Farber v. Compagnie Trust Royal,

• Jurisdiction: Federal Jurisdiction (Canada)
• Judge: Sopinka and Gonthier, JJ.
• Citation: (1996), 210 N.R. 161 (SCC),210 NR 161,[1997] 1 SCR 846,AZ-97111041,[1996] CarswellQue 1158,69 ACWS (3d) 1078,[1996] SCJ No 118 (QL),1997 CanLII 387 (SCC),DTE 97T-411,JE 97-774,145 DLR (4th) 1,27 CCEL (2d) 163
• Court: Supreme Court (Canada)
• Date: 28 November 1996

Farber v. Royal Trust (1996), 210 N.R. 161 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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David Farber (appelant) v. Compagnie Trust Royal (intimée)

(24885)

Indexed As: Farber v. Compagnie Trust Royal

Supreme Court of Canada

Lamer, C.J.C., La Forest, L'Heureux-Dubé,

Sopinka and Gonthier, JJ.

November 28, 1996.

Summary:

Farber sued his former employer Royal Trust. He claimed damages for constructive dismissal.

The Quebec Superior Court dismissed the action. Farber appealed.

The Quebec Court of Appeal, Fish, J.A., dissenting, in a judgment reported J.E. 95-1307; D.T.E. 95T-737; 55 A.C.W.S.(3d) 90, dismissed the appeal. Farber appealed again.

The Supreme Court of Canada allowed the appeal.

Evidence - Topic 1157

Relevant facts - Relevance and materiality - Facts relevant to the issue - Subsequent conduct - [See Quebec Procedure - Topic 9315].

Master and Servant - Topic 7502

Dismissal of employees - General prin­ciples - What constitutes dismissal or discharge (incl. constructive dismissal) - The Supreme Court of Canada discussed what constitutes constructive dismissal in the Canadian common law provinces and held: "Thus, it has been established in a number of Canadian common law deci­sions that where an employer unilaterally makes a fundamental or substantial change to an employee's contract of employment — a change that violates the contract's terms — the employer is committing a fundamental breach of the contract that results in its termination and entitles the employee to consider himself or herself constructively dismissed. The employee can then claim damages from the employer in lieu of reasonable notice." - See para­graphs 33 to 36.

Master and Servant - Topic 7502

Dismissal of employees - General prin­ciples - What constitutes dismissal or discharge (incl. constructive dismissal) - [See second Quebec Nominate Contracts - Topic 6505].

Master and Servant - Topic 8000

Dismissal without cause - Notice of dis­missal - What constitutes reasonable notice - [See second Quebec Nominate Contracts - Topic 6505].

Quebec Civil Law - Topic 2

General principles - Development and interpretation of civil law - The Supreme Court of Canada held: "... the civil law is a complete system in itself; care must be taken not to adopt principles from other legal systems. Thus, for a legal principle to be applicable in the civil law, it must above all be justified within the system itself ... That being said, it may neverthe­less be worthwhile from a comparative point of view to consider how other legal systems have resolved the same issue. That analysis must not, however, lead to the unquestioning adoption of legal rules from other systems." - In addition, if the rules in two systems are similar, precedents, though not binding, may be useful for the purpose of explanation and illustration - See paragraphs 29 to 32.

Quebec Nominate Contracts - Topic 6505

Employment contracts - Dismissal of employees - Implicit (or constructive) dismissal - The Supreme Court of Canada discussed the concept of constructive dismissal in the civil law and held: "To reach the conclusion that an employee has been constructively dismissed, the court must therefore determine whether the unilateral changes imposed by the employer substantially altered the essential terms of the employee's contract of em­ployment. For this purpose, the judge must ask whether, at the time the offer was made, a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed." - See paragraphs 23 to 32.

Quebec Nominate Contracts - Topic 6505

Employment contracts - Dismissal of employees - Implicit (or constructive) dismissal - Farber began working for Royal Trust in 1966 as a real estate agent - Because of his excellent work, he was promoted numerous times: branch manager in 1972, residential sales manager for the Montreal region then assistant regional sales manager in 1976, regional sales manager for Metro-Montreal West in 1979 and regional manager for Western Quebec in 1982 - In 1983, Farber received $150,000 made up of base salary, com­missions and benefits - In 1984, Royal Trust reorganised - Farber's position was eliminated - Farber was offered the mana­ger's position at the "problematic" Dollard branch - His earnings would diminish - Farber did not accept Royal Trust's offer - The Supreme Court of Canada held that he was constructively dismissed and awarded him a year's salary, $150,000, as compen­sation - See paragraphs 37 to 53.

Quebec Nominate Contracts - Topic 6566

Employment contracts - Dismissal of employees - Without cause - Compensa­tion in lieu of notice - Awards - Regional manager - [See second Quebec Nominate Contracts - Topic 6505].

