Mothersele v. Gulf Canada Resources Ltd., 2003 ABQB 2

• Judge: Nation, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: January 02, 2003
• Citations: 2003 ABQB 2;(2003), 333 A.R. 75 (QB)

Mothersele v. Gulf Can. Resources (2003), 333 A.R. 75 (QB)

MLB headnote and full text

Temp. Cite: [2003] A.R. TBEd. JA.095

Christopher D. Mothersele (plaintiff) v. Gulf Canada Resources Limited (defendant)

(Action No. 0001-00243; 2003 ABQB 2)

Indexed As: Mothersele v. Gulf Canada Resources Ltd.

Alberta Court of Queen's Bench

Judicial District of Calgary

Nation, J.

January 2, 2003.

Summary:

The plaintiff sued for damages for wrongful dismissal.

The Alberta Court of Queen's Bench allowed the action and assessed damages accordingly.

Damages - Topic 6744

Contracts - Employment relationship or contract - For breach by employer - Loss of fringe benefits - The defendant dismissed the plaintiff without cause - The plaintiff sought to recover losses he had relating to medical and dental costs during the period of reasonable notice - The defendant asserted that the plaintiff was only entitled to recover the cost to the employer of providing benefits - The Alberta Court of Queen's Bench allowed the plaintiff's claim - The basic principle was that an individual should be compensated not only for salary but also for loss of fringe benefits for the duration of the notice period - The actual expenses of replacing the programs was allowable if incurred, as well as the actual out of pocket expenses for drugs or services incurred but not covered during a transition period - The court deducted the cost of benefits that had been added to the annual salary calculation - The cost of the benefits to the employer was only properly included if there was no proof of actual cost to the plaintiff - See paragraphs 46 to 54.

Damages - Topic 6746

Contracts - Employment relationship or contract - For breach by employer - Loss of share options or share value - On December 21, 1999, the defendant dismissed the plaintiff without cause - The plaintiff had vested and unvested stock options which the defendant had granted to him - Each option contract required that if the defendant dismissed the plaintiff without cause, the option had to be exercised, if at all, within either one year or two years - The defendant unilaterally terminated the options - In assessing the plaintiff's damages, the Alberta Court of Queen's Bench stated that it was the defendant's conduct which disallowed the plaintiff from exercising a choice as to when he would exercise the options, and in fact, he could not exercise that choice at all - Accordingly, damages were to be assessed using the highest share valuation between the date of the plaintiff's termination and the date that the option would have expired, or, in the case where it would not have expired during the period of reasonable notice, the date of the expiry under the option contract - See paragraphs 36 to 45.

Damages - Topic 6753

Contracts - Employment relationship or contract - For breach by employer - Mitigation by employee - The plaintiff, age 47, held the position of Senior Staff Engineer-Corporate Reserves and was the defendant's highest paid technical employee performing engineering work - He had no management responsibilities - The plaintiff was dismissed without cause after 19 years of employment - The Alberta Court of Queen's Bench held that the plaintiff was entitled to 15 months notice - However, the plaintiff had rejected an offer of employment which would have commenced 14 months after his dismissal - Had he accepted the offer, he would have fully mitigated his damages - The plaintiff chose to continue with consulting work, a right that he had, but not at the cost of the defendant in damages - Accordingly, damages were to be calculated based on 14 months - See paragraphs 26 to 29.

Damages - Topic 6754

Contracts - Employment relationship or contract - For breach by employer - Loss of health benefits - [See Damages - Topic 6744 ].

