21 What is of interest for my purposes is not so much the specific solutions proposed by these courts, which vary depending on the legal traditions, constitu- tional guarantees and social norms that exist in each country, as the general trend that emerges from the cases. Just like Canadian courts, including those in Quebec, all of these courts are increasingly concerned about protecting freedom of expression. The law of defamation is changing accordingly. This is the general context in which this case must be considered. I will now look at the legal rules applicable to defamation in Quebec civil law.

(2) Constituent Elements of Defamation in Quebec Civil Law 22 In Quebec, there is no specific form of action for punishing defamation. Ac- tions in defamation come under the general system of civil liability established in art. 1457 C.C.Q. The plaintiff is entitled to compensation if fault, injury and a causal connection are all present. Fault is determined by looking at the defendant’s conduct, while injury is assessed by looking at the impact of that conduct on the victim, and a causal link is established where the decision maker finds that a connection exists between the fault and the injury. This is an area of law where it is important to make a clear distinction between fault and injury. Proof of injury is not a basis for presuming that a fault was committed. Proof that a fault was committed does not, without more, establish the existence of a compensable injury. 23 Actions in defamation also bring the Quebec Charter into play, since, as I have already noted, they are based on interference with the right to the safeguard of reputation guaranteed by s. 4 of that instrument. Under s. 49 of the Quebec Charter, there is a right to obtain compensation for the prejudice caused by unlawful interference with human rights. However, the Quebec Charter has not created an independent, autonomous system of civil liability that duplicates the general system (De Montigny c. Brossard (Succession), 2010 SCC 51, [2010] 3 S.C.R. 64 (S.C.C.), at para. 44). The general principles of civil liability still serve as a starting point for awarding compensatory damages for interference with a right (F.E.E.S.P. c. B´eliveau St-Jacques, [1996] 2 S.C.R. 345 (S.C.C.), at para. 119 (per Gonthier J.) and paras. 16 and 25 (per L’Heureux-Dub´e J., dissenting in part), and De Montigny). Civil liability actions that are based on interference with a right, such as an action in defamation, are therefore a point of intersection between the Quebec Charter and the Civil Code. This convergence of instruments must be considered in defining the three constituent elements of civil liability, namely fault, injury and causal connection. I will say only a few words about fault, since it is not in dispute here. Causal connection is not in issue either. I will instead focus on injury, which is the main issue here. 20 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

(i) Fault 24 Generally speaking, fault is conduct that departs from the standard of conduct of a reasonable person (Barrette c. Ciment du St-Laurent inc., 2008 SCC 64, [2008] 3 S.C.R. 392 (S.C.C.), at para. 21). It should be noted that the concept of a reasonable person is normative in nature rather than descriptive. It refers to the way an informed person would behave in the circumstances. Despite the importance attached by the Quebec Charter to the protection of individual rights, conduct that interferes with a right guaranteed by the Charter does not necessarily constitute civil fault (Québec (Curateur public) c. Syndicat national des employés de l’hôpital St-Ferdinand, [1996] 3 S.C.R. 211 (S.C.C.), at para. 116; Québec (Commission des droits de la personne & des droits de la jeunesse) c. Montréal (Communauté urbaine), 2004 SCC 30, [2004] 1 S.C.R. 789 (S.C.C.) (“Larocque”)). The interference must also violate the objective standard of conduct of a reasonable person under art. 1457 C.C.Q., and there must be nothing else that limits the finding on fault, for example the existence of immunity (Larocque and Prud’homme) or the consideration of competing rights such as freedom of expression. 25 In an action in defamation, the definition or limits of fault reflect the increas- ing importance attached to freedom of expression (Société Radio-Canada c. Radio Sept-Îles inc., [1994] R.J.Q. 1811 (Que. C.A.), at p. 1818). However, defamatory conduct may result from mere negligence. The truth of the message will be only one of the factors used to determine whether conduct is wrongful. Even if a comment is true, it may have been made in a wrongful manner. Scandalmongering and lies are both punished (Prud’homme, at para. 38; Néron, at para. 59).

(ii) Injury 26 The type of injury that defines defamation is damage to reputation. In our law, damage to reputation is assessed objectively, from the perspective of an ordinary person (Néron, at para. 57; Prud’homme, at para. 34; Johnson c. Ar- cand, 2006 QCCA 132, [2006] R.J.Q. 395 (Que. C.A.), at para. 49). 27 This level of analysis is justified by the fact that damage to reputation results in a decrease in the esteem and respect that other people have for the person about whom the comments are made. Therefore, the maker of the comments and the person about whom they are made are not the only ones involved. A person is defamed where the image reflected back to the person by one or more other people is inferior not only to the person’s self-image but above all to the image the person projected to “others” in the normal course of social interaction. In our society, every person can legitimately expect equal legal treatment. However, damage to reputation is at a different level. Defaming a person means damaging a reputation that has been legitimately earned. The effect of defamation is there- Bou Malhab c. Diffusion Métromédia CMR inc. Deschamps J. 21

fore not so much to interfere with the dignity and equal treatment recognized to each person under the Charters as to reduce the esteem in which a person should be held as a result of his or her interactions with society. 28 It is the importance of “others” in the concept of reputation that justifies relying on the objective standard of the ordinary person who symbolizes them. Therefore, the fact that a person alleging defamation feels humiliated, sad or frustrated is not a sufficient basis for an action in defamation. In such an action, injury is examined at a second level focussed not on the actual victim but on the perceptions of other people. Injury exists where “an ordinary person ... believe[s] that the remarks made, when viewed as a whole, brought discredit on the reputation” of the victim (Prud’homme, at para. 34). However, care must be taken to avoid shifting the analysis of injury to a third level by asking, as the majority of the Court of Appeal seems to have done (at para. 73), whether an ordinary person, acting as a trier of fact, would have found that the victim’s reputation was discredited in the eyes of a public that was likely to believe Mr. Arthur’s comments. The judge must instead focus on the ordinary person, who is the embodiment of “others”. 29 There are definite advantages to relying on the objective standard of the ordinary person. Bich J.A. described them well in her reasons: [TRANSLATION] [This standard] has the advantage of not making the characterization of the impugned comments, and thus the determination of injury, dependent on the purely subjective emotions or feelings of the person who has allegedly been defamed. If comments could be shown to be injurious simply by referring to one’s feeling of personal upset, humiliation, mortifica- tion, vexation, indignation or sadness or to the fact that one’s sensibilities or feelings have been offended, hurt or even trampled on, little would be left of freedom of opinion and expression. The very concept of defamation would also become entirely dependent on the particular emotions of each individual. [at para. 40] 30 My discussion of fault demonstrates how reliance on an objective standard is nothing new. In fact, the ordinary person is the counterpart, for injury, of the reasonable person used to assess fault. While both concepts are objective, they are not one and the same. The conduct of the reasonable person establishes a standard of conduct whose violation constitutes a fault. The ordinary person, by contrast, is the embodiment of the society that receives the impugned comments. Injury is therefore assessed through the eyes of this ordinary person who receives the impugned comments or gestures. 31 The judge responsible for assessing fault requires the person who uttered the words to behave the way that a reasonable person would have behaved in the circumstances. In defamation cases, the judge takes account of that person’s right to freedom of expression, and will even accept, in some cases, that the person has expressed exaggerated opinions. In assessing injury, the judge also 22 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

considers the fact that the ordinary person has accepted that freedom of expression is protected and that exaggerated comments can be made in certain circumstances. However, the judge must also ask whether there is a decrease in the esteem that the ordinary person has for the victim. As a result, even though the standard is an objective one in both cases, it is preferable to use two different terms — reasonable person and ordinary person — because they are concepts that relate to two distinct situations: assessing the conduct and assessing the effect of that conduct from society’s perspective. The questions asked at these two stages are different. 32 The use of a standard such as the ordinary person as a test for determining whether someone’s reputation has been damaged has an undeniable practical advantage. Such a standard is a reference point that is rational and objective. It makes it easier to prove injury, which can be hard to prove. Very often, injury can be established only indirectly. One example of this is Néron, in which the impugned remarks resulted in a loss of business that could be related only to them. In other cases, the facts supporting the finding that a reasonable person would not have made the remarks in question will permit the inference that an ordinary person would hold the victim in lower esteem as a result of those remarks. However, this is not a legal presumption that arises from finding that a fault has been committed; rather, it is merely an inference that a judge may draw from the facts adduced in evidence. The practical value of the objective standard is even greater in cases involving comments made about a group, since the injury may be similar for all those who were affected in the same way by the same comments and who sustained damage to the common aspects of their reputations. Nevertheless, the analysis will always be a two-step process. First, the court has to determine whether a reasonable person would have made the impugned remarks in the same context. Second, if the court answers no and finds that the person who made the remarks has committed a fault, it must ask whether the remarks have decreased the ordinary person’s esteem for the victim. It is necessary, of course, that a causal connection be established between fault and injury, but that issue does not arise here. 33 Given the importance of the ordinary person and reasonable person standards, we should consider what they involve. 34 In France, a standard of acceptable conduct is used to assess damage to honour and reputation within the meaning of the Loi sur la presse (N. Mallet- Poujol, “Diffamation et injures”, in B. Beignier, B. de Lamy and E. Dreyer, eds., Traité de droit de la presse et des médias (2009), 441, at p. 450). To assess the wrongfulness of conduct in actions based on the general law of civil liability, the reasonable person standard is used, as in our law. French commentators and courts have said that a reasonable person is more than moderately prudent and informed but less than highly prudent and informed. A reasonable person ap- proves of average behaviour, that is, the behaviour of the majority of people, Bou Malhab c. Diffusion Métromédia CMR inc. Deschamps J. 23

only if it is rational and consistent with the nature of things (P. Jourdain, “No- tion de faute: contenu commun a` toutes les fautes”, Juris-classeur Respon- sabilit´e civile et Assurances (2002), fasc. 120-1, No. 106). 35 The common law also uses an objective standard, that of the right-thinking person, to ascertain the meaning of impugned comments and assess whether they are defamatory. This standard is taken from English common law and is based on the famous case of Sim v. Stretch, [1936] 2 All E.R. 1237 (U.K. H.L.), in which Lord Atkin stated the following, with which his colleagues concurred: The conventional phrase exposing the plaintiff to hatred, ridicule or contempt is probably too narrow [...]. I do not intend to ask your Lordships to lay down a formal definition, but [...] after collating the opinions of many authorities I propose in the present case the test: would the words tend to lower the plaintiff in estimation of right-thinking members of society generally? [p. 1240] 36 Despite the reservation expressed by Lord Atkin about the test he was pro- posing, it has not been forgotten. In fact, the right-thinking person standard was subsequently adopted, including in Canadian case law (Chohan v. Cadsky, 2009 ABCA 334, 464 A.R. 57 (Alta. C.A.); Color Your World Corp. v. Canadian Broadcasting Corp. (1998), 38 O.R. (3d) 97 (Ont. C.A.), leave to appeal refused, [1998] 2 S.C.R. ix (S.C.C.); Botiuk v. Toronto Free Press Publications Ltd., [1995] 3 S.C.R. 3 (S.C.C.), at para. 62; Cherneskey v. Armadale Publishers Ltd. (1978), [1979] 1 S.C.R. 1067 (S.C.C.), at p. 1079 (per Ritchie J.) and p. 1095 (per Dickson J., dissenting)). In Color Your World, the Ontario Court of Appeal, per Abella J.A., outlined the right-thinking person standard as follows: The standard of what constitutes a reasonable or ordinary member of the public is difficult to articulate. It should not be so low as to stifle free expression unduly, nor so high as to imperil the ability to protect the integrity of a person’s reputation. The impressions about the content of any broadcast — or written statement — should be assessed from the perspective of someone reasonable, that is, a person who is reasonably thoughtful and informed, rather than someone with an overly fragile sensibility. A degree of common sense must be attributed to viewers. [p. 106] 37 Raymond Brown conducted an extensive review of Canadian and foreign case law and summarized the ordinary person’s perspective as follows: The court will assume that the ordinary reasonable person is someone who is thoughtful and informed and of fair, average intelligence. They are persons who have a common understanding of the meaning of language and who, in their evaluation of imputation, entertain a sense of justice and apply moral and social standards reflecting the views of society generally. ... The reasonable reader or listener makes an effort to strike a balance between the most extreme meaning the words will bear and the most innocent meaning. ... 24 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

The ordinary reader will draw conclusions from general impressions. He or she is likely to read an article casually or uncritically and not give it concen- trated attention or read it a second time. ... (R. Brown, The Law of Defamation in Canada, 2nd ed. (loose-leaf), vol. 1, at pp. 5-45 - 5-61, citations omitted) 38 While these common law principles cannot be directly transposed into Que- bec civil law because of the major differences between the two systems (Prud’homme, at paras. 54-59), they often serve as a source of inspiration. The two legal communities have the same broad social values. Indeed, there is a striking similarity between the civil law and the common law approaches. 39 As Abella J.A. stated in Color Your World, it is difficult to precisely articulate the parameters of the reasonable person standard of conduct, which the ordinary person standard also incorporates. Systematizing these models would mean taking a snapshot of our society’s values, beliefs and attitudes, which is impossible because these components are intrinsically fluid and vary with the context. A few characteristics can nonetheless be emphasized. 40 The reasonable person acts in an ordinarily informed and diligent manner. He or she shows concern for others and takes the necessary precautions to avoid causing them reasonably foreseeable injury (Ouellet v. Cloutier, [1947] S.C.R. 521 (S.C.C.), at p. 526). He or she respects fundamental rights and therefore cannot disregard the protection established in the charters. Since the standards maintained by the reasonable person are consistent with Charter values, he or she is careful not to violate the rights of others. 41 Although the ordinary person reacts like a sensible person who, like the reasonable person, respects fundamental rights, care must be taken not to idealize the ordinary person and consider him or her to be impervious to all negligent, racist or discriminatory comments, as the effect of this would be to sterilize the action in defamation. As the Superior Court stated in Hervieux-Payette c. Société St-Jean-Baptiste de Montréal (1997), [1998] R.J.Q. 131 (Que. S.C.) (re- versed by the Court of Appeal on other grounds, [2002 CarswellQue 1170 (Que. C.A.)] 2002 CanLII 8266)), [TRANSLATION] “[t]his ordinary person is neither an encyclopedist nor an ignoramus” (p. 143). As I have noted, in assessing injury in an action in defamation, the ordinary person is only an expedient used to identify damage to reputation. Judges must therefore avoid limiting themselves to an inflexible test that would prevent them from recognizing actual damage to reputation where it occurs. 42 The instant case also raises the additional question of group defamation. It presents some specific problems that need to be considered. Bou Malhab c. Diffusion Métromédia CMR inc. Deschamps J. 25

B. Defamatory Nature of Comments Made About a Group of People (1) Need to Prove Personal Injury 43 An action in defamation can succeed only if personal injury has actually been sustained by the plaintiff or plaintiffs. This requirement also applies where the defamatory comments are made about a group. Three rules of Quebec law are applicable here. 44 First, to have the necessary interest to bring an action, a person must have sustained personal injury. An action can be brought only by a person who is able to be a party to an action (art. 56, para. 1 C.C.P.) and who has a sufficient interest (arts. 55 and 59 C.C.P.). Except in cases where the legislature has inter- vened, a group without juridical personality does not have the necessary capacity to be a party to an action. This means that a group cannot bring an action based on injury it claims to have suffered as a group without juridical personality. Moreover, a person does not, simply as a member of a group, have a sufficient interest to bring an action in damages for injury sustained by the group as a group. An interest will not be sufficient unless, inter alia, it is direct and personal. Even if the group’s attributes and those of the plaintiff are not mutually exclusive, the plaintiff must nonetheless be able to assert a right that belongs to the plaintiff (Jeunes canadiens pour une civilisation chrétienne c. Fondation du théâtre du Nouveau-Monde, [1979] C.A. 491 (Que. C.A.), at p. 494). 45 The requirement of proving the existence of a personal interest is not dis- pensed with in the context of a class action. The general provisions of the Code of Civil Procedure apply to class actions to the extent that they are not excluded or inconsistent with the specific rules governing such proceedings (art. 1051 C.C.P.). This is the case for the provisions requiring the demonstration of a sufficient interest (Bouchard c. Agropur coopérative, 2006 QCCA 1342, [2006] R.J.Q. 2349 (Que. C.A.), at para. 103). A non-personal interest based on injury that has been sustained by the group as a group will therefore not be sufficient to permit the institution of a class action in defamation. (See also Cabay c. Fafard, [1986] Q.J. No. 2823 (Que. S.C.), aff’d [1988] Q.J. No. 1052 (Que. C.A.).) 46 Second, the scheme of the Quebec Charter confirms the requirement of proof of a personal injury. The right to the protection of reputation, which is the basis for an action in defamation, is an individual right that is intrinsically attached to the person, whether the person is legal or natural. A group without juridical personality does not have a right to the safeguard of its reputation. Moreover, s. 49 of the Quebec Charter provides that only the “victim” of interference with a right is entitled to compensation, which confirms that only those who have suffered personal interference may obtain compensation. As Bernier J.A. wrote in Jeunes Canadiens pour une civilisation chrtienne, at p. 495: [TRANSLATION] [The Charter] is directed at the person considered individually and makes these remedies [under s. 49] available to the person 26 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

where the person’s rights under the Charter are violated; a party can pursue these remedies only as a person whose Charter rights have been infringed, that is, as a “victim”. In defamation law, the requirement of proof of a personal injury also contributes to maintaining the balance between freedom of expression and the right to the protection of reputation. 47 Third, the rules of civil liability in the C.C.Q. provide that injury is compensable if it is personal to the plaintiff. The purpose of compensation is to put the victim back in the situation he or she was in prior to the injury. The wording of arts. 1607 and 1611 C.C.Q. confirms that the compensated injury must be personal to the creditor of the right to compensation: 1607. The creditor is entitled to damages for bodily, moral or material injury which is an immediate and direct consequence of the debtor’s default. 1611. The damages due to the creditor compensate for the amount of the loss he has sustained and the profit of which he has been deprived. Future injury which is certain and able to be assessed is taken into account in awarding damages. 48 It must be inferred from this that an individual will not be entitled to compensation solely because he or she is a member of a group about which offensive comments have been made. The member or members of the group who bring an action must have sustained personal injury. In other words, defamation must go behind the screen of generality of the group and affect its members personally. 49 That being said, the victim does not have to be expressly named or desig- nated to be able to bring an action in defamation. The attack does not have to be specific or particularized. The person who made the impugned comments cannot avoid liability by hiding behind the fact that he or she used general terms applying to a group. Attacks on a group may in fact personally affect some or all of the group’s members. While the injury must be personal, it does not have to be unique, that is, different from the injury sustained by the other members of the group. The reputation of more than one person may be tarnished by the same wrongful comments. While the law does not punish the defamation of groups having no juridical personality, it does punish multiple individual defamation (D. Buron, “Liberté d’expression et diffamation de collectivités: quand le droit a` l’égalité s’exprime” (1988), 29 C. de D. 491, at pp. 497-98). Even if the members of a group are covered by comments that mention the group, it will be necessary, in order to establish their right to compensation, that the members prove that they personally suffered damage to their reputations. 50 Moreover, as we will see, the personal injury requirement does not change in class action proceedings. Bou Malhab c. Diffusion Métromédia CMR inc. Deschamps J. 27

(2) Impact of the Procedural Vehicle Used 51 Before instituting a class action, authorization must be obtained under arts. 1002 and 1003 C.C.P. If such authorization is granted, the parties proceed on the merits and the plaintiff must prove the defendant’s liability. If the judge allows the action, the judge may order collective or individual recovery. The appellant argues that the use of a class action means that he does not have to prove personal injury at the time the merits of the action are being examined, since the question of the personal nature of the injury should be considered at the time of individual recovery proceedings (factum, at paras. 22 and 52). This argument must be rejected, since it is based on confusion between the type of injury required to ground civil liability, the process used to prove such injury and the assessment of the extent of such injury. 52 This Court has stated on several occasions that a class action is merely a procedural vehicle and that its use does not have the effect of changing the substantive rules applicable to individual actions (Bisaillon c. Concordia Univer- sity, 2006 SCC 19, [2006] 1 S.C.R. 666 (S.C.C.), at para. 17; Union des consommateurs c. Dell Computer Corp., 2007 SCC 34, [2007] 2 S.C.R. 801 (S.C.C.), at paras. 105-108; St. Lawrence Cement, at para. 111). In other words, the class action mechanism cannot be used to make up for the absence of one of the constituent elements of the cause of action. A class action can succeed only if each claim it covers, taken individually, could serve as a basis for court proceedings. 53 The law of defamation therefore applies in its entirety in the class action context. As I mentioned above, for a class action to be allowed, the plaintiff must establish the elements of fault, injury and causal connection in respect of each member of the group (Hôpital St-Ferdinand, at para. 33). Of course, the class action procedure permits the judge to draw inferences from the evidence, but the judge must still be satisfied on a balance of probabilities that each element is present for each member (for injury, see Hôpital St-Ferdinand, at paras. 34-35). 54 However, there can be no question of requiring each member of the group to testify to establish the injury actually sustained. Proof of injury will usually be based on presumptions of fact, that is, on an attempt to find “an element of damage common to everyone ... to be able to infer that there were serious, precise and concordant presumptions that all the [members of the group sustained personal injury]” (Hôpital St-Ferdinand, at para. 41, citing the opinion of Nich- ols J.A.). In this regard, the plaintiff must prove an injury shared by all members of the group so the court can infer that personal injury was sustained by each member. Proof of injury suffered by the group itself and not by its members will not in itself be enough to give rise to such an inference. On the other hand, the plaintiff is not required to prove that each of the members sustained exactly the 28 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

same injury. The fact that the wrongful conduct did not affect each member of the group in the same way or with the same intensity does not prevent the court from finding the defendant civilly liable. This was in fact what happened in St. Lawrence Cement. While the injury sustained by the members of the group in question varied in intensity, this Court confirmed that it could be inferred that each member had sustained injury based on the similarities between them. 55 It is not until the existence of personal injury sustained by each member of the group has been proved that the judge will focus on assessing the extent of the injury and choosing the appropriate recovery method, whether individual or collective. If personal injury is not proved, the class action must be dismissed. Thus, contrary to what is argued by the appellant, the possibility of ordering individual recovery of damages does not relieve the plaintiff of the burden of first proving that each member of the group sustained personal injury. In other words, the recovery method cannot make up for the absence of personal injury. 56 The various factors used to determine whether such injury has been sustained must now be considered.

(3) Factors Used to Determine Whether Personal Injury Has Been Sustained 57 In any action in defamation, injury is proved if the plaintiff satisfies the judge that the impugned comments are defamatory, that is, that an ordinary person would believe that they tarnished the plaintiff’s reputation. The same test is used where the comments apply a priori to a group of individuals, but special attention will then have to be paid to the personal nature of the injury. The plaintiff or plaintiffs must prove that an ordinary person would have believed that each of them personally sustained damage to his or her reputation. 58 The judge must thus analyse the impugned comments, taking into account all the circumstances in which they were made. Although it is impossible to draw up an exhaustive list of the criteria used to determine whether personal injury has been sustained, a number of factors can nevertheless help the judge in this process. Very similar factors are used for this purpose in the countries to which Canada and Quebec look for comparative law purposes. They have to do with the affected group, the comments made and the circumstances extrinsic to the comments or gestures. These factors provide guidance in determining whether one, some or all members of the group have sustained personal injury as a result of the impugned comments or gestures. This list is not exhaustive, however, and none of the factors it contains is determinative on its own.

(i) Size of the Group 59 The size of the group is the factor to which the courts have attached the greatest importance in Quebec and elsewhere. Generally speaking, it is recog- Bou Malhab c. Diffusion M´etrom´edia CMR inc. Deschamps J. 29

nized that the larger the group, the more difficult it is to prove that personal injury has been sustained by the member or members bringing the action. 60 In Quebec, the leading case on defamation resulting from comments made about a group is Ortenberg c. Plamondon (1914), 24 B.R. 69 (Que. K.B.), 385. In that case, Mr. Ortenberg, a Jewish merchant, said that he had been defamed by a speech made by Mr. Plamondon, who had attacked Jews and their religion, called for a boycott of their businesses and predicted that the Jews of Quebec City would commit heinous crimes. Carroll J.A. found that, because of their small number (75 families out of a total population of 80,000), the members of Quebec City’s Jewish community had all come under suspicion and therefore had a cause of action. 61 The size of the group is a constant in the Quebec courts’ analysis of whether an injury is personal (see, for example, Zhang v. Chau, 2008 QCCA 961, [2008] R.R.A. 523 (Que. C.A.), leave to appeal refused, Zhang v. Chau (2008), 3 S.C.R. ix (note) (S.C.C.); Raymond v. Abel, [1946] C.S. 251 (Que. S.C.)). 62 In France, apart from certain statutory mechanisms whose singularity limits their usefulness for comparative purposes, the Loi sur la presse requires a personal interest and personal damage in order to claim compensation. When comments are made about a group, these requirements are satisfied if the group is [TRANSLATION] “small enough that each member can feel affected” (Cass. crim., January 29, 2008, Bull. crim., No. 23, at p. 94). The Court of Cassation, for example, has found defamation where comments were made about a medical team made up of ten surgeons (Cass. Crim., December 6, 1994, Dr. P´enal 1995, comm. 93, obs. M. V´eron). It also found that four members of a political action committee had been sufficiently covered by comments referring to the committee (Cass. crim., January 16, 1969, Bull. crim., No. 35). However, it dismissed an action in defamation where the impugned comments concerned Catholic clergy in general (Cass. crim., November 22, 1934, Bull. crim., D.P. 1936.36.1, note M. Nast). 63 In the common law, the comments must have been made “of and concerning” the plaintiff (Knupffer v. London Express Newspaper Ltd., [1944] A.C. 116 (U.K. H.L.); Butler v. Southam Inc., 2001 NSCA 121, 197 N.S.R. (2d) 97 (N.S. C.A.), at para. 17; Restatement of the Law, Second, Torts 2d (1977), vol. 3, § 564). This corresponds to the personal nature of injury in the civil law. The size of the group is an important consideration (Butler v. Southam Inc., at para. 62; Bai v. Sing Tao Daily Ltd. (2003), 226 D.L.R. (4th) 477 (Ont. C.A.), at para. 15). For example, in Knupffer, the British House of Lords held that a member of a group of about 2,000 Russian immigrants could not bring an action in defamation based on an article written about the group. As well, in the United States, no cause of action was found to arise from articles attacking a group of 27 teachers (O’Brien v. Williamson Daily News, 735 F. Supp. 218 (U.S. Dist. Ct. 1990) 30 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

(E.D. Ky. 1990)), comments made about 382 saleswomen (Neiman-Marcus v. Lait, 13 F.R.D. 311 (S.D.N.Y. 1952)) or allegations made about 637 fishermen (Adams v. WFTV Inc. (Fla. Cir. Ct. 1995), aff’d Adams v. WFTV, Inc., 691 So. 2d 557 (U.S. Fla. Ct. App. Dist. 1997)). On the other hand, the Alberta Court of Queen’s Bench found that an article concerning correctional officers from the Fort Saskatchewan Correctional Centre, of whom there were about 200, was defamatory (A.U.P.E. v. Edmonton Sun (1986), 49 Alta. L.R. (2d) 141 (Alta. Q.B.)). 64 However, the size of the group is not a decisive factor and must be balanced with other considerations. There is no maximum size beyond which the members of a group no longer have a cause of action in defamation. The personal nature of injury can be determined only through a contextual analysis. In the common law, this multi-factored approach involves assessing the “intensity of suspicion” the comments could create in the mind of a sensible person (Butler v. Southam Inc., at para. 56, and Gauthier v. Toronto Star Daily Newspapers Ltd. (2004), 188 O.A.C. 211 (Ont. C.A.), leave to appeal refused, [2005] 1 S.C.R. ix (S.C.C.), and it is used even in the United States, where the size of the group is more important than anywhere else. (See, for example, McCullough v. Cities Service Co. (1984), 676 P.2d 833 (U.S. Sup. Ct.) (Okla. 1984); Fawcett Publications, Inc. v. Morris, 377 P.2d 42 (U.S. Sup. Ct. 1962) (Okla.), at pp. 51- 52.)

(ii) Nature of the Group 65 In general, the more strictly organized and homogeneous the group, the easier it will be to establish that the injury is personal to each member of the group. In Jackson v. TCN Channel 9, [2001] NSWCA 108 (Australia C.A.), a case which involved determining whether a television program referring to outlaw bike gangs was defamatory, an Australian Court of Appeal found that the group’s structure was a significant factor: While “all lawyers” are members of the same profession, they are not members of a cohesive and disciplined group with a command structure such as a gang. The statement about “all lawyers” is an obvious over-generalisation which no reasonable reader or listener would understand applied or was intended to apply literally to every single member of the group. On the other hand outlaw bike gangs of the type described in the programme would only attract and retain members who accepted and were willing to conform to the prevailing culture and ethos of the gang. In my judgment the statements made in this programme are akin to statements about organised groups such as the SS, the Klu Klux Klan or the Mafia, rather than statements such as: “all lawyers are thieves”. It would be well open to a jury to conclude that general statements made about groups such as those applied, and would be understood to apply, to every member of those groups. [paras. 23-24] Bou Malhab c. Diffusion M´etrom´edia CMR inc. Deschamps J. 31

66 Conversely, the imputing of a single characteristic to all members of a group that is highly heterogeneous, has no specific organization or has flexible, broadly defined admission criteria would make an allegation of person injury implausible. For example, the Quebec Court of Appeal has dismissed actions in defamation based on comments made about Scientology (Cabay dite Chatel) and the Falun Gong doctrine (Zhang). 67 Where the group’s members are identifiable or very visible in the community, it will be easier to prove that they sustained personal injury. In A.U.P.E., for example, the Alberta trial court noted that correctional officers could easily be recognized by their uniforms and, from that fact, drew an inference in favour of the plaintiffs’ position. 68 Finally, in certain circumstances, the fact that a group has historically been stigmatized may mean that insults and offensive comments made about the group will stick more easily to its members. The vulnerability of the members of the group thus makes them targets more susceptible to personal defamation.

(iii) Plaintiff’s Relationship with the Group 69 The plaintiff’s status, duties, responsibilities or activities in the group can make it easier to prove personal injury. For example, in Trahan c. Imprimerie Gagné Ltée, [1987] R.J.Q. 2417 (Que. S.C.), the Court of Québec found that the plaintiffs had been affected by comments made about fur traders because they occupied 90 to 98% of the market. Likewise, in Booth v. British Columbia Television Broadcasting System Ltd. (1982), 139 D.L.R. (3d) 88 (B.C. C.A.), the British Columbia Court of Appeal held that allegations made about narcotics squad officers “that are high up — right on top” (p. 90) had defamed two senior detectives. Since what distinguished the plaintiffs was their high rank, it might be more difficult for police officers without any special responsibilities or status to prove personal injury in similar circumstances. Indeed, in the same case, the Court of Appeal ruled against the other nine plaintiffs, who were lower-ranking employees of the narcotics squad. 70 A person who is a well-known member of a group is more likely to suffer damage to his or her reputation as a result of comments made about the group. In Fawcett Publications, a football player brought an action in defamation based on allegations that the members of the team, which had 60 to 70 players, had used amphetamines. He was successful on the ground, inter alia, that he was “well-known and identified in connexion with the group” (at p. 51). Likewise, in Trahan, the Superior Court took note of the fact that the plaintiffs were known as fur traders in the area in reaching the conclusion that they had been defamed by allegations of abuse in the fur trade. 32 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

(iv) Real Target of the Defamation 71 The judge must also consider the words, gestures or images used to convey the message in order to determine the real target of the attacks. The precision or generality of the allegations will influence the analysis of the personal nature of the injury. The more general, evasive and vague the allegations, the more difficult it will be to go behind the screen of the group. For example, attacks on a doctrine, policy, opinion or religion must be distinguished from attacks on the persons supporting it, since proving personal injury will be complicated in the former situation. In Zhang, the Quebec Court of Appeal explained the necessary distinction as follows: [TRANSLATION] [W]hile it was the prerogative of the author of the articles to level criticism, even vehement criticism, at Li Hongzhi’s doctrine and the way it was practised by Falun Gong followers, the authors were guilty of defamation when they accused certain persons of criminal offences and per- verse acts without any proof. [para. 13] Similarly, in France, the Court of Cassation held that a document challenging right-wing extremism in general and associating it with criminal and racist purposes was not defamatory, because it [TRANSLATION] “contained no imputation or allegation of a specific fact about a specific natural or legal person” (Cass. crim., May 26, 1987, Bull. crim., No. 217, at p. 597). It also held that criticism of a type of agricultural production affected only the profession as a whole and left its members’ reputations intact (Cass. Crim., September 16, 2003, Bull. crim., No. 161). 72 Moreover, where allegations apply to only one segment of a group, it will be more difficult for them to reflect personally on all members of the group. This occurs where the comments include an expression such as “some”, “a few”, “several”, “most” or “all but one”. Nonetheless, an action in defamation can sometimes be brought by one, some or all members of the group in such situations, since what is required is not certainty that the allegation relates to each member, but a suspicion that takes root in the mind of the ordinary person. In Farrington v. Leigh (December 4, 1987, reported in the Times Law Report of December 10, 1987), which involved statements made about two of the seven police officers on a team, the English Court of Appeal found that the statements could tarnish each team member’s reputation, because each of them might be suspected of having committed unlawful acts. In the United States, the courts have dismissed actions in defamation where the impugned comments concerned one of about twenty police officers (Arcand v. Evening Call Publishing Co., 567 F.2d 1163 (U.S. C.A. 1st Cir. 1977)) or less than the majority of police officers (Algarin v. Wallkill (Town), 421 F.3d 137 (U.S. C.A. 2nd Cir. 2005)), but they have allowed actions where the allegations concerned “most” of 25 salesmen (Neiman-Marcus) and “all save one” of 12 New York radio critics (Gross v. Cantor, 270 N.Y. 93 (U.S. N.Y. Ct. App. 1936)). Bou Malhab c. Diffusion M´etrom´edia CMR inc. Deschamps J. 33

(v) Seriousness or Extravagance of the Allegations 73 As the Nova Scotia Court of Appeal stated in Butler v. Southam Inc., “the more serious or inflammatory the allegation, the wider may be its sting” (at para. 68). In Farrell v. Triangle Publications, Inc., 159 A.2d 734 (U.S. Pa. S.C. 1960), the Pennsylvania Supreme Court held that an article accusing 13 munici- pal commissioners and other persons of criminal behaviour was not defamatory. Reversing that decision of the trial court, the Court of Appeal of the same state allowed the action in defamation on the following basis: readers ... who, prior to the defamatory article, had not known the identity of all of the township’s commissioners, were impelled by the scandalous nature of the charges to make inquiry and find out who the commissioners were — a process which would almost inevitably lead to connecting the plaintiff’s name with the alleged corruption in office. [pp. 738-39] 74 In some circumstances, the seriousness of the allegations will have the oppo- site effect: an ordinary person will see exaggeration, excessive generalization or extravagance in the allegations and will give them less credence as a result. Thus, where there is no rational connection between an allegation and the members of a group, the statements made will not be accepted by an ordinary person because, as Lord Atkin explained in Knupffer, “the habit of making unfounded generalizations is ingrained in ill-educated or vulgar minds [and] the words are occasionally intended to be a facetious exaggeration” (at p. 122). For example, as Willes J. noted in Eastwood v. Holmes (1858), 1 F. & F. 347, 175 E.R. 758 (Eng. C.P.), at p. 759, an extravagant statement such as “all lawyers are thieves” would not generally entitle a lawyer to bring an action in defamation unless it could be inferred from other circumstances that the statement was directed at the lawyer in question and that he or she was identifiable. 75 However, the fact that comments made by a rabble-rouser are outrageous would not protect him or her fully from actions in damages for defamation. As in any other case where comments are impugned, it is necessary to ensure that all the elements needed to establish entitlement to compensation have been proven. Indignation is not a substitute for the requirements of civil proof or, more generally, the law of civil liability.

(vi) Plausibility of the Comments and Tendency to be Accepted 76 Generally speaking, a plausible or convincing allegation will capture the ordinary person’s attention more and thus make it easier for that person to connect the allegation with each or some of the group’s members personally. Con- versely, the ordinary person will quickly brush aside implausible allegations without connecting them with the group’s members personally. 77 The context of an allegation also has an impact on its plausibility and on the likelihood of its being accepted. The fact that a group is big, that it is heteroge- 34 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

neous, or that the comments are general or exaggerated are all factors that will reduce the probability that the ordinary person would believe the assertion.

(vii) Extrinsic Factors 78 Several other factors, related to the maker or target of the comments, the medium used and the general context, can cause comments that appear to be general to be attached to certain persons in particular and defame them personally. For example, in Assoc. des policiers de Sherbrooke c. Delorme, [1997] R.J.Q. 2826 (Que. S.C.), the Superior Court held, in light of the intended audience, the medium used and a past incident involving the defendant and a member of the plaintiff association, that the comments in issue, which appeared to be about police officers in general, actually targeted police officers in the city of Sherbrooke in particular. Moreover, the reliability of the medium used or the credibility of the person making the comments are additional factors that can lend plausibility to an allegation that may at first seem implausible. 79 Ultimately, the court must not conduct a compartmentalized analysis or seek to find all the relevant criteria. What must be determined is whether an ordinary person would believe that the remarks, when viewed as a whole, brought discredit on the reputation of the victim. The general context remains the best approach for identifying personal attacks camouflaged behind the generality of an attack on a group.

