Anstead v. Park Royal Homes Inc., (2009) 470 A.R. 124 (QB)

JudgeGill, J.
CourtCourt of Queen's Bench of Alberta (Canada)
Case DateMarch 20, 2009
Citations(2009), 470 A.R. 124 (QB);2009 ABQB 179

Anstead v. Park Royal Homes Inc. (2009), 470 A.R. 124 (QB)

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. MR.133

Michele Anstead (plaintiff/defendant by counterclaim) v. Park Royal Homes Inc. (defendant/plaintiff by counterclaim)

(0603 13610; 2009 ABQB 179)

Indexed As: Anstead v. Park Royal Homes Inc.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Gill, J.

March 20, 2009.

Summary:

Anstead signed a one year commission sales agreement in March 2004, when she was hired by the defendant as a new home sales consultant. Anstead was fired in October 2006, when she refused to sign a new agreement. The defendant admitted that Anstead had been wrongfully dismissed. Anstead sought damages for reasonable notice, unpaid commissions and punitive damages. The defendant counterclaimed for overpayment of commissions.

The Alberta Court of Queen's Bench held that 2.5 months of notice was reasonable. Anstead was awarded $25,000 in reasonable notice damages. The court rejected the claim for punitive damages. The defendant was awarded $11,006.28 for overpaid commissions.

Contracts - Topic 4048

Remedies for breach - Liquidated damages and penalties - Penalty - What constitutes - Anstead signed a one year commission sales agreement in March 2004, when she was hired by the defendant as a new home sales consultant - Anstead was fired in October 2006, when she refused to sign a new agreement - The defendant admitted that Anstead had been wrongfully dismissed and asserted that the calculation of commissions owing at the time of termination was governed by clause 8 of the agreement - Anstead asserted that clause 8 was an unenforceable penalty clause - The Alberta Court of Queen's Bench rejected the argument - The purpose of clause 8 was to apportion commissions between the employer and the employee in the event of a cessation of the employment contract - This was necessary because once a customer signed a sales agreement, there was still work to be done by the sales consultant - Clause 8 apportioned the outstanding commission based on work performed and work still to be done in an attempt to provide some certainty in circumstances where an employee left before all commissions were paid - Clause 8 was reasonable in the circumstances, operating as a pre-estimate of damages, rather than a penalty - See paragraphs 20 to 25.

Damage Awards - Topic 1454

Contracts - Employment contracts - Wrongful dismissal - Anstead signed a one year commission sales agreement in March 2004, when she was hired by the defendant as a new home sales consultant - Anstead was fired in October 2006, when she refused to sign a new agreement - The defendant admitted that Anstead had been wrongfully dismissed - The court determined that 2.5 months' notice was reasonable - At issue was the calculation of damages - The defendant asserted that no damages were owed to Anstead because she would not have received any remuneration during the notice period due to the defendant's policy to accept no new sales at that time - The Alberta Court of Queen's Bench rejected the argument - A unilateral business decision by an employer did not affect the legal obligation of the employer to pay damages in lieu of notice - The defendant's position would deprive Anstead of even the minimal notice periods contained in the Employment Standards Code - Anstead was entitled to be compensated for the commissions that she likely would have earned had she continued to work through the reasonable notice period - Anstead averaged five sales a month - The notice period fell at a time when the real estate market was very active and prices were rising rapidly - Consequently, any new sales would likely have been at prices high enough to trigger the $5,000 cap on commission in the commission sales agreement - In light of the staged advances on commission set out in the agreement, Anstead would likely have only received the first installment of her commission, being $2,000 (40%) - At an estimated five sales each month, this worked out to $10,000 per month, for a total award of $25,000 - See paragraphs 45 to 54.