Master and Servant - Topic 7586

Dismissal of employees - Grounds - Untrustworthiness - The plaintiff had been employed by the defendant for 19 years as an engineer and had a history of writing "disgruntled employee" memos to management - The defendant advised the plaintiff, inter alia, that a salary increase was being deferred pending his making improvements - The plaintiff sent a memo to the company's director - The memo was taken as a threat to destroy work product (computer data) if the plaintiff was required to do certain things - The defendant, being a publicly traded company concerned over protecting its assets, dismissed the plaintiff - The Alberta Court of Queen's Bench held that the defendant lacked cause to dismiss the plaintiff - Unlike a reasonable, objective employer, the defendant had not taken immediate steps to back up and protect the data - Knowing the plaintiff, that he might not intend to carry out the threat, his skills and love of the work product, and his personality, the reasonable, objective employer would have communicated the perceived seriousness of the threat and assessed the plaintiff's state of mind and intentions - A stern warning and economic sanctions would have been justified - Although the plaintiff's conduct was close to that which might make an employer lose confidence and trust and might go to the heart of the contractual duty, the defendant had not met the requisite onus - See paragraphs 9 to 20.

Master and Servant - Topic 7587

Dismissal of employees - Grounds - Destruction of files - [See Master and Servant - Topic 7586 ].

Master and Servant - Topic 7716

Dismissal of employees - Damages for wrongful dismissal - Deductions - Earning during notice period - The defendant dismissed the plaintiff without cause - The plaintiff commenced a consulting business which he ran through Lunen and Associates (Lunen) - Ten percent of the plaintiff's income went to Lunen for administrative fees and the remainder was split 45% to the plaintiff and 45% to Lunen - The Alberta Court of Queen's Bench concluded that the plaintiff was entitled to damages in lieu of notice - In determining the plaintiff's net income during the period of reasonable notice, the court refused to allow the plaintiff to write off allowable tax deductions for his home office and a vehicle - Although it would be ordinary to make such deductions, one had to look carefully at the circumstances of each case - Here, the evidence did not establish that the plaintiff had relied on or needed a home office in addition to the spaces and services that his clients provided - The plaintiff's earnings were his consulting fees which already reflected a 55% reduction for the costs of earning income - See paragraphs 30 to 32.

Master and Servant - Topic 8000

Dismissal without cause - Notice of dismissal - What constitutes reasonable notice - [See Damages - Topic 6753 ].

Master and Servant - Topic 8064

Dismissal without cause - Damages - Mitigation - [See Damages - Topic 6753 ].

Master and Servant - Topic 8074

Dismissal without cause - Damages - Stock options - [See Damages - Topic 6746 ].

Cases Noticed:

McKinley v. BC Tel et al., [2001] 2 S.C.R. 161; 271 N.R. 16; 153 B.C.A.C. 161; 251 W.A.C. 161, refd to. [para. 7].

Neudorf v. Sun Valley Co-op Ltd. (1994), 94 Man.R.(2d) 204; 6 C.C.E.L.(2d) 61 (Q.B.), refd to. [para. 14].

Reilly v. Steelcase Canada Ltd. (1979), 103 D.L.R.(3d) 704 (Ont. H.C.), refd to. [para. 17].

Veer v. Dover Corp. (Canada) Ltd. (1997), 39 O.T.C. 1; 31 C.C.E.L.(2d) 119 (Gen. Div.), affd. (1999), 120 O.A.C. 394; 45 C.C.E.L.(2d) 183 (C.A.), refd to. [para. 41].

Hardie v. Trans-Canada Resource Ltd. (1976), 2 A.R. 289; 71 D.L.R.(3d) 668 (C.A.), refd to. [para. 41].

Taggart v. K.D.N. Distribution & Warehousing Ltd. (1997), 160 N.S.R.(2d) 192; 473 A.P.R. 192 (S.C.), refd to. [para. 53].

Ryshpan v. Burns Fry Ltd. (1995), 10 C.C.E.L.(2d) 235 (Ont. Gen. Div.), affd. (1996), 20 C.C.E.L.(2d) 104 (Ont. C.A.), refd to. [para. 53].

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, refd to. [para. 55].

Counsel:

Timothy P. Chick (McCarthy Tetrault LLP), for the plaintiff;

Nancy Dilts (Conoco Phillips), for the defendant.

Nation, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, heard this action on November 4 and 7, 2002, and delivered the following reasons for judgment on January 2, 2003.