C. Application to the Facts of the Case at Bar 80 Injury is the only one of the three elements of civil liability that is in issue in this case. The wrongful nature of Mr. Arthur’s conduct is not in dispute. The respondents concede that, as the Court of Appeal found, [TRANSLATION] “the impugned comments, which we are not trying to excuse by invoking some jour- nalistic standard of conduct, were made without regard for their potential impact on other people even though the person making them should have known that they were false, rude or exaggerated” (para. 27 of the reasons). The appellant is challenging the conclusion of the majority of the Court of Appeal that the members of the group did not sustain compensable injury. In light of the legal principles explained above, it is my opinion that the Court of Appeal’s conclusion must be upheld. 81 Mr. Arthur’s comments were directed at the group made up of taxi drivers working in Montréal whose mother tongue is Arabic or Creole. Therefore, what needs to be asked is whether an ordinary person would have believed that the comments damaged the reputation of each member of that group, with the result that each of them sustained personal injury. At trial, to decide whether each member had been personally defamed, Guibault J. asked whether the drivers had all listened to the impugned comments. That approach does not apply in deter- Bou Malhab c. Diffusion Métromédia CMR inc. Deschamps J. 35

mining injury where the comments are made about a group, since it uses the defamed person as a measure of defamation and ascertains whether subjective injury has been proved by each member of the group individually. On the contrary, the defamatory nature of comments must be assessed objectively and, in a class action context, personal injury can be proved through presumptions of fact on the basis of elements common to all members. This was the test rightly applied by the majority of the Court of Appeal (at para. 69). 82 Mr. Arthur made accusations of uncleanliness, arrogance, incompetence, corruption and ignorance of official languages. By referring to Creole as speaking [TRANSLATION] “nigger”, he disparaged and expressed contempt for the language primarily used by Haitians to communicate with one another. As well, when he called drivers of Arab origin [TRANSLATION] “fakirs”, he made fun of and even ridiculed them. His comments were scornful and racist, as has been found by all the courts that have had to consider them. It is thus easy to understand why the taxi drivers who were called to testify at the hearing said they were hurt by those comments, but this is a subjective perception, not the perception of the ordinary person. There is no doubt that such statements constituted civil fault. However, in this case, I am persuaded by an analysis of the trial judgment and a review of the entire record that an ordinary person might have been annoyed by Mr. Arthur’s comments but could not have applied the insults, abuse and offensive accusations to each taxi driver personally. 83 Admittedly, certain contextual elements work in favour of recognizing personal injury. The members of the group have the same job and are identifiable as taxi drivers when they are driving their vehicles. In interacting with the public or their coworkers, their accent may sometimes also make it possible to recognize their mother tongue. Moreover, they belong to visible minorities. 84 Some of the words used by Mr. Arthur suggested that his attacks were directed more at Montréal taxi drivers whose mother tongue is Arabic or Creole than at the taxi industry in general. When Mr. Arthur used words such as [TRANSLATION] “Arabs”, “Haitians”, “immigrants” or “drivers”, he seemed to be attacking more the drivers themselves, which favours the appellant’s position. However, at other times, the words used by Mr. Arthur gave the impression that he was criticizing the taxi industry in Montréal generally, a topic that, according to the trial judge, is [TRANSLATION] “of great interest to the population as a whole and to the tourist industry in particular” (para. 84). This was the case, inter alia, where allegations were made using the words [TRANSLA- TION] “taxis”, “taxis in Montréal” and “taxi issue”. As shown by Sarrazin v. Duquette (1935), 41 R. de Jur. 365 (Sup. Ct), members of an industry will rarely be entitled to compensation on the basis of a general opinion about the industry, even if it is expressed in virulent terms. Nonetheless, even assuming that the words used by Mr. Arthur referred more generally to the drivers than to the taxi industry as a whole, and even though the members of the group may be identifi- 36 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

able, I must conclude based on the other contextual elements that the drivers’ personal reputations remained intact in the eyes of the ordinary person. 85 First of all, the relevant group is of considerable size. The trial judge esti- mated that the group made up of Montréal taxi drivers whose mother tongue is Arabic or Creole has about 1,100 members. That is a large number. While I am not prepared to rule out the possibility that comments made about such a large group may in certain very specific circumstances reflect on each of its members personally, there are several reasons why that cannot be the case here. 86 It is well known that the group in question is heterogeneous. Taxi drivers in general are not part of a structured or formalized association. Nor is there any indication that the group of drivers in question was organized in any special way that made it easier to recognize each of its members. Of course, the taxi drivers in question share a language and a job and belong to two visible minorities, but no one could reasonably believe that their common attributes extend to their personal knowledge of English and French, their knowledge of driving routes in the city of Montréal, their thoughtfulness with customers, their personal hygiene and the cleanliness of their vehicles. These are highly individual characteristics that do not readily lend themselves to generalization. Moreover, in Canada and in Montréal in particular, the taxi industry is open and, as in several other countries, fortunately or unfortunately, it is a fallback position for a large number of people whose vocational training in their country of origin is not recognized or who for some other reason do not find other employment. In such a heterogeneous group, it is implausible that all members would have the specific failings imputed to them by Mr. Arthur. Certain characteristics could be attributed to such a heterogeneous group only by extrapolation. Furthermore, given Quebec’s French language requirements and the origin of the drivers in question (drivers from Lebanon and Haiti testified at the trial), Mr. Arthur’s general allegation concerning language was unlikely to reflect on each driver. 87 Mr. Arthur’s statements conveyed the message that taxi drivers whose mother tongue is Arabic or Creole should be blamed for all the problems he said existed in the taxi industry in Montréal. There is simply nothing rational about this suggestion, as the trial judge pointed out (at para. 87). 88 Moreover, the impugned comments were subjective in tone and were an extreme generalization. Apart from a single unsatisfactory personal experience that Mr. Arthur recounted, without identifying any driver, the assertions were general and vague. The comments often took the form of questions and set out no specific facts. Instead, they alluded briefly to uncleanliness, corruption, incompetence, etc. Mr. Arthur’s comments could only stem from an intolerance of immigrants in general. 89 In addition, Mr. Arthur was a known polemicist in the area where his show was broadcast. He had become known for his distasteful and provocative lan- Bou Malhab c. Diffusion Métromédia CMR inc. Deschamps J. 37

guage. The radio show during which the impugned comments were broadcast had a satirical style and tried to sensationalize things. This is not intended as a value judgment on shock jock radio, but the context of such shows does have an impact on the real effect of comments made on them. People cannot of course use their general tendency to speak in bad taste as an excuse to defame others on air, but it must be acknowledged that comments made by Mr. Arthur in such a context have very little plausibility from the point of view of the ordinary person. 90 In light of these factors, I am of the opinion that an ordinary person would have understood the extravagant nature of the comments made. Mr. Arthur’s allegations were undoubtedly serious and infuriating, but an ordinary person would nonetheless have recognized that they were an excessive generalization on the part of the host, based on an unpleasant personal experience. An ordinary person would not have believed the offensive allegations and would not have thought that Mr. Arthur was vouching for the validity of his racist and contemptuous insults. An ordinary person certainly would not have associated the allegations of ignorance, incompetence, uncleanliness, arrogance and corruption with each taxi driver whose mother tongue is Arabic or Creole personally. 91 In Gauthier v. Toronto Star Daily Newspapers Ltd. (2003), 228 D.L.R. (4th) 748 (Ont. S.C.J.), a defamation case involving an allegation of reprehensible behaviour by members of a group — the Toronto police — the Ontario Superior Court stated the following: In some cases both the size of the class and the extravagance of the allegedly defamatory statements will indicate that they cannot have been intended — and should not be understood — to apply to each and every member of the class. Statements such as “all lawyers are thieves” and “all police officers are racists” would fall within this category which Lord Atkin describes as con- sisting of vulgar and unfounded generalizations. [para. 21] In my opinion, allegations that all taxi drivers whose mother tongue is Arabic or Creole are incompetent, unclean, arrogant and corrupt also fall within that category. 92 In short, having regard to all of the circumstances, I find that the group is of considerable size and is heterogeneous, that the characteristics attributed to the members of the group are individual and do not lend themselves well to extrapolation, and that the remarks are an extreme, irrational and sensationalist generalization. Accordingly, an ordinary person, while sensitive to such excessive remarks, would not in my view have formed a less favourable opinion of each Arab or Haitian taxi driver, considered individually. I therefore conclude that Mr. Arthur’s comments, while wrongful, did not damage the reputation of each Montr´eal taxi driver whose mother tongue is Arabic or Creole. The plaintiff did not prove that a personal injury was sustained by the members of the group. 38 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

93 Moreover, I cannot endorse the conclusion of Guibault J., who in an attempt to make up for the absence of personal injury, awarded a collective remedy. It was no doubt because he considered himself bound by what Rayle J.A. had stated in her decision to authorize the bringing of the class action that he ordered the payment of damages despite the absence of proof of personal injury. How- ever, the Court of Appeal’s decision to authorize the class action did not limit his discretion as the judge responsible for deciding the merits of the action, especially since the legal test applicable at the stage of the application for authorization differs from the test applicable to the merits. Thus, given the absence of proof of personal injury, the respondents could not be found civilly liable and the judge ought to have dismissed the class action in defamation.

VI. Conclusion 94 I have no doubt that racist speech can have a pernicious effect on the opinions of members of its audience. However, it should be noted that an action in defamation will not always be the appropriate recourse in cases concerning ra- cism or discrimination. In the instant case, I am of the opinion that it is not the appropriate recourse. I would therefore dismiss the appeal. For the reasons given by the Court of Appeal on this question, no costs are awarded in this Court.

Abella J. (dissenting):

95 Democracies cherish the right of their citizens to engage in public debate, and to express the widest possible range of views on the widest possible range of subjects. These views may be hugely unpopular. They may also be hugely influ- ential. And they may be hugely hurtful. The right to express those views is not, however, tied to their popularity, influence, or insensitivity. It is tied to that most complicated of barometers: the nature and extent of their harmful impact. That is why we do not protect libellous statements. Or those promoting violence. Or hate. 96 The challenge lies in how to strike the balance between the need to provide the widest possible scope for freedom of expression, with the need for a narrow interventionist role in those rare circumstances when the words are so deeply harmful that they are no longer entitled to the benefit of the freedom’s protective scope. Context and content matter: there is a difference between yelling “fire” in a crowded theatre and yelling “theatre” in a crowded fire station. 97 Canada’s strength as a multiracial, multicultural and multireligious country flows from its ongoing ability to develop core and transcendent values that help unify the differences. Sometimes that means tolerating slings and arrows of misunderstanding that will be hurtful. And sometimes it means drawing a line because tolerating the “misunderstanding” undermines the core of our core values. Bou Malhab c. Diffusion M´etrom´edia CMR inc. Abella J. 39

98 I see the comments made by radio talk show host André Arthur as undermin- ing that core. He stated, in part: [TRANSLATION] Why is it that there are so many incompetent people and that the language of work is Creole or Arabic in a city that’s French and English? ... I’m not very good at speaking “nigger” .... [T]axis have really become the Third World of public transportation in Montreal. ... [M]y suspicion is that the exams, well, they can be bought. You can’t have such incompetent people driving taxis, people who know so little about the city, and think that they took actual exams. ... Taxi drivers in Montreal are really arrogant, especially the Arabs. They’re often rude, you can’t be sure at all that they’re competent and their cars don’t look well maintained. 99 As Deschamps J. pointed out, the right to freedom of expression in Canadian and Quebec law and in various human rights instruments is not articulated as an absolute right. Limitations on the right to freedom of expression, like those designed to protect reputation or to prevent harmful speech, have long been accepted in this country and internationally. Canada is a party to the International Covenant on Civil and Political Rights, Can. T.S 1976 No. 47, for example, which states in Article 19 that the right to freedom of expression may be limited if necessary to protect the rights and reputation of others. 100 The law of defamation is one such limitation, as McLachlin C.J. pointed out in Grant v. Torstar Corp., 2009 SCC 61, [2009] 3 S.C.R. 640 (S.C.C.): ... freedom of expression is not absolute. One limitation on free expression is the law of defamation, which protects a person’s reputation from unjustified assault. The law of defamation does not forbid people from expressing themselves. It merely provides that if a person defames another, that person may be required to pay damages to the other for the harm caused to the other’s reputation. [para. 2] (See also Prud’homme c. Prud’homme, 2002 SCC 85, [2002] 4 S.C.R. 663 (S.C.C.), at para. 43; Simpson v. Mair, 2008 SCC 40, [2008] 2 S.C.R. 420 (S.C.C.), at para. 2, per Binnie J.; R. v. Keegstra, [1990] 3 S.C.R. 697 (S.C.C.), per Dickson C.J.) 101 It is my respectful view, unlike that of Deschamps J., that the individuals in the group at issue were defamed. 102 In Prud’homme, L’Heureux-Dubé and LeBel JJ. noted that in order to prove defamation under the Civil Code of Québec, R.S.Q., c. C-1991, it was necessary for a plaintiff to prove that the defendant had committed a fault and that the plaintiff had suffered an injury as a result. Defamation was defined as follows: Generally speaking, ... defamation [TRANSLATION] “consists in the communication of spoken or written remarks that cause someone to lose in estimation or consideration, or that prompt unfavourable or unpleasant feelings toward him or her” .... [para. 33] 40 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

103 In order to show fault, a plaintiff must show that the conduct of the defendant was either malicious or negligent (Prud’homme, at para. 35). Mr. Arthur did not contest fault before the Court of Appeal or this Court, and causality is not in issue. The sole issue before us, therefore, and the one that, with great respect, separates me from the conclusion reached by Deschamps J., is whether there is injury. 104 LeBel J. set out the test for injury in Gilles E. Néron Communication Marketing inc. c. Chambre des notaires du Québec, 2004 SCC 53, [2004] 3 S.C.R. 95 (S.C.C.), where he said: ... in order to prove injury the plaintiff must convince the judge that the impugned remarks were defamatory. As noted in Prud’homme, supra, at para. 34, this involves asking “whether an ordinary person would believe that the remarks made, when viewed as a whole, brought discredit on the reputation of another person”. [para. 57] The question is whether an ordinary person would believe that the remarks made, when viewed as a whole, brought discredit to someone’s reputation. Once this objective standard is met, injury is established. 105 At the outset, I resist, with respect, the degree of sophisticated knowledge Bich J.A., writing for the majority in the Court of Appeal, attributed to the “ordinary person”, whom she described as being [TRANSLATION] concerned about protecting and preserving the freedoms of thought, belief, opinion and expression as well as the right to safeguard one’s reputation. Finally, the ordinary citizen is also concerned about personal dignity and is accordingly aware both of convictions, prejudices or discriminatory practices of certain of his or her fellow citizens and of the need not to encourage such attitudes. And the ordinary citizen also knows that, beyond the openly discriminatory opinions or practices of certain people, there is a systemic discrimination that, although less overt and not necessarily intentional, is no less real. (2008 QCCA 1938, [2008] R.J.Q. 2356 (Que. C.A.), at para. 71) This, it seems to me, inappropriately elevates the attributed characteristics of an ordinary person to those of an ordinary third-year law student. 106 In my view, an ordinary person would conclude that the remarks made by Mr. Arthur were defamatory of these plaintiffs and therefore injurious. Mr. Ar- thur’s comments were not about the taxi industry in general. He targeted only Arab and Haitian taxi drivers and accused them of creating “Third World” public transportation in Montréal, of corruption in obtaining their permits, of incompetence, and of keeping unsanitary cars. He also said that neither Arab nor Hai- tian drivers knew their way around the city and that they could not communicate in either English or French. He denigrated Arab taxi drivers as “fakirs” and the Creole language as [TRANSLATION] “nigger”. Bou Malhab c. Diffusion Métromédia CMR inc. Abella J. 41

107 These were highly stigmatizing remarks attacking members of vulnerable communities. There is a difference between provocation or controversy, including offensive statements, and statements that deliberately vilify vulnerable people. The trial judge concluded that the comments in this case were racist. When we are dealing with hortatory language seriously uttered that is blatantly racist, we are inherently dealing with words that diminish dignity and are an invitation to contempt. As Dickson C.J. stated in Keegstra, “[t]he threat to the self-dignity of target group members is ... matched by the possibility that prejudiced messages will gain some credence, with the attendant result of discrimination, and perhaps even violence, against minority groups in Canadian society” (p. 748). Deschamps J. makes a similar point in her reasons when she notes that the fact that a group has been historically stigmatized may mean that offensive comments about that “group will stick more easily to its members” (para. 68). 108 This brings us to the crucial fact that we are dealing with a group, and with whether the members can show that the defamatory words were such as to im- pugn not only the group, but also the plaintiffs as individuals in that group. This case was brought as a class action. Mr. Bou Malhab, the representative plaintiff, is a taxi driver and was, at the relevant time, the President of the Montr´eal Taxi League. He and ten other drivers testified at trial. In the case of a class action “the court can draw from the evidence a presumption of fact that the members of the group have suffered a similar injury” (Barrette c. Ciment du St-Laurent inc., 2008 SCC 64, [2008] 3 S.C.R. 392 (S.C.C.), at para. 108). The requirement that each individual in the class demonstrate an injury caused by the statements is satisfied by having the representative plaintiff adduce evidence that the remarks made were, objectively, defamatory, and therefore injurious, of the members of the group. As in claims of discrimination, it is unnecessary that every member of the group testify that he or she has been affected. As LeBel J. noted in his concurring reasons in Simpson, “actual harm to reputation is not required to establish defamation” (para. 78). If the evidence adduced at trial demonstrates that the impugned statements are defamatory of the group members, it is unnecessary for each of the other individual group members to testify in order to show that they too were defamed. 109 I accept that the factors articulated by Deschamps J. in her reasons are helpful. I see the following as being of particular relevance in this case: the size and nature of the group; the “seriousness or extravagance of the allegations”; and the plausibility of the comments. As she notes, none of the factors is determinative and their synergetic impact will vary with each case. I disagree, however, that consideration of those factors leads to the conclusion that the individual group members in this case were not defamed. 110 Under both the common law and civil law regimes, the fact that comments are aimed at a group is not, in itself, reason to deny a claim. If multiple individuals can show that they were defamed by the comments, each has a right of ac- 42 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

tion. As the reasons of Deschamps J. make clear, the determination of whether the statements relate to each member of the group involves a contextual analysis of both the group and the comments. In both Prud’homme (at para. 38) and Néron (at para. 54), this Court spoke of the need to find the appropriate balance between the right to freedom of expression and the right to respect for one’s reputation. That need for balance does not change when it is alleged that individual members of a group were defamed by remarks directed at the group. 111 Tort law is not normally concerned with the number of plaintiffs who claim injury. Neither the procedural vehicle used nor the ultimate difficulty in assessing damages in respect of multiple plaintiffs is reason in itself to deny a claim for defamation which is otherwise well founded. In this regard, I agree completely with the statement of Cromwell J.A. in Butler v. Southam Inc., 2001 NSCA 121, 197 N.S.R. (2d) 97 (N.S. C.A.): There are no special legal rules concerning individual claims of defamation based on statements made about a group: see, for example, Raymond E. Brown, The Law of Defamation in Canada (2nd 1999), at pp. 324-325. In this sort of case, as in others, the fundamental question remains whether the statements could reasonably be found to be defamatory of the named plaintiffs. Some authorities in some jurisdictions have attempted to define the limit of liability by reference to the size of the group: see, for example, Jo- seph Tanenhaus, “Group Libel” (1950), 35 Cornell Law Quarterly 261, at 263 and Jeffrey S. Broome, “Group Defamation: Five Guiding Factors” (1985), 64 Texas Law review 591, at 595 ff). However, Knupffer, the leading case in the Anglo-Canadian jurisprudence, holds that although the size of the group is relevant, it is not a controlling factor. Lord Atkin in that case stressed that the group aspect of the defamatory statements should not dis- tract the court from the real issue, namely whether the published words refer to the plaintiff. [para. 53] 112 As Justice Cromwell noted in Butler, the key common law case dealing with group defamation, is the decision of the House of Lords in Knupffer v. London Express Newspaper Ltd., [1944] A.C. 116 (U.K. H.L.). The Law Lords made it clear that it was possible for a plaintiff to succeed in a claim for defamation even when the defamatory comments referred to a group. They were unanimously of the view that such an action could succeed provided a plaintiff could show that the words referred to the plaintiff. This principle was clearly expressed by Lord Atkin: There can be no law that a defamatory statement made of a firm, or trustees, or the tenants of a particular building is not actionable, if the words would reasonably be understood as published of each member of the firm or each trustee or each tenant. The reason why a libel published of a large or indeterminate number of persons described by some general name generally fails to be actionable is the difficulty of establishing that the plaintiff was, in fact, included in the defamatory statements: for the habit of making unfounded Bou Malhab c. Diffusion Métromédia CMR inc. Abella J. 43

generalisations is ingrained in ill-educated or vulgar minds, or the words are occasionally intended to be a facetious exaggeration. Even in such cases words may be used which enable the plaintiff to prove that the words complained of were intended to be published of each member of the group, or, at any rate, of himself. [p. 122] 113 The position in Quebec is similar, as Ortenberg v. Plamondon (1915), 24 B.R. 69, 385, demonstrates. In 1910, Jacques-Edouard´ Plamondon had given a lecture in Quebec City during which he made statements attacking Jews. At the time of the lecture, there were about 75 Jewish households in Quebec City out of a population of about 80,000. Towards the end of his lecture, Mr. Plamondon invited the conference attendees to boycott Jewish businesses. A Jewish merchant, Benjamin Ortenberg, brought an action in defamation against Mr. Plamondon alleging that as a result of the lecture, he had been insulted and attacked and had lost part of his business clientele. In his defence, Mr. Plamondon argued that his statements were made about all Jews and that he had not singled out any individual. 114 While the claim was initially dismissed, Mr. Ortenberg was successful on appeal and awarded modest damages. Carroll J. concluded that [TRANSLA- TION] “[i]n ascribing all the crimes of the Jewish race to this small community, the speaker was targeting them to a sufficient extent” (p. 74). According to Car- roll J., [TRANSLATION] “[t]his is not a case of an insult to a community that is large enough that the insult is lost in the crowd” (p. 75). 115 As Ortenberg shows, it is not only the size of the group which is relevant, it is also the extent to which the group is sufficiently defined or easily identifiable such that each person in the group can be said to be affected. Or, as Cromwell J.A. said in Butler, the question is whether the group is so large as to be “indeterminate” (para. 72) (see also A.U.P.E. v. Edmonton Sun (1986), 49 Alta. L.R. (2d) 141 (Alta. Q.B.)). 116 While the group targeted by the statements in this case was large, it was not so diffuse as to be indeterminate. Mr. Arthur’s criticisms were directed at Arab and Haitian taxi drivers in Montr´eal. This is a precisely defined and easily identified group. 117 Secondly, these were serious accusations. Mr. Arthur’s allegations of corruption were particularly dramatic, including: [TRANSLATION] My suspicion is that the exams, well, they can be bought. You can’t have such incompetent people driving taxis, people who know so little about the city, and think that they took actual exams. When I see something like this, I can only think of corruption. 118 As Guibault J. found, the suggestion that Arab and Haitian taxi drivers had obtained their taxi permits illegally along with Mr. Arthur’s numerous other al- 44 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

lusions to corruption in getting those permits [TRANSLATION] “was particularly insulting and hurtful” (para. 80). 119 Mr. Arthur’s comments were aimed at a determinate group of individuals who were of particular racial backgrounds in a particular industry and in a particular city, leading the trial judge to conclude: [TRANSLATION] The general impression conveyed by the program is that problems with respect to taxis in Montr´eal are the fault of Arabs and Hai- tians, that they alone are responsible for those problems and that they must bear all the opprobrium for them. [para. 89] The group was defined with sufficient precision and the statements specific enough to be harmful to the reputations of each of its members. If Mr. Arthur had named an individual taxi driver and accused him or her of similar corruption and incompetence, there seems to me to be little doubt that an ordinary person would find those comments to be defamatory and therefore injurious. 120 Moreover, I do not accept that his listeners would have inevitably treated Mr. Arthur’s statements as less plausible because of his reputation. I appreciate that Mr. Arthur was not averse to comments of a provocative nature, and that his listeners knew that he was given occasionally to making offensive statements. But I do not accept that Mr. Arthur’s comments would necessarily be seen to be hyperbolic by the ordinary person. They were made “seriously”, not satirically or ironically. 121 The members of the group Mr. Arthur vilified interact with the public on a daily basis and their livelihoods depend upon their ability to attract customers. Mr. Arthur’s defamatory comments were, it seems to me, analogous to those made in Ortenberg: they were made seriously and raised, objectively, the clear possibility not only of harm to reputation, but also of harmful economic consequences from customers who may have decided to avoid taxis driven by members of the group, members who were easily identified and who stood accused not only of incompetence, but of having used corruption to become taxi drivers. In my view, those comments would palpably have been seen by an ordinary person as being defamatory, and therefore injurious, of the plaintiffs. 122 I would therefore allow the appeal and restore the award of damages made by Guibault J. Appeal dismissed. Pourvoi rejet´e. Durham (Regional Municipality) v. Verma 45

[Indexed as: Durham (Regional Municipality) v. Verma] Regional Municipality of Durham and Avinash Verma Ontario Court of Justice P.L. Bellefontaine J. Heard: December 8, 2010 Judgment: January 19, 2011* Docket: 2811 999, 2011 ONCJ 19 J. Moffat — Prosecutor D. Petras, for Appellant Motor vehicles –––– Offences and penalties — Prosecutions — Information — Mis- cellaneous –––– Notice of service — Accused was charged with failing to wear complete seatbelt assembly — Accused was convicted — Trial judge found that certificate of offence was complete and regular on its face despite fact that officer failed to certify on certificate that he served offence notice on accused as required by s. 3(5) of Provincial Offences Act — Accused appealed — Appeal dismissed — To require proof of service to be established only by completion of certification of service on face of certificate of offence is unnecessary — Certification on face can be appropriately considered surplusage when documentation before judge establishes service has been effected in another manner — Some situations require it and others do not so there is illogical inconsistency — Act permits service to be effected in different ways — Ignoring valid proofs of service would be inconsistent and unfair — Some flexibility is allowed in considering completeness. Cases considered by P.L. Bellefontaine J.: London (City) v. Young (2008), 2008 CarswellOnt 3091, 2008 ONCA 429, 237 O.A.C. 357, 233 C.C.C. (3d) 10, 75 Admin. L.R. (4th) 280, 91 O.R. (3d) 215, 65 M.V.R. (5th) 208, [2008] O.J. No. 2118 (Ont. C.A.) — considered R. v. Bhandari (2006), 2006 ONCJ 46, 2006 CarswellOnt 912, 29 M.V.R. (5th) 156, [2006] O.J. No. 641 (Ont. C.J.) — followed R. v. Khoshael (2001), 2001 CarswellOnt 1911, [2001] O.J. No. 2110 (Ont. C.J.) — followed York (Regional Municipality) v. Wilson (2005), 27 M.V.R. (5th) 153, 2005 CarswellOnt 7377, [2005] O.T.C. 1090, [2005] O.J. No. 5392 (Ont. S.C.J.) — considered Statutes considered: Provincial Offences Act, R.S.O. 1990, c. P.33 Generally — referred to s. 3(1) — considered

*A corrigendum issued by the court on January 24, 2011 has been incorporated herein. 46 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

s. 3(2) — considered s. 3(3) — considered s. 3(4) — considered s. 3(5) — considered s. 3(6) — considered s. 3(7) — considered s. 5 — considered s. 9 — referred to s. 9.1 [en. 1993, c. 31, s. 1(3)] — considered s. 9.1(2) [en. 1993, c. 31, s. 1(3)] — considered s. 9.1(3) [en. 1993, c. 31, s. 1(3)] — considered s. 10 — considered s. 11(1) — considered

APPEAL of conviction for failing to wear complete seatbelt assembly.

P.L. Bellefontaine J.:

1 The appellant appeals his conviction for the offence of failing to wear a complete seatbelt assembly on the basis that the learned Justice of the Peace erred in finding the certificate of offence to be “complete and regular on its face” under Section 9.1 (2) of the Provincial Offences Act, (the “P.O.A”.) notwithstanding that the Provincial Offences officer who issued the certificate of offence failed to certify on the certificate that he served the offence notice on the appellant as required pursuant to Section 3(5). The position of the appellant is that the certificate of offence should have been quashed. For convenience sake the relevant provisions of the P.O.A. are set out below: PART I COMMENCEMENT OF PROCEEDINGS BY CERTIFICATE OF OFFENCE Certificate of offence and offence notice 3. (1) In addition to the procedure set out in Part III for commencing a proceeding by laying an information, a proceeding in respect of an offence may be commenced by filing a certificate of offence alleging the offence in the office of the court. R.S.O. 1990, c. P.33, s. 3 (1). Issuance and service (2) A provincial offences officer who believes that one or more persons have committed an offence may issue, by completing and signing in the form prescribed under section 13, (a) a certificate of offence certifying that an offence has been committed; and Durham (Regional Municipality) v. Verma P.L. Bellefontaine J. 47

(b) either an offence notice indicating the set fine for the offence or a summons. 2009, c. 33, Sched. 4, s. 1 (2). Service (3) The offence notice or summons shall be served personally upon the person charged within thirty days after the alleged offence occurred. R.S.O. 1990, c. P.33, s. 3 (3). (4) Repealed: 2009, c. 33, Sched. 4, s. 1 (3). Certificate of service (5) Where service is made by the provincial offences officer who issued the certificate of offence, the officer shall certify on the certificate of offence that he or she personally served the offence notice or summons on the person charged and the date of service. R.S.O. 1990, c. P.33, s. 3 (5). Affidavit of service (6) Where service is made by a person other than the provincial offences officer who issued the certificate of offence, he or she shall complete an affidavit of service in the prescribed form. R.S.O. 1990, c. P.33, s. 3 (6). Certificate as evidence (7) A certificate of service of an offence notice or summons purporting to be signed by the provincial offences officer issuing it or an affidavit of service under subsection (6) shall be received in evidence and is proof of personal service in the absence of evidence to the contrary. R.S.O. 1990, c. P.33, s. 3 (7).. Intention to appear 5. (1) A defendant who is served with an offence notice may give notice of intention to appear in court for the purpose of entering a plea and having a trial of the matter by so indicating on the offence notice and delivering the notice to the court office specified in it. 1993, c. 31, s. 1 (2). Notice of trial (2) Where an offence notice is received under subsection (1), the clerk of the court shall, as soon as is practicable, give notice to the defendant and prosecutor of the time and place of the trial. R.S.O. 1990, c. P.33, s. 5 (2). Failure to appear at trial 9.1 (1) A defendant is deemed to not wish to dispute the charge where the defendant has been issued a notice of the time and place of trial and fails to appear at the time and place appointed for the trial. 2009, c. 33, Sched. 4, s. 1 (14). Examination by justice (2) If subsection (1) applies, section 54 does not apply, and a justice shall examine the certificate of offence and shall without a hearing enter a convic- 48 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

tion in the defendant’s absence and impose the set fine for the offence if the certificate is complete and regular on its face. 1993, c. 31, s. 1 (3). Quashing proceeding (3) The justice shall quash the proceeding if he or she is not able to enter a conviction. 1993, c. 31, s. 1 (3). Signature on notice 10. A signature on an offence notice or notice of intention to appear purporting to be that of the defendant is proof, in the absence of evidence to the contrary, that it is the signature of the defendant. 1993, c. 31, s. 1 (4). Reopening 11. (1) If a defendant who has been convicted without a hearing attends at the court office during regular office hours within fifteen days of becoming aware of the conviction and appears before a justice requesting that the conviction be struck out, the justice shall strike out the conviction if he or she is satisfied by affidavit of the defendant that, through no fault of the defendant, the defendant was unable to appear for a hearing or a notice or document relating to the offence was not delivered. 1993, c. 31, s. 1 (5). 2 The issue on this appeal is the subject of two competing decisions in our Court which I am obligated to address. The appellant relies upon R. v. Khoshael, [2001] O.J. No. 2110 (Ont. C.J.) in which Justice Libman held that a certificate of offence which contains no certification of service by the Provincial Offences officer who issued the ticket is not complete and regular on its face even though the defendant had filed a notice of intention to appear to dispute the charge as would have to have been done for the matter to go on to be considered by the Justice under Section 9.1. He granted the appeal against conviction and quashed the certificate of offence as mandated by s. 9.1 (3) when the certificate is not complete and regular on its face. The prosecution relies on a decision of Justice Thomas (now a Justice of the Superior Court of Ontario) in R. v. Bhandari [2006 CarswellOnt 912 (Ont. C.J.)], Court File Number: Municipality of Chatham- Kent, 78600705(2006) who held that in such circumstances “the appellant had notice of the proceedings and whether the issuing officer checked a box on the face of the certificate should no longer be a concern for the judicial officer considering completeness and regularity”. He upheld the conviction entered by the Justice of the Peace notwithstanding the absence of certification of service. 3 I consider the opposing decisions to reflect tensions within the P.O.A itself. Is substantive compliance with the act sufficient if it reaches a level that the Justice is satisfied no injustice is being done to a defendant sufficient or must strict compliance with the wording of the statute prevail even where the Justice is satisfied that no injustice is being done. Justice Libman articulated a number of points in favour of his position. Durham (Regional Municipality) v. Verma P.L. Bellefontaine J. 49

4 R. v. Khoshael was an omnibus decision, for a number of related cases, in which Justice Libman dealt not only with arguments relating to the lack of certification of service, but also situations where the set fine was in error on the certificate of offence. Given the balance in the P.O.A. between the inference that defendants are consenting to a conviction if they fail to act and the obligation on the Justice to ensure injustice does not occur he held that where defects appear in a certificate of offence such that it cannot be said to be complete and regular on its face, the result must be a quashing order. 5 He noted as one of the supports for his decision the prejudice to an accused that could flow from an error in the set fine and the need for strict compliance in this regard to avoid injustice being done. With respect to the prejudice associated with a lack of certification of service even when the defendant has filed a notice of intention to appear, he notes that different appeal routes will be open to an individual depending on whether he has filed a notice of intention to appear or not. I note from Justice Thomas’ decision that it is clear that he feels no injustice is being done to an individual who clearly knows about the offence when service is proved by virtue of his having signed the notice of intention to appear as opposed to having proof of service established by way of the officer’s certification on the Certificate of Offence. It may be significant that the notice of intention to appear signed by the accused (or as in this case by his agent) includes a warning which at that time read: 6 NOTE: IF YOU FAIL TO APPEAR AT THE TIME AND PLACE SET FOR YOUR TRIAL, YOU WILL BE DEEMED NOT TO DISPUTE THE CHARGE, AND A CONVICTION MAY BE ENTERED AGAINST YOU IN YOUR ABSENCE, WITHOUT FURTHER NOTICE. 7 Further support for Justice Libman’s decision was obtained by virtue of the fact that under Section 9.1(3) no power to amend the set fine is available to the Justice to remedy the prejudice and the only recourse upon lack of completeness or regularity of the certificate is to quash it. 8 An important determinant of the issue is whether or not the proof of service portion of the certificate of offence may be found to be surplusage in some cases or whether it must always be completed. Justice Libman held that both proof of service and the correct amount of the set fine were not surplusage and in the absence of them properly on the Certificate of Offence, it was not “complete and regular on its face”. With respect to the requirement for the correct set fine, Khoshael was substantially approved of by the Court of Appeal in London (City) v. Young, [2008] O.J. No. 2118 (Ont. C.A.). This decision was one under Sec- tion 9 of the Provincial Offences Act which applies when the defendant did not respond to the offence notice but is similarly worded to Section 9.1 where a notice of intention to defend has been filed and a notice of trial has been sent to the defendant as requested by him. In London (City) v. Young, the Court of Ap- 50 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

peal held that where an offence notice is being used, the set fine amount cannot be seen to be surplusage as the amount of the fine is necessary for the defendant to make the important decision of whether to defend the matter or not. They also considered the meaning of “regular” and relied on the Oxford English Diction- ary which related one definition that appears to be relevant being “recognized as formally correct”, and went on to state “if the set fine, as in the case at bar, is incorrectly recorded on the certificate of offence, it simply cannot be regular on its face and must be quashed”. The Court also noted that when a matter is proceeded by way of summons, the certificate of offence and offence notice need not contain the set fine because the defendant does not have the option of de- faulting or not. In such a situation he has no need to consider options to defend or not based on the amount of the fine because he must attend court. Accord- ingly whether or not the set fine is required for the certificate of offence to be formally correct for it to be found to be complete and regular on its face, as opposed to surplusage, depends on which option the police have taken to effect service of the certificate of offence. In those situations where service is dealt with by way of summons the set fine need not be included in the certificate of offence for it to be complete and regular on its face notwithstanding that portion of the form that provides for the fine to be set out. The certificate of offence does not provide a place for proof of service of the summons or service by any officer other than the one who has issued the certificate of offence. It does provide a space for a return date of the summons to be included if that mode of service was used which would be left blank in the normal course. 9 In London (City) v. Young the court did not comment on or express any res- ervations about the analysis for the lack of certification of service that was expressed in R. v. Khoshael, and paralleled the incorrect fine issue that they approved of. R. v. Khoshael is in my view entitled to some added deference by virtue of the Court of Appeals reference to it. The Court of Appeal did however expressly overrule York (Regional Municipality) v. Wilson (2005), 27 M.V.R. (5th) 153 (Ont. S.C.J.). which was referenced by Justice Thomas in R. v. Bhandari. I do not consider however that this affects the ratio of R. v. Bhandari that having filed the notice of intention to appear the defendant should be found to have had notice of the proceedings. 10 With respect to those who take a contrary view, I prefer Justice Thomas’s conclusion in R. v. Bhandari for the following reasons: 1) I cannot see how the absence of completion of the certificate with respect to service can be a defect such that the certificate is not complete and regular on its face when it is required in some situations and not in others. The P.O.A. permits service to be effected in different ways. Ser- vice can be proved not only by the certification of the officer who issued the certificate of offence on the certificate, but, pursuant to s.3(6), could also be made by a person other than the provincial offences officer who Durham (Regional Municipality) v. Verma P.L. Bellefontaine J. 51

issued the certificate of offence who would then complete an affidavit of service in the prescribed form [s.3(7)], in which case the certification on the certificate would be blank as it is in this case. Similarly, the P.O.A. allows for service by summons in which case again the boxes for certification of service would properly be left blank and recourse would have to be had to the affidavit of service, a document external to the certificate of offence, to ensure that service had been made. Just as a Justice applying London (City) v. Young would be able to look at external documents to determine what the nature of service was to determine if the set fine was required to be set out, so to the Justice considering the matter under Section 9.1 should equally be able to look to external sources being the Affidavit of Service to determine whether or not service has been affected to determine whether the certification of service on the certificate of offence is required. As an extension of such circumstances I can see little difference as to whether the source of the proof that service has been effected comes from the Affidavit of Service of the serving individual or the admission of service by the defendant which comes by way of the necessary implication flowing from his having signed the notice of intention to appear. 2) Ignoring lawful proof of service of certificates of offence by way of affidavit under s.3 (7) would effectively make that section redundant if it could not be used in the absence of the defendant. As the boxes for certification of service will not be completed in such circumstances they would be surplusage where affidavits of service are lawfully used. 3) A defendant who files a notice of intention to appear does lose the benefit of the expedited re-opening appeal process. However I do not feel that the difference in appeal routes is so significant as to create a prejudice to an accused or an injustice that would require the Certificate to include the certification of service as opposed to allowing other valid proofs of service. The substantive injustice that a Justice must guard against, when reviewing proof of service, is whether the defendant is aware of the proceedings so that he can defend them if he chooses. That injustice can be prevented without taking a narrow view of the statutory requirement that the certificate be complete and regular on its face. 4) The lack of amendment power under s.9.1, which supports the conclusions arrived at in R. v. Khoshael and London (City) v. Young is not relevant to the certification of service issue. While this does provide support in the context of an error in the amount of the set fine, I do not see this argument to be applicable to the requirement for certification of proof of service. 52 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

