Saalfeld v. Absolute Software Corp., (2009) 265 B.C.A.C. 116 (CA)

• Judge: Huddart, Saunders and Neilson, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: October 30, 2008
• Jurisdiction: British Columbia
• Citations: (2009), 265 B.C.A.C. 116 (CA);2009 BCCA 18

Saalfeld v. Absolute Software Corp. (2009), 265 B.C.A.C. 116 (CA);

    446 W.A.C. 116

MLB headnote and full text

Temp. Cite: [2009] B.C.A.C. TBEd. FE.005

Jennifer Saalfeld (respondent/plaintiff) v. Absolute Software Corporation (appellant/defendant)

(CA036271; 2009 BCCA 18)

Indexed As: Saalfeld v. Absolute Software Corp.

British Columbia Court of Appeal

Huddart, Saunders and Neilson, JJ.A.

January 21, 2009.

Summary:

Saalfeld sued her former employer for damages for wrongful dismissal.

The British Columbia Supreme Court, in a decision reported at [2008] B.C.T.C. Uned. 421, allowed the action and held that Saalfeld was entitled to five months' salary in lieu of' notice. The court also compensated Saalfeld for her loss of the right to participate in the employer's stock option plan. The employer appealed the determination of the appropriate notice period and the compensation for the loss of the right to participate in the stock option plan.

The British Columbia Court of Appeal dismissed the appeal.

Master and Servant - Topic 2173

Remuneration - Share or stock options - Entitlement - Saalfeld sued her former employer for damages for wrongful dismissal - The trial judge concluded that Saafeld was entitled to five months' notice and to be compensated for her loss of stock options that would have vested during the notice period - On the trial judge's construction of the employment contract, Saalfeld would have been entitled to those options if proper notice had been given because "for the purpose of assessing damages, the employment continued through the reasonable notice period" - The employer appealed, asserting that the trial judge erred by failing to properly apply the contract and by implying the term "lawful" into clause 1.1(z)(i) of the Share Option Plan - The employer asserted that the Plan provided that an employee's entitlement to options ceased on the date that notice was given (clause 1.1(z)(i)(B)) - Thus it was inconsequential whether the right to receive stock options would have vested within the notice period had Saalfeld received proper notice - The British Columbia Court of Appeal held that the Plan was not clear that the right to exercise stock options terminated on the day of notice - The essential question was whether participation in the Plan was an employment benefit lost by reason of the employer's breach of the employment contract - The court answered in the affirmative - Since Saalfeld was entitled to damages for any benefits she would have accrued if the contract had been performed until the end of the reasonable notice period, she was entitled to damages for the loss of her stock options - Further, had Saalfeld received the notice to which she was entitled, clause 1.1(z)(i)(A) would have applied and she would have had the opportunity to acquire shares - Clause 1.1(z)(i)(B) would not have been applicable - See paragraphs 19 to 44.

Master and Servant - Topic 8000

Dismissal without cause - Notice of dismissal - What constitutes reasonable notice - On October 16, 2006, Saalfeld accepted employment as a salesperson - The job offered her a slightly higher base salary, significant potential for earnings based on sales, stock options and reduced travel - She began work on November 13, 2006 - On July 24, 2007, the employer terminated her employment without cause and paid her one week's salary in lieu of notice - Saalfeld sued for damages for wrongful dismissal - Saalfeld found alternative employment shortly before the trial on May 26, 2008 - The trial judge concluded that Saalfeld was entitled to five months' notice - The employer appealed asserting, inter alia, that the notice period was outside the range of reasonableness - The British Columbia Court of Appeal referred to the importance of determining a range of reasonableness from recent British Columbia jurisprudence and noted that the trial judge's reasons did not reveal such an analysis - Jurisprudence suggested a range of two to three months when adjusted for age (35), length of service (nine months) and job responsibility (a shared quarterly sales target of $650,000 in a new market) - Nevertheless, the trial judge's award was not unreasonable - Of primary importance to the trial judge was the nine months that it took Saalfeld to obtain new employment - In light of a similar case where the notice period was fixed at six months, the award here was at the high end of an acceptable range - See paragraphs 14 to 18.

