Elgert v. Home Hardware Stores Ltd. et al., 2011 ABCA 112

• Judge: Conrad, Hunt and Costigan, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: April 26, 2011
• Citations: 2011 ABCA 112;(2011), 510 A.R. 1

Elgert v. Home Hardware Stores Ltd. (2011), 510 A.R. 1; 527 W.A.C. 1 (CA)

MLB headnote and full text

Temp. Cite: [2011] A.R. TBEd. AU.003

Daniel John Elgert (respondent/plaintiff) v. Home Hardware Stores Limited, Christa Bernier and Diane Stengle (appellants/defendants)

(1003-0051-AC; 2011 ABCA 112)

Indexed As: Elgert v. Home Hardware Stores Ltd. et al.

Alberta Court of Appeal

Conrad, Hunt and Costigan, JJ.A.

April 26, 2011.

Summary:

The defendant employer summarily dismissed the plaintiff for his alleged inappropriate sexual touching of two female co-workers. The plaintiff sued the employer and the co-workers for damages for wrongful dismissal and defamation. A jury, after finding that the plaintiff had been dismissed without cause, awarded him two years' pay in lieu of reasonable notice, $200,000 aggravated damages and $300,000 punitive damages. The jury also found that the two female co-workers had defamed the plaintiff and that qualified privilege did not apply. The plaintiff was awarded $50,000 and $10,000 against the co-workers, respectively. The employer appealed, submitting that "the trial judge erred by admitting character evidence, failing to provide a sufficient road map to the evidence, allowing the [plaintiff] to split his case, admitting irrelevant and confusing expert evidence, and leaving the issue of aggravated and punitive damages with the jury. In addition, they asserted that the damage awards were inordinately high".

The Alberta Court of Appeal, Conrad, J.A., dissenting in part, allowed the appeal to the limited extent of setting aside the $200,000 award for aggravated damages and reducing the $300,000 award for punitive damages to $75,000.

Damage Awards - Topic 2014

Exemplary or punitive damages - Wrongful dismissal - Two female co-workers accused the plaintiff of sexual harassment - The employer summarily dismissed him, without even initially disclosing to him who made the allegations and what they were about - A jury found that the co-workers falsely accused the plaintiff of sexual harassment, defaming him, and that the employer had determined that the sexual harassment occurred even before undertaking its inadequate investigation - The jury awarded that plaintiff $200,000 aggravated damages respecting the employer's bad faith conduct and $300,000 punitive damages for conduct it determined was harsh, vindictive, reprehensible and malicious - The employer and co-workers appealed, submitting that the judge erred in leaving aggravated and punitive damages with the jury and, alternatively, the quantum awarded was so inordinately high as to fall outside any reasonable award - The Alberta Court of Appeal allowed the appeal by setting aside the aggravated damage award and reducing the punitive damage award to $75,000 - Although there was evidence of unfairness and bad faith in the manner of dismissal capable of supporting an award of aggravated damages, if the plaintiff suffered actual damages for mental distress as a result of that conduct, there was no evidence of such actual damages to support leaving aggravated damages with the jury - Although punitive damages were available, the upper limit of $400,000 left with the jury, resulting in the award of $300,000, was "wholly disproportionate or shockingly unreasonable, and went beyond what was necessary to punish [the employer]" - The court determined that no more than $75,000 was required to punish the employer - See paragraphs 70 to 104.

Damages - Topic 911

Aggravation - In contract - Aggravated damages - Wrongful dismissal - [See Damage Awards - Topic 2014 ].