5) Ignoring valid proofs of service not on the face of the certificate such as the statutorily authorized affidavit of service or the statutorily authorized notice of intention to appear leads to an unacceptable result. Applying the strict test in R. v. Khoshael, every defendant who has been lawfully served with a summons or a certificate of offence by a person other than the issuing officer can file a notice of intention to defend, ignore the notice of trial he requested, intentionally fail to appear for his trial and the Justice will be required to quash the certificate based on the lack of certification of service on the face of the certificate even though those other lawful proofs of service are before him or her and are not properly included on the certificate of offence. An interpretation of the act that provides an automatic technical defence to all defendants in that group is inconsistent with the intention of the P.O.A. and should be avoided. 6) The Court of Appeals interpretation of “complete and regular on its face” for the purpose of determining whether the set fine must be included in the certificate of offence in London (City) v. Young allows for some flexibility in considering documents external to the certificate of offence to determine what boxes are surplusage on the form. 7) Given that a large majority of charges will result in the issuing officer serving the certificate on the defendant at the scene I view the option given of certifying service on the face of the certificate of offence as opposed to requiring a separately sworn affidavit of service to be done for convenience and efficiency. I do not consider this part of the form to be fundamental to the charge when alternatives are available to establish service. 11 I am mindful of the need for a balance in the application of the P.O.A. given the significant procedural advantages it gives to the prosecution and accordingly the need for careful scrutiny by a Justice to ensure that no injustice is done to a defendant. However I consider it to be an unnecessarily and overly strict interpretation of the P.O.A. to require proof of service to be established only by completion of certification of service on the face of the certificate of offence. Such certification is appropriately considered surplusage when the documentation before the reviewing Justice otherwise establishes service has been effected. 12 Accordingly the appeal in this matter will be dismissed. Appeal dismissed. R. v. Cardinal 53

[Indexed as: R. v. Cardinal] Her Majesty the Queen (Respondent) and Ernest Cardinal and William James Cardinal (Applicants) Alberta Court of Appeal Peter Costigan J.A. Heard: February 22, 2011 Judgment: March 1, 2011 Docket: Edmonton Appeal 1003-0328-A, 1003-0329-A, 2011 ABCA 72 T.G. Rothwell, S.J. Lopetinsky for Respondent, Alberta Justice and Attorney General - Aboriginal Law T.L. Couillard for Respondent, Alberta Justice and Attorney General - Appeals, Education and Public Policy Branch P.E. Kennedy for Applicants Natural resources –––– Fish and wildlife — Offences — Miscellaneous –––– Leave to appeal — Following undercover operation, aboriginal accused EC was convicted of six counts of unlawfully selling fish and one count of attempting to commit same offence — Crown sought term of imprisonment of four to six months and three years of probation for EC, plus $7,500 fine — EC sentenced to imprisonment for 90 days on each count, concurrent, plus three years’ probation — EC appealed — Appeal was allowed in part — Appeal was dismissed with regard to conviction and granted in regards to sentence — Accused brought application for leave to appeal — Application dismissed — All issues raised on appeal were patently unarguable or had been previously determined — No question that Alberta may regulate sale of fish in province — Doctrine of interjurisdictional immunity did not apply. Cases considered by Peter Costigan J.A.: Cardinal v. Alberta (Attorney General) (1973), [1974] S.C.R. 695, [1973] 6 W.W.R. 205, 13 C.C.C. (2d) 1, 40 D.L.R. (3d) 553, 1973 CarswellAlta 89, 1973 CarswellAlta 154 (S.C.C.) — followed R. v. Blais (2003), 2003 CarswellMan 386, 2003 CarswellMan 387, 2003 SCC 44, 308 N.R. 371, 230 D.L.R. (4th) 22, 177 C.C.C. (3d) 214, [2003] 2 S.C.R. 236, [2003] 4 C.N.L.R. 219, 180 Man. R. (2d) 3, 310 W.A.C. 3, [2004] 11 W.W.R. 199, REJB 2003-47445 (S.C.C.) — considered R. v. Gladue (1995), 1995 CarswellAlta 803, 36 Alta. L.R. (3d) 241, 103 C.C.C. (3d) 216, [1996] 1 C.N.L.R. 153, 130 D.L.R. (4th) 577, 178 A.R. 248, 110 W.A.C. 248, [1995] A.J. No. 1116 (Alta. C.A.) — considered R. v. Horseman (1990), [1990] 4 W.W.R. 97, [1990] 1 S.C.R. 901, 108 N.R. 1, 73 Alta. L.R. (2d) 193, 108 A.R. 1, 55 C.C.C. (3d) 353, [1990] 3 C.N.L.R. 95, 1990 Carswell- Alta 47, 1990 CarswellAlta 653, EYB 1990-66934 (S.C.C.) — followed 54 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

R. v. Jacko (2000), 261 A.R. 396, 225 W.A.C. 396, 2000 ABCA 178, 2000 CarswellAlta 608, [2000] A.J. No. 720 (Alta. C.A.) — referred to Statutes considered: Alberta Natural Resources Act, S.A. 1930, c. 21 s. 9 — referred to s. 10 — considered s. 12 — considered Constitution Act, 1867, (U.K.), 30 & 31 Vict., c. 3, reprinted R.S.C. 1985, App. II, No. 5 s. 92 ¶ 13 — referred to s. 92 ¶ 16 — referred to Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), c. 11, reprinted R.S.C. 1985, App. II, No. 44 s. 35 — considered Indian Act, R.S.C. 1985, c. I-5 s. 88 — referred to Regulations considered: Fisheries (Alberta) Act, R.S.A. 2000, c. F-16 General Fisheries (Alberta) Regulation, Alta. Reg. 203/97 Generally — referred to

APPLICATION by accused for leave to appeal from appeal from convictions for fish and wildlife offences reported at R. v. Cardinal (2010), [2010] A.J. No. 1245, 2010 Carswell- Alta 2117, 2010 ABQB 673 (Alta. Q.B.).

Peter Costigan J.A.:

1 The applicants, members of the Beaver Lake Cree Nation, sold fish without a commercial license on the Beaver Lake Indian reserve and were convicted of offences under the General Fisheries (Alberta) Regulation, Alta. Reg. 203/1997: R. v. Cardinal, 2009 ABPC 77, 470 A.R. 41 (Alta. Prov. Ct.). Their summary conviction appeal was dismissed: R. v. Cardinal, 2010 ABQB 673, [2010] A.J. No. 1245 (Alta. Q.B.). The applicants seek leave to appeal to this Court. Leave to appeal may be granted on an arguable question of law of sufficient public importance. 2 Both the trial judge and the appeal judge concluded that decisions of the Supreme Court of Canada and of this Court have definitively determined that the Province of Alberta has jurisdiction to regulate the sale of fish by Indians on reserves in the province. The applicants argue that these conclusions evince errors in law. They say the seminal case in this area, Cardinal v. Alberta (Attorney General) (1973), [1974] S.C.R. 695, 40 D.L.R. (3d) 553 (S.C.C.) [Cardinal cited to S.C.R.] was wrongly decided; the decision in Cardinal no longer applies because of s. 35 of the Constitution Act, 1982; Alberta has no jurisdiction over R. v. Cardinal Peter Costigan J.A. 55

fishing and, in any event, no jurisdiction over fishing on an Indian reserve because of s. 10 of the Alberta Natural Resources Transfer Agreement [NRTA] and the decision in R. v. Blais, 2003 SCC 44, [2003] 2 S.C.R. 236 (S.C.C.) [Blais]; s. 12 of the NRTA only modified the treaty right to hunt commercially, not to fish commercially; and Alberta lacks the necessary jurisdiction as a result of the application of the doctrine of interjurisdictional immunity. All of the issues raised in this application have been conclusively determined against the applicants or are patently unarguable. 3 There is no question that Alberta has jurisdiction to regulate the sale of fish in the province: s. 9 of the NRTA and ss. 92(13) and (16) of the Constitution Act, 1867. Section 12 of the NRTA extended provincial hunting and fishing laws to all Indians, including those on reserves: Cardinal at 708. Cardinal was affirmed in R. v. Horseman, [1990] 1 S.C.R. 901, [1990] 4 W.W.R. 97 (S.C.C.) [Horse- man cited to S.C.R.], which also affirmed that s. 12 extinguished any treaty right to hunt commercially: Horseman at 931-936. Because s. 35 of the Constitution Act, 1982 addresses existing treaty rights, it is not arguable that it has any application to the treaty rights found to have been extinguished in Horseman: R. v. Gladue (1995), 130 D.L.R. (4th) 577, 178 A.R. 248 (Alta. C.A.) at para. 7 [Gladue]. The principles set out and affirmed in Cardinal and Horseman with respect to hunting laws apply equally to fishing laws: Gladue; R. v. Jacko, 2000 ABCA 178, 261 A.R. 396 (Alta. C.A.) [Jacko]. 4 It is not arguable that s. 10 of the NRTA or Blais have any impact on the principles at issue on this application. Section 10 was considered in Cardinal. Blais considered whether the M´etis are Indians under the hunting rights provisions of the Manitoba Natural Resources Transfer Agreement and says nothing that derogates from the principles set out in Cardinal and Horseman. 5 Nor is it arguable that the doctrine of interjurisdictional immunity has any application. Section 12 of the NRTA specifically recognizes that provincial hunting and fishing laws apply to all Indians, including those on reserves: see also Indian Act, R.S.C. 1985, c. I-5, s.88. Furthermore, provincial hunting and fishing laws do not relate to Indians as Indians: Cardinal at pg. 706. 6 The applications for leave to appeal are dismissed. Application dismissed. 56 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

[Indexed as: Alexander v. Rosedale United Church] The Rev. Arleigh Alexander (Plaintiff / Appellant) and Rosedale United Church and Toronto South Presbytery of the United Church of Canada and Toronto Conference of the United Church of Canada and the United Church of Canada (Defendants / Respondents) Ontario Superior Court of Justice (Divisional Court) Lederer J. Heard: January 31, 2011 Judgment: February 3, 2011 Docket: Toronto 397/10 Ernest J. Guiste for Appellant Alexander D. Pettingill for Respondents Civil practice and procedure –––– Disposition without trial — Dismissal for delay — Length of time constituting delay — In bringing on trial –––– Plaintiff employee alleged that defendant employer-church wrongfully terminated her in 2001 — Employee brought action against employer in 2002 — Action was struck from trial list in 2006 — In 2007, employer’s motion to dismiss for delay was dismissed because, if there had been inordinate delay, it was excusable as result of employee’s medical condition — In 2008, employee amended statement of claim — Action was not set down for trial — Employer successfully brought motion to dismiss action for failure of employee to restore action to trial list — Master held there was inordinate delay — Master held there was no reasonable explanation as to delay — Employee appealed master’s decision dismissing her action for delay — Appeal was dismissed — Master did not make error of law — Master’s reasons were comprehensive, fully reviewed relevant history and applied appropriate law — Master properly reviewed entire history and concluded delay was inordinate — Master did not apply undue weight to period following initiation of action — Master properly considered employee’s medical evidence in determining whether delay was excusable — Prejudice was demonstrably present — Senior minister against who allegations were made was 81 years of age. Civil practice and procedure –––– Disposition without trial — Dismissal for delay — General principles –––– Plaintiff employee alleged that defendant employer-church wrongfully terminated her in 2001 — Employee brought action against employer in 2002 — Action was struck from trial list in 2006 — In 2007, employer’s motion to dismiss for delay was dismissed because, if there had been inordinate delay, it was excusable as result of employee’s medical condition — In 2008, employee amended statement of claim — Action was not set down for trial — Employer successfully brought motion to dismiss action for failure of employee to restore action to trial list — Master held there was inordinate delay — Master held there was no reasonable explanation as to delay — Employee appealed master’s decision dismissing her action for delay — Appeal was dismissed — Master did not make error of law — Master’s reasons were comprehensive, Alexander v. Rosedale United Church Lederer J. 57

fully reviewed relevant history and applied appropriate law — Master properly reviewed entire history and concluded delay was inordinate — Master did not apply undue weight to period following initiation of action — Master properly considered employee’s medical evidence in determining whether delay was excusable — Prejudice was demonstrably present — Senior minister against who allegations were made was 81 years of age. Cases considered by Lederer J.: Armstrong v. McCall (2003), 2003 CarswellOnt 6073 (Ont. S.C.J.) — referred to Armstrong v. McCall (2005), 2005 CarswellOnt 3480 (Ont. S.C.J.) — referred to Armstrong v. McCall (2006), 28 C.P.C. (6th) 12, 213 O.A.C. 229, 2006 CarswellOnt 3134, [2006] O.J. No. 2055 (Ont. C.A.) — followed Christie Corp. v. Lee (1999), 1999 CarswellOnt 485, 29 C.P.C. (4th) 181, [1999] O.J. No. 495 (Ont. C.A.) — followed Wellwood v. Ontario Provincial Police (2010), 319 D.L.R. (4th) 412, 102 O.R. (3d) 555, 262 O.A.C. 349, 2010 ONCA 386, 2010 CarswellOnt 3521, 90 C.P.C. (6th) 101, [2010] O.J. No. 2225 (Ont. C.A.) — followed Woodheath Developments Ltd. v. Goldman (2003), 2003 CarswellOnt 3310, 38 C.P.C. (5th) 80, 66 O.R. (3d) 731, 175 O.A.C. 259, [2003] O.J. No. 3440 (Ont. Div. Ct.) — followed Zeitoun v. Economical Insurance Group (2009), 73 C.C.L.I. (4th) 255, 257 O.A.C. 29, 2009 ONCA 415, 73 C.P.C. (6th) 8, 307 D.L.R. (4th) 218, 2009 CarswellOnt 2665, 96 O.R. (3d) 639, [2009] O.J. No. 2003 (Ont. C.A.) — considered

APPEAL by plaintiff employee from judgment, reported at Alexander v. Rosedale United Church (2010), 83 C.C.E.L. (3d) 301, [2010] O.J. No. 3282, 2010 ONSC 4224, 2010 CarswellOnt 5597 (Ont. Master), dismissing employee’s wrongful dismissal action for delay.

Lederer J.:

1 At the outset of the hearing of this motion, counsel for the plaintiff advised of his client’s concern that many members of the bench were associated with the defendant, Rosedale United Church. I was asked if I had such an association. I was married there thirty-four years ago, but I have never had any association with the church. Counsel did not object to my proceeding. I mention this because counsel for the defendants asked me to and because, after the hearing commenced, as I asked questions of counsel for the plaintiff, he suggested he might wish to re-consider his agreement that I proceed. 2 This is an appeal from the order of Master Glustein, in which he dismissed the action due to delay. 58 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

3 Counsel for the plaintiff submitted that there was a fundamental error in the decision of the Master. In making this submission, he relied on sentences which appear early in the reasons being appealed. They say: For the reasons discussed below, I grant the motion to dismiss for delay on the basis of Alexander’s failure to restore the action to the trial list within 30 days from September 11, 2006. Consequently, I do not consider the under- takings issue, and my reasons below address only the motion to dismiss for delay for the failure of Alexander to restore the actions of the trial list within 30 days from September 11, 2006. 4 It was the position of counsel for the plaintiff that these sentences indicate that the Master evaluated the delay from September 11, 2006 and did not take into account intervening factors which, as counsel sees it, recognize that additional time was required. 5 The standard of review for an appeal from a decision of a Master has been commented on as follows: ...there is no reasoned basis to distinguish between the decision of a Master and that of a judge for the purpose of the standard of review on appeal. (Zeitoun v. Economical Insurance Group, [2009] O.J. No. 2003 (Ont. C.A.), at para. 1) 6 The same Court has more recently defined the standard of review, in circumstances such as this, as: ...on questions of fact and mixed fact and law, deference applies and the role of the reviewing court is limited. An appellate court cannot substitute its interpretation of the facts or reweigh the evidence simply because it takes a different view of the evidence from that of the master. On questions of law, the correctness standard applies. (Wellwood v. Ontario Provincial Police, [2010] O.J. No. 2225 (Ont. C.A.), at para. 28) 7 The plaintiff alleges that she was employed by the defendant, Rosedale United Church, on a part-time basis from September 1, 1997 to July 31, 2000, and in a full-time capacity from July 31, 2000. She was terminated as of July 31, 2001. The plaintiff initiated this action for wrongful dismissal, by Statement of Claim, on November 20, 2002. 8 On September 11, 2006, on consent, an order was obtained vacating the trial date and striking the action from the trial list. 9 From the date the action was struck off the list, there is no evidence of any steps taken in the action until the defendants brought a motion to dismiss for delay. It was heard by Master Egan on February 5, 2007. In response to the motion, the plaintiff filed affidavit evidence which fully addressed her medical condition. It had caused her to withdraw from her friends and life in Toronto. As a result, Master Egan held that the delay was excusable. Master Egan ordered Alexander v. Rosedale United Church Lederer J. 59

that the plaintiff serve an amended Statement of Claim by February 21, 2007. An amended claim was delivered on February 13, 2007. The proposed changes included adding a senior minister from the church as a defendant and sought damages for sexual harassment, intentional infliction of mental suffering and in- ducement of breach of contract. The defendants did not consent to the changes being made. No motion was brought to amend the pleadings until March of 2008, despite the requests of the defendants’ solicitor that this be done. An order amending the Statement of Claim was made. The senior minister was not added as a party, but the allegations of sexual harassment remained to support claims of negligence made against the church. 10 These were the intervening factors, counsel submitted, that were ignored by the Master in his decision. 11 In particular, counsel for the plaintiff drew the court’s attention to the following statement contained within the order of Master Egan, dated February 5, 2007: An order can be sought — probably on consent — to restore the actions of the trial list once the parties no longer need to bring any discovery related motions and an extension to do so is given accordingly. 12 Counsel for the plaintiff submitted that, by this statement, Master Egan provided an extension in the time allowed to restore the action to the trial list. Ac- cording to counsel, this is a principal factor the Master ignored when he measured the delay from September 11, 2006. As counsel sees it, this statement demonstrated the recognition by Master Egan that more time would be required. 13 In making this submission, counsel relied on Armstrong v. McCall, [2006] O.J. No. 2055 (Ont. C.A.) as demonstrating that a failure to take into account intervening events was a fatal error to the determination made by the Master. Counsel for the plaintiff was of a view that, given the statement made by Master Egan, only the time since her order was made should be accounted for in evalu- ating the delay. Counsel for the defendants, the responding parties, disagreed. It is his submission that the case does not stand for the principle as enunciated by counsel for the plaintiff. Counsel for the defendants said it was open to the Master to consider the full length of any delay and not just the delay beginning with the order of Master Egan. In any event, the Master had given full consideration to that decision and the intervening factors present in this case. 14 In Armstrong v. McCall, supra, the plaintiff sued doctors for malpractice. The action was commenced during the month of August 1998. On March 7, 2003, the physicians brought a motion to dismiss action for delay. It was denied by the judge. On September 23, 2003 [2003 CarswellOnt 6073 (Ont. S.C.J.)], a second motion to dismiss the action for delay was brought. It, too, was dismissed. A motion seeking leave to appeal the decision in the second motion also failed. On August 2, 2005 [2005 CarswellOnt 3480 (Ont. S.C.J.)], a third motion 60 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

to dismiss the action of the plaintiffs for delay was argued. It was granted. The action was dismissed. 15 The decision of the Court of Appeal overturned the dismissal. The question it asked was: What was it that worsened the position of the defendants from the time the leave to appeal of the second refusal was dismissed? The court found there was nothing. By that time, the action had been set down for trial and the trial co-ordinator was awaiting the co-operation of counsel for the doctors to provide available dates for the trial. 16 The court did not hold, as counsel for the plaintiff suggested, that the case requires a delay to be measured from the intervening order as opposed to the commencement of the action. Rather, the Court said: While it was not wrong for the motion judge to consider ‘the whole course’ of the action in determining whether it should have been dismissed, as the appellant contended, given that the respondents failed to establish a fatal delay before Sachs J. and B. Wright J., she should have focused on the delay subsequent to the decision of O’Driscoll J. The question which the court must address is whether delay that is properly described as inordinate and inexcusable has given rise to a substantial risk that a fair trial for the defendant will not be possible. 17 The case noted that the prejudice, to which the Court of Appeal referred, could be presumed. The Court quoted the decision of the Divisional Court in an appeal from a Master in Woodheath Developments Ltd. v. Goldman (2003), 66 O.R. (3d) 731 (Ont. Div. Ct.) at 732: Specifically, I accept as correct the principles applicable to motions to dismiss for delay derived by the learned Master from the case law and accu- rately summarized in the headnote at (2001), 56 O.R. (3d) 658 as follows: The principle to be applied on a motion to dismiss for delay is that the action should not be dismissed unless: (1) the default is intentional and contumelious; or (2) the plaintiff or his or her lawyers are responsible for the inexcusable delay that gives rise to a substantial risk that a fair trial might not be possible. It is presumed that memories fade over time, and then inordinate delay after the cause of action arose or after the passage of limitation period [sic] gives rise to a presumption of prejudice. Where there is a presumption of prejudice, the defendant need not lead actual evidence of prejudice and the action will be dismissed for delay unless the plaintiff rebuts the presumption. 18 The decision of the Master in the case I am asked to decide clearly demonstrates he was aware of these principles (see: Alexander v. Rosedale United Church, 2010 ONSC 4224 (Ont. S.C.J.), at para. 57(b), (d), (e), (f), and (h)). 19 In particular, the Master noted that he was entitled to consider all of the delay in the action and not just the time from the date the action was struck off Alexander v. Rosedale United Church Lederer J. 61

the list. The court was entitled to consider all of the conduct of the litigation up to the date of the motion (see: Alexander v. Rosedale United Church, supra, at paras. 63 and 64). 20 The Master reviewed the entire history and concluded that the delay was inordinate (see: Alexander v. Rosedale United Church, supra, at para. 62). 21 In respect of the point that the full period of delay could be considered, the Court of Appeal, in Armstrong v. McCall, supra, quoted Christie Corp. v. Lee (1999), 29 C.P.C. (4th) 181 (Ont. C.A.) as follows: In some cases, under Rule 24, it will be appropriate to consider the time elapsed from the time an action was commenced in considering the reasonableness of the delay relied on by the defendant. In the circumstances of this case, however, it is our view that the motions judge erred in principle and placing undue weight on this factor. 22 In this case, it cannot be said that the Master applied undue weight to the period following the initiation of the action. He observed: In any event, even if I only consider the time period from September 11, 2006, the date the action was struck from the trial list (or even from Master Egan’s order on February 5, 2007), up to the present motion (which I do not find to be an appropriate approach for the reasons discussed above), this further delay of 3 1/2 to 4 years would be inordinate on its own, as very little has happened in the action since the 2006-07 time period. (Alexander v. Rosedale United Church, supra, at para. 66) 23 The Master, having found that the delay was inordinate, went on to determine that it was inexcusable. In doing so, he considered the evidence as to the medical condition of the plaintiff. He found that he did not have evidence that established that the delay was excusable for medical reasons (see: Alexander v. Rosedale United Church, supra, at paras. 71-76). The assertion that it would be necessary to conduct some discovery on the amended pleadings which was prof- fered as demonstrating that the delay in setting the action down for trial was excusable was found by the Master to be “contrived and not supported by the evidence” (see: Alexander v. Rosedale United Church, supra, at paras. 77-79). 24 Finally, counsel for the defendants pointed out that the prejudice that could be presumed was, in this case, demonstrably present. The senior minister against whom the allegations have been made has lived under their cloud since the first draft of the proposed amended Statement of Claim was presented on February 13, 2007. Given these allegations, he will be the principal witness called on behalf of the defendants. He is now eighty-one years old, an age when memory loss is a factor in many lives. Unlike Armstrong v. McCall, supra, the matter has not been set down for trial. The case is not waiting for counsel to provide the dates they are available for trial. Consistent with the requirements outlined by the Court of Appeal in Armstrong v. McCall, supra, the Master considered what 62 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

was before him and found that the plaintiff did not rebut the presumption of prejudice created by the passage of time (see: Alexander v. Rosedale United Church, supra, at paras. 85-96). 25 Finally, I add that counsel for the plaintiff misreads the Order of Master Egan made on February 5, 2007. It does not, as he suggested, extend the time for restoring the action to the trial list. Rather, it does nothing more than say that an order to that effect can be requested when there are no more discovery-related motions to be brought. To do otherwise would limit the discretion of any judicial officer to whom the request was made. 26 To my mind, this all demonstrates that the Master fully considered the issue of whether and how to account for the full history of the conduct of the action and properly balanced the concerns it raised. 27 There is no error of law made by the Master. His reasons are comprehensive and fully review the relevant history. He properly applied the law to that history. 28 The appeal is dismissed. 29 The parties requested that they be permitted to make submissions as to costs in writing once the decision had been released. Accordingly, if the parties are unable to agree, I will consider submissions as to costs made in writing on the following terms: 1. On behalf of the defendants, no later than fifteen days after the release of these reasons. Such submissions are to be no longer than three pages double-spaced, excluding any Cost Outline or Bill of Costs and case law that may be included. 2. On behalf of the plaintiff, no later than ten days thereafter. Such submissions are to be no longer than three pages double-spaced, excluding any Cost Outline or Bill of Costs and case law that may be included. 3. If necessary, submissions, on behalf of the defendants, in reply to those of the plaintiff, no later than five days thereafter. Such submissions are to be no longer than one page double-spaced. Appeal dismissed. C.E.P. v. Mercury Graphics 63

[Indexed as: C.E.P. v. Mercury Graphics] In the Matter of an Application for Judicial Review Pursuant to Part 52 of the Queen’s Bench Rules And In the Matter of an Application for an Order in the Nature of Certiorari to Quash an Arbitration Award Dated June 7, 2010 Communications, Energy & Paperworkers Union of Canada, Local 721-G (Applicant) and Mercury Graphics (Respondent) Saskatchewan Court of Queen’s Bench P. Foley J. Judgment: January 24, 2011 Docket: Saskatoon Q.B.G. 1317/10, 2011 SKQB 41 Gary L. Bainbridge for Applicant Dwayne W. Chomyn for Respondent Labour and employment law –––– Labour law — Labour arbitrations — Jurisdic- tion of arbitration board — Miscellaneous –––– Employer was printing company — Strike/lockout terminated collective bargaining agreements (CBAs) — Employer’s plant subsequently closed — Each of CBAs had contained provision of severance pay in event of severance due to consolidation or technological change calculated at rate of 2 weeks’ pay for each completed year of service with employer — Union grieved, submitting that severance pay was vested right such that it was due and owing even though CBAs were terminated prior to severance of employees and that, alternatively, arbitration board had jurisdiction to award severance pay in accordance with common law principles — At conclusion of union’s case, employer’s motion for non-suit was granted — Motion granted — Arbitrator found that while amount of severance pay provided for in terminated CBAs was directly proportional to length of service, severance pay provisions were contingent right — Arbitrator found that for severance pay provided for in CBAs to become vested right, there would have had to be triggering or crystallizing event, namely severance — Arbitrator found that further, to be enforceable under CBAs, severance, as triggering event, would have had to occur prior to CBAs being terminated — Arbitrator found that right to severance pay provided for by terminated CBAs had not vested prior to CBAs having been terminated — As such, arbitration board had no jurisdiction to enforce severance pay provisions — Union brought application for judicial review — Ap- plication dismissed — Issue was not one of jurisdiction and did not require standard of correctness — Arbitrator had jurisdiction to find that although motion for non-suit was allowed, arbitrator had already determined that no rights had vested, and then that no severance matters survived termination of collective agreement, and that in that sense, no further jurisdiction existed — Arbitrator’s findings regarding vested rights were reasonable and correct. Labour and employment law –––– Occupational health and safety legislation — Ad- ministrative procedures under legislation — Jurisdiction –––– Employer was printing 64 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d) company — Strike/lockout terminated collective bargaining agreements (CBAs) — Em- ployer’s plant subsequently closed — Each of CBAs had contained provision of severance pay in event of severance due to consolidation or technological change calculated at rate of 2 weeks’ pay for each completed year of service with employer — Union grieved, submitting that severance pay was vested right such that it was due and owing even though CBAs were terminated prior to severance of employees and that, alternatively, arbitration board had jurisdiction to award severance pay in accordance with common law principles — At conclusion of union’s case, employer’s motion for non-suit was granted — Motion granted — Arbitrator found that while amount of severance pay provided for in terminated CBAs was directly proportional to length of service, severance pay provisions were contingent right — Arbitrator found that for severance pay provided for in CBAs to become vested right, there would have had to be triggering or crystallizing event, namely severance — Arbitrator found that further, to be enforceable under CBAs, severance, as triggering event, would have had to occur prior to CBAs being terminated — Arbitrator found that right to severance pay provided for by terminated CBAs had not vested prior to CBAs having been terminated — As such, arbitration board had no jurisdiction to enforce severance pay provisions — Union brought application for judicial review — Application dismissed — Issue was not one of jurisdiction and did not require standard of correctness — Arbitrator had jurisdiction to find that although motion for non-suit was allowed, arbitrator had already determined that no rights had vested, and then that no severance matters survived termination of collective agreement, and that in that sense no further jurisdiction existed — Arbitrator’s findings regarding vested rights were reasonable and correct. Cases considered by P. Foley J.: Dayco (Canada) Ltd. v. C.A.W. (1993), 1993 CarswellOnt 883, 1993 CarswellOnt 978, 14 Admin. L.R. (2d) 1, (sub nom. Dayco (Canada) Ltd. v. CAW-Canada) [1993] 2 S.C.R. 230, (sub nom. Dayco (Canada) Ltd. v. C.A.W.-Canada) 102 D.L.R. (4th) 609, 63 O.A.C. 1, 152 N.R. 1, 13 O.R. (3d) 164 (note), (sub nom. Dayco v. C.A.W.) 93 C.L.L.C. 14,032, EYB 1993-67498, [1993] S.C.J. No. 53 (S.C.C.) — considered New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1, 69 Admin. L.R. (4th) 1, 69 Imm. L.R. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) [2008] 1 S.C.R. 190, 844 A.P.R. 1, (sub nom. Dunsmuir v. New Brunswick) 2008 C.L.L.C. 220-020, D.T.E. 2008T-223, 329 N.B.R. (2d) 1, (sub nom. Dunsmuir v. New Bruns- wick) 170 L.A.C. (4th) 1, (sub nom. Dunsmuir v. New Brunswick) 291 D.L.R. (4th) 577, 2008 CarswellNB 124, 2008 CarswellNB 125, 2008 SCC 9, 64 C.C.E.L. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) 95 L.C.R. 65, [2008] S.C.J. No. 9, [2008] A.C.S. No. 9 (S.C.C.) — followed Prairie North Regional Health Authority v. Kutzner (2010), [2011] 1 W.W.R. 1, 2010 SKCA 132, 2010 CarswellSask 704, 325 D.L.R. (4th) 401, [2010] S.J. No. 650 (Sask. C.A.) — considered U.F.C.W., Local 1400 v. FirstSask Credit Union Ltd. (2009), 2009 C.L.L.C. 220-016, (sub nom. United Food & Commercial Workers, Local 1400 v. FirstSask Credit Union Ltd.) 320 Sask. R. 156, (sub nom. United Food & Commercial Workers, Local C.E.P. v. Mercury Graphics P. Foley J. 65

1400) 444 W.A.C. 156, 2009 SKCA 10, 2009 CarswellSask 61 (Sask. C.A.) — referred to

APPLICATION by union for judicial review of determination, reported at C.E.P. v. Mercury Graphics (2010), 83 C.C.E.L. (3d) 285, 2010 CarswellSask 337 (Sask. Arb. Bd.), granting motion by employer for non-suit.

