Soost v. Merrill Lynch Canada Inc.,

• Judge: C,Kent,McDonald
• Neutral Citation: 2010 ABCA 251
• Citation: 2010 ABCA 251,(2010), 487 A.R. 389 (CA),487 AR 389,(2010), 487 AR 389 (CA),487 A.R. 389
• Date: 27 August 2010
• Court: Court of Appeal (Alberta)

Soost v. Merrill Lynch Can. Inc. (2010), 487 A.R. 389 (CA);

      495 W.A.C. 389

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. SE.002

Merrill Lynch Canada Inc. (appellant) v. Kurt G.J. Soost (respondent)

(0901-0309-AC; 2010 ABCA 251)

Indexed As: Soost v. Merrill Lynch Canada Inc.

Alberta Court of Appeal

Côté and McDonald, JJ.A., and Kent, J.(ad hoc)

August 27, 2010.

Summary:

The plaintiff financial advisor sued his employer for damages for wrongful dismissal. The employer pleaded cause for dismissal and counterclaimed for monies allegedly owing under a loan to the plaintiff.

The Alberta Court of Queen's Bench, in a judgment reported (2009), 473 A.R. 254, allowed the action and dismissed the counterclaim. The court awarded 12 months' pay ($600,000) in lieu of reasonable notice and $1,600,000 Wallace damages where the manner of dismissal had a significant detrimental effect on the plaintiff's industry reputation and his ability to keep old clients and attract new ones. The court dismissed the plaintiff's claims of defamation and interference with economic relations. The employer appealed only the $1,600,000 damage award.

The Alberta Court of Appeal allowed the appeal, striking the $1,600,000 damage award as having no basis in law. The award purported to compensate the plaintiff for non-compensable matters and lacked a factual basis. It also contained an element of double-counting for the lack of reasonable notice, for which the plaintiff had already been awarded $600,000.

Damage Awards - Topic 1454

Contracts - Employment contracts - Wrongful dismissal - The plaintiff financial advisor was recruited from another financial institution along with his $70-$80 million book of business - After three years' employment (treated administratively as seven years by the employer), he was summarily dismissed without cause - The trial judge determined that the employer honestly believed it had just cause due to the plaintiff's breach of industry regulations, etc. - The plaintiff alleged that the effect of the wrongful dismissal delayed his finding other employment in the industry due to the damage to his reputation and resulted in him retaining only $10 million of his $150 million book of business, which forced him out of the industry - The trial judge awarded the plaintiff $600,000 in lieu of reasonable notice (12 months) - Additionally, the court awarded $1,600,000 aggravated damages (Wallace damages), because "the manner in which the plaintiff was terminated had a significant detrimental effect on his reputation in the industry and in his ability to keep his old clients and attract new clients. ... the [employer] knew at the time it hired the plaintiff that if it purported to terminate for cause and without notice, the plaintiff would suffer significant damages to his reputation and book of business or goodwill such as would not be compensated for simply by an award of damages in lieu of notice." - The Alberta Court of Appeal quashed the $1,600,000 award as having no basis in fact or law - Wallace damages were for insensitivity and unfairness in the method of dismissal, not the mere fact of dismissal or its prejudicial effects - Something akin to intent, malice or blatant disregard for the employee was required - No mental suffering was alleged - The employer honestly believed it had cause to summarily dismiss the plaintiff - There was no unfairness or insensitivity - The plaintiff's clients were told that the plaintiff left, not that he was dismissed or why he left - This was not "a trumped-up exercise to steal clients" - A dismissed employee "gets no damages for any prejudicial effect (even on reputation) of the dismissal itself" - The employer was entitled to end the employment relationship without any reason, as long as reasonable notice was given - Economic loss from dismissal did not warrant Wallace damages - The $1,600,000 award, on top of damages in lieu of reasonable notice, effectively provided the plaintiff with 3.66 years' notice, which was not justified - The $1,600,000 award purported to compensate for matters not recognized by the law as compensable - Additionally, the award contained an element of double counting for the lack of reasonable notice that had already been compensated for.