Damage Awards - Topic 2014

Exemplary or punitive damages - Wrongful dismissal - Anstead signed a one year commission sales agreement in March 2004, when she was hired by the defendant as a new home sales consultant - Anstead was fired in October 2006, when she refused to sign a new agreement - The defendant admitted that Anstead had been wrongfully dismissed - At issue was Anstead's claim for punitive damages - The Alberta Court of Queen's Bench dismissed the claim - Anstead's claim for punitive damages appeared to be rooted in the stop payment order placed on her final pay cheque - However, the evidence revealed that the stop payment was not a vindictive act by the defendant, but rather a result of the belief that Anstead had been overpaid - Moreover, the defendant was upfront about the issue surrounding the cheque - After terminating Anstead, the defendant requested that she either return the cheque or not cash it because the defendant believed that she had been overpaid - The defendant also called her later that day to advise that he had put a stop payment on the cheque - There was a genuine dispute as to whether or not the commissions were overpaid - As a result, the conduct here did not meet the threshold established in Keays v. Honda Canada Inc. (2008 S.C.C.) - See paragraphs 56 and 57.

Damages - Topic 6703

Contracts - Employment relationship or contract - General principles - Wrongful dismissal - [See Damage Awards - Topic 1454 and second Master and Servant - Topic 7704 ].

Damages - Topic 6747

Contracts - Employment relationship or contract - Breach by employer - Loss of commissions - [See Contracts - Topic 4048 , Damage Awards - Topic 1454 , Equity - Topic 1122 and second Master and Servant - Topic 7704 ].

Equity - Topic 1122

Equitable relief - Contracts - Unconscionability - Unconscionable bargain defined - Anstead signed a one year commission sales agreement in March 2004, when she was hired by the defendant as a new home sales consultant - Anstead was fired in October 2006, when she refused to sign a new agreement - The defendant admitted that Anstead had been wrongfully dismissed and asserted that the calculation of commissions owing at the time of termination was governed by clause 8 of the agreement which apportioned commissions between the employer and the employee in the event of a cessation of the employment contract - Anstead asserted that clause 8 was unconscionable - The Alberta Court of Queen's Bench rejected the argument - The court applied the test for unconscionability from Cain v. Clarica Life Insurance Co. (2005 Alta. C.A.), finding that, here, there was no overwhelming imbalance in bargaining power nor was the agreement a grossly unfair or improvident transaction - There was no basis for Anstead's claim that she was unduly deprived for the work she had done - After she left, the deals that she had closed were not entirely complete and the defendant had to assign other employees to her files, who were in turn compensated for their work - This was the situation that clause 8 was intended to cover - Clause 8 was not unconscionable - See paragraphs 26 to 32.

Master and Servant - Topic 1006

Contract of hiring (employment contract) - General - Validity of - Anstead signed a one year commission sales agreement in March 2004, when she was hired by the defendant as a new home sales consultant - Anstead was fired in October 2006, when she refused to sign a new agreement - The defendant admitted that Anstead had been wrongfully dismissed and asserted that the calculation of commissions owing at the time of termination was governed by clause 8 of the agreement - Anstead asserted that the agreement was not enforceable because it was not freely bargained for in that she did not have the opportunity to negotiate the agreement's terms - The Alberta Court of Queen's Bench held that the agreement was freely bargained for - After one or two meetings with the defendant, Anstead signed the agreement after being given an opportunity to read it - She could have taken it away for review prior to signing had she wished to do so - Subsequently, she did not raise any issues concerning the agreement's terms, working under it for 2.5 years - When changes were proposed to the agreement, she voiced her objections and refused to sign - See paragraphs 17 to 19.

Master and Servant - Topic 1202

Contract of hiring (employment contract) - Duration of contract - Continuation of employment after fixed term - Effect of - Anstead signed a one year commission sales agreement in March 2004, when she was hired by the defendant as a new home sales consultant - Anstead was fired in October 2006, when she refused to sign a new agreement - The defendant admitted that Anstead had been wrongfully dismissed and asserted that the calculation of commissions owing at the time of termination was governed by clause 8 of the agreement - Anstead asserted that clause 8 was not part of the ongoing agreement - The Alberta Court of Queen's Bench held that the commission sales agreement changed into a contract of indefinite employment after the one year term expired because the parties acted as if such an agreement was in place - Anstead continued to do the same duties and got paid the same compensation - The terms of the commission sales agreement continued "as is" - See paragraphs 15 and 16.