P. Foley J.:

1 The applicant union seeks judicial review of an arbitration award made by a sole arbitrator, Mr. Bob Pelton, Q.C., on June 7, 2010. 2 The issue before the arbitrator was whether the respondent was in breach of the severance payment clause in each of three collective bargaining agreements and whether, alternatively, the employees have a claim at common law for damages arising from wrongful dismissal. 3 The facts are not in dispute in that the union called a lawful strike on Sep- tember 7, 2008, which, so the parties agree, by operation of law, terminated the three collective bargaining agreements in place for the various trades involved in the respondent’s operation. 4 Group and individual notices of termination were given on September 19, 2008, whereby all employees were notified that operations would cease and all employees terminated on December 18, 2008. 5 All employees were terminated as provided for in the notice. 6 The various collective bargaining agreements, by Article 21.01, Article 15.1 and Article 17.01, provided: In the event of severance due to consolidation or technical change, severed employees shall receive severance pay of not less than two (2) week’s [sic] pay at their regular rate of pay for each completed year of service with the employer. 7 By virtue of New Brunswick (Board of Management) v. Dunsmuir, 2008 SCC 9, [2008] 1 S.C.R. 190 (S.C.C.), the standard of review to be applied is either one of reasonableness or one of correctness. The Saskatchewan Court of Appeal has held that interpretation of collective bargaining agreements by arbi- trators will usually involve the application of a reasonableness standard. See U.F.C.W., Local 1400 v. FirstSask Credit Union Ltd., 2009 SKCA 10, 320 Sask. R. 156 (Sask. C.A.). On such a standard, this Court needs to determine whether the interpretation made by the arbitrator is one which the wording of the agreement will reasonably bear. The Court, in conducting a review for reasonableness, must inquire into the qualities that make the decision reasonable both through the process of articulating the reasons and through outcomes. In the context of judicial review, reasonableness entails determinating existence of jus- 66 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

tification, transparency and intelligibility within the decision-making process and determining whether the decision falls within a range of possible acceptable outcomes justifiable in light of the particular facts and the relevant law. 8 In this case, however, the applicant says that the arbitrator made an error of law which it characterizes as follows: The Arbitrator exceeded his jurisdiction, made an unreasonable decision, or committed an otherwise reviewable error of law, as follows: (a) The Arbitrator was incorrect in law ruling that he was without jurisdiction to apply the severance provisions of the collective agreements to the grievances before him; (b) The Arbitrator was incorrect in law in ruling that he was without jurisdiction to award severance at common law in the absence of a collective agreement being in effect; and (c) Such further and other grounds as counsel may advise. 9 Based on this characterization, the applicant says that a correctness standard, rather than a reasonableness standard, needs to be applied. 10 In supporting its position, the applicant makes reference to that portion of the arbitration award where, at paragraph 95, the arbitrator states: 95. The right to severance pay provided for by the terminated Collective Bar- gaining Agreements in this case had not vested prior to the Collective Bar- gaining Agreements having been terminated. As such I have no jurisdiction to enforce the severance pay provisions. 11 The applicant echoes this statement at paragraph 25 of its brief, stating: 25. By his award issued June 7, 2010, the arbitrator granted the employer’s non-suit application on the basis that he had no jurisdiction to enforce the severance pay requests, the collective agreements having terminated with the Union having taken strike action. 12 While it is to be admitted that true jurisdictional issues warrant a standard of correctness, I conclude that the issue here is not truly one of jurisdiction. The distinction between the two was clearly articulated in the decision of the Sas- katchewan Court of Appeal in Prairie North Regional Health Authority v. Kutz- ner, 2010 SKCA 132, [2010] S.J. No. 650 (Sask. C.A.), where Richards J.A. for the Court, at paragraph 29, stated: 29 In my view, the Authority’s argument in this case is an invitation to do precisely what the Supreme Court has counselled against. Granted, it is possible to dress up the subject matter of this appeal in a jurisdictional-type cos- tume. However, this does not negate the fact that the root issue here is whether, on the particular facts of this case, the privileges of Drs. Kutzner and Blackwell were changed in a way amounting to their amendment, sus- pension or revocation. This is not the sort of discrete or preliminary issue which can properly be seen as a question of “true” jurisdiction. As the Su- C.E.P. v. Mercury Graphics P. Foley J. 67

preme Court has directed, courts should not characterize as jurisdictional those issues which are only doubtfully or arguably so. In the result, I conclude the issue raised with the Tribunal was not jurisdictional in the required sense. See: Macdonald v. Mineral Springs Hospital, 2008 ABCA 273, 295 D.L.R. (4th) 609 at para. 30. 13 In my view, a like confusion has occurred in this case. Although the employer’s motion for a non-suit was allowed, the arbitrator, in fact, had already proceeded to determine whether there were in the circumstances of the case before him vested rights which survived the strike. Once he concluded that vesting had not occurred, he then held that no severance matters survived the termination of the collective agreement and, in that sense, he had no further jurisdiction. He had jurisdiction to enter into the enquiry and did so. 14 The issue of survival of vested rights or entitlements were considered and applied by the Supreme Court of Canada in Dayco (Canada) Ltd. v. C.A.W., [1993] 2 S.C.R. 230 (S.C.C.), where the Court stated at pages 270-271: ... However, I do not think the law of contracts need be (or can be) disre- garded altogether in determining the status of a collective agreement: see Palmer [Collective Agreement Arbitration in Canada, 3rd ed. (Toronto: But- terworths, 1991)] at pp. 142-43. The analogy I would draw is to the common law notion of termination of a contract. A collective agreement is rather like a contract for a fixed term. At the end of the term, the contract or agreement is said to “expire” by mutual agreement. But the contract is not thereby rendered a nullity. It ceases to have prospective application, but the rights that have accrued under it continue to subsist. This termination or expiration can be contrasted with the contractual notion of rescission, whereby the contract is rendered null and void, and the parties have no obligations thereunder: see Anson’s Law of Contract (26th ed. 1984), at pp. 428-39; Atiyah, An Intro- duction to the Law of Contract (4th ed. 1989), at pp. 411-32. Thus it should not be seen as a novel concept that grievances can arise after the expiration of a collective agreement that relate to rights accruing under that agreement. It seems to me that it would take very clear words to demonstrate that the parties intended to rescind their agreement by agreeing to enter into a suc- ceeding agreement. Rather, the presumed intention is only that the prospective relationship between the parties is to be governed by the new agreement, and that the old agreement ceases to have any relevance to that ongoing relationship. [Emphasis added] The Court continued at page 272: ... Moreover, I see nothing differentiating the promise to pay retirement health benefits from promises to pay regular wages or vacation pay. All of these can be enforced after the termination of the agreement. Any other conclusion would render meaningless a wide range of promises to employees that might extend beyond the expiration of a collective agreement. In addi- 68 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

tion to unpaid wages and retirement benefits, disability benefits owing to former employees and pension benefits to retired workers would also be placed in jeopardy. [Emphasis added] 15 In short, this was not one of those cases where, although a collective bargaining agreement comes to an end by operation of law through strike action, rights that have accrued or vested during the term of the agreement such that those rights continue to be amenable to the arbitration/grievance process and remain enforceable against the employer. 16 For its part, the employer relies upon Dayco as well and states at paragraph 42 of its brief: 42. A vested right is one that has “prospective application.” It is a promise that has been made that extends beyond the expiry of a collective agreement. In order to vest, there would have to be a triggering or crystallizing event prior to the termination of the agreement which would give rise to the claim. Dayco (Canada) Ltd. v. CAW-Canada, supra. at paras. 44 and 46 .... Black’s Law Dictionary .... 17 In this case, the arbitrator actually construed the terms of the severance provision as meaning that unless the conditions precedent for vesting, namely, severance due to consolidation or a technical change, occurred during the term of the collective agreement, there were no rights to be enforced thereafter through the residual grievance/arbitration process. 18 Consequently, in my view, this aspect of the award, properly stated, requires the application to a reasonableness standard. 19 The conclusion reached by the arbitrator that the severance pay provisions did not vest prior to the collective bargaining agreements having been terminated was one the agreement reasonably bore. His decision was within the range of reasonable outcomes and, consequently, this aspect of the application is dismissed. 20 The arbitrator also concluded: 96. Further, with the Collective Bargaining Agreements having been terminated prior to the dispute having arisen, there are no Collective Agreements into which I can insert common law principles...... 98. Whether, because the Collective Bargaining Agreements had been terminated, the terminated employees have a common law claim for wrongful dismissal, enforceable in the Courts, is not a matter before me and I offer no opinion on that question. 21 These conclusions, whether characterized as jurisdictional or matters of law, in my opinion are both reasonable and correct. Given the parties’ agreement that Bennett v. Cunningham 69

the collective bargaining agreements had expired prior to any termination having occurred, then any rights accruing to the employees under common law principles, including a claim for wrongful dismissal, cannot be grafted to the expired collective bargaining agreement process. 22 For these reasons, the application is dismissed in its entirety with costs. Application dismissed.

[Indexed as: Bennett v. Cunningham] Dawn Marie Bennett (Plaintiff / Appellant) and Karen Rosalee Cunningham (Defendant / Respondent) Ontario Superior Court of Justice (Divisional Court) Hackland R.S.J., Harvison Young, Whitaker JJ. Heard: October 18, 2010 Judgment: March 11, 2011 Docket: Brampton DC-07-0026-ML, 2011 ONSC 1364 William R. Gale, Nikolay Y. Chsherbinin for Plaintiff / Appellant Plaintiff/Appellant Kenneth Alexander for Defendant / Respondent Civil practice and procedure –––– Costs — Costs of appeals — General principles –––– Plaintiff employee worked as associate in defendant employer’s law office — Employee was unsatisfied with employer’s efforts to address her concerns regarding office resources and time docket entries — Employee gave employer strongly worded letter, suggesting employer was disorganized, incompetent, and dishonest and negligent with respect to docketing issues — Employer terminated employee’s employment — Employee unsuccessfully brought action seeking damages for wrongful dismissal — Trial judge found employer had just cause to terminate employment without notice — Trial judge held content and tone of letter was insolent and constituted serious misconduct — Employee successfully appealed trial judge’s decision that employee was lawfully dismissed from her employment for just cause — Trial judgment was varied — Em- ployee was awarded damages in lieu of notice in amount of $17,065 — Trial judge committed overriding and palpable error in failing to discuss context in which he found letter was sufficiently insolent to justify summary dismissal — Parties made submissions as to costs of appeal — Costs were awarded — Appellant employee was awarded costs of appeal in amount of $10,000 inclusive of disbursements. Civil practice and procedure –––– Costs — Appeals as to costs — Leave to appeal –––– Plaintiff employee worked as associate in defendant employer’s law office — Employment relationship took serious downturn and employer terminated employee’s 70 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

employment — Employee brought action for damages for breach of contract and wrongful dismissal — After two days of trial, parties agreed employee was owed commissions and prejudgment interest in settlement of breach of contract issue — Both parties made offers to settle before trial — At trial, employee’s claim for wrongful dismissal was dismissed on basis that employment was terminated for cause — Parties made submissions as to costs of trial — Trial judge held employee was entitled to costs on partial indemnity basis until settlement of commission issue — Trial judge held that fair and reasonable costs award was $15,000, all inclusive — There were no costs consequences to either party as result of offers to settle — Employee successfully appealed trial judge’s decision that employee was dismissed for just cause — Parties made submissions as to costs of appeal — Costs were awarded — Parties requested leave to provide submissions regarding variation of trial judge’s award of costs — Leave was granted — Parties were granted leave to provide submissions on issue of whether trial judge’s award of costs should be varied.

ADDITIONAL REASONS respecting costs of judgment reported at Bennett v. Cunning- ham (2011), 2011 ONSC 28, 2011 CarswellOnt 212 (Ont. Div. Ct.), varying damages award.

Per curiam:

1 Costs of the appeal are fixed in the sum of $10,000 inclusive of disbursements, plus H.S.T., payable forthwith by the respondent to the appellant. 2 The parties are granted leave to provide submissions in writing on the issues of whether the trial judge’s award of costs of the trial should be varied and, if so, what trial costs should be awarded to the appellant. The appellant will provide her submissions within 14 days of the release of this endorsement and the respondent will provide her submissions within 14 days of receiving the appellant’s submissions. Order accordingly. Saltsov v. Rolnick 71

[Indexed as: Saltsov v. Rolnick] Leon Saltsov and 968831 Ontario Inc., formerly known as Cashcode Co. Inc. (Appellants) and Abe Rolnick (Respondent) Ontario Superior Court of Justice (Divisional Court) Murray, Dambrot, Wilson JJ. Judgment: December 22, 2010 Docket: Toronto 30/09, 40/09, 2010 ONSC 6645 Richard B. Swan, Jason W. Waycheshyn for Appellant, Leon Saltsov Rocco DiPucchio, Andrew Winton for Appellant, 968831 Ontario Inc., formerly known as CashCode Co. Inc. Brian A. Grosman, John R. Martin for Respondent Civil practice and procedure –––– Costs — Scale and quantum of costs — Miscella- neous –––– Defendant commenced employment as president of company in October 2003 — Defendant complained in November that plaintiff shareholder was interfering in his management of company — Defendant’s employment was terminated in May 2004 — Plaintiff brought action against defendant — Defendant brought counterclaim against plaintiff for, inter alia, breach of contract and third party claim against company in July 2007 — Plaintiff and company brought unsuccessful motions to dismiss counterclaim and third party claim — On appeal, defendant’s counterclaim and third-party claim were struck, and costs were awarded to plaintiff and company in appellate court and court below — Parties made submissions concerning costs — Plaintiff and company were entitled to their costs on partial indemnity basis as result of their success in appeal — Plain- tiff was now seeking costs on motion below, on leave to appeal and on appeal, and costs of action itself, claiming total amount of $65,918.20 — Amount relating to voluntary mediation was deducted from aggregate claim for costs, and so plaintiff was entitled to costs of $57,456.70, all-inclusive — As to company, costs for motion fixed at $16,390.89, all- inclusive — Fair amount to be awarded for leave to appeal was $5,000, including GST, plus disbursements of $981.56 — Fair and reasonable amount for costs on appeal was $6,000, including GST, plus disbursements as claimed in amount of $1,643.18 — Costs for action itself were fixed in amount of $8,900, including tax and disbursements — Costs and disbursements incurred because of participation in voluntary mediation agreed to by parties were not awarded. Civil practice and procedure –––– Costs — Costs of particular proceedings — Inter- locutory proceedings — Motions and applications –––– Defendant commenced employment as president of company in October 2003 — Defendant complained in Novem- ber that plaintiff shareholder was interfering in his management of company — Defendant’s employment was terminated in May 2004 — Plaintiff brought action against defendant — Defendant brought counterclaim against plaintiff for, inter alia, breach of contract and third party claim against company in July 2007 — Plaintiff and company brought unsuccessful motions to dismiss counterclaim and third party claim — On ap- 72 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d) peal, defendant’s counterclaim and third-party claim were struck, and costs were awarded to plaintiff and company in appellate court and court below — Parties made submissions concerning costs — Plaintiff and company were entitled to their costs on partial indemnity basis as result of their success in appeal — Plaintiff was now seeking costs on motion below, on leave to appeal and on appeal, and costs of action itself, claiming total amount of $65,918.20 — Amount relating to voluntary mediation was deducted from aggregate claim for costs, and so plaintiff was entitled to costs of $57,456.70, all-inclusive — As to company, costs for motion fixed at $16,390.89, all-inclusive — Fair amount to be awarded for leave to appeal was $5,000, including GST, plus disbursements of $981.56 — Fair and reasonable amount for costs on appeal was $6,000, including GST, plus disbursements as claimed in amount of $1,643.18 — Costs for action itself were fixed in amount of $8,900, including tax and disbursements — Costs and disbursements incurred because of participation in voluntary mediation agreed to by parties were not awarded. Civil practice and procedure –––– Costs — Costs of particular proceedings — Mis- cellaneous –––– Defendant commenced employment as president of company in October 2003 — Defendant complained in November that plaintiff shareholder was interfering in his management of company — Defendant’s employment was terminated in May 2004 — Plaintiff brought action — Defendant brought counterclaim against plaintiff for, inter alia, breach of contract and third party claim against company in July 2007 — Plain- tiff and company brought unsuccessful motions to dismiss counterclaim and third party claim — On appeal, counterclaim and third-party claim were struck, and costs were awarded to plaintiff and company in appellate court and court below — Parties made submissions concerning costs — Plaintiff and company were entitled to their costs on partial indemnity basis as result of their success in appeal — Costs and disbursements relating to voluntary mediation were not included in calculation of costs — Voluntary mediation was not step authorized by Rules of Civil Procedure and, not being authorized by Rules, counsel fees and disbursements incurred at mediation were not properly subject of costs endorsement and should not be determined in accordance with s. 131 of Courts of Justice Act and factors set out in R. 57.01(1) of Rules — In this case, while there was no formal agreement on costs of mediation, it appeared that claim by plaintiff and company to partial indemnity costs and disbursements related to mediation was not disputed in principle by defendant — However, agreement in principle did not fetter jurisdiction of court to deny claim for mediation-related costs and disbursements — There were policy reasons why voluntary mediation should not be subject of costs award by court. Cases considered by Murray J.: Boucher v. Public Accountants Council (Ontario) (2004), 48 C.P.C. (5th) 56, 2004 Cars- wellOnt 2521, 188 O.A.C. 201, 71 O.R. (3d) 291, [2004] O.J. No. 2634 (Ont. C.A.) — followed Haasz, Re (1959), 21 D.L.R. (2d) 764, [1959] O.J. No. 456 (Ont. C.A.) — considered Naneff v. Con-Crete Holdings Ltd. (1993), 1993 CarswellOnt 157, 11 B.L.R. (2d) 218, [1993] O.J. No. 1756 (Ont. Gen. Div. [Commercial List]) — followed Saltsov v. Rolnick Murray J. 73

Statutes considered: Courts of Justice Act, R.S.O. 1990, c. C.43 s. 131 — considered s. 131(1) — considered Judicature Act, R.S.O. 1980, c. 223 s. 78 — referred to Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 Generally — referred to R. 24.1 — considered R. 57.01(1) — considered Tariffs considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 Tariff A — referred to

ADDITIONAL REASONS to judgment reported at Saltsov v. Rolnick (2010), 2010 Cars- wellOnt 2428, 2010 ONSC 914, 101 O.R. (3d) 599, 318 D.L.R. (4th) 195, 262 O.A.C. 299, 81 C.C.E.L. (3d) 34 (Ont. Div. Ct.), concerning costs.

Murray J.:

1 Saltsov and 968831 Ontario Inc., formerly known as CashCode Co. Inc., are entitled to their costs on a partial indemnity basis as a result of their success in the Divisional Court which, by decision dated April 19, 2010, struck Rolnick’s counterclaim against Saltsov and his third-party claim against CashCode. Costs were awarded by the Divisional Court to both appellants in the Divisional Court and in the court below. 2 I agree with the submissions of counsel for the appellants that when fixing costs, the Court should consider the result achieved and fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding. I also agree that comparison to the fees charged by the unsuccessful party can be a helpful indicator of the reasonable expectations of that party. See: Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (Ont. C.A.) at para. 26.

Costs of the Appellant Saltsov 3 In the court below Rolnick was successful. He was awarded costs on a partial indemnity basis in the amount of $27,500. Saltsov now seeks costs on the motion below, on the leave to appeal and on the appeal before the Divisional Court on a partial indemnity basis. In addition, because the action by Rolnick was dismissed by the Divisional Court, Saltsov also claims costs of the action 74 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

itself. Saltsov claims a total amount of $65,918.20, including tax and disbursements. 4 Rolnick agrees that the aggregate costs claimed by Saltsov are reasonable. 5 Included in the aggregate amount of $65,918.20 claimed by Mr. Saltsov is the amount of $8,461.50 for fees and disbursements related to a voluntary mediation, including a portion of the mediator’s fees. For reasons set out below, I am deducting this amount from the aggregate claim for costs of $65,918.20. 6 Saltsov is therefore entitled to costs in the amount of $57,456.70, all- inclusive.

Costs of the Appellant 968831 Ontario Inc., Formerly Known as CashCode Co. Inc. 7 Rolnick’s counsel is in agreement with costs for the motion on July 16, 2008 being awarded in the amount of $15,651.30, including GST, plus disbursements of $739.59. In light of the agreement of the parties, I fix the amount of for the motion at $16,390.89, all-inclusive. A fair amount to be awarded for the leave to appeal is $5,000, including GST, plus disbursements of $981.56, for a total of $5981.56. With respect to the costs of the appeal before the Divisional Court, I am of the view that a fair and a reasonable amount for costs on the appeal to the Divisional Court is $6,000 including GST, plus disbursements as claimed in the amount of $1,643.18, for a total amount of $7,643.18, all-inclusive. In fixing costs, I have substantially discounted counsel fees in the amount of $2,175, excluding GST claims for preparation of the bill of costs. In addition, I have taken into account that the issues raised in the motion for summary judgment were not particularly complex and involved the application of well established principles of law. The amounts fixed are fair and reasonable. 8 The action against CashCode was also dismissed by the Divisional Court. As a result, the company also claims costs on a partial indemnity scale related to the litigation. CashCode’s counsel claims $25,330.88 in fees and disbursements (including GST), on a partial indemnity scale. Included in the total amount claimed is the sum of $10,920 for counsel fees related to the mediation (not including GST of $546), and an additional $4,951.80 in mediation-related disbursements (including GST), which includes a portion of the mediator’s fee. Without the mediation related fees and disbursements, the amount claimed for fees and disbursements is $8,913.08. I fix costs for the action itself in the amount of $8,900, including tax and disbursements. For reasons set out below, I am not prepared to award costs or disbursements incurred because of participation in a voluntary mediation agreed to by the parties. Saltsov v. Rolnick Murray J. 75

Costs Incurred by the Parties in Mediation 9 Costs and disbursements incurred as a result of participating in voluntary mediation should not be included in awards of costs determined by the Court. In this case, the submissions of all parties appear to proceed on the assumption that fees and disbursements incurred in voluntary mediation should be considered by the Court in deciding the matter of costs. I disagree. 10 It is trite to say that the Court is not bound or fettered by the agreement of the parties as to what is properly concluded in an assessment of costs. See Haasz, Re, [1959] O.J. No. 456 (Ont. C.A.) in which Laidlaw J.A said: The power of the court or judge to determine the matter of costs is set forth in section 78 of The Judicature Act, R.S.O. 1950, Chap. 190, and I reproduce subsection (1) thereof as follows: 78(1) Subject to the express provisions of any statute, the costs of and incidental to all proceedings authorized to be taken in court or before a judge shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent the costs shall be paid. That section means precisely what it says. (The Young Sid (1929) p. 190; 98 L.J.P. 97.) It means that a court or a judge should have absolute discretion over all costs within their jurisdiction, subject only to the express provision of any statute. (Re Foster v. Greatwestern Ry. Co. (1882) 8 Q.B.D. 520 at pp. 521-522.) I refer also to Campbell v. Pollak (1927) A.C. 732, and observe that Lord Cave refers to the discretion possessed by the court or a judge as “absolute.” In Sharp v. Wakefield (1891) A.C. 173 at p. 179 Lord Halsbury L.C. said: ... when it is said that something is to be done within the discretion of the authorities that that something is to be done according to the rules of reason and justice, not according to voluntary opinion: according to law and not humour. It is to be, not arbi- trary, vague, and fanciful, but legal and regular. And it must be exercised within the limit to which an honest man competent to the discharge of his office ought to confine himself. The exercise of the discretion vested in the court or a judge by section 78 of The Judicature Act is not subject to the consent of parties in proceedings, and no such consent can fetter the court or a judge. To so hold would mean that in proceedings authorized to be taken in court or before a judge, the parties can, by their consent, usurp the function and power of a court or judge. I express the firm opinion, free from all doubt, that a judge cannot be bound by such a consent nor by any other means except by the express provisions of a statute, and if he holds himself so bound he is not exercising the discretion vested in him by law. It is both the right and the duty of a judge to exercise that discretion, and he cannot abdicate the right or abandon the duty: (Coniagas Reduction Co. Ltd. v. Hydro-Electric Power Commission of On- 76 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

tario (1932) O.R. 463 at p. 466). If a judge omits or refuses to exercise the discretion intended by law to be exercised by him or permits a consent of parties or their counsel to be substituted in place thereof, he does not perform his duty and the question left to his discretion is not determined in accordance with the law. It is right and proper that a judge should give great weight and consideration to any consent of parties or counsel acting on their behalf, but such consent does not discharge him from the duty to exercise his discretion according to the particular circumstances in each case. 11 Justice Laidlaw based his analysis in Haasz, Re on section 78 of The Judica- ture Act. The current legislative provision is section 131(1) of the Courts of Jus- tice Act, R.S.O. 1990, c. C.43, which states as follows: 131.(1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid. s. 131 (1). 12 There is no meaningful difference between section 78 of The Judicature Act and section 131(1) of the Courts of Justice Act and Justice Laidlaw’s decision remains an accurate statement of the law. Therefore, any agreement by the parties, either actual or implied, does not bind this Court in the exercise of its discretion. 13 Tariff A states that the fees for any step in a proceeding authorized by the Rules of Civil Procedure, and counsel fees for motions, applications, trials, references and appeals shall be determined in accordance with section 131 of the Courts of Justice Act and the factors set out in sub-rule 57.01(1). Mediations to which Rule 24.1 apply are governed by a mediator’s fee schedule and by the procedure set out in the Rule. For mandatory mediation pursuant to Rule 24.1, each party bears an equal share of the mediator’s fees for the mandatory mediation session process. (I note that the Rules do not speak to counsel fees related to mandatory mediation). On the other hand, voluntary mediation is not a step authorized by the Rules of Civil Procedure and, not being authorized by the Rules, counsel fees and disbursements incurred at mediation are not properly the subject of a costs endorsement and should not be determined in accordance with section 131 of the Courts of Justice Act and the factors set out in sub-rule 57.01(1). The mediation engaged in by the parties in this case is not mandatory mediation required by the Rules after January 1, 2010. 14 I certainly am not critical of any decision by litigants to try and resolve a dispute by voluntary mediation. Often voluntary mediation is very sensible, effi- cient and successful. Furthermore, if parties wish to agree that, if the mediation does not result in settlement, the successful litigant will be able to claim mediation-related costs and disbursements, then that is an agreement that they may make between themselves before embarking on mediation. There has been no such agreement here. Saltsov v. Rolnick Murray J. 77

15 In this case, while there is no formal agreement on costs of the mediation, it appears that the claim by the successful appellants to partial indemnity costs and disbursements related to mediation is not disputed in principle by the respondent Saltsov. However, as noted above, an agreement in principle does not fetter the jurisdiction of this Court to deny a claim for mediation-related costs and disbursements. 16 In Naneff v. Con-Crete Holdings Ltd., [1993] O.J. No. 1756 (Ont. Gen. Div. [Commercial List]), Blair J. (as he then was) stated as follows: The foregoing analysis leaves the fees claimed in the Bill of Costs intact and reduces the disbursements by a total of $853.25. In the overall result, however, I intend to fix the fees claimed in an amount which is a little more than $4,000.00 less than that claimed. I do so principally for the following reason. The parties engaged in a lengthy mediation process before Farley J. They made a genuine effort to settle. They are to be commended for this effort notwithstanding that, in the end, it was unsuccessful. In my view the costs of mediation process — which is a voluntary effort to find a suitable out-of-court resolution — should be borne equally by the parties engaging in it. Otherwise, parties will be discouraged from engaging in what can in many instances be a fruitful exercise leading to a self-made result, for fear that at the end of the day, if it is not successful and the proceedings are consequently lengthened, they will bear more costs. 17 I wholeheartedly endorse the reasons of Mr. Justice Blair. In my view, Jus- tice Blair touched on an important policy issue, that is, (if mediation-related costs are awarded) parties may be discouraged from engaging in constructive dispute resolution processes for fear that at the end of the day, if such proceedings do not lead to settlement, costs will be increased. Thus, he concluded, and I agree, that the costs of mediation process — which is a voluntary effort to find a suitable out-of-court resolution — should be borne equally by the parties engaging in it. 18 There are other policy reasons why voluntary mediation should not be the subject of costs awards by the Court. Without probing into without prejudice discussions/negotiations, it is neither possible nor desirable to attempt to assess the conduct of either party at mediation. Without probing into without prejudice discussions, it is it is neither possible nor desirable to assess the reasonableness of positions taken by the parties or whether the time spent in attempting to find resolution was reasonable. In short, the mediation process is neither subject to nor amenable to supervision by the Court. Finally, the fees charged by mediators vary greatly and the Court should not place its imprimatur on mediators’ fees by treating such fees as bona fide disbursements to be paid by the unsuccessful litigant. 19 For the above reasons, I have declined to include mediation-related costs and disbursements in the calculation of costs in this case. 78 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

Dambrot J.:

I AGREE

J. Wilson J.:

I AGREE Order accordingly.

[Indexed as: Mason v. Chem-Trend Ltd. Partnership] Mason and Chem-Trend Limited Partnership Ontario Superior Court of Justice Kruzick J. Judgment: February 8, 2011 Docket: 8352/09, 2011 ONSC 839 John R. Evans, K.C. Wysynski for Applicant Norman J. Emblem, Tiffany D. Soucy for Respondent Labour and employment law –––– Employment law — Termination and dismissal — Practice and procedure — Costs — Entitlement to costs –––– Employee brought wrongful dismissal action against his former employer — Employee brought unsuccessful application to have restrictive covenant declared unenforceable — Application was argued as long motion and required day — Parties made submissions concerning costs, with employer seeking costs of $175,000 on partial indemnity scale, and employee seeking costs on substantial indemnity basis of $25,000 — Costs awarded to employer in amount of $17,000, payable to employer by employee in cause — Employer was successful on application — However, in looking at amount claimed, principle of proportionality was borne in mind — In other words, parties had to deal with case in manner that was proportionate to what was involved — Rules 57.01(e) and (i) of Rules of Civil Procedure were broad enough to capture consideration of proportionality when considering costs — Amount sought by employer was excessive. Cases considered by Kruzick J.: Tucci v. Pugliese (2010), 2010 ONSC 2144, 2010 CarswellOnt 3826, [2010] O.J. No. 2432 (Ont. S.C.J.) — referred to Statutes considered: Courts of Justice Act, R.S.O. 1990, c. C.43 s. 131 — referred to Mason v. Chem-Trend Ltd. Partnership Kruzick J. 79

Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 57.01(1) — referred to R. 57.01(1)(e) — referred to R. 57.01(1)(i) — referred to

ADDITIONAL REASONS to judgment reported at Mason v. Chem-Trend Ltd. Partner- ship (2010), 2010 ONSC 4119, 2010 CarswellOnt 6363, 84 C.C.E.L. (3d) 311, 2011 C.L.L.C. 210-005 (Ont. S.C.J.), concerning costs.

Kruzick J.: Background 1 This was an Application by the Applicant, Mason, to have a restrictive covenant, signed June 18, 1992, declared unenforceable. The motion arises out of a wrongful dismissal action commenced by Mason against his former employer, Chem-Trend. In summary, Mason sought relief from a one year restriction, following his termination, restricting him from competing with his former employer or dealing with customers and business entities of his former employer. 2 The application was argued as a long motion and required the day. Reasons were released August 26, 2010. I invited counsel to make submissions in writing on costs if they could not agree. 3 Since then counsel have made submissions in writing on costs and then made a request to re-attend before me. As a result a hearing date was scheduled on January 31, 2011. On consent, that date has now been adjourned without a date. Having not heard further, this is my decision on costs.

Submissions 4 Chem-Trend seeks costs on the grounds that it was successful on the application. Chem-Trend argues the general principle that a successful party is entitled to their costs and that there is no reason to deviate from this general principle. 5 The amount sought by Chem-Trend is $175,000.00, on a partial indemnity scale. 6 Mason seeks costs on a substantial indemnity basis of $25,000.00 on the basis that the position taken by Chem-Trend in these circumstances was unreasonable. In the alterative, Mason argues that the facts of this case are such that no costs should be awarded. If costs are awarded, Mason submits that the appropriate range is $8,000.00 to $12,000.00.

Costs Awards 7 I bear in mind the overall objectives of assessing costs so that the award is fair and reasonable in the circumstances. In exercising the court’s discretion 80 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

under section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, I am guided by the factors set out in Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. 8 Here Chem-Trend was successful on the application. However, in looking at the amount claimed, I bear in mind the principle of proportionality. In other words, the parties must deal with a case in a manner that is proportionate to what is involved. I am of the view that Rule 57.01 (1)(e) and (i) are broad enough to capture the consideration of proportionality when considering costs. See also Tucci v. Pugliese, [2010] O.J. No. 2432 (Ont. S.C.J.). I find the amount as sought by Chem-Trend here is excessive.

Disposition 9 In the exercise of my discretion, I award costs to Chem-Trend in the amount of $17,000.00 payable to Chem-Trend by Mason in the cause. Order accordingly. Mason v. Chem-Trend Ltd. Partnership 81

[Indexed as: Mason v. Chem-Trend Ltd. Partnership] Tom Mason (Appellant / Applicant) and Chem-Trend Limited Partnership (Respondent / Respondent) Ontario Court of Appeal Doherty, Moldaver and Feldman JJ.A. Heard: April 13, 2011 Judgment: May 3, 2011 Docket: CA C52707, M39782, 2011 ONCA 344 Chris G. Paliare, Richard Stephenson for Appellant Karen Fields, Susan Crawford for Respondent Labour and employment law –––– Employment law — Interpretation of employment contract — Particular covenants — Restrictive covenants — Whether covenant reasonable –––– Employee was employed as technical sales representative by employer for 17 years before he was terminated — Employee agreed to restrictive covenant when he commenced employment — Employee brought action for wrongful dismissal — Employer alleged employee breached restrictive covenant following termination — Em- ployee brought application to have restrictive covenant declared unenforceable — Appli- cation was dismissed — Applications judge held that geographic scope of covenant was reasonable although broad and worldwide — Employer’s business was global in nature — Employee worked in two countries and within various regions — Applications judge found covenant’s restriction of any business or activity in competition with employer was reasonable — Applications judge found that time period of one year for which covenant ran was reasonable — Employee appealed — Appeal allowed — Applications judge erred in concluding that complete prohibition on competing with employer was not overly broad restriction — There were other clauses in agreement that protected employer; there was separate covenant that protected trade secrets and confidential information of employer — Prohibition on dealing with businesses that may be former customers of employer was not consistent with one year restriction on competition — It was not possible for employee to know which potential customers he was prohibited from doing business with — Scope of category of customers employee was prohibited from dealing with was any business which was customer of employer during period in which he was employee — Employer had world-wide operations with customers many of which also operated in many countries; employee neither knew nor had access to list of all employer’s customers which was very large. Cases considered by K. Feldman J.A.: H.L. Staebler Co. v. Allan (2008), 2008 CarswellOnt 4650, 296 D.L.R. (4th) 592, 2008 C.L.L.C. 210-034, 92 O.R. (3d) 107, 2008 ONCA 576, 239 O.A.C. 230, [2008] O.J. No. 3048 (Ont. C.A.) — followed 82 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

J.G. Collins Insurance Agencies v. Elsley (1978), 3 B.L.R. 183, 36 C.P.R. (2d) 65, 20 N.R. 1, 1978 CarswellOnt 592, [1978] 2 S.C.R. 916, 83 D.L.R. (3d) 1, 1978 Cars- wellOnt 1235, [1978] S.C.J. No. 47 (S.C.C.) — followed KRG Insurance Brokers (Western) Inc. v. Shafron (2009), 52 B.L.R. (4th) 165, (sub nom. Shafron v. KRG Insurance Brokers (Western) Inc.) 301 D.L.R. (4th) 522, 383 N.R. 217, [2009] 3 W.W.R. 577, (sub nom. Shafron v. KRG Insurance Brokers (Western) Inc.) 2009 C.L.L.C. 210-010, 87 B.C.L.R. (4th) 1, 265 B.C.A.C. 1, 446 W.A.C. 1, 2009 SCC 6, 2009 CarswellBC 79, 2009 CarswellBC 80, 70 C.C.E.L. (3d) 157, 68 C.C.L.I. (4th) 161, (sub nom. Shafron v. KRG Insurance Brokers (Western) Inc.) [2009] 1 S.C.R. 157 (S.C.C.) — followed

APPEAL by employee from judgment reported at Mason v. Chem-Trend Ltd. Partner- ship (2010), 2010 ONSC 4119, 2010 CarswellOnt 6363, 84 C.C.E.L. (3d) 311, 2011 C.L.L.C. 210-005 (Ont. S.C.J.), dismissing his application to have restrictive covenant in employment contract declared unenforceable.

K. Feldman J.A.:

1 The appellant was terminated, allegedly for cause, after 17 years of employment with the respondent. Wrongful dismissal litigation between the parties is ongoing. In order to try to quickly determine whether and to what extent he was free to compete with the respondent, the appellant brought a separate application asking the court to declare the restrictive covenant in his employment contract unenforceable. He was unsuccessful and appeals to this court.

Facts 2 The respondent is a Michigan corporation in the business of formulating, manufacturing and selling release agents and related processing chemicals for use in the general rubber, tire, polyurethane, composites, thermoplastics and die casting industries for customers that operate around the world. The appellant was hired in 1992 and operated as a technical salesperson for the respondent for 17 years before his employment was terminated in July, 2009. 3 When the appellant was hired, he was required to sign the Chem-Trend Con- fidential Information Guide and Agreement (“CIGA”), which contains the restrictive covenant clause that is the subject of this appeal and provides: 3. I agree that if my employment is terminated for any reason by me or by the Company, I will not, for a period of one year following the termination, directly or indirectly, for my own account or as an employee or agent of any business entity, engage in any business or activity in competition with the Company by providing services or products to, or soliciting business from, any business entity which was a customer of the Company during the period in which I was an employee of the Company, or take any action that will cause the ter- Mason v. Chem-Trend Ltd. Partnership K. Feldman J.A. 83

mination of the business relationship between the Company and any customer, or solicit for employment any person employed by the Company. [Emphasis added.] 4 From July, 1992 to November, 1993, the appellant’s territory of responsibility was the province of Ontario. He then moved to the United States where he was responsible for the states of Wisconsin, Iowa, North Dakota, South Dakota, Illinois, Nebraska, Colorado and Minnesota. In 2001 he returned to Canada with responsibility for the whole of Canada as well as certain mid-Atlantic U.S. states. 5 As technical sales representative, the appellant acquired knowledge about the company, its products and its customers, including the Chem-Trend products that each customer used and the prices it paid. As many of the clients were multi-national corporations, that knowledge extended beyond the appellant’s geographical territory. He also attended annual sales and product meetings that were attended by the sales forces for specific product or industry groups. The topics discussed included sales, sales targets, market opportunities and potential areas for business development. One area of the Chem-Trend business that the appellant was not involved in was die casting. 6 The application judge accepted the appellant’s evidence that the respondent’s operations were “extremely guarded and protected”, and that consequently, he had only cursory knowledge of both the general workings of the laboratory, the compound lists and the formulas. He also accepted that the appellant had no access to the respondent’s large current or older customer lists. 7 Although by the time the appeal was argued, the one-year temporal limit in the non-competition clause had expired, the court understood that the issue of the enforceability of the clause was not moot, as the parties are involved in relevant ongoing litigation both here and in Michigan.

Reasons of the Application Judge 8 The application judge addressed three issues in his analysis of whether the restrictive covenant was unenforceable: (1) was the restrictive covenant ambiguous? (2) was it unreasonable? (3) was there any other matter that would affect the appellant’s claim for declaratory relief? 9 On the first issue, the application judge found that the covenant is unambigu- ous in its wording and that the appellant understood what he was agreeing to when he signed the offer letter and the CIGA in 1992 when he was hired. 10 Following the Supreme Court of Canada decision in J.G. Collins Insurance Agencies v. Elsley, [1978] 2 S.C.R. 916 (S.C.C.), the application judge looked at the covenant in context, and considered the three factors to determine its reasonableness: geographic scope, the activity that is restricted, and the time period of the restriction. He accepted that because of the world-wide operations of the 84 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

respondent and of many of its customers, it was reasonable that the covenant be broad and geographically world-wide. He further accepted that it was reasonable to restrict any activity of the appellant in competition with the respondent because of the appellant’s access to significant information about the respondent’s business and his technical knowledge of the industry. Finally, he found the one- year temporal restriction to be relatively short compared to other cases. He concluded that the more onerous geographic and activity restrictions in this covenant were balanced out by the shorter temporal limitation to make the clause as a whole a reasonable one. 11 Although not necessary to do so, the application judge discussed the respondent’s argument that the appellant should fail because his conduct since being terminated disqualified him on the basis of the clean hands doctrine. The impugned conduct involved the appellant approaching customers of the respondent and dealing with competitive products before bringing the application to determine the validity of the restrictive covenant. The application judge concluded that: “In the end, I find Mr. Mason did bring this application realizing the difficulty the CIGA presented for him.”

Issues 12 Is the restrictive covenant in the employment contract between the appellant and the respondent enforceable or unenforceable at law?