Quebec Procedure - Topic 9315

Evidence - Best evidence rules - Admiss­ibility of ex post facto evidence - Royal Trust eliminated Farber's regional manager position - It offered him a manager's position at a then "problematic" branch considered for closing - Farber's new salary consisted of real estate commissions based on the branch's sales - Farber esti­mated that his salary would diminish unacceptably - He refused the offer and sued for damages for constructive dis­missal - Royal Trust replied that Farber's new salary did not constitute a change of his employment contract and would, in fact, have increased - It sought to present evidence of the branch's "markedly higher" sales after the offer - The Supreme Court of Canada held that this evidence was inadmissible as not being relevant since "the subsequent sales figures could not reasonably have been foreseen" by Farber - See paragraphs 40 to 47.

Cases Noticed:

Asbestos Corp. v. Cook, [1933] S.C.R. 86, refd to. [para. 23].

Columbia Builders Supplies Co. v. Bartlett, [1967] B.R. 111 (Que. C.A.), refd to. [para. 23].

Cantin v. Soupes Campbell Ltée (1991), 51 Q.A.C. 140; D.T.E. 91T-741 (C.A.), refd to. [para. 23].

Standard Broadcasting Corp. v. Stewart, [1994] R.J.Q. 1751 (C.A.), refd to. [para. 23].

Cass. soc., January 21, 1988, Bull. civ. V, No. 58, p. 39, refd to. [para. 28].

Cass. soc., February 4, 1988, Bull. civ. V, No. 96, p. 65, consd. [para. 28].

Cass. soc., February 25, 1988, Bull. civ. V, No. 140, p. 93, refd to. [para. 28].

Cass. soc., November 15, 1988, Bull. civ. V, No. 594, p. 382, refd to. [para. 28].

Lavigne v. Sidbec Dosco Inc., [1985] C.S. 26 (Que.), consd. [para. 30].

Montreal Public Service Co. v. Champagne (1916), 33 D.L.R. 49 (P.C.), consd. [para. 30].

Rubis v. Gray Rocks Inn Ltd., [1982] 1 S.C.R. 452; 41 N.R. 108, appld. [para. 31].

Driver v. Coca Cola Ltd., [1961] S.C.R. 201, appld. [para. 31].

Hallé v. Canadian Indemnity Insurance Co., [1937] S.C.R. 368, appld. [para. 31].

Desrosiers v. Canada (1920), 60 S.C.R. 105, appld. [para. 31].

Tucker v. Royal Trust Co., [1982] 1 S.C.R. 250; 40 N.R. 361, refd to. [para. 32].

Pauze v. Gauvin, [1954] S.C.R. 15, refd to. [para. 32].

Rubel Bronze and Metal Co. and Vos, Re, [1918] 1 K.B. 315, consd. [para. 33].

Stewart v. MacMillan Bloedel Ltd. (1992), 42 C.C.E.L. 225 (B.C.C.A.), affing. (1991), 37 C.C.E.L. 292 (B.C.S.C.), refd to. [para. 33].

Cox v. Royal Trust Corp. of Canada (1989), 33 O.A.C. 95; 26 C.C.E.L. 203 (C.A.), leave to appeal refused [1989] 2 S.C.R. x; 105 N.R. 75; 37 O.A.C. 395, refd to. [para. 33].

Mifsud v. MacMillan Bathurst Inc. (1987), 60 O.R.(2d) 58 (H.C.), refd to. [para. 33].

Schwann v. Husky Oil Operations Ltd. (1989), 76 Sask.R. 97; 27 C.C.E.L. 103 (C.A.), refd to. [para. 33].

Saint John Shipbuilding Ltd. v. Snyders (1989), 100 N.B.R.(2d) 14; 252 A.P.R. 14; 29 C.C.E.L. 26 (C.A.), refd to. [para. 33].

Farquhar v. Butler Brothers Supplies Ltd. (1988), 23 B.C.L.R.(2d) 89 (C.A.), refd to. [para. 33].

Baker v. Burns Foods Ltd. (1977), 74 D.L.R.(3d) 762 (Man. C.A.), refd to. [para. 33].

Cayen v. Woodwards Stores Ltd. (1993), 22 B.C.A.C. 32; 38 W.A.C. 32; 45 C.C.E.L. 264 (C.A.), refd to. [para. 33].

Poole v. Tomenson Saunders Whitehead Ltd. (1987), 16 B.C.L.R.(2d) 349 (C.A.), refd to. [para. 33].

Orth v. MacDonald Dettwiler & Associates Ltd. (1986), 8 B.C.L.R.(2d) 1 (C.A.), refd to. [para. 33].

Reber v. Lloyds Bank Canada (1985), 61 B.C.L.R. 361 (C.A.), refd to. [para. 33].

Chouinard v. Groupe Commerce, compa­gnie d'assurances (1995), 67 Q.A.C. 83 (C.A.), refd to. [para. 36].

Daigneault v. Coopexcel, coopérative agri­cole (1991), 42 C.C.E.L. 128 (Que. S.C.), refd to. [para. 36].

Roy v. Caisse populaire de Thetford Mines, [1991] R.J.Q. 2693 (S.C.), refd to. [para. 36].

Nyveen v. Russell Food Equipment Ltd. (1987), 19 C.C.E.L. 227 (Que. S.C.), refd to. [para. 36].

Vigeant v. Canadian Thermos Products Ltd., D.T.E. 88T-295 (Que. S.C.), refd to. [para. 36].

Désormeaux v. Banque de Montréal, D.T.E. 87T-210 (Que. S.C.), refd to. [para. 36].

Reilly v. Hotels of Distinction Canada Inc., [1987] R.J.Q. 1606 (S.C.), refd to. [para. 36].

Carrier (Rémi) Inc. v. Nolan, D.T.E. 86T-370 (C.A.), refd to. [para. 36].

Lynch v. Carter (Mac) Ltd. (1995), 169 N.B.R.(2d) 202; 434 A.P.R. 202; 17 C.C.E.L.(2d) 292 (T.D.), refd to. [para. 36].

Pulak v. Algoma Publishers Ltd. (1995), 10 C.C.E.L.(2d) 111 (Ont. Gen. Div.), refd to. [para. 36].

McNeil v. Presstran Industries (1992), 60 O.A.C. 303; 45 C.C.E.L. 78 (C.A.), refd to. [para. 36].

Johnson v. Moncton Chrysler Dodge (1980) Ltd. (1991), 114 N.B.R.(2d) 192; 289 A.P.R. 192; 34 C.C.E.L. 164 (C.A.), refd to. [para. 36].

Sherrard v. Moncton Chrysler Dodge (1980) Ltd. (1990), 113 N.B.R.(2d) 355; 285 A.P.R. 355; 33 C.C.E.L. 72 (C.A.), refd to. [para. 36].

Cook v. Royal Trust (1990), 31 C.C.E.L. 6 (B.C.S.C.), refd to. [para. 36].

Rebitt v. Pacific Motor Sales & Service Ltd. (1988), 20 C.C.E.L. 239 (B.C.C.A.), refd to. [para. 36].

Jobber v. Addressograph Multigraph of Canada Ltd. (1980), 1 C.C.E.L. 87 (Ont. C.A.), refd to. [para. 36].

Compagnie minière Québec Cartier v. Métallurgistes unis d'Amérique, local 6869, [1995] 2 S.C.R. 1095; 183 N.R. 313, refd to. [para. 41].

Bertucci v. Banque Toronto-Dominion (1994), 65 Q.A.C. 17 (C.A.), refd to. [para. 41].

Fabrique de la Paroisse de Saint-Phillippe d'Arvida v. Desgagne's Estate, Immeubles Murdock Ltée, Dauphinais and Belanger, [1984] 1 S.C.R. 19; 51 N.R. 241, consd. [para. 47].

Statutes Noticed:

Civil Code of Lower Canada, art. 1022, art. 1668, art. 1670 [para. 23].

Implementation of the reform of the Civil Code, Act respecting the, S.Q. 1992, c. 57, sect. 2 [para. 22].

Authors and Works Noticed:

Baudouin, Jean-Louis, Les Obligations, 4e éd., 1993, p. 243 [para. 23].

Baudouin, Jean-Louis, Interprétation du Code civil québécois par la Cour suprême du Canada (1975), 53 Can. Bar Rev. 715, p. 726 [para. 32].

Gagnon, Robert P., Droit du travail du Québec: pratiques et théories, 3e éd., 1996, p. 66 [para. 25].

Lyon-Caen, Gérard, Pélissier, Jean, and Supiot, Alain, Droit du travail, 17e éd., 1994, pp. 273, 492, 664 [para. 28].

Rivero, Jean, and Savatier, Jean, Droit du travail, 12e éd., 1991, pp. 509, 510 [para. 28].

Sherstobitoff, Nicholas W., Constructive Dismissal, in Unemployment and Justice (1994), 127, p. 129 [para. 34].

Teyssié, Bernard, Droit du travail, 2e éd., 1992, vol. 1, pp. 592 to 596 [para. 28].

Counsel:

Brahm L. Campbell and Leonard E. Seid­man, for the appellant;

Guy Dion and Benoit Mailloux, for the respondent.

Solicitors of Record:

Campbell, Cohen, Seidman, Montral, Que­bec, for the appellant;

Martineau, Walker, Quebec, Quebec, for the respondent.

This appeal was heard on November 28, 1996, by Lamer, C.J.C., La Forest, L'Heu­reux-Dubé, Sopinka and Gonthier, JJ., of the Supreme Court of Canada.

The judgment of the Supreme Court was delivered on November 28, 1996 and reasons were filed in both official languages on March 27, 1997, by Gonthier, J.