Damages - Topic 911

Aggravation - In contract - Aggravated damages - Wrongful dismissal - The Alberta Court of Appeal stated that "[aggravated] damages resulting from the manner of dismissal (as opposed to the fact of dismissal) are available, however, if damages arise out of the conduct of the employer in the course of termination. To be compensable, such conduct must be unfair or in bad faith, in that it is 'untruthful, misleading or unduly insensitive' ... Aggravated damages must be grounded in proof of actual damages resulting from the unfair or bad faith conduct in the manner of dismissal. ... Thus, if actual damages are shown, a determination of whether an employee is entitled to aggravated damages arising out of the employer's conduct during termination must focus on whether the methods used were fair or in bad faith, by being for example, untruthful, misleading or unduly insensitive" ... aggravated damages are not an extension of the notice period, but are to be considered from the point of view of the actual damages for mental distress suffered by the employee as a result of unfairness and bad faith in the manner of dismissal" - See paragraphs 72 to 75, 84.

Damages - Topic 1326

Exemplary or punitive damages - Wrongful dismissal - The Alberta Court of Appeal stated that "punitive damages are recoverable when the employer's conduct gives rise to an independent actionable wrong ... Punitive damages 'are restricted to inadvertent wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own' - See paragraph 79.

Damages - Topic 1326

Exemplary or punitive damages - Wrongful dismissal - The Alberta Court of Appeal stated that "when evaluating the employer's conduct in the context of punitive or aggravated damages, it is important to acknowledge that an employer cannot be faulted for honestly believing an allegation of sexual harassment (or any other wrongdoing) and should not be punished simply because an investigation was clumsy or a jury subsequently concludes that the allegation was not substantiated. An employer is entitled, indeed sometimes required, to make decisions to suspend or terminate employees (even if a court subsequently disagrees with its assessment) without being subject to a claim for punitive or aggravated damages. Employers must take seriously allegations of sexual harassment. There is no specific standard of investigation that employers must follow; what is required will vary depending on the facts surrounding the employer, its policies, sophistication, experience and workforce. Courts must not require such a high standard of investigation that there is a chilling effect on employers' manner of dealing with allegations of sexual harassment. Nevertheless, how the employer reacts is subject to judicial scrutiny. Its responsibilities do not give it licence to conduct an inept or unfair investigation or behave in malicious, vindictive or outrageous ways." - See paragraphs 88 to 89.

Evidence - Topic 510

Presentation of evidence - Rebuttal evidence - General principles - The plaintiff sued his employer and two co-workers for wrongful dismissal and defamation - The co-workers had alleged sexual misconduct by the plaintiff - After the defence called its evidence, the plaintiff sought to call rebuttal evidence from two witnesses (former employee and current employee) for the purpose of, inter alia, challenging the credibility of one of the co-workers - The plaintiff conceded that rebuttal evidence was limited to matters necessary to contradict or qualify new evidence raised during the case for the defence - The plaintiff argued that rebuttal evidence should be permitted where the defendants had the onus of proving "just cause" in the wrongful dismissal action and "justification" in the defamation action - The defendants disagreed that a reverse onus automatically justified rebuttal evidence - The trial judge stated that "a court has the discretion in certain limited instances to allow a plaintiff employee to call rebuttal evidence given that the defendant employer bears the burden of proof to establish 'just cause'. Similarly, the law presumes that the plaintiff is innocent with respect to the defamatory charges, therefore he or she does not have to adduce evidence that the words are false. The burden is on the defendant if he or she wishes to justify the defamatory publication to provide that it was 'true'. The court has a discretion in such a case to allow for reply/rebuttal evidence in certain limited instances." - The judge, following a voir dire to examine the scope of the proposed rebuttal evidence of the two witnesses, ruled that the evidence was admissible because it was relevant to the credibility of one of the co-workers who alleged sexual misconduct - It was not collateral evidence - The Alberta Court of Appeal held that "the trial judge did not mis-exercise his discretion to permit rebuttal evidence" - See paragraphs 50 to 56.