Analysis 13 KRG Insurance Brokers (Western) Inc. v. Shafron, [2009] 1 S.C.R. 157 (S.C.C.), is the most recent decision of the Supreme Court where the propriety and enforceability of restrictive covenants is discussed. The issue before the court was whether an unenforceable restrictive covenant could be read down or modified by a court in order to make it enforceable. In the course of answering that question, the court reviewed the law on restrictive covenants in sale and employment contracts. Rothstein J. reiterated that although covenants in re- straint of trade are contrary to the public policy in favour of trade, certain of such covenants will be upheld if they are found to be reasonable in the circumstances. Where the covenant is found in an employment contract it will be sub- jected to stricter scrutiny than where it is part of the consideration for the sale of a business. 14 The court referred to the three-pronged test for reasonableness set out by Dickson J. in Elsley, but held that before addressing that issue, the first question is whether there is ambiguity in the interpretation of the meaning of the restrictive covenant clause. Rothstein J. explained that: “[a]n ambiguous restrictive covenant will be prima facie unenforceable because the party seeking enforce- ment will be unable to demonstrate reasonableness in the face of an ambiguity.” Mason v. Chem-Trend Ltd. Partnership K. Feldman J.A. 85

(para. 27). And further: “...if the covenant is ambiguous, in the sense that what is prohibited is not clear as to activity, time, or geography, it is not possible to demonstrate that it is reasonable. Thus, an ambiguous restrictive covenant is, by definition, prima facie unreasonable and unenforceable.” (para 43). 15 In Shafron, the geographical restriction in the covenant was described as “Metropolitan City of Vancouver”. The court found that there was no legal or judicial definition of this location as described, and it was unclear what it meant or what the parties meant by it. This constituted an ambiguity which could not be read down or rectified. The covenant was thus prima facie unreasonable, because it was not possible to determine the reasonableness of the covenant unless the ambiguity could be resolved. As a result, the restrictive covenant was held to be both ambiguous and unreasonable and was therefore struck down. 16 This court also recently discussed the governing principles that are applicable when considering whether a restrictive covenant in a contract of employment is unreasonable and therefore unenforceable in H.L. Staebler Co. v. Allan (2008), 92 O.R. (3d) 107 (Ont. C.A.). They can be summarized as follows: • To be enforceable, the covenant must be “reasonable between the parties and with reference to the public interest.” (Elsley at p. 923) • The balance is between the public interest in maintaining open competition and discouraging restraints on trade on the one hand, and on the other hand, the right of an employer to the protection of its trade secrets, confidential information and trade connections. • “The validity, or otherwise, of a restrictive covenant can be determined only upon an overall assessment of the clause, the agreement within which it is found and all of the surrounding circumstances.” (Elsley at p. 924) • In that context, the three factors to be considered are, 1) did the employer have a proprietary interest entitled to protection? 2) are the temporal or spatial limits too broad? and 3) is the covenant overly broad in the activity it proscribes because it prohibits competition generally and not just solicitation of the employer’s customers? 17 It is convenient to reproduce again the restrictive covenant clause that is at issue in this case: I agree that if my employment is terminated for any reason by me or by the Company, I will not, for a period of one year following the termination, directly or indirectly, for my own account or as an employee or agent of any business entity, engage in any business or activity in competition with the Company by providing services or products to, or soliciting business from, any business entity which was a customer of the company during the period in which I was an employee of the Company, or take any action that will cause the termination of the business relationship between the Company and 86 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

any customer, or solicit for employment any person employed by the Com- pany. [Emphasis added.]

Ambiguity of the Restrictive Covenant 18 In determining whether the restrictive covenant is enforceable, the application judge, following Shafron, looked first at the meaning of the clause and whether it is ambiguous. He concluded that the plain words were clear, that the appellant understood them and therefore there was no ambiguity. I agree. 19 Although the appellant sought to characterize the practical unworkability of the covenant as ambiguity in implementation, I prefer to consider it as part of the reasonableness inquiry.

Reasonableness of the Restrictive Covenant 20 The application judge recognized that the respondent has trade secrets, confidential information and trade contacts that are entitled to protection. These included not only product information, but information about customers’ needs and pricing arrangements with the company that give it a competitive advantage. Because of the world-wide nature of the business entities in issue, he found the lack of any spatial limit in the restrictive covenant to be appropriate. He also observed that the temporal limit on competition of one year is relatively short compared to some other covenants that have been upheld. 21 When dealing with what activity the appellant was restricted from, the application judge noted that the respondent did not dispute that the activity restriction was very broad and included “anything that would be in competition with its business”. He accepted the respondent’s reasoning that because the appellant had been a technical sales representative, his knowledge of significant product and customer information could be used against the respondent and be harmful to its business if he were allowed to compete with them. Therefore, he could not be allowed to have any dealings with the respondent’s customers, whether he solicited them or they came to him. 22 With respect to the application judge, he erred in concluding that a complete prohibition on competing with the respondent was not an overly broad restriction on the activity of the appellant. 23 First, when the agreement is examined as a whole, there are other clauses that protect the respondent. In particular, there is a separate covenant that protects trade secrets and confidential information of the respondent: 2. I will not at any time, either during or after my employment with the Company, use or disclose to others any trade secrets or confidential information of the Company, except as required in performing my duties for the Company or with the Company’s written consent. Mason v. Chem-Trend Ltd. Partnership K. Feldman J.A. 87

24 This clause contains significant protection for the company and must be intended to work in conjunction with the restrictive covenant after the appellant is no longer an employee of the company. 25 Second, the prohibition on dealing with businesses who may be former customers of the company, whose customer information could be very stale indeed in the case of a 17-year employee, is not consistent with a one year restriction on competition, which then allows the employee to compete freely. If the rationale behind the one year prohibition is that after one year the appellant’s information on the company and its clients may no longer be current, then the prohibition on dealing with former customers is even less justifiable. 26 Third, the appellant was part of the technical sales force for a large company, who operated in a limited sales territory. The appellant is prohibited not just from soliciting former customers, but from any dealing with them in competition with the respondent. He was not the president or chief financial officer, where there may be more justification for a broader prohibition on competition after such a highly placed employee leaves the company. See, for example, El- sley at pp. 925-28, in which the court held that the restrictive covenant in question was not overly broad where the employee was the general manager of the company and had significant personal knowledge of and influence over the company’s customers. 27 Fourth, in practice, it is not possible for the appellant to know with which potential customers he is prohibited from doing business. The scope of the category of customers that the appellant is prohibited from dealing with during the one year operation of the restriction is “any business entity which was a customer of the Company during the period in which [he] was an employee of the Company.” 28 The appellant was an employee for 17 years. The company has world-wide operations with customers, many of which also operate in many countries. The restriction is not limited to the appellant’s own customers over that period, but includes all customers of the company during that period. As the application judge found, the appellant neither knows nor has he any access to a list of all of the company’s customers, a list which is very large. Therefore, the appellant has no way to know whether any particular potential contact he may wish to make, either is or was during the last 17 years, a customer of the company. 29 In oral argument, counsel suggested that in practice, the appellant could contact the company and vet with it any potential customer he was contemplating contacting, and the company could advise if that contact is on the prohibited list, and further whether the company would be willing to allow him to contact the customer in any event. On further discussion, it was acknowledged that this suggestion would be unworkable for the appellant, nor is it realistic where the par- 88 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

ties are in ongoing litigation. In any event, there is no legal basis for it in the agreement itself. 30 Effectively, because the appellant cannot know which potential customers are off-limits to him, he is prohibited for one year from dealing with any business that may have been a customer of the company. The restriction is therefore not only ambiguous in its practical implementation, but effectively prohibits the appellant from competing with the respondent for one year. 31 After conducting the balancing process between the rights of the respondent to protect its trade secrets and customer information, and the public interest in free and open competition, in the context of the agreement as a whole and the role of the appellant in the company as a salesman, I conclude that the complete prohibition on competition for one year is overly broad as well as unworkable in practice and makes the restrictive covenant unreasonable and unenforceable.

Clean Hands 32 The parties both addressed the “clean hands” issue in their factums, but not in oral argument. After the application was brought, the appellant moved for an order striking out portions of affidavits filed by the respondent. The respondent resisted the order sought on several grounds and alleged that the appellant had not come to court with “clean hands”. In an endorsement dated December 17, 2009, Gray J. found that the conduct alleged by the respondent did not disclose “any lack of clean hands on the part of the [appellant]”. He held that “[t]he fact that the applicant is engaging in activities that are arguably contrary to the restrictive covenant is of no moment. If the restrictive covenant is invalid, the applicant is free to engage in those activities. If it is valid, the respondent has remedies” (para. 8). 33 The application judge did not appear to make a finding of “unclean hands” on the part of the appellant. In any event, the application in this matter was not one for equitable relief but for a declaration regarding the enforceability of the restrictive covenant.

Result 34 I would allow the appeal and grant a declaration that the restrictive covenant is unreasonable and therefore unenforceable by the respondent. I would grant costs of the appeal to the appellant fixed at $25,000 inclusive of disbursements and HST. 35 The respondent brought a motion seeking leave to appeal the costs endorsement of the application judge, dated February 8, 2011, and seeking higher costs of the application. In light of the success of the appellant on the appeal, the motion is dismissed. If the parties cannot agree on the amount and disposition of Mason v. Chem-Trend Ltd. Partnership M.J. Moldaver J.A. 89 the costs of the application, they may make brief (2 pages each) written submissions to the court within two weeks of release of these reasons. Appeal allowed.

Doherty J.A.:

I agree

M.J. Moldaver J.A.:

I agree

Appendix

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 1. QUALIFYING READ INS THAT IDENTIFY A DOCUMENT AND RELATE TO THE WITNESS’ LACK OF KNOWLEDGE OF A DOCUMENT REFERRED TO IN THE PLAINTIFFS’ READ IN 1126 Elizabeth 40 275:11- First proposed qualifying read-in Admissible in Burnett 276:1, explains scope of witness’ part 275:11- 276:21- knowledge/employment, provid- 276:1 277:5 and ing context for evidence. Addi- 277:16-20 tional qualifying read-ins are superfluous and inadmissible. 8095 Donald S. 52 149:5-16 Plaintiffs’ read-in is inadmissi- n/a Guzik 332:22- ble. 333:10 338:2-7 8096 Donald S. 53 149:5-16 Plaintiffs’ read-in is inadmissi- n/a Guzik 218:6-17 ble. 347:4-16 8170 Donald S. 58 376:13-18 Qualifying read-in completes Admissible Guzik identification of document and explains scope of witness’ knowledge. 8106 Donald S. 59 376:13-18 See Guzik #58, above. Admissible Guzik 10051 William 27 137:20- Explains and clarifies references Admissible Holmberg 138:2 to “he” and “him” and author of document. 90 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 10123 William 50 173:15-23 In first qualifying read-in Admissible Holmberg (unopposed) (173:15-23), witness identifies 174:5-15 memorandum attaching schedule and 175:23- on which he is examined. Fur- 176:1 ther qualifying read-ins provide complete information on the identification of the document referred to in the read-in. 13127 Denise 64 111:9-17 Necessary to properly identify Admissible Johnson document witness is examined on and to explain her familiarity with it in relation to scope of her responsibilities. 14036 Kristine 16 129:19-22 129:19-22 completes the question Admissible King and 130:16- at 129:12-18 and provides wit- 24 ness’ answer. 129:19-22 and 130:16-24 identify document and witness’ scope of responsibilities in connection to it. 14042 Kristine 17 135:11-19 Plaintiffs’ read-in has been ruled Admissible King admissible. Necessary to properly identify document witness is examined on and to explain her familiarity with it in relation to scope of her responsibilities 17108 Matthew 61 132:4-15 Without qualifying read-in, evi- Admissible Ogle dence is incomplete and confus- ing. 17109 Matthew 62 132:4-15 See Ogle #61, above. Admissible Ogle 18006 Laxmi 6 26:16-27:1 Plaintiffs’ reasons for opposing Admissible Peri qualifying read-in are not re- sponsive to the read-in and appear to relate to a different read- in. 21009 Terry 6 134:3-10; First qualifying read-in (Shep- Admissible Shepherd Burnett, herd) qualifies the witness’ per- 9/11/02, sonal knowledge of document he 205:23- is examined on. Second qualify- 206:4 ing read-in (Burnett) identifies the document. 2. QUALIFYING READ INS THAT IDENTIFY A DOCUMENT REFERRED TO IN THE PLAINTIFFS’ READ IN Mason v. Chem-Trend Ltd. Partnership M.J. Moldaver J.A. 91

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 9038 Steven 31 Burnett, Witness is examined on docu- Admissible Healy 9/11/02, ment. Evidence is incomplete 205:23- and potentially misleading with- 206:4 out identification of document. 9039 Steven 32 Burnett, See Healy #31, above. Admissible Healy 9/11/02, 205:23- 206:4 9041 Steven 33 Burnett, See Healy #31, above. Admissible Healy 9/11/02, 205:23- 206:4 9042 Steven 34 Burnett, See Healy #31, above. Admissible Healy 9/11/02, 205:23- 206:4 9044 Steven 36 Burnett, See Healy #31, above. Admissible Healy 9/11/02, 205:23- 206:4 9065 Steven 53 222:13- No materials provided Healy 223:3 224:17- 225:1 12065 Barbara 22 Burnett, Completes identification of docu- Admissible Il- 09/12/02, ment as U.S. launch material. lingworth 414:23- 415:6 21010 Terry 7 Burnett, See Healy #31, above. Admissible Shepherd 9/11/02, 205:23- 206:4 21012 Terry 8 Burnett, See Healy #31, above. Admissible Shepherd 9/11/02, 205:23- 206:4 3. QUALIFYING READ INS THAT RELATE TO THE WITNESS’ LACK OF KNOWL- EDGE OF THE SUBJECT OF THE PLAINTIFFS’ READ IN 4065 Alan Flo- 36 7:7-13 See plaintiffs’ submissions. Inadmissible ry 11019 Roy 8 102:19- See plaintiffs’ submissions. Inadmissible Hosek 103:9 106:16-24 92 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 11025 Roy 11 120:19- Explains that the opinions ex- Admissible Hosek 121:1 pressed in the memo do not come from a trained chemist. 11075 Roy 33 379:1-11 Answer is clear and complete. Inadmissible Hosek Qualifying read-ins adduce further evidence. 17135 Matthew 80 299:8-17 See defendants’ submissions. Admissible Ogle 20082 Monica 52 452:5-20 See defendants’ submissions. Admissible in M. Sch- Qualifying read-in clarifies up to part 452:5-12 ultz line 12. The additional qualifying read-in adduces further evidence. 20097 Monica 64 452:5-20 See Schultz #52, above. Admissible in M. Sch- 459:16-25 part 452:5-12 ultz 4. QUALIFYING READ INS THAT IDENTIFY THE SUBJECT OF THE PLAINTIFFS’ READ IN 10132 William 55 221:9-222:1 See defendants’ submissions. Admissible Holmberg 10149 William 66 278:6-279:1 See Holmberg #55, above. Admissible Holmberg 10171 William 74 360:10-21 See Holmberg #55, above. Admissible Holmberg 231 Alan Flo- 77 752:9-753:8 Proposed read-in relates to par- Inadmissible ry (Cana- and D0584 ticular statements under the regu- dian lations and whether the deponent discovery) had agreed to those specific ones. The qualifying read-in refers to other reviewed forms not asked about. It adduces additional evidence and does not explain the original read-in. 5. QUALIFYING READ INS THAT ANSWER THE SAME QUESTION AS PUT TO THE WITNESS IN THE PLAINTIFFS’ READ IN 4134 Alan Flo- 76 564:15- See defendants’ submissions. Admissible ry 565:10 5020 Dr. Robert 14 83:3-12 See defendants’ submissions. Admissible Frater 8085 Donald S. 48 294:21- See defendants’ submissions. Al- Admissible Guzik 295:2 so, witness’ answer is cut off by counsel at 294:11-16. Mason v. Chem-Trend Ltd. Partnership M.J. Moldaver J.A. 93

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 10083 William 33 92:18-25 See defendants’ submissions. Admissible Holmberg 10102 William 41 125:5-126:4 See defendants’ submissions. Admissible in Holmberg 125:17-126:04 are unresponsive part. 125:5- answers. 16 125:5-16 explains the witness’ knowledge of the subject matter asked about in the plaintiffs’ read-in. 10186 William 81 472:7-19 See defendants’ submissions. Admissible Holmberg 12162 Barbara 66 183:14-25 The qualifying read-in is not the Inadmissible Il- same question but the continua- lingworth tion of the line of questioning. It does not qualify or explain the previous answer, but expands on it. This is adducing further evidence. 19054 Jonas 44 181:25- Answer is clear and complete. Inadmissible Runquist 182:16 Qualifying read-ins adduce fur- 183:21- ther evidence. 184:12 19076 Jonas 58 257:4-11 See Runquist #44, above. Inadmissible Runquist 21054 Terry 27 442:12-25 See plaintiffs’ submissions. Inadmissible Shepherd 22201 Katherine 125 584:25- See defendants’ reply submis- Admissible in Tweden 587:25 sions. part 584:25- 585:1-5, 586:20-25, 587:1-25. 203 Alan Flo- 68 649:19- See plaintiffs’ submissions. Inadmissible ry (Cana- 650:5 dian discovery) 6. QUALIFYING READ INS WHERE THE OBJECTION IS THAT THE QUALIFYING EXCERPT IS FROM A DIFFERENT WITNESS 11114 Roy 46 Shepherd, Does not qualify or explain. Inadmissible Hosek 5/21/04, Qualifying read-ins adduce fur- 115:6- ther evidence. 116:12 94 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 18004 Laxmi 4 Flory, See defendants’ submissions. Admissible Peri 10/18/2005 at 218:22- 219:8 19031 Jonas 24 Tweden, Not clear that the qualifying Inadmissible Runquist 2/14/03, read-in answers the question Mr. 530:8-23 Runquist was asked. The answer does not qualify or explain Mr. Runquist’s answers - he is explaining in vitro testing for he- molysis and the qualifying read- ins deal with the significance of animal testing. This is additional evidence. 19039 Jonas 33 Tweden, See defendants’ submissions and Admissible Runquist 2/14/03, reply submissions for Runquist 539:15- #24. 543:14 19043 Jonas 36 Tweden, See Runquist #24 reply submis- Admissible Runquist 1/31/03, sions. 355:21- 357:19 19045 Jonas 38 Tweden, See Runquist #24 reply submis- Admissible Runquist 2/14/03, sions. 548:19- 549:9, 551:10- 553:20 19047 Jonas 40 Tweden, See Runquist #24 reply submis- Admissible Runquist 2/14/03, sions. 562:12- 566:2 19063 Jonas 50 225:21 - See defendants’ submissions and Admissible Runquist 226:15 reply submissions, Runquist #24. Tweden, 01/31/03, 101:1- 102:23 19094 Jonas 70 Tweden, See defendants’ submissions and Admissible Runquist 1/31/03, reply submissions, Runquist #24. 325:11- 326:5, 327:3- 328:14 Mason v. Chem-Trend Ltd. Partnership M.J. Moldaver J.A. 95

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 20093 Monica 61 Flory, 338:6-16 qualifies statements Admissible in M. Sch- 11/12/02, made by witness regarding the part 338:6-16 ultz 338:6- finality of the report. The re- 340:17 mainder of the qualifying read-in explains the difference between retrospective and prospective studies. This is additional evidence. 7. QUALIFYING READ INS WHERE THE WITNESS’ ANSWER WAS INTERRUPTED BY COUNSEL IN THE PLAINTIFFS’ READ IN 19060 Jonas 47 200:23- See defendants’ submissions. Admissible Runquist 201:1 22102 Katherine 58 198:21- See defendants’ submissions. Admissible Tweden 199:1 22115 Katherine 66 227:13-18 See defendants’ submissions. Admissible Tweden 22153 Katherine 90 332:17-19 See defendants’ submissions. Admissible Tweden 8. MISCELLANEOUS READ INS THAT CLARIFY, QUALIFY OR EXPLAIN THE PLAINTIFFS’ READ IN 1051 Elizabeth 16 98:11-22 See defendants’ submissions. Admissible Burnett 5013 Dr. Robert 9 Johnson, See defendants’ submissions. Admissible Frater 07/13/05, 57:25-58:3 5014 Dr. Robert 10 62:4-63:6; See defendants’ submissions. Admissible Frater 64:18- 65:10; 70:8- 23 5070 Dr. Robert 40 253:11-17 See defendants’ submissions. Admissible Frater 264:25- 265:15 5072 Dr. Robert 41 264:25- See plaintiffs’ submissions. Inadmissible Frater 265:15 6022 Roland 18 337:14- See plaintiffs’ submissions. Inadmissible Gerard 339:11 8133 Donald S. 73 Healy, Partial qualifying read-in Admissible in Guzik 03/20/02, removes potentially misleading part 54:7-10 53:21- impression. 56:9-13 54:23, 56:6- 13 96 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 8146 Donald S. 77 Guzik, First qualifying read-in is unop- Admissible Guzik 10/15/02, posed. 227:14-22, Second qualifying read-in clari- 233:1-7 fies unclear answer. 9105 Steven 87 427:21- Plaintiffs’ read-in ruled admissi- Admissible Healy 428:7 ble. See defendants’ reply submissions. 11052 Roy 21 189:9-190:4 Plaintiffs’ read-in is inadmissi- n/a Hosek Flory, ble. 11/13/02, 594:25- 596:15 11099 Roy 39 61:7-21 The witness’ answer is not clear, Inadmissible Hosek but qualifying read-in adduces further evidence and does not clarify. 12009 Barbara 2 40:4-11 See defendants’ submissions. Admissible Il- 47:15-24 lingworth 48:9-14 12108 Barbara 40 62:12-63:23 See defendants’ submissions. Admissible Il- lingworth 12141 Barbara 56 125:14- See defendants’ submissions. Admissible Il- 126:5 lingworth 12163 Barbara 67 184:11- See defendants’ submissions. Admissible Il- 186:25 lingworth 13017 Denise 8 31:3-20 See defendants’ submissions. Admissible Johnson 13082 Denise 42 43:17-44:12 Plaintiffs’ have put whether Admissible Johnson and 49:13- PVLs are permanent in classify- 24 ing them for reportable events in issue. Qualifying read-ins clarify witness’ answer by explaining why PVLs are not considered permanent. 13093 Denise 48 61:1-3 See defendants’ submissions. Admissible Johnson 13177 Denise 87 242:13-24 See defendants’ reply submis- Admissible Johnson sions. Mason v. Chem-Trend Ltd. Partnership M.J. Moldaver J.A. 97

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 16022 Daniel 17 81:17-24 Qualifying read-in explains that Admissible Langanki the witness is discussing an extrapolation from a “worst case scenario.” 16035 Daniel 25 334:8- The qualifying read-in explains Admissible Langanki 335:24 an error the witness made at the 336:11- time that he did his work and 338:10, analysis in transposing figures 339:3- from the Master Series Valve 339:7, file to the Epic Valve file. This 339:18- affects his conclusions in the 340:9, plaintiffs’ read-in and the quali- 340:18- fying read-in will assist the trial 340:20 judge in understanding an otherwise incorrect answer. 16043 Daniel 29 334:8- See Langanki #25, above. Admissible Langanki 335:24 336:11- 338:10, 339:3- 339:7, 339:18- 340:9, 340:18- 340:20 16045 Daniel 31 3:9-11 See Langanki #25, above. Admissible Langanki 334:8- 335:24 336:11- 338:10, 339:3- 339:7, 339:18- 340:9, 340:18- 340:20 16061 Daniel 41 324:19- See plaintiffs’ submissions. Admissible in Langanki 327:6; Partial qualifying read-in ex- part 327:22- 327:22- plains scope of deponent’s 328:19 331:4; knowledge of document upon 331:11- which he is expanding. 332:14 16080 Daniel 50 348:25- See defendants’ submissions. Admissible Langanki 349:19 98 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 17076 Matthew 43 168:14-25 See defendants’ submissions and Admissible Ogle 171:11- reply submissions. 172:14 17116 Matthew 69 251:6- Qualifying read-in explains that Admissible in Ogle 252:14 the data discussed has a very part 251:6-24 large error bar. This qualifies the evidence given in the plaintiffs’ read-in. Balance of read-in is additional evidence. 17118 Matthew 70 265:3-10 See defendants’ submissions. Admissible Ogle 7121 Matthew 72 256:6- See defendants’ submissions. Admissible Ogle 256:24 270:3-13 19014 Jonas 8 42:9-16 See defendants’ submissions. Admissible Runquist 19015 Jonas 9 47:15-48:7 See defendants’ submissions. Admissible Runquist 19024 Jonas 19 84:18-85:2 Qualifying read-in explains what Admissible Runquist is meant by the terms “solicited” which is necessary to understanding this excerpt without being misled. 19025 Jonas 20 84:18-85:2 See Runquist #19, above. Admissible Runquist 19026 Jonas 21 91:11-25 Answer is complete. Qualifying Inadmissible Runquist read-in is additional evidence in response to a different question. 20058 Monica 36 Flory, See defendants’ submissions and Admissible M. Sch- 11/13/02, reply submissions. ultz 594:25- 596:15 20109 Monica 72 Correction Qualifying read-in corrects and Admissible M. Sch- delivered clarifies Ms. Schultz’s answer ultz June 24, which may otherwise be mis- 2010 leading. 21033 Terry 17 376:24- Mr. Shepherd answers at 376:13 Admissible Shepherd 377:25 that it is “essentially correct” that SJM was not allowed to suggest or imply efficacy. Qualifying read-in explains his understanding of the word “suggestion.” Mason v. Chem-Trend Ltd. Partnership M.J. Moldaver J.A. 99

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 21034 Terry 18 376:24- See defendants’ submissions and Admissible Shepherd 377:25 reply submissions. 21043 Terry 21 397:1-399:5 See defendants’ submissions. Admissible Shepherd 22198 Katherine 122 563:16- See defendants’ submissions. Admissible Tweden 565:1 and 565:7-24 22213 Katherine 133 619:6-620:3 Second qualifying read-in com- Admissible in Tweden 626:16- pletes answer. part 626:16- 627:13 627:13 19 Alan Flo- 7 D0273 Partial qualifying read-in com- Admissible in ry (Cana- pletes the witness’ answer. part - begin- dian ning with discovery) “St. Jude Medical recognized...” and continuing to end of read-in. 73 Alan Flo- 26 285:20- See plaintiffs’ submissions. Inadmissible ry (Cana- 286:13 and dian D0363 discovery) 198 Alan Flo- 66 609:22- See defendants’ submissions and Admissible ry (Cana- 610:17 reply submissions. dian 617:24- discovery) 619:5 309 Alan Flo- 109 1046:12- See defendants’ submissions and Admissible ry (Cana- [now 1047:12 reply submissions. dian 108] and D0692 discovery) 328 Alan Flo- 130 1177:1-25 See plaintiffs’ submissions. Inadmissible ry (Cana- [now dian 128] discovery) 354 Alan Flo- 153 Follow-up See defendants’ submissions and Admissible ry (Cana- [now question reply submissions. dian 151] and answer discovery) to D0705 362 Alan Flo- 157 1345:12-24 Admissible except last two Admissible in ry (Cana- [now and D0866 sentences of supplementary an- part dian 155] swer to D0866. discovery) See plaintiffs’ submissions. 100 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 364 Alan Flo- 158 1352:5- See defendants’ submissions and Admissible ry (Cana- [now 1354:6 reply submissions. dian 156] discovery) 1. DEFENDANTS’ OBJECTIONS TO PLAINTIFFS’ READ INS REGARDING REGU- LATORY COMPLIANCE 8047 Donald S. 31 169:4-170:9 Relevant to SJM’s knowledge of Admissible Guzik adverse events and its conduct in relation to adverse event reporting: para. 47, Read-Ins Ruling, 14/09/10 (“Ruling”). 9052 Steven 43 All Similar to Healy #41: Ruling, pa- Inadmissible Healy ras. 52-53. Sole purpose is to establish that a particular advertisement in a medical journal violated FDA conditions of approval. 9055 Steven 46 All Primarily directed at FDA’s as- Inadmissible Healy sessment of SJM’s marketing materials and compliance with FDA’s conditions. 9057 Steven 48 180:5-181:7 Directed at whether marketing Inadmissible Healy materials complied with FDA’s conditions of approval. 9082 Steven 65 All Relates to specific foreign regu- Inadmissible Healy latory requirements: Ruling, para. 47. 9105 Steven 87 428:8-19 Required for context and rele- Admissible Healy vant to SJM’s knowledge: Rul- (qualifying ing, para. 62. read-in admissible) 11115 Roy 47 114:4-7 See Ruling, para. 52. Inadmissible Hosek 14018 Kristine 9 86:23-87:8 Directed at FDA marketing re- Inadmissible King strictions. 23023 Margaret 14 All Questions explore the deponent’s Admissible Wallner factual knowledge against the background of FDA restrictions on efficacy claims, but are not primarily directed at compliance. Mason v. Chem-Trend Ltd. Partnership M.J. Moldaver J.A. 101

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 561 Judith 31 371:14-23 The passage is contextually im- Admissible Cameron portant because the witness’ answers refer to documents in production 366. 2. DEFENDANTS’ OBJECTIONS TO PLAINTIFFS’ READ INS REGARDING U.S. SALES CORRESPONDENCE 9060 Steven 51 All Correspondence to U.S. physi- Inadmissible Healy cians and surgeons respecting sales and marketing are irrelevant: Ruling, paras. 52, 59. 9118 Steven 95 464:21- The objected-to passage is found Inadmissible Healy 467:5 in a letter from a U.S. sales rep to a U.S. physician commenting on journal article. Witness confirms accuracy of material read to him from article, but provides no other evidence. See also Rul- ing, para. 59. 320 Alan Flo- 120 All The questions about the letter are Admissible in ry (Cana- irrelevant and inadmissible: Rul- part 1134:3- dian brief) ing, para. 59. The admissible 1134:12 portion reflects company’s knowledge and belief at the time. The question imbeds the content of the letter (“there’s absolutely no cause for concern”) making the balance of the excerpt unnecessary for context. 3. DEFENDANTS’ OBJECTIONS TO PLAINTIFFS’ READ INS WHERE THE WITNESS LACKS SUFFICIENT KNOWLEDGE OR EXPERTISE REGARDING THE DOCUMENT OR SUBJECT MATTER 1204 Elizabeth 60 481:16- The witness does not have the Inadmissible Burnett 483:22 scientific knowledge to respond to the questions: Ruling, para. 26. 8043 Donald S. 29 All See Ruling, paras. 23, 26. Inadmissible Guzik Witness is asked about concerns expressed by a physician in a memorandum, which the witness had not previously seen, regarding a meeting he had not attended. 8095 Donald S. 52 All See Guzik #29, above. Inadmissible Guzik 102 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 8096 Donald S. 53 330:7- See Guzik #29, above. Inadmissible Guzik 333:10 8099 Donald S. 55 347:4- See Guzik #29, above. Inadmissible Guzik 351:11 9179 Steven 131 374:2-375:9 Relevant to company’s under- Admissible Healy standing of its disclosure obligations: Ruling, para. 28. 11052 Roy 21 All The witness does not recall see- Inadmissible Hosek (191:22- ing the memorandum, is not fa- 192:17) miliar with it and merely confirms what is set out in it: Ruling, para. 23. 13149 Denise 78 All (165:1- See Ruling, para. 23. Inadmissible Johnson 9) 13162 Denise 80 All The witness is unfamiliar with at Inadmissible Johnson (182:19-22) least two of the reports that indicate problems. She simply confirms what is written in them and adds no information or personal knowledge to these documents: Ruling, para. 23. 17021 Matthew 16 All The witness indicates that this Inadmissible Ogle information is beyond his knowledge and scope of responsibility as these are clinical issues and he is not in the clinical depart- ment. He has no information re- sponsive to the questions. 19091 Jonas 69 All Witness has no information or Inadmissible Runquist knowledge to contribute about the document and is unable to identify it. While it may be otherwise admissible, his evidence adds nothing to the evidentiary record as he merely confirms what is read to him from the document. 4. DEFENDANTS’ OBJECTIONS TO PLAINTIFFS’ READ INS MISCELLANEOUS OB- JECTIONS Mason v. Chem-Trend Ltd. Partnership M.J. Moldaver J.A. 103

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 6025 Roland 21 All The court was unaware at the Inadmissible Gerard time of ruling that the concerns were communicated after the date of recall (as submitted by defendants). In that event, there is no relevant, non-hearsay purpose for the transcript excerpt as the fact that the concerns were communicated is not relevant to whether SJM met the standard of care. 4114 Alan Flo- 61 All Ruling, para 59 does not apply. Admissible ry Evidence is relevant to SJM’s conduct at that time. 20033 Monica 19 All The notes on the presentations Inadmissible M. Sch- by physicians are merely repeat- ultz ed and not adopted for their truth - inadmissible hearsay. 13300 Denise 142 102:3-15 Excerpt in issue relates to SJM’s Inadmissible Johnson practices in 2005 and has no probative value to its practices immediately following recall or whether there were any deficien- cies in them prior to recall. 5065 Dr. Robert 36 All Excerpt does not relate to Inadmissible Frater Silzone-coated products or relevant time period. 9051 Steven 42 All Epic valve was not sold in Cana- Admissible in Healy da, but claims are made about part 116:24- Silzone and advertisement is di- 117:3, rected at clinicians and academ- 118:19- ics, including Canadian 119:14 physicians: Ruling, para. 63. 119:15-120:13 inadmissible (compliance with FDA conditions). 14042 Kristine 17 All Claims about Silzone relevant to Admissible King defendants’ knowledge at time. (qualifying read-in admissible) 6012 Roland 11 All Gerard’s reporting obligations Inadmissible Gerard are unrelated to issues in litigation, particularly as Gerard only reported to Guzik after the recall. 104 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 6023 Roland 19 All See defendants’ submissions. Inadmissible Gerard The opinion of a SJM employee is not relevant to common issues. There is no probative connection between his opinion and the duty of care owed to class. Gerard was not involved in on-going communications with U.K. MDA regarding Silzone and the document at issue is from March 2000. 6026 Roland 22 All See Gerard #19, above. Inadmissible Gerard 21109 Terry 46 All See Gerard #19, above. Inadmissible Shepherd 7041 Peter 19 All Primarily directed at whether a Inadmissible Gove statement in Annual Report to shareholders was fair and accurate. Irrelevant to common issues in this action. Witness provides no evidence regarding SJM’s knowledge. 9076 Steven 61 270:17- Statement of counsel is argumen- Inadmissible Healy 271:2 tative and not evidence. Witness does not agree or accept it. 13067 Denise 31 All Initial read-in is inadmissible: Inadmissible Johnson Ruling, para. 15. Additional proposed read-in does not clarify or correct misleading impression of initial read-in. 16065 Daniel 42 260:21- Neither the witness’ conduct af- Inadmissible Langanki 263:1; ter he left company nor specula- 263:17- tive answers about what he 264:21 might have done in the circumstances if still employed are probative to any common issue. 17093 Matthew 51 All (pro- Initial read-in is vague and am- Admissible. Ogle posed biguous. Plaintiffs’ proposed Defendants amending amending read-in addresses prob- may propose read-in: lem. qualifying 205:12-25, read-in(s). 206:1-10) Hemingway v. Desire2Learn Inc. 105

sort# Deponent read Defendants’ Comments Disposition in# Qualifying Read In(s) 19004 Jonas 2 15:12-16:15 Relevant to company’s under- Admissible Runquist standing of its disclosure obligations: see Ruling, para. 28.

[Indexed as: Hemingway v. Desire2Learn Inc.] Daryl Hemingway (Plaintiff) and Desire2Learn Incorporated and John Allan Baker (Defendants) Ontario Superior Court of Justice P.J. Flynn J. Heard: September 7-10, 2010 Judgment: March 2, 2011 Docket: C-229-07, 2011 ONSC 1286 Wayne R. Bumstead for Plaintiff R. Ross Wells for Defendants Labour and employment law –––– Employment law — Termination and dismissal — Remedies — Damages — Stock options and shares –––– Damages in lieu of specific performance — Plaintiff employee was hired as vice-president by defendant employer — Employment contract promised employee portion of employee ownership trust (“trust”), which was not in existence at time — Employer sent employee e-mail prior to contract specifying that trust compensation would be around $35,000 in value and options per year (“e-mail”) — Employee’s entitlement was undefined in trust document — Em- ployee’s employment was terminated without cause after three months on contract basis and two years on permanent basis — Plaintiff brought action for damages in lieu of specific performance for breach of promise to transfer corporate stock to him — Action was allowed — Employee was awarded $70,000 in damages for breach of promise — Trust did not create entitlement to any defined ownership interest — Employee accepted salary discount because of employer’s promise of ownership — It was intention of both parties that employee be compensated in some fashion for his discounted starting salary — E- mail clarified clause in employment contract and was part of employment contract — Employee was entitled to accept valuation of benefit as stated in e-mail — Estimate of value of trust compensation as being $35,000 per year was fairest, most common-sense answer. Labour and employment law –––– Employment law — Wages and benefits — Mis- cellaneous –––– Salary discount — Transfer of corporate stock — Plaintiff employee was hired as vice-president by defendant employer — Employee accepted starting salary well 106 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

below his prior employment remuneration — Employer assured employee at time of hire that employee’s combination of salary and ownership would be generous — Employment contract promised employee portion of employee ownership trust (“trust”), which was not in existence at time — Employer sent employee e-mail prior to contract specifying that trust compensation would be around $35,000 per year (“e-mail”) — Employee’s employment was terminated without cause after three months on contract basis and two years on permanent basis — Plaintiff brought action for damages in lieu of specific performance for breach of promise to transfer corporate stock to him — Action was allowed — Em- ployee was awarded $70,000 in damages for breach of promise — Employee accepted salary discount because of employer’s promise of ownership — It was intention of both parties that employee be compensated in some fashion for his discounted starting salary — E-mail was only place where parties were ad idem on extra compensation — Esti- mate of value of trust compensation as being $35,000 per year was fairest, most common- sense answer. Labour and employment law –––– Employment law — Interpretation of employment contract — Performance or breach –––– Transfer of corporate stock — Plaintiff employee was hired as vice-president by defendant employer — Employee accepted starting salary well below his prior remuneration — Employment contract promised employee portion of employee ownership trust (“trust”), which was not in existence at time — Employer sent employee e-mail prior to contract specifying that trust compensation would be around $35,000 per year (“e-mail”) — Employee’s entitlement was undefined in trust document — Employee’s employment was terminated without cause after three months on contract basis and two years on permanent basis — Plaintiff brought action for damages for wrongful dismissal and for breach of promise to transfer corporate stock to him — Action was allowed — Parties settled wrongful dismissal claim for $42,500 in damages to employee — Employee was awarded $70,000 in damages for breach of promise — It was intention of both parties that employee be compensated in some fashion for his discounted starting salary — E-mail was only place where parties were ad idem on extra compensation — E-mail clarified clause in employment contract and was part of employment contract — Estimate of value of trust compensation as being $35,000 per year was fairest, most common-sense answer. Forms considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 Form 57B — referred to

ACTION by employee for damages in lieu of specific performance for breach of promise to transfer corporate stock, and for wrongful dismissal.

