Bagby v. Gustavson International Drilling Co. Ltd., Raymond Concrete Pile Co. of the Americas, Global Marine Exploration Co. and Raymond International Inc., (1980) 24 A.R. 181 (CA)

• Judge: Laycraft, Morrow and Harradence, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: August 26, 1980
• Citations: (1980), 24 A.R. 181 (CA);1980 ABCA 227;24 AR 181;[1980] AJ No 743 (QL)

Bagby v. Gustavson Intl. Drilling Co. (1980), 24 A.R. 181 (CA)

MLB headnote and full text

Bagby v. Gustavson International Drilling Co. Ltd., Raymond Concrete Pile Company of the Americas, Global Marine Exploration Company and Raymond International Inc.

(12372)

Indexed As: Bagby v. Gustavson International Drilling Co. Ltd., Raymond Concrete Pile Co. of the Americas, Global Marine Exploration Co. and Raymond International Inc.

Alberta Court of Appeal

Laycraft, Morrow and Harradence, JJ.A.

August 26, 1980.

Summary:

This case arose out of the plaintiff's action for damages for wrongful dismissal. The plaintiff was a long-time top executive with an oil well drilling company and was dismissed without notice when the company was sold. He brought an action for damages including loss of bonus and fringe benefits. He also claimed payment of moneys owed to him under his employment contract and payment of a share of a pension fund contribution allegedly owing by the employer.

The Alberta Supreme Court, Trial Division, in a judgment reported 20 A.R. 244 allowed the action in part and awarded the plaintiff the money due under his employment contract and payment of 15 months salary in lieu of reasonable notice of termination, together with payment of a bonus and fringe benefits for the 15 month period. The Trial Division dismissed the plaintiff's claim for a share of pension contribution, because the employer was paid up in his pension fund contributions. The employer appealed on the issue of the requirement of notice and the plaintiff cross-appealed on the pension plan issue.

The Alberta Court of Appeal dismissed both the appeal and the cross-appeal.

Company Law - Topic 313

Nature of corporations - Lifting the corporate veil - Related companies - The plaintiff executive was nominally employed by a company, which was owned by two subsidiary companies of a parent company - The parent company was in complete control of the plaintiff's employer and governed every aspect of his employment - The Alberta Court of Appeal held that the plaintiff's nominal employer and the parent company were liable to the plaintiff for damages for wrongful dismissal, but that the two subsidiary companies which owned the nominal employer were not - The Court of Appeal found that the parent company was the actual employer of the plaintiff, so that attaching liability to it did not involve piercing the corporate veil - See paragraphs 43 to 50.

Interest - Topic 5302

Interest as damages - Interest on payment of money or debt withheld - Improper withholding - What constitutes - Judicature Act, R.S.A. 1970, c. 193, s. 34(16) - The Alberta Court of Appeal held that interest could not be awarded under s. 34(16) on damages for wrongful dismissal - The Court of Appeal held that, where the damages were only ascertainable after the court determined the amount, it could not be said that the amount was "improperly withheld" within the meaning of s. 34(16) - See paragraphs 34 to 42.

Master and Servant - Topic 1024

Contract of hiring - Parties - Employer - What constitutes - The plaintiff executive was nominally employed by a company, which was owned by two subsidiary companies of a parent company - The parent company was in complete control of the plaintiff's employer and governed every aspect of his employment - The Alberta Court of Appeal held that the plaintiff's nominal employer and the parent company were liable to the plaintiff for damages for wrongful dismissal, but that the two subsidiary companies which owned the nominal employer were not - The Court of Appeal found that the parent company was the actual employer of the plaintiff - See paragraphs 43 to 50.

Master and Servant - Topic 1912

Remuneration - Bonuses - Entitlement - The long-time top executive of an oil well drilling company was dismissed without notice - In an action for wrongful dismissal he claimed as part of his damages the loss of a bonus - The Alberta Supreme Court, Trial Division, held that the executive was entitled to damages for loss of bonus, because the company's bonus incentive plan had become an integral part of the executive's wage structure - The Trial Division awarded damages for loss of bonus based on the 15 month notice period, which should have been given before dismissal - The Alberta Court of Appeal affirmed the decision of the Trial Division - See paragraphs 22 to 26.

Master and Servant - Topic 1932

Remuneration - Fringe benefits - Transportation - An executive of a company was dismissed without notice - During his employment he had the use of a company car, which was available to him for his personal use, when it was not being used on business - The Alberta Supreme Court, Trial Division, held that the executive was not entitled to damages for loss of use of the car - The Trial Division held that the use of a car was not a fringe benefit, because its primary purpose was to assist him in carrying out the functions of his employment - The Alberta Court of Appeal affirmed the decision of the Trial Division - See paragraph 31.

Master and Servant - Topic 1933

Remuneration - Fringe benefits - Insurance - Premiums - An executive of a company was dismissed without notice - During his employment the employer paid premiums for life insurance, health and accident insurance, unemployment insurance, workmen's compensation, Canada Pension Plan and company pension plan - The Alberta Supreme Court, Trial Division, awarded the executive damages for loss of premiums for the 15 month notice period, which should have been given before dismissal, for life insurance, health and accident insurance, unemployment insurance and Canada Pension Plan - Damages for loss of premiums for workmen's compensation and the company pension plan were not awarded - The Alberta Court of Appeal affirmed the decision of the Trial Division, but awarded damages for loss of the employer's contributions to the company pension plan - See paragraphs 27 to 30.