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting - On October 16, 2006, Saalfeld accepted employment as a salesperson with Absolute Software - The job at Absolute Software offered her a slightly higher base salary, significant potential for earnings based on sales, stock options and reduced travel - She began work on November 13, 2006 - On July 24, 2007, Absolute Software terminated her employment without cause - The company paid her one week's salary in lieu of notice - Saalfeld sued for damages for wrongful dismissal - The trial judge concluded that Saalfeld was entitled to five months' notice - Absolute Software appealed, asserting that the notice period was outside the range of reasonableness and that the erroneous result might have been influenced by the trial judge's unsupported finding that there was a "slight degree of inducement" - The British Columbia Court of Appeal rejected the assertion - The trial judge did not give the factor "significant weight" probably because the evidence did not support a finding of inducement as that concept was understood in the jurisprudence - Saalfeld lost nothing that related to the determination of her notice period by accepting the employment - She had been in her previous employment for 16 months - She presented no evidence to suggest that either she or Absolute Software anticipated a difficult job market when she was hired or if she were terminated - She was looking for an opportunity to advance her software sales career - Absolute Software offered her that opportunity and nothing more - As with any sales job, continuance of employment depended on demonstrable results - See paragraphs 11 and 12.

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting - On October 16, 2006, Saalfeld accepted employment as a salesperson with Absolute Software - The job at Absolute Software offered her a slightly higher base salary, significant potential for earnings based on sales, stock options and reduced travel - She began work on November 13, 2006 - On July 24, 2007, Absolute Software terminated her employment without cause - The company paid her one week's salary in lieu of notice - Saalfeld sued for damages for wrongful dismissal - The trial judge concluded that Saalfeld was entitled to five months' notice - Absolute Software appealed, asserting that the notice period was outside the range of reasonableness and that the erroneous result might have been influenced by the trial judge's unsupported finding that Saalfeld held a senior position - The British Columbia Court of Appeal rejected the assertion - The trial judge's reference to senior could only have meant that the position was important to Saalfeld - While the trial judge discussed the diminishing importance given by the courts to the character of employment in determining the appropriate notice, she recognized the important factors were Saalfeld's age, her length of service, her position and availability of similar employment - Primary importance was given to the last factor - See paragraph 13.

Master and Servant - Topic 8074

Dismissal without cause - Damages - Stock options - [See Master and Servant - Topic 2173 ].

Cases Noticed:

Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R.(2d) 140 (Ont. H.C.), refd to. [para. 9].

Ansari v. British Columbia Hydro and Power Authority, [1986] 4 W.W.R. 123; 2 B.C.L.R.(2d) 33 (S.C.), refd to. [para. 9].

Cronk v. Canadian General Insurance Co. (1995), 85 O.A.C. 54; 128 D.L.R.(4th) 147; 25 O.R.(3d) 505 (C.A.), refd to. [para. 11].

Timm v. Juran Institute (Canada) Ltd. et al., [2004] O.T.C. 615 (Sup. Ct.), refd to. [para. 12].

Wright v. Feliz Enterprises Ltd., [2003] B.C.T.C. 267; 2003 BCSC 267, refd to. [para. 12].

Shinn v. TBC Teletheatre B.C. et al. (2001), 148 B.C.A.C. 244; 243 W.A.C. 244; 85 B.C.L.R.(3d) 75; 2001 BCCA 83, refd to. [para. 12].

Foster v. Kockums Cancer Division, Hawker Siddeley Canada, [1993] 8 W.W.R. 477; 32 B.C.A.C. 292; 53 W.A.C. 292; 83 B.C.L.R.(2d) 207 (C.A.), refd to. [para. 14].

Cassell & Co. v. Broome, [1972] 1 All E.R. 801; [1972] A.C. 1027 (H.L.), refd to. [para. 14].

Bavaro v. North American Tea, Coffee & Herbs Trading Co. (2001), 149 B.C.A.C. 295; 244 W.A.C. 295; 86 B.C.L.R.(3d) 249; 2001 BCCA 149, consd. [para. 14].

Zeidel v. Metro-Goldwyn-Mayer Studios Inc., [2004] B.C.T.C. 1415; 2004 BCSC 1415, refd to. [para. 15].

Duprey v. Seanix Technology (Canada) Inc., [2002] B.C.T.C. 1335; 20 C.C.E.L.(3d) 136; 2002 BCSC 1335, refd to. [para. 15].

Woolard v. Unum Life Insurance Co. of Canada, [2002] B.C.T.C. 1178; 4 B.C.L.R.(4th) 333; 2002 BCSC 1178, refd to. [para. 15].