Master and Servant - Topic 7704

Dismissal of employees - Damages for wrongful dismissal - Measure of damages for wrongful dismissal - [See Damage Awards - Topic 1454 ].

Master and Servant - Topic 7704

Dismissal of employees - Damages for wrongful dismissal - Measure of damages for wrongful dismissal - Anstead signed a one year commission sales agreement in March 2004, when she was hired by the defendant as a new home sales consultant - Anstead was fired in October 2006, when she refused to sign a new agreement - The defendant admitted that Anstead had been wrongfully dismissed - The court determined that 2.5 months' notice was reasonable - At issue was the calculation of damages - The defendant asserted that Anstead should not be compensated for the later commission advances that might have been issued during the reasonable notice period because other employees were assigned to her files - The Alberta Court of Queen's Bench rejected the argument - The purpose of reasonable notice damages was to compensate a wrongfully terminated employee for the breach of the employment contract - This objective was accomplished by awarding the terminated employee damages commensurate with the compensation that would have been earned had the employee worked throughout the notice period - Accordingly, the fact that the work remaining to be done on Anstead's files was carried out by another paid employee did not change the fact that had Anstead continued to work during the reasonable notice period, she would have completed that work and been paid accordingly - The defendant appeared to be arguing that the reasonable notice damages payable to Anstead were paid to the employee who actually performed the work - This did not accord with the principle of reasonable notice - See paragraph 55.

Master and Servant - Topic 7712

Dismissal of employees - Damages for wrongful dismissal - Punitive or vindictive damages - [See Damage Awards - Topic 2014 ].

Master and Servant - Topic 8000

Dismissal without cause - Notice of dismissal - What constitutes reasonable notice - Anstead signed a one year commission sales agreement in March 2004, when she was hired by the defendant as a new home sales consultant - Anstead was fired in October 2006, when she refused to sign a new agreement - The defendant admitted that Anstead had been wrongfully dismissed - At issue was the period of reasonable notice - The Alberta Court of Queen's Bench found that a notice period of 2.5 months was reasonable - The factors to be applied in determining reasonable notice were Anstead's position in the company, the duration of employment, Anstead's age and the availability of similar employment - Anstead worked at the company for approximately 2.5 years - While she was not a manager, she had considerable responsibilities in terms of dealing with the customers and also arranging for a sales assistant to cover for her and the show home - The knowledge base required to perform her job effectively was extensive - She had to be conversant with the features of each house model and up-to-date about the area in which the homes were being built - She was close to 50 years of age at the time of dismissal, and was able to find similar, albeit less remunerative, work within a relatively short period after her dismissal - See paragraphs 40 to 44.

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting (incl. bad faith) - [See Damage Awards - Topic 2014 ].

Cases Noticed:

32262 B.C. Ltd. v. See-Rite Optical Ltd. et al. (1998), 216 A.R. 33; 175 W.A.C. 33; 1998 ABCA 89, refd to. [para. 20].

Cain v. Clarica Life Insurance Co. (2005), 384 A.R. 11; 367 W.A.C. 11; 2005 ABCA 437, appld. [para. 26].

Collins (J.G.) Insurance Agencies Ltd. v. Elsley Estate, [1978] 2 S.C.R. 916; 20 N.R. 1, refd to. [para. 27].

Globex Foreign Exchange Corp. v. Kelcher et al. (2005), 376 A.R. 133; 360 W.A.C. 133; 2005 ABCA 419, refd to. [para. 27].

Schellenberg v. Marzen Artistic Aluminum Ltd., [1986] B.C.J. No. 1190 (C.A.), refd to. [para. 38].

Bardal v. Globe and Mail Ltd. (1960), 24 D.L.R.(2d) 140 (Ont. H.C.), appld. [para. 43].