Master and Servant - Topic 1950

Remuneration - Pension benefits - Under provisionally funded plan - Employer's obligation where employee's employment ceases - Under a company employees' pension plan the company was required to contribute $510,948.00 for past service of employees - However, the employer could pay the amount in installments over a long period of time, being a "provisionally funded plan" under the Pension Benefits Act, R.S.A. 1970, c. 272 - Before the employer completed its payments, an employee left and claimed that the existing deficiency in employer's contributions should be paid up immediately - The Alberta Court of Appeal held that under s. 7 of the regulations under the Pension Benefits Act the plan was deemed to be solvent if provisionally funded and that there was no acceleration of all future payments by the employer, when the employee left his employment - See paragraphs 51 to 61.

Master and Servant - Topic 7998

Dismissal without cause - Notice of dismissal - When required - The Alberta Court of Appeal held that in a contract for service of indefinite duration there was an implied term of reasonable notice of termination, which could not be negatived except by clear words - See paragraphs 9 to 16.

Master and Servant - Topic 8000

Dismissal without cause - Notice of dismissal - Reasonable notice - What constitutes - The top executive of an oil well drilling company was dismissed without notice after 24 continuous years in the drilling business - He had acquired managerial expertise and a vast knowledge of all facets of the business - However, when he was suddenly and unexpectedly released into the labour market, his age and the unavailability of similar employment in the drilling industry were against him - The Alberta Supreme Court, Trial Division, held that the executive was entitled to payment of 15 months salary in lieu of notice of termination - The Alberta Court of Appeal affirmed the decision of the Trial Division - See paragraphs 18 to 21.

Cases Noticed:

African Assn. Ltd. and Allen, Re, [1910] 1 K.B. 396, appld. [para. 14].

Chadburn v. Sinclair Canada Oil Company (1966), 57 W.W.R.(N.S.) 477, appld. [para. 16].

Allison v. Amoco Production Company, [1975] 5 W.W.R. 501, appld. [para. 16].

Bardal v. The Globe & Mail Ltd. (1960), 24 D.L.R.(2d) 140, appld. [para. 18].

McCartan v. Belfast Harbour Commissioners, [1911] 2 I.R. 143, appld. [para. 20].

Hunt v. Cimco Ltd. (1977), 2 A.R. 514, appld. [para. 25].

Hermann v. Manalta Coal Ltd. and Loram Co. Ltd. (1979), 16 A.R. 322, folld. [para. 25].

Hardie v. Trans-Canada Resources Ltd. (1977), 2 A.R. 289, appld. [para. 27].

Bradley v. Bailey and Jasperson (1922), 52 O.L.R. 435, appld. [para. 37].

McLean v. Canadian Pacific Rwy. Co. (1923), 53 O.L.R. 533, refd to. [para. 38].

Great Lakes Steamship Co. v. Maple Leaf Milling Co. Ltd. (1925), 58 O.L.R. 244, refd to. [para. 38].

The King v. MacKay, [1930] S.C.R. 130, reversing [1929] Ex. C.R. 149, appld. [para. 39].

D. Robarts Painters & Decorator Ltd. v. Coburg Gardens Ltd. (1976), 22 N.S.R.(2d) 656; 31 A.P.R. 656 (N.S.C.A.), refd to. [para. 40].

Ditmars v. Ross Drug Co. Ltd. (1971), 3 N.B.R.(2d) 139, appld. [para. 25].

London, Chatham and Dover Rwy. v. S.E. Rwy., [1893] A.C. 429, refd to. [para. 41].

Salomon v. Salomon, [1897] A.C. 22, dist. [para. 45].

Toronto v. Famous Players Canadian Corporation, [1936] S.C.R. 141, consd. [para. 47].

Manley Inc. and Manley Popcorn of Canada Ltd. (1977), 2 B.L.R. 277 (Ont. C.A.), consd. [para. 47].

Statutes Noticed:

Judicature Act, R.S.A. 1970, c. 193, sect. 34(16) [para. 35].

Pension Benefits Act, R.S.A. 1970, c. 272, sect. 17(2) [para. 56]; Regulation, sect. 7 [para. 55].

Court of Appeal Act, S.A. 1978, c. 50, sect. 8 [para. 64].

Authors and Works Noticed:

Harris, Wrongful Dismissal, p. 105 [para. 46].

Counsel:

L.M. Sali, for Gustavson International Drilling Co. Ltd., Raymond Concrete Pile Company of the Americas, Global Marine Exploration Company and Raymond International Inc.;

S. Carscallen, for Robert Bagby.

This case was heard before LAYCRAFT, MORROW and HARRADENCE, JJ.A., of the Alberta Court of Appeal.

On August 26, 1980, LAYCRAFT, J.A., delivered judgment for the Court of Appeal. MORROW, J.A., orally indicated his intention to concur, but died before he was able to sign the judgment: