Howard v. Benson Group Inc.

• Jurisdiction: Ontario
• Court: Court of Appeal (Ontario)
• Judge: Cronk, Pepall and Miller, JJ.A.
• Citation: (2016), 348 O.A.C. 381 (CA),2016 ONCA 256
• Date: 16 October 2015

Howard v. Benson Group Inc. (2016), 348 O.A.C. 381 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. AP.018

John Howard (plaintiff/appellant) v. Benson Group Inc., carrying on business as The Benson Group Inc. (defendant/respondent)

(C60404; 2016 ONCA 256)

Indexed As: Howard v. Benson Group Inc.

Ontario Court of Appeal

Cronk, Pepall and Miller, JJ.A.

April 8, 2016.

Summary:

Howard was employed at an automotive service centre as Truck Shop Manager and then as Sales Development Manager. His written employment contract was for a five-year term, commencing September 2012. His employer terminated his employment, without alleging cause, 23 months later. Howard sued for breach of contract, seeking payment of his compensation for the unexpired portion of the contract. Howard moved for summary judgment.

The Ontario Superior Court, in a decision with neutral citation 2015 ONSC 2638, granted the motion, but instead of payment of salary to the end of the term of the contract, Howard was awarded common law damages for wrongful dismissal. The quantum of damages, subject to mitigation, was to be assessed at a mini trial. Howard appealed.

The Ontario Court of Appeal allowed the appeal. The motion judge erred in holding that Howard was entitled to common law damages and that a duty to mitigate applied in the circumstances of this case. Howard was entitled to a contractual sum for the termination of his employment in an amount equal to his salary and benefits for the unexpired term of the employment contract.

Master and Servant - Topic 8064

Dismissal without cause - Damages - Mitigation - [See Master and Servant - Topic 8079 ].

Master and Servant - Topic 8079

Dismissal without cause - Damages - Fixed term contract - Howard was employed at an automotive service centre as Truck Shop Manager and then as Sales Development Manager - His written employment contract was for a five-year term, commencing September 2012 - His employer terminated his employment, without alleging cause, 23 months later - Howard sued for breach of contract, seeking payment of his compensation for the unexpired portion of the contract - Howard brought a motion for summary judgment - The motion judge granted the motion, but instead of payment of salary to the end of the term of the contract, Howard was awarded common law damages for wrongful dismissal - The quantum of damages, subject to mitigation, was to be assessed at a mini trial - Howard appealed - The Ontario Court of Appeal allowed the appeal - The motion judge erred in holding that Howard was entitled to common law damages and that a duty to mitigate applied in the circumstances of this case - Howard was entitled to a contractual sum for the termination of his employment in an amount equal to his salary and benefits for the unexpired term of the employment contract - The court stated that "In the absence of an enforceable contractual provision stipulating a fixed term of notice, or any other provision to the contrary, a fixed term employment contract obligates an employer to pay an employee to the end of the term, and that obligation will not be subject to mitigation. Just as parties who contract for a specified period of notice (or pay in lieu) are contracting out of the common law approach in Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (3d) 140 (Ont. H.C.), so, too, are parties who contract for a fixed term without providing in an enforceable manner for any other specified period of notice (or pay in lieu)" - See paragraphs 20 to 44.

Practice - Topic 8800.2

Appeals - General principles - Duty of appellate court regarding findings of law - [See Practice - Topic 8808 ].

Practice - Topic 8808

Appeals - General principles - Duty of appellate court respecting conclusions or interpretation of trial judge (incl. contractual interpretation) - Howard was employed under a written employment contract for a five-year term commencing September 2012 - His employer terminated his employment, without alleging cause, 23 months later - Howard sued for breach of contract, seeking payment of his compensation for the unexpired portion of the contract - Howard brought a motion for summary judgment - The motion judge granted the motion, but instead of payment of salary to the end of the term of the contract, Howard was awarded common law damages for wrongful dismissal - The quantum of damages, subject to mitigation, was to be assessed at a mini trial - Howard appealed - The Ontario Court of Appeal held that the applicable standard of review was correctness - The court stated that "Generally, a motion judge's interpretation of a contract will be entitled to deference and is reviewable for palpable and overriding error on the reasonableness standard. This is because contractual interpretation most often raises questions of mixed fact and law. However, where the decision below contains an extricable question of law, it is reviewable on the correctness standard. ... The first question raised by the appellant is properly characterized as an extricable question of law. The question is whether an employer who: (1) terminates without cause (2) a fixed term employment contract that (3) does not include an enforceable provision for early termination without cause is (4) liable for damages according to the common law of reasonable notice, or for wages for the unexpired term of the contract? Accordingly, in light of this extricable question of law, the correctness standard of review applies" - See paragraphs 17 to 19.

Cases Noticed:

Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633; 461 N.R. 335; 2014 SCC 53, refd to. [para. 17].

Bowes v. Goss Power Products Ltd. (2012), 293 O.A.C. 1; 351 D.L.R.(4th) 219; 2012 ONCA 425, refd to. [para. 20].

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, refd to. [para. 20].

Ceccol v. Ontario Gymnastic Federation (2001), 149 O.A.C. 315; 55 O.R.(3d) 614 (C.A.), refd to. [para. 20].

Lovely v. Prestige Travel Ltd. et al. (2013), 568 A.R. 215; 2013 ABQB 467, refd to. [para. 21].

Canadian Ice Machine Co. v. Sinclair, [1955] S.C.R. 777, refd to. [para. 22].

Loyst v. Chatten's Better Hearing Service, [2012] O.T.C. Uned. 1653; 98 C.C.E.L.(3d) 243; 2012 ONSC 1653, affd. [2013] O.A.C. Uned. 625; 14 C.C.E.L.(4th) 151; 2013 ONCA 781, refd to. [para. 40].

Graham v. Marleau, Lemire Securities Inc. et al., [2000] O.T.C. 92; 49 C.C.E.L.(2d) 289 (Sup. Ct.), refd to. [para. 40].

Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R.(3d) 140 (Ont. H.C.), refd to. [para. 44].

Counsel:

Kevin Sherkin and Ryan Wozniak, for the appellant;

Albert Campea and Rachel Goldenberg, for the respondent.

This appeal was heard on October 16, 2015, before Cronk, Pepall and Miller, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Miller, J.A., and was released on April 8, 2016.