P.J. Flynn J.:

1 The Plaintiff sued for damages for wrongful dismissal and, in lieu of specific performance, for damages for breach of a promise to transfer corporate stock to him. Hemingway v. Desire2Learn Inc. P.J. Flynn J. 107

2 The Defendant Baker is the President, CEO and directing mind of the corporate Defendant, Desire2Learn Incorporated (D2L), formed in 1999 to provide electronically supported teaching and learning. 3 D2L can be called a typical “tech start-up”. 4 By the time the Plaintiff commenced employment there, in the Fall of 2003, the company had about 12 employees. 5 The Plaintiff is an MIT graduate with a Masters Degree in Engineering and Management. His resume is quite impressive. For example, it shows that he worked as an astronaut trainer at NASA. 6 He and his family had known Mr. Baker and his family since the Plaintiff was a teenager in a small Ontario community. 7 He and Mr. Baker renewed acquaintances at a Christmas Eve service in De- cember 2002 and thereafter kept in touch. 8 In the Summer of 2003, the Plaintiff’s primary goal was to move from being an employee to entrepreneurism and business ownership. He professed to be highly interested in “start-ups” like D2L, and this eventually led to a meeting with Mr. Baker after Labour Day that year. 9 As a result of their meeting, on October 18, 2003, the Plaintiff accepted an employment offer from D2L for the senior management position of Vice-Presi- dent International Business Development, first on a three month contract basis, then on a full-time permanent basis. 10 He successfully completed the contract term and continued on as a permanent indefinite hire until his employment was terminated without cause on Feb- ruary 10, 2006, pursuant to written notice dated January 25, 2006. 11 On the second day of the trial, the parties settled the wrongful dismissal claim and entered into Minutes of Partial Settlement (Exhibit 4). According to that agreement, the wrongful dismissal claim was agreed to be adjudged in the Plaintiff’s favour against D2L with damages fixed at $42,500.00. The settlement agreement also provided that the Plaintiff abandon its claim against the individual Defendant Baker and its claim for aggravated damages. D2L abandoned its claim for set-off of the Plaintiff’s alleged debt to D2L. 12 So that left for determination in the trial the Plaintiff’s claim for damages, in lieu of specific performance, for breach of promise to transfer corporate stock to him. 13 In other words, the balance of the trial was concerned with D2L’s liability for its failure to deliver to the Plaintiff a 1% ownership interest in the company and to determine the date for assessing those damages. 108 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

14 The parties have agreed that the measure of those damages (1% of the worth of the company) is: (i) $195,000, if assessed at January 25, 2006 (the date of notice of the termination of the Plaintiff’s employment); or (ii) $472,000, if assessed at the date of trial. 15 The Plaintiff’s position is that he is entitled to have damages for this breach assessed as at the date of trial ($472,000) based on the argument that, although damages for breach of contract are generally assessed as at the date of the breach, because an ownership interest in D2L is a unique property, the Plaintiff ought to benefit by the exception to that general rule. 16 However, it must be said that prior to trial the Plaintiff was seeking an amount equal to 5% of the value of the stock in the company. 17 The Defendant’s first position is simple: This is a contract case. The contract of employment was reduced to writing (Exhibit 2, Tab 9), is in plain language and was never challenged. Therefore, the result is that the Plaintiff gets no damages because of the terms of the contract, including these: (i) for anyone to be entitled there must be a liquidation event and none has occurred; and (ii) for anyone to be entitled they must be an employee at the time of the liquidation event or have no participation in the plan. 18 While the Plaintiff says that the 1% entitlement can be found in the wording of the contract, the Defendant simply replies by saying there is no such contract. 19 The parties have a very different interpretation of the effect of the key provisions of the contract at the root of this dispute. 20 The contract, subject to the probationary term (a three month contract period), is a contract of indefinite hire with stipulated remuneration set out for the three month contract term, after which the position was to be reviewed and on mutual agreement, the employment continued on a full-time, permanent basis with compensation and employment package to be negotiated at that time. 21 The Plaintiff successfully completed the contract term (around January 20, 2004) and continued his employment at an agreed upon salary. As I understand his evidence and argument, the myriad of discussions, emails and other communications between the Defendant Baker, or other D2L employees and himself, between the time that he signed the original employment contract and the time that the employee stock trust was created in December 2005, constituted the further negotiations referred to in the employment contract which resulted in his entitlement. Hemingway v. Desire2Learn Inc. P.J. Flynn J. 109

22 The key provisions of the contract at root of the dispute are these: As to the Ownership Claim (1) “Upon completion of the contract term and joining as a permanent member of the team, you will then be included in the employee ownership plan. This plan will give you a portion of the employee ownership trust based on your position, performance, time with D2L, and overall contribution to the company.” The “No Promises” Stipulation (2) “I accept the employment offer as well as the terms contained in this letter. I have received no promises other than those contained in this letter.” 23 Reasonable people can differ. 24 The Plaintiff is a sophisticated person with a Masters Degree in Management from MIT. 25 The Defendant argues that all of the Plaintiff’s entitlements must be found within the plain wording of the contract and if properly read, this contract results in the Plaintiff receiving no further benefit or compensation. 26 The Plaintiff was entitled to the undefined benefit conferred by the contract: namely, “a portion of the employee ownership trust based on (his) position, performance, time with D2L, and overall contribution to the company.” 27 When the contract of employment was executed, the D2L employee stock trust did not yet exist, except perhaps as flickering shadows in the mind of John Baker. 28 The trust document itself was not settled until December 24, 2005 (Exhibit 3, Tab 56), almost two years after the Plaintiff became a permanent employee and about a month before he was given notice of his termination. 29 The trust agreement lists the Plaintiff and some 73 others as beneficiaries. This demonstrates a six-fold increase in the employees of the company since the Plaintiff joined. 30 In the trust document itself, not only is the Plaintiff’s entitlement undefined, the allocation of shares or distribution of income to any of the beneficiaries from time to time is completely at the discretion of the trustees, the majority of whom are John and Patricia Baker. 31 Moreover, to receive a share allotment, a beneficiary must be an employee of D2L on the division date (the date upon which a defined liquidation event occurs). 32 The Defendant argues that the Plaintiff’s employment contract was fulfilled when he was included in the employee ownership trust, even though its details may not be what the Plaintiff had hoped for or expected when he accepted the offer of employment. 110 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

33 The Defendant also argues that if there was a breach of the Plaintiff’s employment contract, it must have occurred on January 20, 2004, at the time when the Plaintiff became a permanent employee and was not then included in any employee ownership plan. 34 That breach, says the Defendant, was a fundamental breach which the Plain- tiff condoned by not treating the employment contract as at an end. In the alternative, the Defendant argues that the ownership paragraph of the employment contract, through which the Plaintiff claims, lacks sufficient certainty to be enforceable by this court. 35 I find as a fact that until the employee stock trust agreement was signed in December 2005 (there is some suggestion in the evidence that the agreement itself though dated in December 2005 was not signed until January 2006, just before the Plaintiff was terminated), its nature, makeup and operation were not defined or understood by either party to this lawsuit. 36 There were various concepts floated by Mr. Baker and other senior employees in the organization, such as Jeremy Auger, the company’s Chief Operating Officer, from the time of the Plaintiff’s hiring process until the plan eventually morphed into its final form as Mr. Baker vacillated, tinkered and delayed with the concept. 37 While the Plaintiff had originally hoped and expected that he would get some concrete ownership of the company as part of his compensation package — at one time he put a 5% interest to Baker, which Baker ignored — he came to believe he was entitled to a 1% interest in the company by the time his employment was terminated. 38 It is clear that the employee stock trust agreement does not create any entitlement to any defined ownership interest. 39 It is equally clear that the Plaintiff’s employment contract promises his in- clusion in an employee ownership plan, which was to give him a portion of the employee ownership trust, which was not yet in existence. 40 And, further it is also clear that the “no promises” clause, plainly eliminates any past promises. 41 The employment contract obliged D2L to deliver an employee ownership plan which it eventually did and thus the Defendant says that ought to be the end of the matter. 42 But I do not agree with the Defendant that the torturous and vacillating steps taken to get to the final form of the trust agreement or the continuing “negotiations” are not relevant to my determination. 43 All the while Baker knew that there was no stock trust agreement in place and from a certain point in time Hemingway was aware of this as well, but the Plaintiff never left off believing that the eventual document or the eventual vehi- Hemingway v. Desire2Learn Inc. P.J. Flynn J. 111

cle would provide him with pure stock ownership. As he testified on the stand, ownership of a company means having shares. 44 I agree with the Defendant that there is no right to specific performance of an employment contract. 45 But here the Plaintiff seeks damages in lieu of specific performance of one clause only in his employment contract, while at the same time accepting damages for his wrongful dismissal. 46 Of course, had the parties entered into full Minutes of Settlement with respect to the breach of the employment contract, the Defendant’s argument that the Plaintiff accepted repudiation and treated the entire agreement as at an end would hold sway. 47 But that’s not what happened. Here the parties bifurcated the issues and only fought over the meaning of one clause in the contract and whether or not there was a breach by the employer which would entitle the aggrieved employee to damages. 48 Just as the contract for personal services cannot be required to be specifically performed, I am of the view that in the circumstances of this case where the Defendant D2L is a closely held private corporation it would be improper to order specific performance of the delivery of shares. Hence the Plaintiff’s only remedy is damages in lieu of that requirement. It is not that I do not accept that there couldn’t be an order for the specific performance of the delivery of shares, but in this case, with no market for those shares, the Plaintiff would end up holding shares, the value of which may never be realized. 49 The Defendant is right in saying that the Plaintiff does not now want shares in the Defendant corporation. 50 Instead the Plaintiff seeks damages for the value of 1% of the stock in the company at the time of trial. 51 I find as a fact that the Plaintiff started employment for the Defendant at a salary well below his prior employment remuneration at the time of hire. 52 It was clear that the Defendant recognized this but in its efforts to bring the Plaintiff onto its “team”, had to offer the Plaintiff something of value to compensate him for reducing his salary expectations. 53 I also find as a fact that at the time of the Plaintiff’s hire, the Defendant was still in “start up” mode and could not afford to meet his then actual salary expectations (about $95,000 Canadian). 54 The Plaintiff initially told Baker that ownership was his highest priority and while Baker didn’t offer a specific amount or percentage of ownership, he assured the Plaintiff that the combination of salary and ownership would be generous (in fact several times the Plaintiff testified to Mr. Baker assuring him that it would be ‘extremely generous’) and I accept the Plaintiff’s evidence in this re- 112 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

gard without reservation, in light of the salary “discount” the Plaintiff was offering. 55 Courts are meant to uphold business contracts, including employment contracts, to give them their full measure of commercial “common sense”. 56 In my view, that means that there must be objective fairness to the business bargain between the parties - fairness observable to the reasonable reader of the Report on Business, riding the Bridgeport bus. 57 I cannot find that there is a promise for the delivery of 1% of the stock of the Defendant, but I do find that the contract promised something of financial value to the Plaintiff beyond his salary and the other defined perks in the employment letter. 58 This court must measure the intent of the parties at the making of the employment contract and it seems to me that what was reasonably to be expected by the Plaintiff when entering into the contract, must be found in the pre-contract email (September 11, 2003) to the Plaintiff from the Defendant’s C.O.O., Jeremy Auger (Exhibit 2, Tab 7). 59 Mr. Auger writes: Because the trust is not yet finalized, the exact terms are currently not defined. However, the trust compensation would be in the ballpark of the equivalent of $35 + K in value/options. 60 I am not of the view that this is “mere puffery”. Rather, it seems to be an earnest effort by Mr. Auger “to continue the hiring process” and therefore an honest and businesslike approach to creating and managing employee expectations. 61 I find that this email is a clarification or aid to interpretation by the company of the impugned clause in the employment contract. Indeed, I would find that this email is part of the contract of employment. 62 The Plaintiff was entitled to accept Mr. Auger’s valuation of the benefit of the Plaintiff’s portion of the employee stock plan. 63 It makes no sense whatever that a person with the Plaintiff’s education and background would have no reasonable expectation of the value of his “discount”. 64 Mr. Auger’s email must be taken as the company’s position and the company must be held accountable for setting that position out so as to create a reasonable expectation in the Plaintiff prior to his executing the actual agreement. 65 I agree with the Plaintiff in thinking that ownership must mean something concrete — not the ephemeral, almost illusory and vanishing, trust concept now held out by the company. Hemingway v. Desire2Learn Inc. P.J. Flynn J. 113

66 While I cannot find that concrete ownership interest to have a pegged percentage value, I do find, on the balance of probabilities, on all of the evidence before me, that Auger’s ballpark estimation of the value of the trust compensation for the Plaintiff at $35,000 or more per year to be the fairest, most common- sense answer to this commercial conundrum. 67 To do other than to incorporate into the contract Mr. Auger’s email setting out the company’s estimation of the value of the stock trust agreement for the Plaintiff is to not give the contract commercial sense. 68 Clearly an employee in the Plaintiff’s shoes would otherwise have nothing but a hope and a prayer. 69 Without the incorporation of the Auger email, the letter of the contract was incapable of fulfillment when it was signed. In the spirit of the contract the intent of the parties was not honoured. 70 While the Plaintiff’s evidence was coloured by his fixated hope that he was entitled to 1% of the stock of the company, by outright transfer, the evidence of the Defendant Baker was tainted by his rationalization of his own dithering, dal- lying and vacillating in creating the “employee ownership plan” promised in the contract — something which eventually morphed into the Desire2Learn employee stock trust. 71 The words of the contract are clear enough to foretell something like the final stock trust, but that document was not in the contemplation of either party. And when one otherwise searches for the initial bargain entered into by the parties, and I find that there was indeed such a bargain at the time of the Plaintiff’s hiring, the common interest must have centred on an employee ownership plan equivalent to about $35,000 per annum. 72 John Baker may not have intended the Plaintiff to be rewarded with 1% of the company stock, but his assurances of generosity clearly had a role to play in the Plaintiff’s decision to accept employment and forego a much higher starting salary. 73 Although I cannot find a specific agreement to transfer 1% of the company stock to the Plaintiff, I do find that it was the intention of both parties to the contract that the Plaintiff be compensated in some fashion for his discounted starting worth. 74 And the only place where I can find that the company and the Plaintiff are ad idem on this score is that the company touted and the Plaintiff accepted as part of the profit valuation of the employee ownership plan - the trust compensation - “to be in the ballpark of the equivalent of $35 + K/ year in value/options.” 75 This is the only logical way to read the impugned promise in the contract. 76 The Plaintiff worked for the company for a total of 27 months. Deducting the three month “contract term”, this means that he was a full-time employee for 114 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

two years and, in spite of the wording of the after-drafted trust agreement, he ought to have been compensated for those two years at the rate of $35,000 per year. He wasn’t, of course. 77 So, I would award the Plaintiff damages for this breach in the amount of $70,000. I would also award damages in accordance with the Minutes of Partial Settlement in the amount of $42,500. This results in a total damages award to the Plaintiff of $112,500. 78 The claim against the Defendant, Baker, is dismissed in accordance with the parties’ agreement.

Costs 79 I shall fix costs, if sought, following my receipt and review of the parties’ costs submissions as follows: (i) on or before March 25, 2011, the Plaintiff shall serve and deliver to me at my Kitchener chambers his 57B Costs Outline, aug- mented by no more than two pages, together with his Bill of Costs and any relevant Offer(s) to Settle; and (ii) on or before April 22, 2011, the Defendant shall serve and deliver to me at my Kitchener chambers its 57B Costs Outline, aug- mented by no more than two pages, together with its Bill of Costs and any relevant Offer(s) to Settle. Action allowed. Jensen v. Schaeffler Canada Inc./FAG Bearings Ltd. 115

[Indexed as: Jensen v. Schaeffler Canada Inc./FAG Bearings Ltd.] Mary Anne Jensen (Formerly Mary Anne Lott) (Plaintiff) and Schaeffler Canada Inc./FAG Bearings Limited (Defendant) Ontario Superior Court of Justice J.R. Haines J. Judgment: March 1, 2011 Docket: 09-2005SR, 2011 ONSC 1342 Anne-Marie Tymec for Plaintiff John M. Skinner, Q.C. for Defendant Labour and employment law –––– Employment law — Termination and dismissal — Notice — Mitigation by employee — Miscellaneous –––– Plaintiff employee was employed by defendant employer for 28 years — Employee was assembly operator earning $22.40 per hour — As result of work injury, employee was in temporary administrative position at time of layoff — Employee was laid off because of poor economy — After 35 weeks, employee’s layoff was deemed permanent — Employee was entitled to termination pay of $7,040 and severance pay of $22,880, which were paid to her — Employee enrolled in labour market re-entry program through Workplace Safety Insurance Board (WSIB) — Employee received $45,839.72 from WSIB as loss of earnings payments during notice period — Employee successfully brought action against employer for damages for termination of her employment without adequate notice or pay in lieu of notice — Employee’s damages in lieu of 18 months of notice totalled $69,880 — Parties made additional submissions as to appropriate treatment of WSIB payments — WSIB payments were applied to reduce employee’s damages — WSIB payment was in lieu of earnings to compensate employee for loss while unable to work — If employee were fit to work, her income earned in employment during notice period would be deducted as mitigation income — There was no policy reason for WSIB payments to be treated differently than employment income. Labour and employment law –––– Employment law — Termination and dismissal — Notice — Considerations affecting length of notice — Emotional or health issues –––– Forty-eight-year-old plaintiff employee was employed by defendant employer for 28 years — Employee was assembly operator earning $22.40 per hour — As result of work injury, employee was in temporary administrative position at time of layoff — Em- ployee was laid off because of poor economy — After 35 weeks, employee’s layoff was deemed permanent — Employee was entitled to termination pay of $7,040 and severance pay of $22,880, which were paid to her — Employee enrolled in labour market re-entry program through Workplace Safety Insurance Board (WSIB) — Employee received $45,839.72 from WSIB as loss of earnings payments during 18-month notice period — Employee successfully brought action against employer for damages for termination of her employment without adequate notice or pay in lieu of notice — Appropriate notice period at common law was 18 months — Absent employee’s physical limitations due to 116 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d) workplace injury, appropriate notice period would have been 15 months — Employee had grade 11 education — It would take time for employee to be re-trained in less physi- cally demanding work — Parties made additional submissions as to appropriate treatment of WSIB payments — WSIB payments were applied to reduce employee’s damages — Employee did not prove loss of wages during notice period — Employee’s damages in lieu of notice totalled $69,880 — Employee’s damages were reduced by severance, termination and WSIB payments — Employee received more payments during notice period than her total damages. Labour and employment law –––– Employment law — Termination and dismissal — Remedies — Damages — Entitlement to specific heads of damage –––– Plaintiff employee was employed by defendant employer for 28 years — Employee was assembly operator earning $22.40 per hour — As result of work injury, employee was in temporary administrative position at time of layoff — Employee was laid off because of poor economy — After 35 weeks, employee’s layoff was deemed permanent — Employee was entitled to termination pay of $7,040 and severance pay of $22,880, which were paid to her — Employee enrolled in labour market re-entry program through Workplace Safety Insurance Board (WSIB) — Employee successfully brought action against employer for damages for termination of her employment without adequate notice or payment in lieu of notice — Appropriate notice period at common law was 18 months — Parties made additional submissions as to employee’s damages — Employee claimed for out-of-pocket pecuniary expenses — Employee’s claims were granted — Employee sustained out-of- pocket losses in relation to health care expenses, prescriptions, and optometry expenses that she incurred after her benefits had been terminated that totalled $4,674.95 — Em- ployee’s claims represented pecuniary losses as result of her wrongful dismissal — Em- ployee’s losses, including pecuniary loss, were less than she received in severance, termination and WSIB payments. Labour and employment law –––– Employment standards legislation — Termina- tion of employment — Termination pay — Calculation –––– Plaintiff employee was employed by defendant employer for 28 years — Employee was assembly operator earning $22.40 per hour — As result of work injury, employee was in temporary administrative position at time of layoff — Employee was laid off because of poor economy — After 35 weeks, employee’s layoff was deemed permanent — Employee was entitled to termination pay of $7,040 and severance pay of $22,880, which were paid to her — Em- ployee enrolled in labour market re-entry program through Workplace Safety Insurance Board (WSIB) — Employee successfully brought action against employer for damages for termination of her employment without adequate notice or payment in lieu of notice — Appropriate notice period at common law was 18 months — Parties made additional submissions as to employee’s damages — Employee claimed her termination payments were calculated on incorrect hourly rate — Employee’s claim was granted — Termination payment was based on hourly rate of $22 — Payment should have been calculated on employee’s actual hourly rate of $22.40 — Employee was entitled to additional $544 that employer was obliged to pay as severance and termination payments. Labour and employment law –––– Employment standards legislation — Termina- tion of employment — Severance pay — Calculation –––– Plaintiff employee was em- Jensen v. Schaeffler Canada Inc./FAG Bearings Ltd. 117 ployed by defendant employer for 28 years — Employee was assembly operator earning $22.40 per hour — As result of work injury, employee was in temporary administrative position at time of layoff — Employee was laid off because of poor economy — After 35 weeks, employee’s layoff was deemed permanent — Employee was entitled to termination pay of $7,040 and severance pay of $22,880, which were paid to her — Employee enrolled in labour market re-entry program through Workplace Safety Insurance Board (WSIB) — Employee successfully brought action against employer for damages for termination of her employment without adequate notice or payment in lieu of notice — Ap- propriate notice period at common law was 18 months — Parties made additional submissions as to employee’s damages — Employee claimed her severance payments were calculated on incorrect hourly rate — Employee’s claim was granted — Severance payment was based on hourly rate of $22 — Payment should have been calculated on employee’s actual hourly rate of $22.40 — Employee was entitled to additional $544 that employer was obliged to pay as severance and termination payments. Labour and employment law –––– Employment law — Termination and dismissal — Remedies — Damages — Pensions –––– Plaintiff employee was employed by defendant employer for 28 years — Employee was assembly operator earning $22.40 per hour — As result of work injury, employee was in temporary administrative position at time of layoff — Employee was laid off because of poor economy — After 35 weeks, employee’s layoff was deemed permanent — Employee was entitled to termination pay of $7,040 and severance pay of $22,880, which were paid to her — Employee enrolled in labour market re-entry program through Workplace Safety Insurance Board (WSIB) — Employee successfully brought action against employer for damages for termination of her employment without adequate notice or payment in lieu of notice — Appropriate notice period at common law was 18 months — Parties made additional submissions as to employee’s damages — Employee claimed she was entitled to lost pension benefits — Employee’s claim was granted — Employee was entitled to lost pension benefits during notice period — Employee was awarded amount equal to actual contributions employer would have made toward employee’s pension during notice period. Cases considered by J.R. Haines J.: Salmi v. Greyfriar Developments Ltd. (1985), 1985 CarswellAlta 19, [1985] 4 W.W.R. 463, 17 D.L.R. (4th) 186, 36 Alta. L.R. (2d) 182, 58 A.R. 364, 7 C.C.E.L. 80, [1985] A.J. No. 1089 (Alta. C.A.) — followed Statutes considered: Employment Standards Act, 2000, S.O. 2000, c. 41 Generally — referred to

ADDITIONAL REASONS to judgment reported at Jensen v. Schaeffler Canada Inc./FAG Bearings Ltd. (2011), 2011 ONSC 781, 2011 CarswellOnt 1700 (Ont. S.C.J.), respecting damages for wrongful dismissal. 118 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

J.R. Haines J.:

1 Counsel re-attended at my request to address the treatment of WSIB payments received by Ms. Jensen during the notice period. This is significant because the total of those payments added to the payments made for termination and severance pursuant to the Employment Standards Act exceeds her lost earnings for the 18 month notice period. Her lost wages for that period are ($22.40 × 40 hours × 78 weeks) $69,880. She received a total of $29,920 ($22,880 + $7,040) for severance and termination. It is accepted that these amounts must be deducted from the loss, leaving a balance of $39,968. 2 Since Ms. Jensen was not notified of her termination until October 31, 2007, I take that date as the date of her termination. Therefore, the 18 month notice period extends to April 30, 2009. During that period she received income replacement benefits from WSIB of $45,839.72. That has resulted in her being paid $5,871.72 more than her lost wages during the notice period. 3 In submitting that the WSIB benefits received by Ms. Jensen should be applied to reduce her claim, the defendant relies on the analysis of the Alberta Court of Appeal in Salmi v. Greyfriar Developments Ltd., [1985] A.J. No. 1089 (Alta. C.A.) at pars. 9 and 10: .... in determining the actual award in a wrongful dismissal case the court must take into account the earnings of the plaintiff over the period of the award in mitigation of damages. Therefore if the respondent had been fit for work and had earned $2,400.00 in wages from the Workers’ Compensation Board it would have been deducted. The reason the respondent did not attempt to locate other work was his medical condition. In lieu of wages for the period he received workers’ compensation provided by assessments paid by his employer and others in like kinds of industry. The fund is set up by legislation. The employer is the only contributor. The payment is in lieu of wages and takes away the right to sue the employer for injury resulting in his present medical condition which makes him unfit for employment for the period involved or for death. If the money came from earnings from a complete stranger the appellant would have the advantage of it in mitigation of the loss. As a matter of policy I am quite unable to see why it ought not to be deducted where it is paid from a fund contributed to by the employer by force of law particularly where the payment is in lieu of earnings and to compensate for their loss while unable to work because of injury sustained during the course of the respondent’s employment. 4 Although I am not required to follow this decision I agree with the reasoning and conclude that the benefits paid by WSIB on account of lost earnings during the notice period must be credited against the loss. As a result Ms. Jensen has proven no loss of wages for the 18 month notice period. Jensen v. Schaeffler Canada Inc./FAG Bearings Ltd. J.R. Haines J. 119

5 Ms. Jensen also claims the following: 1) The severance and termination payments made pursuant to the Employ- ment Standards Act were based on an hourly rate of $22. They should have been calculated on a rate of $22.40 per hour. The difference is $544. 2) $325 paid for a semi-private hospital room during the layoff period that should have been covered by her continuing medical benefits. 3) $407.95 paid for prescriptions during the notice period. 4) $2,200 for premiums for replacement health care benefits during the notice period. 5) $1,098 for optometry expenses incurred during the notice period and after her medical benefits had been terminated. 6 I am satisfied that the foregoing which total $4,674.95, represent pecuniary losses that were sustained by Ms. Jensen as a result of her wrongful dismissal. When this amount is added to her lost wages of $69,880 the total loss is $74,554.95. This amount still falls short of the $75,759.72 she received in severance, termination and WSIB payments by $1,204.77. Nonetheless she is still entitled to receive the additional $544 that the defendant was obligated to pay as severance and termination pay pursuant to the Employments Standards Act. 7 Ms. Jensen is also entitled to lost pension benefits during the notice period. This loss is usually calculated by determining the present value of the loss of increase in the employee’s pension resulting from the employer not paying its contributions during the notice period. Since I have not been provided with the necessary evidence to make this calculation I would award Ms. Jensen an amount equal to the actual contributions the employer would have made toward her pension during the notice period. She should be paid the difference between that and the surplus of the amounts she has received. 8 There will be judgment in accordance with the foregoing reasons. Counsel may make written submissions with respect to costs within 30 days. Order accordingly. 120 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

[Indexed as: Altman v. Steve’s Music Store Inc.] Shelley A. Altman (Plaintiff) and Steve’s Music Store Inc., also carrying on business as Steve’s Music, Steve’s Music Store and Steve’s Digital (Defendant) Ontario Superior Court of Justice Corrick J. Heard: January 31, 2011; February 1, 3, 4, 7, 2011 Judgment: March 8, 2011 Docket: CV-10-398619, 2011 ONSC 1480 Mr. Albert S. Frank for Plaintiff Mr. Earl Altman for Defendant Labour and employment law –––– Employment standards legislation — Vaca- tions — Vacation pay –––– Employee worked for employer music store for more than 30 years — Employee sometimes worked at home on her days off, and was personally acquainted with members of owner’s family — Employee was diagnosed with stage three lung cancer in 2007, underwent surgery in early 2008, and her treatment was completed September 17, 2008 — After her surgery employee worked reduced hours due to treatment — Owner decided to continue to pay employee in full but directed controller to deduct whatever he could from her vacation account — She was notified by letter via bailiff that she had been remiss in her duties and was warned to fulfil obligations or be terminated — Employee returned to work, but then began three month medical leave — Employee was notified by letter via bailiff that her employment was terminated — Em- ployee brought action for, inter alia, salary and benefits earned but unpaid including wages and vacation pay — Action allowed — Evidence indicated that employee received no salary after September 20, 2008 — Circumstances in which employer can withhold salary are limited; circumstances did not fall within s. 13 of Employment Standards Act — Employer was not entitled to withhold salary because they concluded they had overpaid her for services performed; alleged overpayment was not result of administrative error but was result of decision taken by president of company to pay her salary while she was receiving treatment for cancer — Employer was not entitled to withhold vacation account; it could have cross-claimed or brought action to recover salary it believed was owed. Labour and employment law –––– Employment standards legislation — Wages — Deductions from wages — Debts owed to employer –––– Employee worked for employer music store for more than 30 years — Employee sometimes worked at home on her days off, and was personally acquainted with members of owner’s family — Em- ployee was diagnosed with stage three lung cancer in 2007, underwent surgery in early 2008, and her treatment was completed September 17, 2008 — After her surgery employee worked reduced hours due to treatment — Owner decided to continue to pay employee in full but directed controller to deduct whatever he could from her vacation ac- Altman v. Steve’s Music Store Inc. 121 count — She was notified by letter via bailiff that she had been remiss in her duties and was warned to fulfil obligations or be terminated — Employee returned to work, but then began three month medical leave — Employee was notified by letter via bailiff that her employment was terminated — Employee brought action for, inter alia, salary and benefits earned but unpaid including wages and vacation pay — Action allowed — Evidence indicated that employee received no salary after September 20, 2008 — Circumstances in which employer can withhold salary are limited; circumstances did not fall within s. 13 of Employment Standards Act — Employer was not entitled to withhold salary because they concluded they had overpaid her for services performed; alleged overpayment was not result of administrative error but was result of decision taken by president of company to pay her salary while she was receiving treatment for cancer — Employer was not entitled to withhold vacation account; it could have cross-claimed or brought action to recover salary it believed was owed. Labour and employment law –––– Employment law — Termination and dismissal — Notice — Considerations affecting length of notice — Bad faith –––– Employee was 58 year old woman who worked as store manager for employer music store for more than 30 years — Employee sometimes worked at home on her days off, and was personally acquainted with members of owner’s family — Employee was diagnosed with stage three lung cancer in 2007, underwent surgery in early 2008, and her treatment was September 17, 2008 — After her surgery employee worked reduced hours due to treatment — She was notified by letter via bailiff that she had been remiss in duties and was warned to fulfil obligations or be terminated — Employee returned to work, but then began three month medical leave — Employee was notified by letter via bailiff that her employment was terminated — Employee brought action for wrongful dismissal and sought, inter alia, pay in lieu of notice and moral damages for mental distress — Action allowed — Em- ployer’s treatment of employee was callous and insensitive — She had been treated like family and worked as if she were member of family, she deserved to be treated better than twice having bailiff deliver her letter replete with mistruths from lawyers especially when employer knew she was recovering from cancer treatment — No one in management had decency to speak to her personally to express their dissatisfaction — Letters devastated employee and caused her significant mental distress to point of clinical depression — Damages in amount of $35,000 was awarded for extenuating circumstances as result of employer’s breach of its duty to deal with employee in good faith in manner. Labour and employment law –––– Employment law — Termination and dismissal — Notice — Considerations affecting length of notice — Emotional or health issues –––– Employee was 58 year old woman who worked as store manager for employer music store for more than 30 years — Employee sometimes worked at home on her days off, and was personally acquainted with members of owner’s family — She was well known in Canadian music industry and was member of advisory board of Music Indus- tries Association of Canada — Employee was diagnosed with stage three lung cancer in 2007, underwent surgery in early 2008, and her treatment was September 17, 2008 — After her surgery employee worked reduced hours due to treatment — She was notified by letter via bailiff that she had been remiss in duties and was warned to fulfil obligations or be terminated — Employee returned to work, but then began three month medical leave — Employee was notified by letter via bailiff that her employment was termi- 122 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d) nated — Employee brought action for wrongful dismissal and sought, inter alia, pay in lieu of notice — Action allowed — Employee was 58 years old at time of termination, apart from her state of health, prospect of her finding employment that would provide her with opportunity to be involved and recognized at national level in industry was unlikely — Period of reasonable notice was 22 months, inclusive of her eight weeks statutory entitlement — Disability payments were not deductible from damages — It was reasonable to infer that employee should retain disability benefits given that she paid part, if not all, of premiums, insurer paid benefits not employer, and she did not receive disability until more than one year from date she took medical leave due to employer’s failure to complete policyholder’s portion of claim form. Labour and employment law –––– Employment law — Termination and dismissal — Notice — Considerations affecting length of notice — Availability of similar employment –––– Employee was 58 year old woman who worked as store manager for employer music store for more than 30 years — Employee sometimes worked at home on her days off, and was personally acquainted with members of owner’s family — She was well known in Canadian music industry and was member of advisory board of Music Indus- tries Association of Canada — Employee was diagnosed with stage three lung cancer in 2007, underwent surgery in early 2008, and her treatment was September 17, 2008 — After her surgery employee worked reduced hours due to treatment — She was notified by letter via bailiff that she had been remiss in duties and was warned to fulfil obligations or be terminated — Employee returned to work, but then began three month medical leave — Employee was notified by letter via bailiff that her employment was terminated — Employee brought action for wrongful dismissal and sought, inter alia, pay in lieu of notice — Action allowed — Employee was 58 years old at time of termination, apart from her state of health, prospect of her finding employment that would provide her with opportunity to be involved and recognized at national level in industry was unlikely — This aspect of her employment was significant to her, and was relevant in assessing similar employment opportunities — Period of reasonable notice was 22 months, inclusive of her eight weeks statutory entitlement. Labour and employment law –––– Employment law — Termination and dismissal — Termination of employment by employer — What constituting just cause — Inca- pacity to perform work — Physical illness or injury –––– Employee was 58 year old woman who worked as store manager for employer music store for more than 30 years — Employee sometimes worked at home on her days off, and was personally acquainted with members of owner’s family — She was well known in Canadian music industry and was member of advisory board of Music Industries Association of Canada — Employee was diagnosed with stage three lung cancer in 2007, underwent surgery in early 2008, and her treatment was September 17, 2008 — After her surgery employee worked reduced hours due to treatment — She was notified by letter via bailiff that she had been remiss in duties and was warned to fulfil obligations or be terminated — Employee returned to work, but then began three month medical leave — Employee wrote to employer several months later indicating when she would be returning to work — Employee was notified by letter via bailiff that her employment was terminated — Employee brought action for wrongful dismissal and sought, inter alia, pay in lieu of notice — Ac- tion allowed — Employer argued that employment contract was frustrated due to her ill- Altman v. Steve’s Music Store Inc. 123 ness — With respect to evidence regarding employee’s health and ability to work post- termination, only employee’s incapacity before dismissal should be examined — Em- ployer had not determined at time of termination that employee’s illness was of such nature that she was unable to perform duties of her job given her doctors’ evidence that she was able to work, fact that employer never expressed dissatisfaction with quality of her work, her letter indicating that she would be returning, and that she was terminated without inquiry about her ability to perform her job — Defence of frustration failed; reasonable notice period was 22 months. Labour and employment law –––– Employment law — Interpretation of employment contract — Frustration of contract –––– Employee was 58 year old woman who worked as store manager for employer music store for more than 30 years — Employee sometimes worked at home on her days off, and was personally acquainted with members of owner’s family — She was well known in Canadian music industry and was member of advisory board of Music Industries Association of Canada — Employee was diagnosed with stage three lung cancer in 2007, underwent surgery in early 2008, and her treatment was September 17, 2008 — After her surgery employee worked reduced hours due to treatment — She was notified by letter via bailiff that she had been remiss in duties and was warned to fulfil obligations or be terminated — Employee returned to work, but then began three month medical leave — Employee wrote to employer several months later indicating when she would be returning to work — Employee was notified by letter via bailiff that her employment was terminated — Employee brought action for wrongful dismissal and sought, inter alia, pay in lieu of notice — Action allowed — Em- ployer argued that employment contract was frustrated due to her illness — With respect to evidence regarding employee’s health and ability to work post-termination, only employee’s incapacity before dismissal should be examined — Employer had not determined at time of termination that employee’s illness was of such nature that she was unable to perform duties of her job given her doctors’ evidence that she was able to work, fact that employer never expressed dissatisfaction with quality of her work, her letter indicating that she would be returning, and that she was terminated without inquiry about her ability to perform her job — Defence of frustration failed. Labour and employment law –––– Employment law — Termination and dismissal — Remedies — Damages — Aggravated, punitive or exemplary damages. Cases considered by Corrick J.: Bardal v. Globe & Mail Ltd. (1960), [1960] O.W.N. 253, 24 D.L.R. (2d) 140, 1960 Cars- wellOnt 144, [1960] O.J. No. 149 (Ont. H.C.) — followed Bohemier v. Storwal International Inc. (1982), 1982 CarswellOnt 827, 40 O.R. (2d) 264, 142 D.L.R. (3d) 8 (Ont. H.C.) — considered Bohemier v. Storwal International Inc. (1983), 44 O.R. (2d) 361, 3 C.C.E.L. 79, 4 D.L.R. (4th) 383, 1983 CarswellOnt 771, [1983] O.J. No. 3312 (Ont. C.A.) — referred to Bohemier v. Storwal International Inc. (1984), 3 C.C.E.L. 79 (note), 54 N.R. 319 (note), [1984] 1 S.C.R. xiii (note) (S.C.C.) — referred to Carroll v. Stonhard Ltd. (2001), 53 O.R. (3d) 175, 12 C.C.E.L. (3d) 107, 2001 Carswell- Ont 661, [2001] O.J. No. 726 (Ont. S.C.J.) — referred to 124 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