Crisall v. Western Pontiac Buick GMC (1999) Ltd. (2003), 13 Alta. L.R.(4th) 104; 2003 ABQB 255, refd to. [para. 52].

Farmer v. Foxridge Homes Ltd. et al. (1994), 149 A.R. 139; 63 W.A.C. 139 (C.A.), refd to. [para. 52].

Keays v. Honda Canada Inc., [2008] 2 S.C.R. 362; 376 N.R. 196; 239 O.A.C. 299; 2008 SCC 39, refd to. [para. 56].

Authors and Works Noticed:

Ball, Stacey Reginald, Canadian Employment Law, p. 6-14 [para. 16].

Harris, David, Wrongful Dismissal, para. 3.2C [para. 37].

Sproat, Wrongful Dismissal Handbook, p. 6-46.5 [para. 47].

Counsel:

Michael L. Furman (Glenora Law Office), for the plaintiff;

Craig W. Neuman, Q.C. (Neuman, Thompson), for the defendant.

This action was heard on March 9 and 10, 2009, by Gill, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for judgment on March 20, 2009.

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3 practice notes
  • Elgert v. Home Hardware Stores Ltd. et al., (2010) 486 A.R. 213 (QB)
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • January 27, 2010
    ...[para. 4]. Brien v. Niagara Motors Ltd., [2009] O.A.C. Uned. 639; 2009 ONCA 887, refd to. [para. 4]. Anstead v. Park Royal Homes Inc. (2009), 470 A.R. 124; 2009 ABQB 179, refd to. [para. Albert v. Conseil scolaire francophone de la Colombie-Britannique (2009), 265 B.C.A.C. 130; 446 W.A.C. 1......
  • Weber et al. v. Coco Homes Ltd., [2013] A.R. Uned. 282 (QB)
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • March 20, 2013
    ...v United Grain Growers Ltd , [1997] 3 SCR 701 at para 82. [117] Ms. Weber's counsel directed me to Anstead v Park Royal Homes Inc , 2009 ABQB 179 at paras 41- 44, 470 AR 124. In that case, the plaintiff worked for the defendant as a new home sales consultant for two and a half years. Her in......
  • Passey v Motion Industries (Canada) Inc, 2020 ABPC 51
    • Canada
    • Provincial Court of Alberta (Canada)
    • March 4, 2020
    ...It is noted that the legislation merely provides a minimum that cannot be reduced by contract: Anstead v Park Royal Homes Inc, 2009 ABQB 179. At common law, Mr. Passey may be entitled to more than the minimum. [13]           Mr. Passey argue......
3 cases
  • Elgert v. Home Hardware Stores Ltd. et al., (2010) 486 A.R. 213 (QB)
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • January 27, 2010
    ...[para. 4]. Brien v. Niagara Motors Ltd., [2009] O.A.C. Uned. 639; 2009 ONCA 887, refd to. [para. 4]. Anstead v. Park Royal Homes Inc. (2009), 470 A.R. 124; 2009 ABQB 179, refd to. [para. Albert v. Conseil scolaire francophone de la Colombie-Britannique (2009), 265 B.C.A.C. 130; 446 W.A.C. 1......
  • Weber et al. v. Coco Homes Ltd., [2013] A.R. Uned. 282 (QB)
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • March 20, 2013
    ...v United Grain Growers Ltd , [1997] 3 SCR 701 at para 82. [117] Ms. Weber's counsel directed me to Anstead v Park Royal Homes Inc , 2009 ABQB 179 at paras 41- 44, 470 AR 124. In that case, the plaintiff worked for the defendant as a new home sales consultant for two and a half years. Her in......
  • Passey v Motion Industries (Canada) Inc, 2020 ABPC 51
    • Canada
    • Provincial Court of Alberta (Canada)
    • March 4, 2020
    ...It is noted that the legislation merely provides a minimum that cannot be reduced by contract: Anstead v Park Royal Homes Inc, 2009 ABQB 179. At common law, Mr. Passey may be entitled to more than the minimum. [13]           Mr. Passey argue......

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