Mitchell v. Paxton Forest Products Inc. et al., [2001] B.C.T.C. 1802; 2001 BCSC 1802, affd. (2002), 174 B.C.A.C. 205; 286 W.A.C. 205; 2002 BCCA 532, refd to. [para. 15].

Kussmann v. AT&T Capital Canada Inc., [2000] B.C.T.C. 268; 49 C.C.E.L.(2d) 124; 2000 BCSC 268, refd to. [para. 15].

Beglaw v. Archmetal Industries Corp., [2004] B.C.T.C. Uned. 648; 36 C.C.E.L.(3d) 265; 2004 BCSC 1369, refd to. [para. 16].

Longshaw v. Monarch Beauty Supply Co., [1995] B.C.T.C. Uned. F37; [1996] 3 W.W.R. 365; 14 B.C.L.R.(3d) 88 (S.C.), refd to. [para. 16].

Athey v. Steve Marshall Motors Ltd., [1996] B.C.T.C. Uned. D77; 23 C.C.E.L.(2d) 114 (S.C.), refd to. [para. 16].

Frederick v. International Fund Raising Consultants Ltd., [1991] B.C.T.C. Uned. C96 (S.C.), refd to. [para. 16].

Paradis v. Skyreach Equipment Ltd., [2002] B.C.T.C. 32; 2002 BCSC 32, refd to. [para. 16].

Nygard International Ltd. v. Robinson (1990), 46 B.C.L.R.(2d) 103 (C.A.), refd to. [paras. 20, 36].

Iacobucci v. WIC Radio Ltd. et al. (1999), 131 B.C.A.C. 252; 214 W.A.C. 252; 72 B.C.L.R.(3d) 234; 1999 BCCA 753, refd to. [paras. 20, 36].

Life Innova Capital Inc. et al. v. Perceptronix Medical Inc., [2008] B.C.T.C. Uned. 753; 2008 BCSC 1132, refd to. [para. 24].

Veer v. Dover Corp. (Canada) Ltd. (1999), 120 O.A.C. 394; 45 C.C.E.L.(2d) 183; 2 B.L.R.(3d) 234 (C.A.), refd to. [paras. 24, 39].

Gryba v. Moneta Porcupine Mines Ltd. (2000), 139 O.A.C. 40; 5 C.C.E.L.(3d) 43 (C.A.), leave to appeal refused (2001), 275 N.R. 387; 152 O.A.C. 199 (S.C.C.), refd to. [paras. 24, 39].

Brock v. Matthews Group Ltd. (1991), 43 O.A.C. 369; 34 C.C.E.L. 50 (C.A.), refd to. [paras. 25, 39].

Kieran v. Ingram Micro Inc. (2004), 189 O.A.C. 58; 33 C.C.E.L.(3d) 157 (C.A.), leave to appeal refused (2005), 337 N.R. 190; 206 O.A.C. 394 (S.C.C.), refd to. [paras. 26, 39].

Dunlop v. British Columbia Hydro & Power Authority, [1989] 2 W.W.R. 518; 32 B.C.L.R.(2d) 334 (C.A.), refd to. [paras. 29, 36].

Martell v. Ewos Canada Ltd. et al. (2005), 218 B.C.A.C. 241; 359 W.A.C. 241; 2005 BCCA 554, refd to. [para. 31].

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, consd. [para. 32].

Tull v. Norske Skog Canada Ltd., [2004] B.C.T.C. Uned. 873; 34 C.C.E.L.(3d) 225; 2004 BCSC 1098, refd to. [para. 32].

Gillies v. Goldman Sachs Canada Inc. et al. (2001), 160 B.C.A.C. 149; 261 W.A.C. 149; 95 B.C.L.R.(3d) 260; 2001 BCCA 683, refd to. [para. 36].

Counsel:

N.T. Mitha and D. Rideout, for the appellant;

C. Forguson, for the respondent.

This appeal was heard at Vancouver, British Columbia, on October 30, 2008, by Huddart, Saunders and Neilson, JJ.A., of the British Columbia Court of Appeal. The judgment of the court was delivered on January 21, 2009, with the following opinions:

Huddart, J.A. - see paragraphs 1 to 33;

Saunders, J.A. - see paragraphs 34 to 43;

Neilson, J.A. - see paragraph 44.