Master and Servant - Topic 7713

Dismissal or discipline of employees - Damages for wrongful dismissal - Aggravated damages - [See Damage Awards - Topic 1454 ].

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting (incl. bad faith) - [See Damage Awards - Topic 1454 ].

Cases Noticed:

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. 9].

Desforge v. E-D Roofing Ltd., [2008] O.T.C. Uned. J40; 69 C.C.E.L.(3d) 115 (Sup. Ct.), refd to. [para. 9].

Marchen v. Dams Ford Lincoln Sales Ltd. (2010), 282 B.C.A.C. 120; 476 W.A.C. 120; 315 D.L.R.(4th) 728; 2010 BCCA 29, refd to. [para. 9].

Farber v. Compagnie Trust Royal, [1997] 1 S.C.R. 846; 210 N.R. 161; 145 D.L.R.(4th) 1, refd to. [para. 12].

Dowling v. Workplace Safety and Insurance Board (Ont.) (2004), 192 O.A.C. 126; 246 D.L.R.(4th) 65 (C.A.), refd to. [para. 14].

Poliquin v. Devon Canada Corp. (2009), 454 A.R. 61; 455 W.A.C. 61; 2009 ABCA 216, refd to. [para. 14].

Jean v. Pêcheries Roger L. ltée et al. (2010), 354 N.B.R.(2d) 300; 913 A.P.R. 300; 2010 NBCA 10, refd to. [para. 15].

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. 15].

Gismondi v. Toronto (City) (2003), 171 O.A.C. 1; 64 O.R.(3d) 688; 226 D.L.R.(4th) 334 (C.A.), refd to. [para. 17].

McNevan v. AmeriCredit Corp. et al. (2008), 245 O.A.C. 28; 94 O.R.(3d) 458; 2008 ONCA 846, refd to. [para. 17].

Mulvihill v. Ottawa (City) (2008), 235 O.A.C. 113; 90 O.R.(3d) 285; 2008 ONCA 201, refd to. [para. 23].

Peso Silver Mines Ltd. v. Cropper, [1966] S.C.R. 673; 56 W.W.R.(N.S.) 641, refd to. [para. 25].

Manitoba Keewatinowi Okimakanak Inc. v. McIvor, [2007] 12 W.W.R. 63; 220 Man.R.(2d) 240; 407 W.A.C. 240; 2007 MBCA 134, refd to. [para. 26].

Mathieson v. Scotia Capital Inc., [2009] O.T.C. Uned. S03; [2010] C.L.L.C. 10-002; 78 C.C.E.L.(3d) 76 (Sup. Ct.), refd to. [para. 28].

Hadley v. Baxendale (1854), 9 Exch. 341; 156 E.R. 145; 23 L.J. Ex. 179, refd to. [para. 39].

RBC Dominion Securities Inc. v. Merrill Lynch Canada Inc. et al., [2008] 3 S.C.R. 79; 380 N.R. 166; 260 B.C.A.C. 198; 439 W.A.C. 198; 2008 SCC 54, refd to. [para. 45].

Whitehouse v. RBC Dominion Securities Inc. (2006), 400 A.R. 209; 2006 ABQB 372, refd to. [para. 45].

Authors and Works Noticed:

Anson, William R., The Law of Contract (28th Ed. 2002), pp. 600 [para. 40]; 601 [para. 41].

Cheshire, Geoffrey Chevalier, Fifoot, Cecil Herbert Stuart, and Furmston, Michael P., Law of Contract (15th Ed. 2007), p. 751 [para. 40].

Treitel, Guenter, The Law of Contract (12th Ed. 2007), pp. 1045, 1046 [para. 40]; 1055, 1056 [para. 41].

Counsel:

F.R. Foran, Q.C., J.G. Hopkins and L.Y. Pan, for the appellant;

K. McGuigan and B. Nelson, for the respondent.

This appeal was heard on June 3, 2010, before Côté and McDonald, JJ.A., and Kent, J.(ad hoc), of the Alberta Court of Appeal.

On August 27, 2010, Côté, J.A., delivered the following judgment for the Court of Appeal.