Evidence - Topic 4847

Witnesses - Examination - Impeaching character - Evidence of good character - An employer summarily dismissed the plaintiff for his alleged inappropriate sexual touching of two female co-workers - The plaintiff sued for damages for wrongful dismissal and defamation - At the jury trial, the plaintiff proposed to call family members and past and present employees of the defendant to ask them a series of questions respecting his general character (character evidence) - The defendant objected, submitting that the character evidence would not be probative and would lead to circumstantial proof of a collateral fact in issue - The trial judge (486 A.R. 137), held that the plaintiff could not lead the general character evidence - A jury found wrongful dismissal and defamation - On appeal, the employer and co-workers argued that notwithstanding the trial judge's ruling on character evidence, he permitted such evidence to be admitted - The Alberta Court of Appeal held that the judge did not err in admitting the impugned evidence, as it was not truly character evidence addressing the plaintiff's general character and reputation, but was relevant to the quality of the employer's investigation of the sexual harassment complaints - In any event, the challenge about character evidence failed for lack of a timely objection, which greatly undermined the employer's and co-workers' argument on appeal - See paragraphs 37 to 48.

Libel and Slander - Topic 4423

Damages - General damages (incl. measure of) - Elements and considerations - The 48 year old supervisor was summarily dismissed after two female co-workers alleged sexual harassment - A jury determined that the allegations were malicious lies, presumably in retaliation for negative employee assessments and a transfer to a different department, and that the supervisor was wrongfully dismissed - The defamatory remarks were made to co-workers and superiors and spread through the workforce and the small town, affecting the supervisor's re-employment - The trial judge left the jury with a range of $5,000 to $60,000 damages to be apportioned between the two co-workers - The jury awarded $50,000 against one co-worker and $10,000 against the other - The co-workers appealed - The Alberta Court of Appeal dismissed the appeal - Damage awards for defamation of an individual were usually low - The court stated that "although the $60,000 defamation damages award is high, it is not unreasonable. Accordingly, we decline to interfere." - See paragraphs 105 to 119.

Libel and Slander - Topic 5430

Evidence - Admissibility - Evidence of plaintiff's character - [See Evidence - Topic 4847 ].

Practice - Topic 5191

Juries and jury trials - Charge to jury - Failure to object to - The Alberta Court of Appeal stated that "in a civil jury trial, the lack of objections with respect to the jury charge and questions to the jury are strong factors against finding that the charge was faulty and that a new trial should be ordered" - See paragraph 34.

Cases Noticed:

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 29].

Prosser v. 20 Vic Management Inc. et al. (2010), 474 A.R. 288; 479 W.A.C. 288; 2010 ABCA 57, refd to. [para. 29].

Dupuis v. Edmonton Cellular Sales Ltd. (2006), 397 A.R. 376; 384 W.A.C. 376; 2006 ABCA 283, refd to. [para. 30].

Hamblin v. Ben et al., [2004] A.R. Uned. 80; 2004 ABCA 182, refd to. [para. 31].

Young v. Bella et al., [2006] 1 S.C.R. 108; 343 N.R. 360; 254 Nfld. & P.E.I.R. 26; 764 A.P.R. 26; 2006 SCC 3, refd to. [para. 32].

Herron et al. v. Hunting Chase Inc. et al. (2003), 330 A.R. 53; 299 W.A.C. 53; 2003 ABCA 219, refd to. [para. 32].

Edmonton (City) v. Westinghouse Canada Inc. et al. (2000), 250 A.R. 385; 213 W.A.C. 385; 2000 ABCA 80, refd to. [para. 33].

Foley v. Administrator, Motor Vehicle Accident Claims Act (Alta.) et al. (2002), 330 A.R. 1; 299 W.A.C. 1; 2002 ABCA 297, refd to. [para. 33].

Mallett and Mallett v. Alberta (Administrator of Motor Vehicle Accident Claims Act) et al. - see Foley v. Administrator, Motor Vehicle Accident Claims Act (Alta.) et al.

Royal Bank of Canada v. Wilton (1995), 165 A.R. 261; 89 W.A.C. 261; 123 D.L.R.(4th) 266 (C.A.), leave to appeal dismissed (1995), 195 N.R. 160; 181 A.R. 80; 116 W.A.C. 80 (S.C.C.), refd to. [para. 34].