Dao v. Brick Warehouse LP (October 5, 2005), Doc. 0240-05-ES (Ont. L.R.B.) — referred to Demuynck v. Agentis Information Services Inc. (2003), 2003 BCSC 96, 2003 CarswellBC 93, [2003] B.C.J. No. 113 (B.C. S.C.) — referred to Faryna v. Chorny (1951), 1951 CarswellBC 133, 4 W.W.R. (N.S.) 171, [1952] 2 D.L.R. 354, [1952] 4 W.W.R. 171, [1951] B.C.J. No. 152 (B.C. C.A.) — followed Grapple Marketing Inc. v. Harrison (2010), [2010] O.L.R.B. Rep. 272, 2010 Carswell- Ont 7172, [2010] O.E.S.A.D. No. 160 (Ont. L.R.B.) — considered Halabi v. Becker Milk Co. (1998), 1998 CarswellOnt 2951, 39 O.R. (3d) 153, 38 C.C.E.L. (2d) 89 (Ont. Gen. Div.) — considered Keays v. Honda Canada Inc. (2008), 2008 SCC 39, (sub nom. Honda Canada Inc. v. Keays) 2008 C.L.L.C. 230-025, 376 N.R. 196, 294 D.L.R. (4th) 577, (sub nom. Honda Canada Inc. v. Keays) [2008] 2 S.C.R. 362, 92 O.R. (3d) 479 (note), (sub nom. Honda Canada Inc. v. Keays) 63 C.H.R.R. D/247, 66 C.C.E.L. (3d) 159, 2008 CarswellOnt 3743, 2008 CarswellOnt 3744, 239 O.A.C. 299, [2008] S.C.J. No. 40, EYB 2008-135085 (S.C.C.) — considered Lafrenière v. Leduc (1990), 66 D.L.R. (4th) 577, 72 O.R. (2d) 285, 1990 CarswellOnt 912 (Ont. H.C.) — referred to Lavinskas v. Jacques Whitford & Associates Ltd. (2005), 51 C.C.E.L. (3d) 112, 2005 C.L.L.C. 210-045, 2005 CarswellOnt 5266, [2005] O.J. No. 4580 (Ont. S.C.J.) — considered Lippa v. Can-Cell Industries Inc. (2009), 483 A.R. 262, 2009 ABQB 684, 2009 Carswell- Alta 1900, 15 Alta. L.R. (5th) 333, 2009 C.E.B. & P.G.R. 8369, 78 C.C.E.L. (3d) 46, [2010] 3 W.W.R. 145, [2009] A.J. No. 1285 (Alta. Q.B.) — considered Love v. Acuity Investment Management Inc. (2011), 2011 ONCA 130, 2011 CarswellOnt 1060 (Ont. C.A.) — referred to M.U.A., local 6869 c. Cie minière Québec Cartier (1995), 1995 CarswellQue 24, 1995 CarswellQue 24F, (sub nom. Cie minière Québec Cartier v. M.U.A., local 6869) 183 N.R. 313, (sub nom. Cie minière Québec Cartier v. Quebec (Grievances arbitrator)) 125 D.L.R. (4th) 577, (sub nom. Cie minière Québec Cartier v. Métallurgistes Unis D’Amérique, Local 6869) 95 C.L.L.C. 210-031, (sub nom. Cie minière Québec Cartier v. Quebec (Grievances arbitrator)) [1995] 2 S.C.R. 1095, EYB 1995-67724, [1995] S.C.J. No. 65 (S.C.C.) — followed MacLellan v. H.B. Contracting Ltd. (1990), 32 C.C.E.L. 103, 1990 CarswellBC 722, [1990] B.C.J. No. 935 (B.C. S.C.) — referred to Marks v. Dartmouth Ferry Commission (1904), 1904 CarswellNS 69, 34 S.C.R. 366 (S.C.C.) — followed Marshall v. Harland & Wolff Ltd. (1972), [1972] 1 W.L.R. 899, [1972] 2 All E.R. 715 (N.I.R.C.) — followed Marshall v. Watson Wyatt & Co. (2002), 2002 CarswellOnt 65, 2002 C.L.L.C. 210-019, 16 C.C.E.L. (3d) 162, 155 O.A.C. 103, 57 O.R. (3d) 813, 209 D.L.R. (4th) 411, [2002] O.J. No. 84 (Ont. C.A.) — referred to McIntyre v. Hockin (1889), 16 O.A.R. 498, [1889] O.J. No. 36 (Ont. C.A.) — followed McNamara v. Alexander Centre Industries Ltd. (2001), 2001 CarswellOnt 1441, 144 O.A.C. 376, 53 O.R. (3d) 481, 8 C.C.E.L. (3d) 204, 2001 C.L.L.C. 210-030, 199 D.L.R. (4th) 717, 27 C.C.P.B. 252, [2001] O.J. No. 1574 (Ont. C.A.) — followed Altman v. Steve’s Music Store Inc. 125

MenuPalace.com Corp. v. Saladino (2008), 2008 CarswellOnt 5544, [2008] O.L.R.B. Rep. 424 (Ont. L.R.B.) — referred to Michaels v. Red Deer College (1975), [1976] 2 S.C.R. 324, 1975 CarswellAlta 57, 1975 CarswellAlta 142, [1975] 5 W.W.R. 575, 5 N.R. 99, 75 C.L.L.C. 14,280, 57 D.L.R. (3d) 386, [1975] A.C.S. No. 81, [1975] S.C.J. No. 81 (S.C.C.) — referred to O.N.A. v. Peterborough Civic Hospital (1982), 1982 CarswellOnt 1339, 132 D.L.R. (3d) 415 (Ont. Div. Ct.) — referred to Piresferreira v. Ayotte (2008), 2009 C.L.L.C. 210-023, 2008 CarswellOnt 7733, 72 C.C.E.L. (3d) 23, [2008] O.J. No. 5187 (Ont. S.C.J.) — followed Rae v. Attrell Hyundai Subaru (2004), 2004 CarswellOnt 7357 (Ont. S.C.J.) — referred to Rae v. Attrell Hyundai Subaru (2005), 2005 CarswellOnt 6599 (Ont. C.A.) — considered S.M.W.I.A., Local 397 v. Northland Superior Supply Co. (2004), [2004] O.L.R.B. Rep. 384, 2004 CarswellOnt 6033, [2004] O.E.S.A.D. No. 307 (Ont. L.R.B.) — considered Sills v. Children’s Aid Society of Belleville (City), Hastings (County) & Trenton (City) (2001), 2001 CarswellOnt 1448, (sub nom. Sills v. Children’s Aid Society of Belleville (City)) 53 O.R. (3d) 577, 198 D.L.R. (4th) 485, 8 C.C.E.L. (3d) 232, 144 O.A.C. 140, 2001 C.L.L.C. 210-029, [2001] O.J. No. 1577 (Ont. C.A.) — followed Singer v. Tullett & Tokyo Forex (Canada) Ltd. (1998), 1998 CarswellOnt 2291, 46 C.C.E.L. (2d) 160, [1998] O.J. No. 2248 (Ont. Div. Ct.) — considered Skopitz v. Intercorp Excelle Foods Inc. (1999), 1999 CarswellOnt 2050, 43 C.C.E.L. (2d) 253, [1999] O.J. No. 1543 (Ont. Gen. Div.) — referred to Sylvester v. British Columbia (1997), [1997] 2 S.C.R. 315, 43 C.C.L.I. (2d) 1, 212 N.R. 51, 1997 CarswellBC 1025, 1997 CarswellBC 1024, 146 D.L.R. (4th) 207, 91 B.C.A.C. 124, 148 W.A.C. 124, [1997] 6 W.W.R. 625, 34 B.C.L.R. (3d) 1, 29 C.C.E.L. (2d) 1, 97 C.L.L.C. 210-012, [1997] S.C.J. No. 58 (S.C.C.) — considered Wallace v. United Grain Growers Ltd. (1997), 123 Man. R. (2d) 1, 159 W.A.C. 1, 152 D.L.R. (4th) 1, 1997 CarswellMan 455, 1997 CarswellMan 456, 219 N.R. 161, [1997] 3 S.C.R. 701, [1999] 4 W.W.R. 86, 36 C.C.E.L. (2d) 1, 3 C.B.R. (4th) 1, [1997] L.V.I. 2889-1, 97 C.L.L.C. 210-029, [1997] S.C.J. No. 94 (S.C.C.) — considered White v. F.W. Woolworth Co. (1996), 1996 CarswellNfld 205, 433 A.P.R. 324, 139 Nfld. & P.E.I.R. 324, 22 C.C.E.L. (2d) 110, [1996] N.J. No. 113 (Nfld. C.A.) — referred to Whiten v. Pilot Insurance Co. (2002), 156 O.A.C. 201, 35 C.C.L.I. (3d) 1, [2002] 1 S.C.R. 595, 2002 SCC 18, 2002 CarswellOnt 537, 2002 CarswellOnt 538, 283 N.R. 1, 20 B.L.R. (3d) 165, [2002] I.L.R. I-4048, 209 D.L.R. (4th) 257, [2002] S.C.J. No. 19, REJB 2002-28036 (S.C.C.) — considered Wilmot v. Ulnooweg Development Group Inc. (2007), 57 C.C.E.L. (3d) 170, 2007 C.L.L.C. 210-035, 2007 CarswellNS 183, 2007 NSCA 49, 283 D.L.R. (4th) 237, 807 A.P.R. 376, 253 N.S.R. (2d) 376, [2007] N.S.J. No. 172 (N.S. C.A.) — followed Yeager v. R.J. Hastings Agencies Ltd. (1984), 5 C.C.E.L. 266, 1984 CarswellBC 768, [1985] 1 W.W.R. 218, [1984] B.C.J. No. 2722 (B.C. S.C.) — referred to 126 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

Statutes considered: Courts of Justice Act, R.S.O. 1990, c. C.43 Generally — referred to Employment Standards Act, 2000, S.O. 2000, c. 41 Generally — referred to s. 1(1) “wages” — considered s. 13 — considered s. 13(1) — considered s. 13(2) — considered s. 13(3) — considered s. 35.2 [en. 2002, c. 18, Sched. J, s. 3(18)] — referred to s. 40 — considered s. 64 — considered s. 64(1)(b) — considered Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 54.02(1)(a) — referred to R. 54.02(1)(c) — referred to

ACTION by employee for wrongful dismissal and payment of salary and benefits earned prior to her termination.

Corrick J.: Introduction 1 Shelley Altman is a 59-year-old woman who worked for Steve’s Music Store for slightly more than 30 years. In December 2007 Ms. Altman was diagnosed with stage IIIa non-small cell lung cancer. On April 7, 2009 Steve’s Mu- sic terminated Ms. Altman’s employment. 2 This is an action for wrongful dismissal. Ms. Altman seeks damages under the following heads: pay in lieu of notice, moral damages for mental distress, and punitive damages. She also seeks payment of salary and benefits earned before her termination remaining unpaid, including wages, vacation pay, commissions, bonuses and deferred profit sharing plan entitlements. 3 Steve’s submits that Ms. Altman’s employment contract was frustrated as she was unable to work due to her illness, and therefore there has been no wrongful dismissal. Steve’s also submits that Ms. Altman has received all pay and compensation earned to the date that her job ended. 4 There are five issues to decide: 1. Does Steve’s owe Ms. Altman any outstanding compensation for severance, wages, vacation, commission, bonus and deferred profit sharing plan? Altman v. Steve’s Music Store Inc. Corrick J. 127

2. Was Ms. Altman’s employment contract frustrated? 3. If Ms. Altman’s employment contract was not frustrated, what is the appropriate period of notice? 4. Are moral damages for mental distress appropriate, and if so, what is the quantum? 5. Are punitive damages appropriate, and if so, what is the quantum? 5 I address each of these issues in sequence. 6 For the reasons that follow, I find that Ms. Altman’s employment contract was not frustrated and that she was wrongfully dismissed. She is entitled to 22 months salary in lieu of notice, $35,000.00 in damages for mental distress and $20,000 in punitive damages.

Procedural History 7 Ms. Altman moved for summary judgment on the issue of her entitlement to statutory termination and severance pay, and payment of amounts held for her in a deferred profit sharing plan. On December 29, 2010 Conway J. ordered Steve’s to pay Ms. Altman the statutory minimum of eight weeks termination pay, plus pre-judgment interest by no later than January 7, 2011. Conway J. also ordered Steve’s to pay Ms. Altman the amount held for her in the deferred profit sharing plan and provide Ms. Altman with an accounting. Conway J. ordered the action to proceed directly to trial, including the issue of statutory severance pay. 8 On January 11, 2011 Steve’s paid Ms. Altman $11,230 in satisfaction of the termination pay required by the Employment Standards Act, S.O. 2000, c.41 [“the Act”]. Ms. Altman has also received two cheques totalling $46,551.06 representing the proceeds from the deferred profit sharing plan. Steve’s has not provided the accounting to Ms. Altman as ordered by Justice Conway.

Facts 9 Ms. Altman began working for Steve’s in 1978 and worked there continu- ously until she was terminated in 2009. Steve’s is a family-run business owned by Steven Kirman. His son, Michael Kirman, is the vice-president of the company. Its head office is in Montreal. It has retail stores in Toronto, Ottawa, and Montreal, and employs more than 200 people. 10 Ms. Altman began at Steve’s in Toronto doing unpaid work. Her husband at the time was the assistant manager of the store and Ms. Altman was helping on the floor because there was not enough sales staff. She began her paid employment with Steve’s working at the front counter. She advanced within the company to being responsible for the daily accounting to becoming office manager, 128 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

and in 1998, becoming store manager. When Steve’s terminated her, she was a store manager. 11 Ms. Altman’s employment at Steve’s was very important to her. She considered the Kirman family part of her family, and worked at Steve’s as if she were part of the Kirman family. She was personally acquainted with the members of the Kirman family. She attended the wedding of Steve Kirman’s daughter. 12 Ms. Altman was a loyal and dedicated employee. As counsel for Steve’s admitted, she was a valued employee for 30 years. She did not simply clock in and clock out at work. On her days off, she worked at home and stayed in touch with the store. She represented Steve’s on an advisory board of the Music Indus- tries Association of Canada. She was particularly proud of being the only female non-related manager of a major music store in Canada. She was well known throughout the Canadian music industry. 13 In December 2007 Ms. Altman was diagnosed with stage IIIa non-small cell lung cancer. She underwent surgery in February 2008, in which part of her lung was removed. In April 2008 she underwent chemotherapy, followed by six and a half weeks of radiotherapy. Her treatment was completed on September 17, 2008. Following her surgery in February 2008 Ms. Altman was off work for one month. Between March and October 18, 2008 Ms. Altman worked reduced hours. She worked as much as she could, given the amount of time she had to take off to have her cancer treatments and the physical effects of the treatment. It was important to her to continue working as she felt it was her duty and it helped her maintain some degree of normalcy throughout her treatment. 14 Steve’s was aware of Ms. Altman’s illness, the treatment she was having, and the reduced hours she was working. Steve’s was supportive of her and was paying Ms. Altman her regular salary. No one at Steve’s told Ms. Altman that she was being remiss in her duties or that her absences were putting her job at risk. 15 On October 15, 2008, Ms. Altman received a letter by bailiff from Kaufman Laram´ee LLP, a law firm representing Steve’s, which read as follows: We are the attorneys representing the interests of your employer Steve’s Mu- sic and as such, we have as instructions to serve you with the present letter. According to the information provided by our client, it appears that you have been remiss in your duties and obligations towards Steve’s Music in failing to work minimum number of hours required by your employer from Monday to Friday. You have taken it upon yourself to come in late and leave early or for that matter not attend for days on end, without providing your employer with prior notice or written justification for your absenteeism. In view of the foregoing, we have as instructions to advise you that unless you fulfill your obligations towards your employer in full by working regular working day [sic] as stipulated by your employer’s directives, Steve’s Music Altman v. Steve’s Music Store Inc. Corrick J. 129

will have no alternative but to advise you that your employment will be terminated, without further notice or delay. 16 The letter shocked Ms. Altman. She had no reason to expect it, and she was devastated by it. She went to work the next day, October 16, 2008, because she feared she would be terminated if she did not. That was the last day she worked at Steve’s. She began a three-month medical leave of absence on October 17, 2008. That medical leave was extended for a further three months on January 9, 2009. 17 On April 1, 2009 Ms. Altman faxed Steve’s head office indicating she was returning to work on April 8, 2009. She sent another fax on April 6, 2009 indicating that she had to delay her return to work until April 20, 2009 because she had fractured her back and her doctor had suggested she take two further weeks off work. 18 On April 7, 2009 Kaufman Laram´ee sent Ms. Altman a letter by bailiff terminating her employment. Parts of the letter read as follows: We have as instructions from our client to advise you that in light of our correspondence addressed to both you and your attorney since October 2008 to date, as well as your application for long term disability and the fact that your position with Steve’s Music, has since been abolished, Steve’s Music has no obligation to re-instate you. .... Steve’s Music was fully entitled to offset and deduct from your remuneration or for that matter any other sums due and owing to you, for your absenteeism, late arrivals and early departures. 19 Steve’s Music paid Ms. Altman nothing upon termination.

Relief Sought 20 In her statement of claim, Ms. Altman claims the following: a. damages in the amount of $450,000; b. payment of the amount that should be in her vacation bank; c. payment of earned but unpaid amounts of commission on store sales; d. payment of unpaid salary; e. damages for the loss of her insurance plan, which includes her medical, dental, disability and life insurance benefits and more, or in the alternative an order that Steve’s take the necessary steps to ensure that her plan continues in full force and effect until she is 65 years of age; f. punitive, aggravated and exemplary damages in the amount of $250,000; g. pre and postjudgment interest; and 130 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

h. costs of the action and pre-litigation steps on a substantial indemnity scale. 21 At trial, Ms. Altman also claimed monies held for her in Steve’s deferred profit sharing plan, and severance pay pursuant to section 64 of the Act. While these claims were not formally pleaded in the statement of claim, both counsel presented evidence and made submissions at trial as if they were part of the plaintiff’s claim. I have treated them as such. If sought, I would have granted an amendment to the claim, as there was no prejudice. 22 No evidence was presented regarding e. above, the loss of insurance benefits, and that claim is therefore dismissed.

Findings of Credibility 23 Many of the facts of this case are not in dispute. Where witnesses differed, it was usually a matter of degree. Three witnesses testified about the circumstances of Ms. Altman’s employment and remuneration — Ms. Altman, Michael Kirman and Wallace McKeaveney. I wish to address, in a general way, my findings of the credibility and reliability of each of them. 24 Ms. Altman was a credible witness. She described events in a matter-of-fact manner without embellishment. Her memory of events was clear and she indicated when she could not remember or did not know the precise answer to a question, even when that was to her detriment. 25 She was not vindictive in her testimony. She offered information about circumstances that could explain some of Steve’s conduct. For example, she testified that the difficulties she experienced with her pay cheques in August 2008 were due to the fact that the transfer of responsibility for the payroll system to Montreal had not gone perfectly smoothly. In Ms. Altman’s words, “that was understandable.” 26 She made efforts to obtain information, which is in stark contrast to the efforts made by Michael Kirman and Wallace McKeaveney. For example, the second page of the April 7, 2009 letter to Ms. Altman terminating her employment was missing from Tab 70 of Exhibit #2. Ms. Altman searched for it and submitted it to the court. 27 Ms. Altman’s evidence was coherent and accords with common sense. 28 Mr. Kirman’s knowledge and memory of events was lacking. He has worked for Steve’s for 20 years and has been vice-president for five years. He is responsible for reviewing and overseeing the general operations of the store, including the store managers. He testified that he knew nothing about Ms. Altman’s vacation account, or her salary. In his words, “he doesn’t pry into the salaries or vacation accounts of employees.” He had nothing to do with the decision to deduct Ms. Altman’s vacation account, or to terminate her employment. He tes- Altman v. Steve’s Music Store Inc. Corrick J. 131

tified that he first saw many of the documents relevant to this dispute at his examination for discovery in January 2011. 29 Despite the fact that he was the company’s representative in this litigation, he made no effort to inform himself about the matters in dispute such as Ms. Altman’s vacation account, unpaid salary, or deferred profit sharing plan. On the other hand, he was well informed about matters that assisted his position. For example, whether Steve’s was obliged to pay Ms. Altman severance pay was an issue in the trial. The obligation depended on whether the amount of Steve’s payroll exceeded $2.5 million. If Steve’s payroll in Quebec was included in the total, the payroll exceeded $2.5 million; otherwise it did not. When asked what Steve’s total payroll was, including Quebec, Mr. Kirman responded that he had no clue. When asked what the Ontario payroll was, he said $2 million. He testified that he reviewed the amount of the Ontario payroll because he knew it was an issue in the trial. When I dismissed his counsel’s objection that the question was irrelevant, he acknowledged that the total was more than $2.5 million. I conclude that Mr. Kirman was either untruthful about his knowledge of the total payroll when he said he had no clue, or that he deliberately failed to inform himself. In either event, I find that his evidence lacks credibility. 30 Mr. McKeaveney has been the controller of Steve’s Music since April 1999. He is responsible for the day-to-day accounting operations of Steve’s, including the administration of payroll, and the supervision of the accounting staff. Mr. McKeaveney’s evidence was vague. His memory was faulty about the timing of the instructions he received to withdraw money from Ms. Altman’s vacation account. Despite his responsibilities at Steve’s, Mr. McKeaveney was unable to provide the court with information about Ms. Altman’s salary or her contributions to the deferred profit sharing plan. He acknowledged, for example, that Ms. Altman had not been paid for nine hours and fourteen minutes that she had worked between September 21 and 25, but was unable to tell the court how much she should have been paid. What he was able to tell the court was that Steve’s did not owe Ms. Altman any money. He testified that he did not know how the deferred profit sharing plan worked. I do not find Mr. McKeaveney to have been a reliable witness. 31 I am entitled to accept none, some or all of a witness’s testimony. Where the testimony of Ms. Altman varies from the testimony of Mr. Kirman and Mr. McKeaveney, I prefer the testimony of Ms. Altman. I adopt the words of O’Halloran J. of the British Columbia Court of Appeal in Faryna v. Chorny:1 [10] [...] the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical

1[1952] 2 D.L.R. 354, 1951 CarswellBC 133 (B.C. C.A.). 132 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

and informed person would readily recognize as reasonable in that place and in those conditions.

Severance Pay 32 Entitlement to severance pay is governed by section 64 of the Act, which provides as follows: 64. (1) An employer who severs an employment relationship with an employee shall pay severance pay to the employee if the employee was employed by the employer for five years or more and, (b) the employer has a payroll of $2.5 million or more. 33 Steve’s Music has operations in Ontario and Quebec. The issue before me is whether the payroll of Steve’s employees in Quebec should be included in the determination of the payroll under s. 64(1)(b). The evidence is that the Ontario payroll is $2.1 million. If the Quebec payroll is included, the total exceeds $2.5 million. 34 In the case of S.M.W.I.A., Local 397 v. Northland Superior Supply Co.,2 the Ontario Labour Relations Board held that only the payroll of an employer’s operation in Ontario is relevant to s. 64(1)(b). The Board held that Ontario has legislative authority with respect to businesses operating in Ontario and has no authority to legislate concerning payrolls in other provinces. 35 The Board relied on the decision of the Divisional Court in Singer v. Tullett & Tokyo Forex (Canada) Ltd.3 in which the court held that an employee of a Canadian subsidiary of a U.S. company who had worked four years for the U.S. company, and two years in Ontario for the Canadian subsidiary, was not entitled to severance pay because he had not worked in Ontario for more than five years. The court held that the provision in the Act was directed to Ontario based employment. Similar rulings have been made in other cases.4 36 Ms. Altman is not entitled to severance pay given that Steve’s payroll for its Ontario operations is less than $2.5 million. This claim is therefore dismissed.

Unpaid Commission 37 Steve’s has agreed to pay Ms. Altman $4,725.00 in commission.

2[2004] O.L.R.B. Rep. 384 (Ont. L.R.B.). 3[1998] O.J. No. 2248 (Ont. Div. Ct.). 4See Dao v. Brick Warehouse LP [(October 5, 2005), Doc. 0240-05-ES (Ont. L.R.B.)], 2005 CanLII 37984; Carroll v. Stonhard Ltd. (2001), 53 O.R. (3d) 175 (Ont. S.C.J.). Altman v. Steve’s Music Store Inc. Corrick J. 133

Deferred Profit Sharing Plan 38 Wallace McKeaveney, the controller of Steve’s Music, testified that once a year Steve Kirman, the president of Steve’s, contributed money into an account on behalf of certain employees. Money was contributed on behalf of Ms. Alt- man. The amount contributed was in the sole discretion of Steve Kirman. He based it on the company’s annual earnings. Ms. Altman did not receive regular statements regarding this account, and was not aware of how much money was in it. Statements related to the account contained in Tabs D1 and D2 of Exhibit #2 show that the account was managed by a third party, and that the quarterly statements were addressed to Ms. Altman at Steve’s head office in Montreal. 39 On December 29, 2010, the parties appeared before Conway J. at which time Steve’s agreed to pay Ms. Altman the amount held on her behalf in the deferred profit sharing plan. Conway J. ordered that the payment be accompanied by an accounting. Ms. Altman has received two cheques totalling $46,551.06 from the account. She has not received an accounting. The parties consent to have the issue of the amount owed to Ms. Altman from the deferred profit sharing plan determined at a reference before a master pursuant to rule 54.02(1)(a) of the Rules of Civil Procedure.5

Salary 40 Ms. Altman testified that she has not received salary for days that she worked. Specifically, she testified that she was not paid for time she worked during the week of October 13, 2008. When the payroll function was transferred to Montreal in August 2008, she testified that her paycheques were not accurate for a time. Ms. Altman testified that she never received paycheque #28444. Fi- nally, Ms. Altman was entitled to bonus payments each year. These payments were deposited directly into her bank account, but she did not receive a bonus payment for 2006 or 2007. 41 Mr. McKeaveney testified that, as a result of an oversight, Ms. Altman was not paid for nine hours that she worked between September 21 and 29, 2008. A document Mr. McKeaveney prepared for the trial setting out the number of hours Ms. Altman worked compared to the number of hours for which she was paid indicates that Ms. Altman received no salary after September 20, 2008. 42 Steve’s submits that it does not owe Ms. Altman any salary because she was paid her full salary from January 12 to September 20, 2008 despite her absences from work.

5R.R.O. 1990, Reg. 194 (the “Rules of Civil Procedure”). 134 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

43 The circumstances under which an employer can withhold salary from an employee are limited. They are set out in s. 13 of the Act, which provides as follows: 13. (1) An employer shall not withhold wages payable to an employee, make a deduction from an employee’s wages or cause the employee to return his or her wages to the employer unless authorized to do so under this section. (2) An employer may withhold or make a deduction from an employee’s wages or cause the employee to return them if a statute of Ontario or Canada or a court order authorizes it. (3) An employer may withhold or make a deduction from an employee’s wages or cause the employee to return them with the employee’s written authorization. 44 The circumstances in this case do not fall within s. 13, and Steve’s is not entitled to withhold Ms. Altman’s salary because they concluded they had overpaid her for services performed. The alleged overpayment was not the result of an administrative error, but was the result of a decision taken by the president of the company to pay Ms. Altman her salary while she was receiving treatment for cancer. 45 In the case of Lavinskas v. Jacques Whitford & Associates Ltd.6 the court dealt with a similar situation. Whitford clawed back from Lavinskas’ last pay disability benefits that had been paid to him because Whitford did not agree that the medical evidence produced by Lavinskas supported his disability claim. Ait- ken J. commented as follows: [117] [...] Under s. 13(1) of the Employment Standards Act, 2000, S.O. 2000, c. 41, an employer shall not withhold wages payable to an employee, make a deduction from an employee’s wages or cause the employee to return his or her wages to the employer unless authorized to do so under that section. There are no provisions in s. 13 that authorized Jacques Whitford to claw back the disability payments from Mr. Lavinskas’ last paycheque. That Jacques Whitford had been in error to do so was acknowledged by its counsel at the end of the trial. Counsel subsequently notified the court that Mr. Lavinskas had been repaid the amount of that clawback. This issue is now a moot point, though it does exemplify the harsh nature in which Jacques Whitford treated Mr. Lavinskas at the time of his dismissal.7

62005 CarswellOnt 5266, 2005 C.L.L.C. 210-045, 51 C.C.E.L. (3d) 112 (Ont. S.C.J.). 7See also O.N.A. v. Peterborough Civic Hospital, 1982 CarswellOnt 1339, 132 D.L.R. (3d) 415 (Ont. Div. Ct.). Altman v. Steve’s Music Store Inc. Corrick J. 135

46 I find that Steve’s has not paid Ms. Altman all of the wages to which she is entitled nor has it made all of the bonus payments to which Ms. Altman is entitled. No precise amounts of unpaid salary or bonus were presented in the evidence before me. I direct that the amount of unpaid salary for 2008 and the amount of unpaid bonus payments for 2006 and 2007 be determined at a reference to a master pursuant to rule 54.02(1)(c) of the Rules of Civil Procedure.

Vacation Pay 47 Beginning in 1998, Ms. Altman was entitled to 6% of her gross pay as vacation pay. Mr. McKeaveney testified that employees were entitled to different amounts of vacation pay depending on the individual employee’s agreement with Steve Kirman. For every pay period, 6% of Ms. Altman’s gross earnings were put into a vacation account. If Ms. Altman did not take vacation in any given year, the money in the vacation account would be accrued. The amount deposited into the vacation account was not indicated on Ms. Altman’s pay cheque. Mr. McKeaveney testified that employees were required to call Steve’s head office to determine their vacation entitlement. 48 Ms. Altman testified that she rarely took vacation time and had thus accrued a great deal of money in her vacation account. She was not aware of the precise amount, although she calculated it to be about $37,504.90. 49 Mr. McKeaveney testified that there was no outstanding balance in Ms. Alt- man’s vacation account when she was terminated on April 7, 2009. On the in- struction of Steve Kirman, Mr. McKeaveney transferred out the balance in Ms. Altman’s vacation account to offset the difference between the time Ms. Altman worked and the time for which she was paid. Ms. Altman was not informed of this. Mr. McKeaveney testified that he did not tell her. Michael Kirman testified that he did not tell her. 50 Steve’s had no formal written sick leave policy. Although Mr. McKeaveney testified that the employees of Steve’s were not entitled to sick days, he also testified that employees took sick days at the discretion of their manager. In Ms. Altman’s case, Steve Kirman, the president, decided that Ms. Altman would receive her full salary despite her absences due to cancer. As a result, she received her full salary every two weeks between January and September 2008. I find that the informal sick leave policy applied in Ms. Altman’s case was that she was paid for her sick days. There was no policy, written or otherwise, formal or informal, that an employee’s vacation pay would be deducted for sick days. 51 Mr. McKeaveney testified that he was told by Steve Kirman to pay Ms. Alt- man her full salary but deduct whatever he could from her vacation account. Mr. McKeaveney could not recall when Steve instructed him to do this. He prepared 136 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

a document8 showing the number of hours Ms. Altman worked between Decem- ber 30, 2007 and October 4, 2008, and the number of hours for which she was paid. When he was asked what the company did with the information, he re- plied, “I had to figure out how much to take out of her [Ms. Altman’s] vacation bank for absent time.” 52 I find that when Ms. Altman became ill, Steve Kirman decided that she would continue to receive her full salary, but changed his mind in October 2008, and directed Mr. McKeaveney to deduct whatever he could from Ms. Altman’s vacation account. 53 According to Mr. McKeaveney, Steve’s paid Ms. Altman for 1,505.5 hours between December 2007 and October 2008. She worked 573.5 hours during that time. Steve’s paid Ms. Altman for 932 hours or for approximately 23 weeks that she did not work. 54 The issue is whether Steve’s was entitled to deduct money from Ms. Alt- man’s vacation account to pay her salary while she was off work due to her illness. 55 The analysis must begin with the Act. The definition of wages set out in s. 1 of the Act includes “any payment required to be made by an employer to an employee under this Act.” Vacation pay is a payment that is required to be made to an employee pursuant to s. 35.2 of the Act. Vacation pay is therefore wages: Halabi v. Becker Milk Co.,9 and is subject to the restrictions set out in s. 13 of the Act.10 56 In Grapple Marketing Inc.,11 the vice-chair of the Ontario Labour Relations Board dealt with the withholding of vacation pay this way: [9] The purpose behind s. 13 of the Act is clear: it is to prohibit an employer from using its power as the holder of the employee’s wages to get its way with respect to monetary or other disputes between it and the employee. This ensures that except, in unusual circumstances, an employer is not in a better position than anyone else who might have a claim against its employee. This is an especially important point where the wages at issue are vacation pay which is subject to a statutory trust (see s. 40(1)). [17] [...] [T]he Act is designed to protect employees against the very thing that occurred here: an employer who holds back money from wages that it

8Produced at Tab D5 of Exhibit #2. 91998 CarswellOnt 2951, 39 O.R. (3d) 153, 38 C.C.E.L. (2d) 89 (Ont. Gen. Div.). 10See MenuPalace.com Corp. v. Saladino, 2008 CarswellOnt 5544, [2008] O.L.R.B. Rep. 424 (Ont. L.R.B.); Grapple Marketing Inc. v. Harrison, [2010] O.E.S.A.D. No. 160, [2010] O.L.R.B. Rep. 272 (Ont. L.R.B.). 11Supra. Altman v. Steve’s Music Store Inc. Corrick J. 137

believes it is owed money from the employee. Moreover, nothing in this decision prevents the employer from obtaining the money in other ways.12 57 Similarly, in this case, Steve’s is not entitled to withhold Ms. Altman’s vacation account. If Steve’s believed that Ms. Altman owed them salary, it could have cross-claimed or brought an action to recover it. As the details of the amount due Ms. Altman from her vacation account are not before me, I direct that the amount of vacation pay due Ms. Altman be determined at a reference to a master, pursuant to rule 54.02(1)(c) of the Rules of Civil Procedure.

Frustration 58 Steve’s submits that Ms. Altman’s employment contract was frustrated due to her illness. Steve’s bears the onus of establishing that the employment contract was frustrated. 59 In 1904, in the case of Marks v. Dartmouth Ferry Commission,13 the Su- preme Court of Canada first articulated the principle that whether the termination of employment is justified depends on whether the employee’s disability is temporary or permanent. In a subsequent decision the term ‘permanent’ has been used to describe an illness that would “put an end, in [the] business sense, to their business engagement” and thus “frustrate the object of that engagement.”14 60 To determine whether an illness should be considered temporary or permanent, many courts have relied on guidelines laid out in Marshall v. Harland & Wolff Ltd.15 In that case, Sir John Donaldson held that the dismissal of an employee who was absent for 18 months during his twenty-third year of employment was wrongful. At pages 718-719, he said the following: The tribunal must ask itself: was the employee’s incapacity, looked at before the purported dismissal, of such a nature, or did it appear likely to continue for such a period, that further performance of his obligations in the future would either be impossible or would be a thing radically different from that undertaken by him and agreed to be accepted by the employer under the agreed terms of his employment? 61 He then laid out a number of matters to be taken into account in determining whether the illness should be considered temporary or permanent. These matters include the terms of the contract, how long the employment was likely to last in the absence of illness, the nature of the employment, the nature of the illness or

12Supra. 13(1904), 34 S.C.R. 366 (S.C.C.). 14See Yeager v. R.J. Hastings Agencies Ltd. (1984), 5 C.C.E.L. 266, [1985] 1 W.W.R. 218 (B.C. S.C.), at 82 . 15[1972] 1 W.L.R. 899, [1972] 2 All E.R. 715 (N.I.R.C.). 138 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

injury and how long it has lasted, the prospects of recovery, and the period of past employment. These matters are obviously useful considerations, although they may not be exhaustive and any one matter is not necessarily determinative. Each case must be decided on its own facts. 62 Some cases have narrowed the list of relevant matters for consideration to this: To determine if a contract has been frustrated, regard must be had to the relationship of the term of the incapacity or absence from work to the duration of the contract, and to the nature of the services to be performed.16 63 Steve’s argues that it terminated Ms. Altman’s employment because her illness was permanent in the sense that she was no longer able to perform her duties at work. It is useful to consider a chronological summary of events, which is set out below. October 2, Ms. Altman began working for Steve’s 1978 December Ms. Altman is diagnosed with lung cancer 2007 February 2008 Ms. Altman has surgery April 2008 Ms. Altman undergoes radiation and chemotherapy September 17, Ms. Altman’s cancer treatments are completed 2008 October 15, Ms. Altman receives letter from Kaufman Larame´e by 2008 bailiff warning her that she will be terminated if she does not work full time hours October 16, Last day Ms. Altman worked at Steve’s 2008 October 16, Dr. Brade’s letter to Steve’s in support of three-month 2008 medical leave for Ms. Altman October 17, Ms. Altman faxes Steve’s asking for necessary forms to 2008 apply for medical disability October 21, Ms. Altman applies for Employment Insurance 2008

16Skopitz v. Intercorp Excelle Foods Inc., 1999 CarswellOnt 2050, [1999] O.J. No. 1543 (Ont. Gen. Div.); Yeager v. R.J. Hastings Agencies Ltd., supra; Lafreni`ere v. Leduc (1990), 66 D.L.R. (4th) 577 (Ont. H.C.) . Altman v. Steve’s Music Store Inc. Corrick J. 139

December 1, Letter from Kaufman Laram´ee to Ms. Altman’s lawyer 2008 enclosing her Record of Employment and disability claim form December 16, Ms. Altman submits disability claim form to Standard 2008 Life December 18, Employment insurance benefits approved for Ms. Altman 2008 effective October 19, 2008 January 9, Dr. Brade’s second letter to Steve’s in support of further 2009 three-month medical leave for Ms. Altman January 18, Ms. Altman faxes Steve’s confirming she will take fur- 2009 ther three-month medical leave and asking for completed Employer’s Form to submit to Standard Life March 6, Dr. Brade completes “Physician’s Statement” portion of 2009 disability claim form April 1, 2009 Ms. Altman faxes Steve’s indicating she will return to work April 8, 2009 April 6, 2009 Ms. Altman faxes Steve’s that she cannot return to work April 8, 2009 because of a compression fracture in her back. She needs two more weeks and will return to work on April 20, 2009. April 7, 2009 Date of letter sent by bailiff to Ms. Altman from Kaufman Larame´e terminating her employment September Ms. Altman diagnosed with bone metastases 2009 Between Sept Sometime between these two dates, Steve’s submits Em- 18 — Dec 14, ployer’s Form to Standard Life 2009 October 2009 Ms. Altman diagnosed with brain metastases December 14, Ms. Altman approved for disability payments 2009 May 6, 2010 Dr. Brade completes “Physician’s supplementary statement” for Standard Life indicating that Ms. Altman cannot work August 27, Dr. Brade completes medical report in support of Ms. 2010 Altman’s application for CPP disability 140 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

64 Steve’s submits that on April 7, 2009, Ms. Altman was permanently disabled and unable to perform the functions of her job. Steve’s points to the following facts in support of that argument: a. Ms. Altman had been unable to work full-time hours between February and October 2008 because of her surgery and cancer treatments. b. Dr. Brade, Ms. Altman’s oncologist, had written two letters to Steve’s recommending two medical leaves for Ms. Altman, each of three months duration. c. Following Ms. Altman’s letter of April 1, 2009 indicating she would be returning to work on April 8, 2009, she had to extend the date of her return to work two further weeks until April 20, 2009 because she had suffered a compression fracture in her back. d. Ms. Altman applied for long-term disability benefits on Decem- ber 18, 2008. e. On December 14, 2009 Ms. Altman’s application for long-term disability benefits was approved. f. On May 6, 2010 Dr. Brade completed a statement to Ms. Alt- man’s insurer indicating that she could not work. g. On August 27, 2010 Dr. Brade completed a report in support of Ms. Altman’s application for CPP disability. 65 In my view, Ms. Altman’s disability must be assessed at the time of her dismissal on April 7, 2009. Before reviewing the jurisprudence on this issue, I will set out the evidence regarding Ms. Altman’s ability to fulfill her job functions on April 7, 2009. 66 As store manager, Ms. Altman was responsible for supervising employees, including hiring and firing staff. She testified that she was not required to lift things at work, nor was she required to be on her feet all day. She did paperwork in the office. Michael Kirman testified that she was responsible for ensuring her departments were staffed, for occasional meetings with sales representatives, for walking the floor to ensure customers were being attended to, and generally being a set of eyes to make sure the business was running properly. 67 Ms. Altman shared these responsibilities with another manager, Gerry Markman. 68 After taking a month off to recover from surgery, Ms. Altman worked reduced hours. She missed time from work to undergo chemotherapy and radiation but went to work as much as she could. Everyone at Steve’s, including Michael Kirman and Steven Kirman, knew about Ms. Altman’s illness and the treatment she was undergoing. They were supportive of her. Altman v. Steve’s Music Store Inc. Corrick J. 141

69 In September 2008, Michael Kirman met with the managers of the Toronto store, including Ms. Altman, to review a schedule. Ms. Altman’s name was not on the schedule. She asked Michael why it was not. He told her that it was because she was working reduced hours, and that when she was better, they could discuss adding her to the permanent schedule. No one from Steve’s told her that she was remiss in her duties while at work. No one from Steve’s said anything negative to her about the amount of time she was working. She was not given any direction about her hours nor was she told that her job was at risk. At one point, Steve Kirman called Ms. Altman and suggested that she take advantage of the disability insurance available to Steve’s employees. Ms. Altman re- plied that she wanted to work. 70 She first learned of Steve’s dissatisfaction with her work arrangements when she received a letter from Kaufman Larame´e by bailiff on October 15, 2008. That letter, the contents of which are set out earlier in these reasons, does not suggest that Ms. Altman was not performing her duties properly while at work. Its complaint is that she was not working full-time hours. 71 Dr. Madeline Li and Dr. Anthony Brade testified about Ms. Altman’s ability to work. Both doctors were treating Ms. Altman at the relevant time. Dr. Li is a psychiatrist who specializes in the treatment of cancer patients, particularly with respect to the lifestyle and quality of life implications of being diagnosed with cancer. Dr. Brade is Ms. Altman’s radiation oncologist. Both doctors stated cate- gorically that on April 7, 2009, Ms. Altman was not permanently disabled and unable to work. 72 Dr. Li testified that it was important to Ms. Altman to continue to work throughout her cancer treatment because it made her feel like a functioning person contributing to her workplace. Dr. Li first met Ms. Altman on November 17, 2008 and continues to see her for supportive counselling every few months. In Dr. Li’s opinion, Ms. Altman was able to work on April 7, 2009. Dr. Li testified that in formulating her opinion about Ms. Altman’s ability to work, she had access to Ms. Altman’s entire clinical file, which included notes and reports from other physicians treating Ms. Altman. She relied on a report written by Ms. Alt- man’s thoracic surgeon, Dr. Keshavjee, on April 3, 2009, which is marked as Exhibit #4. In this report, Dr. Keshavjee wrote that he had encouraged Ms. Alt- man to return to work. In Dr. Li’s opinion, there was no physical or psychological reason preventing Ms. Altman from returning to work in April 2009. 73 Dr. Brade testified that he informed Steve’s by letter dated October 16, 2008 that he had recommended to Ms. Altman that she take a leave from work for three months. He routinely recommends to patients undergoing cancer treatment that they take time off from work. According to Dr. Brade’s letter, fatigue is a common side effect of the trimodality therapy (surgery, chemotherapy and radiation) Ms. Altman had undergone. Ms. Altman was suffering from fatigue, 142 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

dyspnea and dysphagia. In the October 16, 2008 letter, Dr. Brade did not address Ms. Altman’s ability to work. He indicated he would re-evaluate her early in the New Year. 74 He reassessed Ms. Altman in January 2009, and on January 9, 2009 informed Steve’s by letter that he recommended a further three-month leave. That letter did not address Ms. Altman’s ability to work either. 75 The compression fractures Ms. Altman developed in her back in April 2009 were not a significant impediment to Ms. Altman’s ability to work, according to Dr. Brade. Ms. Altman was prescribed medication for back pain. 76 Dr. Brade testified that he has never been of the opinion that Ms. Altman was unable to work. He never told Ms. Altman or Steve’s that she was not able to work. Even in December 2010, when the cancer had spread to Ms. Altman’s brain and bones, Dr. Brade was of the view that she could work with reduced hours or modified duties. She could not be on her feet for eight hours and she would have to remain seated most of the time, but she was able to work. 77 Ms. Altman testified that at the end of the second three-month leave, she felt well enough to return to work full-time. She wrote Steve’s on April 1, 2009 indicating that she would be returning to work on April 8, 2009. She heard nothing from Steve’s in response to her letter until a bailiff delivered another letter from Kaufman Larame´e to her on April 7, 2009 informing her that Steve’s was not obliged to reinstate her. 78 No one from the management of Steve’s has spoken to Ms. Altman since the day she started her medical leave on October 16, 2008. Michael Kirman testified that he has not spoken to Ms. Altman since October 16, 2008. Ms. Altman testified that she has not spoken to Steve Kirman either. 79 On April 7, 2009 Steve’s had no information about the state of Ms. Altman’s health or ability to work other than the letter from Ms. Altman saying she was returning to work. 80 Steve’s submits that the fact that Ms. Altman applied for long-term disability in December 2008 is evidence that Ms. Altman was unable to work. The Group Insurance Policy for employees of Steve’s defines disability as follows: A state of complete and continuous incapacity, resulting from illness or acci- dental injury, which wholly prevents you from performing: a. each and every function of your regular employment during the elimination period and during the twenty-four months immediately following, without regard to the availability of such occupation; and b. afterwards, any remunerated function or work for which you are reasonably fitted by training, education or experience. 81 Steve’s submits that Ms. Altman’s application for long-term disability in De- cember 2008 is evidence that she considered herself to be disabled according to Altman v. Steve’s Music Store Inc. Corrick J. 143

this definition, which in turn is evidence that her illness was permanent and prevented her from performing the functions of her job. I disagree with this analysis. Ms. Altman testified that she believed she was entitled to disability benefits if she was unable to perform each and every function of her job. She believed she was unable to fulfill each and every function of her regular employment because she could not work full time. In addition, she applied for benefits in December 2008 when she was still recovering from her cancer treatments. 82 Furthermore, despite the wording of the policy, there is no evidence about how Standard Life applied the definition. The evidence is that Standard Life pays disability benefits in cases where the insured can potentially return to work. In a letter dated December 14, 2009, Standard Life informed Ms. Altman that it might periodically ask for medical reports to evaluate her potential return to work.17 Thus, it is apparent that Standard Life would pay disability benefits even in cases where the disability is not permanent. 83 In further support of its submission that Ms. Altman was unable to work at the time she was terminated, Steve’s relies on medical reports submitted by Dr. Brade to Ms. Altman’s insurer on May 6, 2010 in which he opines that Ms. Altman is unable to return to work and is not suitable for trial employment. Dr. Brade testified that, in May 2010, he did not think Ms. Altman would survive more than six months, and for that reason he did not think she would be able to return to work. 84 Similarly, on August 27, 2010, Dr. Brade submitted a medical report to Human Resources and Skills Development Canada in support of Ms. Altman’s application for CPP disability benefits in which he describes Ms. Altman as suffering from significant fatigue due to disease and ongoing treatment. 85 Both of these reports were written more than one year after Steve’s terminated Ms. Altman’s employment. They were written after Ms. Altman’s cancer had spread to her brain and her bones. Reliance on them as evidence of permanent disability raises the question of whether an employer can rely on post-termination evidence to establish permanent disability and inability to work. 86 A number of decisions in British Columbia18 have held that post-termination evidence of disability is relevant to determining the permanence of an employee’s disability. This approach is based on well-settled law dealing with the

17Letter at Tab 82 of Exhibit #2. 18MacLellan v. H.B. Contracting Ltd., [1990] B.C.J. No. 935 (B.C. S.C.); Demuynck v. Agentis Information Services Inc., [2003] B.C.J. No. 113 (B.C. S.C.). 144 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

dismissal of an employee for good cause. The law was articulated by the Ontario Court of Appeal in McIntyre v. Hockin19 as follows: It is now settled law that if a good cause of dismissal really existed, it is immaterial that at the time of dismissal the master did not act or rely upon it, or even did not know of its existence, or that he acted upon some other cause in itself insufficient. The main question always is, were there at the time of the dismissal facts sufficient in law to warrant it... 87 I conclude that this approach is inappropriate for determining the permanence of an employee’s disability for the reasons set out in Wilmot v. Ulnooweg Development Group Inc.:20 [44] [...] ... First, the loss of one’s job could contribute to the degree of disability suffered by the time of trial that might not have existed but for the loss of employment ... The MacLellan position could allow an employer to take advantage of a post-termination condition that might have been affected by the effects of the termination itself ... Second, the employer would be taking advantage of an employee’s condition after the employment relationship formally ended (by the employer’s termination) ... Third ... this analogy is logically flawed. The doctrine of “after acquired knowledge” in just cause cases allows the employer to use the conduct and actions of an employee before termination to subsequently establish just cause. That evidence has crystallized as of the date of termination. To the contrary, the post-termination condition of employees takes into account their condition after the termination. This offers no guarantee that the condition could change for any variety of reasons, some of which might or might not have been operating at the time of termination. 88 I adopt the approach set out in Marshall v. Harland & Wolff Ltd.,21 which requires the court to examine the employee’s incapacity before the purported dismissal. This approach is consistent with the approach taken by the Supreme Court of Canada in M.U.A., local 6869 c. Cie minière Québec Cartier22 in which L’Heureux-Dubé J. wrote as follows: [13] This brings me to the question [...] whether an arbitrator can consider subsequent-event evidence in ruling on a grievance concerning the dismissal by the Company of an employee. In my view, an arbitrator can rely on such evidence, but only where it is relevant to the issue before him. In other words, such evidence will only be admissible if it helps to shed light on the

19(1889), 16 O.A.R. 498 (Ont. C.A.), at 501 . 202007 NSCA 49, 2007 CarswellNS 183 (N.S. C.A.). 21Supra. 22[1995] 2 S.C.R. 1095, 125 D.L.R. (4th) 577 (S.C.C.). Altman v. Steve’s Music Store Inc. Corrick J. 145

reasonableness and appropriateness of the dismissal under review at the time that it was implemented. [emphasis added] 89 This approach has been followed in Lippa v. Can-Cell Industries Inc.,23 Wilmot v. Ulnooweg Development Group Inc.,24 and White v. F.W. Woolworth Co.25 To paraphrase the words of Saunders J.A. in Wilmot v. Ulnooweg Development Group Inc., “In other words, the question to be decided was whether the contract was frustrated when in [April 2009 Steve’s] decided to fire [Ms. Altman]. Evidence as to whether she was still disabled at the time of trial, i.e., ‘how she turned out’ was not relevant to answering that question.”26 90 I turn now to the guidelines set out in Marshall v. Harland & Wolff Ltd.,27 highlighted in italics below, as they relate to the facts of this case. 91 The terms of the contract, including the provisions as to sickness pay — The whole basis of weekly employment may be destroyed more quickly than that of monthly employment and that in turn more quickly than annual employment. Steve’s employed Ms. Altman on the basis of an annual contract. She was paid on the basis of an annual salary. Steve’s did not pay her while she was on medical leave. 92 How long the employment was likely to last in the absence of sickness — The relationship is less likely to survive if the employment was inherently temporary in its nature or for the duration of a particular job, than if it was expected to be long term or even lifelong. Ms. Altman expected to retire from Steve’s. The employment relationship was expected to be lifelong. 93 The nature of the employment — Where the employee is one of many in the same category, the relationship is more likely to survive the period of incapacity than if he occupies a key post which must be filled and filled on a permanent basis if his absence is prolonged. Ms. Altman was one of three managers who performed the same or similar duties within the Toronto store. Steve’s did not replace her with another employee during her absence. Other store managers took on her duties while she was away. 94 The nature of the illness or injury and how long it has already continued and the prospects of recovery — The greater the degree of incapacity and the longer the period over which it has persisted and is likely to persist, the more likely it is that the relationship has been destroyed. At the date of termination on April 7,

232009 ABQB 684, [2009] A.J. No. 1285 (Alta. Q.B.). 24Supra. 25(1996), 139 Nfld. & P.E.I.R. 324 (Nfld. C.A.). 26Wilmot, supra at para. 41. 27Supra. 146 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

2009, Ms. Altman had been on medical leave for six months. For the eight months prior to that she had been working reduced hours. 95 The period of past employment — A relationship which is of long standing is not so easily destroyed as one which has but a short history. This is good sense and, we think, no less good law, even if it involves some implied and scarcely detectable change in the contract of employment year by year as the duration of the relationship lengthens. The legal basis is that over a long period of service the parties must be assumed to have contemplated a longer period or periods of sickness than over a shorter period. Ms. Altman had worked for Steve’s for more than 30 years. 96 I conclude that Steve’s Music has not established that on April 7, 2009 Ms. Altman’s illness was of such a nature that she was unable to perform the duties of her job. I base this finding on the following facts: a. The uncontradicted evidence of Drs. Brade and Li, Ms. Altman’s treating physicians, that she was able to work on April 7, 2009. b. Prior to her medical leave on October 17, 2008, Ms. Altman had been performing the duties of her job at reduced hours. Steve’s never expressed dissatisfaction with the quality of her work, or advised her that she was not performing her duties as required. Steve’s complaint, as detailed in the Kaufman Larame´e letter Ms. Altman received on October 15, was with the number of hours she was working, not with her ability to do the job. c. On April 1, 2009 Ms. Altman wrote Steve’s indicating that she would be returning to work on April 8, 2009. She did not write that she was unable to work full time or that she was unable to perform any of her duties. The letter from Kaufman Larame´e terminating her employment was written in response to that letter. d. Steve’s terminated Ms. Altman without inquiring about her ability to perform her job. No one in the management of Steve’s spoke with Ms. Altman between October 16, 2008 (the last day she worked) and April 7, 2009. Both letters to Steve’s from Dr. Brade invited Steve’s to contact him if further information was required. No one from Steve’s contacted Dr. Brade. 97 I find that the defence of frustration fails. Altman v. Steve’s Music Store Inc. Corrick J. 147

Notice 98 In determining the period of reasonable notice in this case, I am required to weigh and balance a number of factors.28 Although not an exhaustive list, some of the factors to consider are set out in Bardal v. Globe & Mail Ltd.:29 a. the character of Ms. Altman’s employment; b. the length of her service; c. her age; and d. the availability of similar employment having regard to Ms. Alt- man’s experience, training and qualifications. 99 Ms. Altman was a manager of a retail store that sold musical instruments. She knew the business well, having started there in 1978 working at the front counter, selling strings, guitar picks and other accessories. She moved to doing the daily accounting and then became office manager. In 1998, she became a store manager. She was responsible for hiring and firing employees. She was well known in the Canadian music industry by sales representatives and musi- cians. She was a member of an advisory board of the Music Industries Associa- tion of Canada. Ms. Altman considered her position a prestigious one. 100 Ms. Altman worked for Steve’s for 30 years. She was nearly 58 years old when Steve’s terminated her employment. She is now 59 years old. 101 Quite apart from Ms. Altman’s current state of health, the prospect of her finding employment that would provide her with the opportunity to be involved and recognized at a national level in an industry is unlikely. This aspect of her employment at Steve’s was significant to Ms. Altman, and is relevant in assessing similar employment opportunities.30 102 Weighing all of these factors, I find that a period of reasonable notice is 22 months, inclusive of her eight weeks statutory entitlement.

Disability Payments 103 Steve’s submits that the disability payments received by Ms. Altman during the notice period should be deducted from any award of damages. 104 Ms. Altman participated in a benefits plan while employed by Steve’s. The plan included health and dental benefits, life insurance, and long-term disability benefits. Both Steve’s and Ms. Altman paid the premiums. There is no evidence about the precise contribution Steve’s made to the premiums for the long-term

28Love v. Acuity Investment Management Inc., 2011 ONCA 130 (Ont. C.A.) . 29(1960), 24 D.L.R. (2d) 140 (Ont. H.C.) . 30Love v. Acuity Investment Management Inc., supra at para. 22. 148 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

disability benefits. Ms. Altman receives the benefits tax-free. Ms. Altman’s contribution to the premium for the long-term disability insurance was deducted from her paycheques. 105 The long-term disability insurance carrier was Standard Life. Standard Life paid the benefits to Ms. Altman. 106 Steve’s did not pay Ms. Altman while she was on medical leave. On Decem- ber 18, 2008 she received sickness employment insurance benefits from the Government of Canada retroactive to October 19, 2008. These benefits lasted 15 weeks. 107 After a very lengthy delay, Ms. Altman began receiving disability payments from Standard Life in December 2009. The payments were retroactive to Febru- ary 2009. 108 The question of whether disability insurance benefits are deductible from an award of damages “turns on the terms of the employment contract and the intention of the parties.”31 In the case of Sylvester v. British Columbia,32 an employee of the BC government was terminated while receiving disability benefits. The employer funded the costs of the disability plan, and paid the disability benefits. In those circumstances, Major J. found that it could not be inferred that the parties would agree that the employee should retain disability benefit payments in addition to damages for wrongful dismissal. 109 This case is distinguishable. Ms. Altman paid premiums for the long-term disability insurance and the benefits were paid by Standard Life, not Steve’s. The circumstances of this case are more akin to those in McNamara v. Alexander Centre Industries Ltd. [2001 CarswellOnt 1441 (Ont. C.A.)],33 Sills v. Children’s Aid Society of Belleville (City), Hastings (County) & Trenton (City),34 and Piresferreira v. Ayotte,35 in which the courts held that disability benefits were not deductible from a damages award. 110 The words of Simmons J.A. in Sills are apt: [45] [...] I consider it reasonable to assume that an employee would not will- ingly negotiate and pay for a benefit that would allow her employer to avoid responsibility for a wrongful act. I consider it reasonable to infer that parties would agree that an employee should retain disability benefits in addition to

31Sylvester v. British Columbia, [1997] 2 S.C.R. 315 (S.C.C.) at para. 12. 32Supra. 332001 CanLII 3871. 34(2001), 53 O.R. (3d) 577 (Ont. C.A.) 35(2008), 72 C.C.E.L. (3d) 23 (Ont. S.C.J.) . Altman v. Steve’s Music Store Inc. Corrick J. 149

damages for wrongful dismissal where the employee has effectively paid for the benefits in question. [46] The same reasoning applies to the suggestion in Sylvester that a disabled employee who receives adequate notice should not be treated differently than a disabled employee who is wrongfully dismissed — an employer should not be relieved of the obligation to pay damages for a wrongful act because of a benefit plan provided by the employee. Moreover, the concern expressed in Sylvester, that disabled employees who are wrongfully dismissed be treated the same as working employees who are wrongfully dismissed, simply does not arise where the employee has paid for the plan that provides a disability income. 111 In this case, there is no written employment contract, and no written provision precluding recovery of both damages for wrongful dismissal and disability benefit payments. It is reasonable to infer from all the circumstances that Ms. Altman should retain the disability benefits in addition to the damages. The relevant circumstances are that, a) Ms. Altman paid part, if not all, of the premiums for the long term disability benefits, b) Standard Life, not Steve’s, paid the benefits to Ms. Altman, c) Ms. Altman received no disability payment until Decem- ber 2009 — more than one year from the date she took her medical leave — due to Steve’s failure to complete the policyholder’s portion of the claim form, and d) Steve’s terminated Ms. Altman while on medical leave, but before she had received any disability payment. 112 Following the reasoning in Piresferreira, Sills and McNamara, I find that the long-term disability benefits Ms. Altman received are not deductible from the damages I have awarded.

Mitigation 113 Once terminated by Steve’s, Ms. Altman had a duty to mitigate her damages. Steve’s submits that mitigation is not an issue because Ms. Altman was not fit to work. Alternatively, if she was capable of working, and was wrongfully dismissed, Steve’s submits she should have looked for work. 114 Ms. Altman testified that following her termination on April 7, 2009 she looked for work. She went to two employment centres and filed for a job search, searched on line for jobs, and looked in newspapers, particularly in the section dealing with management positions. She was unable to find anything suitable. She testified that there was very little available for someone in her position. I find that the efforts Ms. Altman made in mitigation were reasonable. 115 Steve’s did not plead failure to mitigate. In any event, Steve’s bears the onus of demonstrating that Ms. Altman failed to make reasonable efforts to find work, 150 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

and that she could have found an alternative position had she taken reasonable steps.36 I find that Steve’s has not met that onus.

Moral Damages 116 Ms. Altman claims damages resulting from the failure of Steve’s to act in good faith in the manner of her termination. 117 The Supreme Court of Canada’s decision in Keays v. Honda Canada Inc.,37 confirmed its earlier ruling in Wallace v. United Grain Growers Ltd.38 that damages resulting from the manner of dismissal will be available 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.”39 The normal distress and hurt feelings resulting from dismissal from employment are not compensable.40 The award of damages for mental distress caused by the manner of termination must reflect the actual damage caused and is meant to be compensatory in nature. 118 In my view, Ms. Altman is entitled to moral damages. What damage did she suffer as a result of the actions of Steve’s? 119 Dr. Madeline Li testified about the impact on Ms. Altman of the letters she received from Steve’s law firm, Kaufman Larame´e. Dr. Li is one of Ms. Alt- man’s treating physicians. She described herself as a cancer psychiatrist. She specializes in treating the psychiatric complications that are seen in cancer patients. She first met Ms. Altman on November 17, 2008, and continues to treat her. 120 Dr. Li met Ms. Altman after she had undergone surgery, chemotherapy and radiation therapy. Dr. Brade referred Ms. Altman to Dr. Li as Ms. Altman was suffering from psychological distress. Dr. Li diagnosed her as suffering from a major depressive episode of moderate severity. In Dr. Li’s opinion, this illness was precipitated by Ms. Altman’s receipt by bailiff of the October 7, 2008 letter from Kaufman Larame´e informing her that she will be terminated if she does not work full-time hours. Dr. Li testified that this letter was more traumatic for Ms. Altman than being diagnosed with cancer or being told that her cancer could not be cured.

36Michaels v. Red Deer College (1975), [1976] 2 S.C.R. 324 (S.C.C.). 37[2008] 2 S.C.R. 362 (S.C.C.). 38[1997] 3 S.C.R. 701 (S.C.C.). 39Wallace, supra at para. 98. 40Honda, supra at para. 56. Altman v. Steve’s Music Store Inc. Corrick J. 151

121 According to Dr. Li, working for Steve’s was very important to Ms. Altman, particularly during her cancer treatment. It allowed Ms. Altman to continue to see herself as a functioning person contributing to her work place. Her relationship with Steve’s was such that she not only depended on it for her living but also for her sense of identity and purpose in life. The accommodation Steve’s had given her throughout her cancer treatment led her to have no expectation of receiving the October letter by bailiff. Receipt of the letter forced Ms. Altman to reassess how she sees herself, and her trust in the world. Dr. Li analogized Ms. Altman’s reaction to this letter to the situation in which a loyal and defenceless dog is unpredictably whipped and abandoned to die by its owner. 122 Dr. Li testified that Ms. Altman’s depression required treatment because the presence of depression in cancer patients is very strongly co-related with poor survival, poor response to treatment, and higher mortality. Ms. Altman’s depression remitted only following a four-week course of anti-depressant medication. 123 Although Ms. Altman’s depression remitted, her psychological distress has not abated, according to Dr. Li. Ms. Altman continues to be distressed over the conflicts she has had with her employer, which is activating her hormonal stress system and putting her health at further risk. 124 Steve’s actions must be viewed in the context of Ms. Altman’s age, length of service, state of health, and relationship with Steve’s Music. After 30 years of service, and having just completed rigorous cancer treatment, Steve’s counsel, Kaufman Larame´e, sent a letter by bailiff to Ms. Altman (the contents of which are set out at para. 10 of these reasons) that misstated the arrangement she had made with her employer about her work hours during her cancer treatments. 125 This was followed on April 7, 2009 with a similar letter delivered by bailiff terminating her employment. The April 2009 letter states that Steve’s has no obligation to reinstate Ms. Altman because her position with Steve’s has been abolished and she has applied for long-term disability. The language of this letter indicates that, as of April 7, 2009, Steve’s already considered Ms. Altman to be terminated. 126 As counsel for Steve’s indicated, the April 2009 letter of termination was insensitive and inappropriate, and does not accord with the way the law requires employers to treat employees. However, he submits, the letter is an aberration, and is inconsistent with the way Steve’s treated Ms. Altman throughout her illness. 127 Ms. Altman testified that she was shocked upon receiving news that her position had been abolished. At first she was unsure whether it meant she was terminated or that her job was being changed. Her termination was totally unex- pected and was devastating for her. 128 Michael Kirman testified that he did not instruct the sending of the October 2008 letter. Common sense dictates that if the October 2008 letter was not in 152 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

keeping with the way Steve’s intended to treat Ms. Altman, after employing her for 30 years, Michael Kirman would have contacted Ms. Altman promptly to apologize or explain. Instead, Michael Kirman has never spoken to Ms. Altman about it and in fact, has not spoken to Ms. Altman at all since her last day of work at Steve’s on October 16, 2008. In addition, a letter written in the same tone and delivered to Ms. Altman in the same way was sent by Steve’s counsel six months later. Although one aberrant letter may be possible, I conclude that two are not. 129 The manner of communicating termination has been held to justify damages for mental distress. In Bohemier v. Storwal International Inc.41 the Ontario Court of Appeal upheld an award of damages for mental distress in circumstances where an employee of 35 years was terminated by means of a cold and perfunctory letter delivered to his house by taxi on a Friday evening. 130 Similarly, an employer’s harsh treatment of an employee known to be in difficult circumstances has been held to be the proper subject of damages for mental distress. In Rae v. Attrell Hyundai Subaru42 the employer sent notice of dismissal to an employee of four years by courier two weeks prior to the birth of her child. The Court of Appeal upheld the trial judge’s finding that this inexcusable conduct on the part of the employer merited a two-month increase in notice. 131 Steve’s treatment of Ms. Altman was callous and insensitive. She was a 30- year employee who had been treated like family, and who worked for Steve’s as if she were a member of the family. She deserved to be treated better than twice having a bailiff deliver her a letter replete with mistruths from Steve’s lawyers — especially when Steve’s knew she was recovering from cancer treatment. No one in the management of Steve’s had the decency or courtesy to speak to her personally to express their dissatisfaction with the work arrangement to which they had previously agreed. I conclude that once Steve’s decided that Ms. Altman had become more of a liability than an asset to the organization because of her cancer, they abandoned her to be dealt with by their lawyers. These letters devastated Ms. Altman and caused her significant mental distress to the point of clinical depression. Ms. Altman’s mental distress has been long lasting and is ongoing. 132 I award Ms. Altman damages in the amount of $35,000.00 as compensatory damages as a result of Steve’s breach of its duty to deal with Ms. Altman in good faith and with fairness in the manner in which they terminated her employment.

41(1982), 40 O.R. (2d) 264 (Ont. H.C.), varied (1983), 44 O.R. (2d) 361 (Ont. C.A.), leave to appeal to S.C.C. refused (1984), 3 C.C.E.L. 79 (note) (S.C.C.). 422005 CarswellOnt 6599 (Ont. C.A.) affirming 2004 CarswellOnt 7357 (Ont. S.C.J.). Altman v. Steve’s Music Store Inc. Corrick J. 153

Punitive Damages 133 Ms. Altman also seeks punitive damages. To succeed, Ms. Altman must establish three things: 1. Steve’s conduct was so harsh, vindictive, reprehensible and malicious or so malicious, oppressive and high handed that it offends the court’s sense of decency. 2. Steve’s committed a separate or independent actionable wrong causing her damage. 3. The compensatory damages are not sufficient to express the court’s repugnance at Steve’s conduct, and to punish and deter Steve’s.43 134 The Supreme Court of Canada in Keays v. Honda Canada Inc.44 set out the circumstances in which punitive damages may be awarded. At paragraph 62, Bastarache J. said, “punitive damages are restricted to advertent wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own.” 135 I am required by the Honda decision to focus on the misconduct of Steve’s Music, rather than on the loss suffered by Ms. Altman in determining whether to award punitive damages. 136 In my view, the following conduct on the part of Steve’s Music calls for an award of punitive damages: a. Steve’s refused to pay Ms. Altman the statutory minimum termination pay set out in the Act until Ms. Altman brought an application for summary judgment in December 2010, 20 months after her employment was terminated. Steve’s was ordered to pay the statutory minimum by Conway J. b. Steve’s has improperly withheld wages Ms. Altman earned, contrary to the Act. c. Steve’s failed to provide Ms. Altman an accounting of the amount held for her in the deferred profit sharing plan, contrary to the order made by Conway J. on December 29, 2010. d. Steve’s used Ms. Altman’s vacation bank to reimburse itself for time Ms. Altman was absent. This factor is particularly important given that at all times, Steve’s led Ms. Altman to believe that she was being paid her full salary and never informed her it would

43Marshall v. Watson Wyatt & Co., [2002] O.J. No. 84 (Ont. C.A.) at paras. 44 and 45. 44Supra. 154 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

use the time she had accrued in her vacation bank. This was done in the face of section 40 of the Act, which deems employers to hold all vacation pay accruing to employees in trust for the employees. e. Despite numerous attempts by Ms. Altman, and others on her behalf, to have Steve’s complete the Policyholder’s Statement in the Standard Life claim form, Steve’s failed to do so until more than one year after Ms. Altman went on medical leave, and more than six months after it terminated Ms. Altman’s employment. Ms. Altman was unable to receive the disability benefits she had paid for because of Steve’s failure to complete this form. She ultimately received benefits in December 2009 retroactively. f. Ms. Altman was required to retain counsel to obtain her Record of Employment that would permit her to receive Employment In- surance Benefits. Her counsel received the Record of Employ- ment on December 1, 2008. Michael Kirman’s only explanation for this delay was that the Record of Employment must have been lost in the mail. Steve’s failure to provide Ms. Altman with this document meant that Ms. Altman had no income whatsoever between October 18 and December 18, 2008. 137 Steve’s violations of the Employment Standards Act amount to an independent actionable wrong, separate from its breach of the employment contract in not providing Ms. Altman reasonable notice of termination. 138 Steve’s conduct in relation to Ms. Altman is consistent with the description provided by its counsel in his submissions — “Steve’s Music Store has been for many years Steve’s. He’s the guiding light. He’s the boss.” That is the way the business is run. Michael Kirman testified that Steve’s has no employment policy manual. He guessed that employees learn of Steve’s employment policies through their managers, who know them based on the tradition of how Steve’s has conducted business over the years. I find that in this case Ms. Altman was the victim of ad hoc decisions made by the management of Steve’s. When she first became ill, Steve Kirman decided that she would be paid her salary. When her illness resulted in too many absences, Steve decided to withdraw her vacation pay without telling her. When she became more of a liability to the business than an asset, Steve’s decided to terminate her employment and withhold her wages, termination pay, and other money owed Ms. Altman to make up for her missed work time. As the April 7, 2009 letter to Ms. Altman from Kaufman Laram´ee said, As for your reference to so called outstanding issues relating to your remuneration and unpaid benefits, once again, the correspondence addressed to you to date is clear and unequivocal in that Steve’s Music was fully entitled Altman v. Steve’s Music Store Inc. Corrick J. 155

to offset and deduct from your remuneration or for that matter any other sums due and owing to you, for your absenteeism, late arrivals and early departures. [emphasis added] Consequently, be advised that according to Steve’s Music’s records, you are owed nothing further. Consequently, be advised that any attempt to claim any sums whatsoever from your former employer, will be vigorously contested. 139 Steve’s conduct must be viewed in the totality of Ms. Altman’s circumstances. In October 2008, Ms. Altman had just completed very intensive cancer treatment. Steve’s did not pay her during her medical leave, which began on October 17, 2008. In fact, Steve’s did not pay her for the hours she had worked that week. Ms. Altman had no source of income. Steve’s failure to honour its statutory obligations to pay her termination pay, to provide her with a Record of Employment to allow her to obtain Employment Insurance benefits, to comply with an order made by Conway J. to provide Ms. Altman with an accounting of her share of the deferred profit sharing plan, together with the other misconduct listed in paragraph 136 is reprehensible and high handed conduct that is deserving of this court’s denunciation. 140 Punitive damages must serve a rational purpose. They must be rationally required to serve as a deterrent. “This rationality test applies to the question of whether the award should be made at all and to the question of the amount:” Whiten v. Pilot Insurance Co. 45 In Whiten, Binnie J. held that proportionality is the “key to the permissible quantum of punitive damages.”46 To determine proportionality, Binnie J. listed a number of factors to consider, including, the blameworthiness of the defendant’s conduct, the degree of vulnerability of the plaintiff, the harm directed specifically at the plaintiff and the need for deterrence.47 141 Relevant to the blameworthiness of Steve’s conduct is the fact that it persisted until Ms. Altman was forced to retain counsel to bring an application before the court to force Steve’s to pay her statutory termination pay. 142 I need not repeat the details of Ms. Altman’s circumstances, including her health and lack of income, to indicate that Ms. Altman was vulnerable. 143 Steve’s conduct was directed specifically at Ms. Altman. 144 The conduct on the part of Steve’s Music that I have outlined above as wor- thy of punitive damages is different from the conduct that serves as the founda- tion for the award of damages for mental distress. The compensatory damages

45[2002] 1 S.C.R. 595 (S.C.C.). 46Supra at para. 111. 47Supra at paras. 112 to 122. 156 CANADIAN CASES ON EMPLOYMENT LAW 89 C.C.E.L. (3d)

awarded Ms. Altman for her mental distress are not sufficient to avoid a repeti- tion of this conduct or to express the court’s repugnance at the conduct. In the circumstances, I award Ms. Altman $20,000.00 in punitive damages.

Disposition 145 Pursuant to the agreement of the parties, I order that Steve’s pay Ms. Altman $4,725.00 in commission. 146 In this judgment, I have determined that Steve’s should also pay Ms. Altman salary for 22 months, including the eight weeks statutory termination pay, $35,000.00 in damages for mental distress and $20,000.00 in punitive damages. 147 Ms. Altman is also entitled to pre-judgment interest from the date of her claim and post-judgment interest, in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43. 148 I direct that the following matters be determined at a reference before a master and that the amount determined by the master be paid to Ms. Altman along with pre-judgment interest from the date of her claim: a. The amount of money owed Ms. Altman from the deferred profit sharing plan. b. The amount of salary earned by Ms. Altman between July 31, 2008 and October 17, 2008 that has not been paid. c. The amount of two bonus payments to Ms. Altman that should have been paid to her for the years 2006 and 2007. d. The amount of vacation pay in Ms. Altman’s vacation bank that Mr. McKeaveney transferred out to pay for Ms. Altman’s absences.

Costs 149 If the parties are unable to agree on costs, Ms. Altman shall provide brief written costs submissions not to exceed three pages (excluding the bill of costs) of double-spaced type to me within 14 days of the release of these reasons, and Steve’s shall provide brief responding costs submissions not to exceed three pages of double-spaced type within 10 days thereafter. Action allowed.