R. v. Krause, [1986] 2 S.C.R. 466; 71 N.R. 61; 33 D.L.R.(4th) 267, refd to. [para. 53].

Browne v. Dunn (1894), 6 R. 67 (H.L.), refd to. [para. 55].

Stone v. SDS Kerr Beavers Dental, [2006] O.T.C. 558 (Sup. Ct.), affd. 2007 ONCA 543, refd to. [para. 62].

Foerderer v. Nova Chemicals Corp. (2007), 418 A.R. 64; 2007 ABQB 349, refd to. [para. 62].

Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986; 136 N.R. 40; 53 O.A.C. 200; 91 D.L.R.(4th) 491, refd to. [para. 66].

Machtinger v. HOJ Industries Ltd. - see Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd.

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. 67].

Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701; 219 N.R. 161; 123 Man.R.(2d) 1; 159 W.A.C. 1; 152 D.L.R.(4th) 1, refd to. [para. 73].

Soost v. Merrill Lynch Canada Inc. (2010), 487 A.R. 389; 495 W.A.C. 389; 2010 ABCA 251, refd to. [para. 74].

Mulvihill v. Ottawa (City) (2008), 235 O.A.C. 113; 90 O.R.(3d) 285; 2008 ONCA 201, refd to. [para. 77].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201; 2002 SCC 18, refd to. [para. 78].

Pendergras and Presley v. McGrath and Tilden Rent A Car Co. (1988), 86 A.R. 291; 60 Alta. L.R.(2d) 276 (C.A.), refd to. [para. 99].

Pawlett v. Dominion Protection Services Ltd. et al. (2008), 440 A.R. 241; 438 W.A.C. 241; 302 D.L.R.(4th) 336; 2008 ABCA 369, refd to. [para. 100].

Hill v. Church of Scientology of Toronto and Manning, [1995] 2 S.C.R. 1130; 184 N.R. 1; 84 O.A.C. 1, dist. [para. 100].

Sylvan Lake Golf & Tennis Club Ltd. v. Performance Industries Ltd. and O'Connor (No. 2) (2000), 255 A.R. 329; 220 W.A.C. 329; 2000 ABCA 116, refd to. [para. 101].

Downham v. Lennox and Addington (County), [2005] O.T.C. 1025; 56 C.C.E.L.(3d) 112 (Sup. Ct.), refd to. [para. 102].

Bouma v. Flex-N-Gate Canada Co. (2004), 37 C.C.E.L.(3d) 301 (Ont. Sup. Ct.), refd to. [para. 102].

Mastrogiuseppe v. Bank of Nova Scotia, [2007] O.A.C. Uned. 411; 61 C.C.E.L.(3d) 1; 2007 ONCA 726, refd to. [para. 102].

Murphy v. Alexander et al. (2004), 183 O.A.C. 325; 236 D.L.R.(4th) 302 (C.A.), refd to. [para. 107].

Tremblay v. Campbell (2008), 289 Nfld. & P.E.I.R. 81; 890 A.P.R. 81; 2008 NLTD 203, refd to. [para. 107].

Varga v. Van Panhuis (2000), 269 A.R. 211; 200 ABQB 538, refd to. [para. 113].

Olson v. Runciman et al. (2001), 291 A.R. 195; 2001 ABQB 495, refd to. [para. 114].

Warman v. Grosvenor, [2008] O.T.C. Uned. N20; 92 O.R.(3d) 663 (Sup. Ct.), refd to. [para. 115].

Counsel:

D.L. Pentelechuk, Q.C., for the respondent;

D.D. Risling, for the appellants.

This appeal was heard on November 30, 2010, before Conrad, Hunt and Costigan, JJ.A., of the Alberta Court of Appeal.

On April 26, 2011, the following memorandum of judgment of the Court was filed, including the following opinions:

Hunt and Costigan, JJ.A. - see paragraphs 1 to 120;

Conrad, J.A., dissenting in part - see paragraphs 121 to 147.