Therrien et al. v. True North Properties Ltd. et al., (2007) 418 A.R. 26 (QB)

• Judge: Sulyma, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: November 06, 2006
• Citations: (2007), 418 A.R. 26 (QB);2007 ABQB 312

Therrien v. True North Prop. Ltd. (2007), 418 A.R. 26 (QB)

MLB headnote and full text

Temp. Cite: [2007] A.R. TBEd. MY.061

Hector R. Therrien and H.R. Therrien Professional Corporation (plaintiffs) v. True North Properties Ltd., Grandin Manor Ltd., Grand Central Manor Ltd., the Greenview Inn Ltd., the Greenwood Inn (Winnipeg) Ltd., the Greenwood Inn Ltd. and Gaetan Gagnon (defendants)

(0103 10348; 2007 ABQB 312)

Indexed As: Therrien et al. v. True North Properties Ltd. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Sulyma, J.

May 11, 2007.

Summary:

Therrien was a chartered accountant practising under his professional corporation's name in partnership with other chartered accountants. Gagnon asked Therrien to work for Gagnon and his companies (the defendants) full-time and exclusively. Therrien agreed and sold his partnership interest. Less than one year later, Gagnon told Therrien that he would not be able to employ him full-time past a certain date. Therrien brought an action for wrongful dismissal.

The Alberta Court of Queen's Bench held that Therrien had been wrongfully dismissed and was entitled to damages in lieu of notice. The reasonable period of notice was 12 months.

Master and Servant - Topic 303

Nature of relationship - What constitutes an employer-employee relationship - Therrien was a chartered accountant practising under his professional corporation's name in partnership with other chartered accountants - Gagnon asked Therrien to work for Gagnon and his companies (the defendants) full-time and exclusively - Therrien agreed and sold his partnership interest - Therrien and Gagnon agreed that the defendants would be invoiced for Therrien's hours through Therrien's professional corporation - Less than one year later, Gagnon told Therrien that he would not be able to employ him full-time past a certain date - Therrien brought an action for wrongful dismissal - The defendants asserted that Therrien was an independent contractor, they had no contract with Therrien personally and the court ought not to pierce the corporate veil in these circumstances - The Alberta Court of Queen's Bench held that an employer-employee relationship existed between Therrien and the defendants - Gagnon had control and direction of Therrien regarding work to be done and how to allocate hours and fees - Therrien relied on Gagnon's job offer as his sole source of income and was not free to provide professional services to others - In finding an employment relationship, the court was not piercing the corporate veil - The professional corporation was merely the vehicle for receiving payment - See paragraphs 29 to 38.

Master and Servant - Topic 2264

Breach of contract - Repudiation by employer or employee - What constitutes repudiation - Therrien was a chartered accountant practising in partnership with other chartered accountants - In 1999, Gagnon asked Therrien to work for Gagnon and his group of companies (the defendants) full-time and exclusively - Therrien agreed and sold his partnership interest - In January 2000, he began working for the defendants - On December 15, 2000, Gagnon told Therrien he would not be able to employ him full-time after May 1, 2001 - Therrien consulted a lawyer and, on December 22, 2000, provided Gagnon with a letter prepared by the lawyer - The employment relationship ended - Therrien sued for damages for wrongful dismissal - The defendants counterclaimed, asserting, inter alia, that Therrien's December 22 letter was a wrongful repudiation of the employment contract - The Alberta Court of Queen's Bench dismissed the counterclaim - Therrien was wrongfully dismissed - Therrien's December 22 letter was not a repudiation of the contract - Therrien was only advising Gagnon that he did not accept the new contract terms being imposed on him - See paragraphs 43 and 58.

Master and Servant - Topic 7502

Dismissal or discipline of employees - General principles - What constitutes dismissal or discharge (incl. constructive dismissal) - Therrien was a chartered accountant practising in partnership with other chartered accountants - Gagnon asked Therrien to work for Gagnon and his group of companies (the defendants) full-time and exclusively - Therrien agreed and sold his partnership interest - In January 2000, he began working for the defendants - On December 15, 2000, Gagnon told Therrien he would not be able to employ him full-time after May 1, 2001, and that he might want to look for additional work - The employment relationship ended - Therrien brought an action for wrongful dismissal - The Alberta Court of Queen's Bench held that Gagnon's December 15 statements amounted to a constructive dismissal - The court rejected Gagnon's submission that Therrien was only being advised of potential changes - Any reasonable person in Therrien's place would have felt that the employment contract's essential terms were being substantially changed - See paragraphs 39 to 42.

Master and Servant - Topic 7716

Dismissal or discipline of employees - Damages for wrongful dismissal - Deductions - Earnings during notice period - Therrien was a chartered accountant practising under his professional corporation's name - In 1999, Gagnon asked Therrien to work for Gagnon and his group of companies (the defendants) full-time and exclusively - Therrien sold his partnership interest - In January 2000, he began working for the defendants - On December 15, 2000, Gagnon told Therrien he would not be able to employ him full-time after May 1, 2001 - The employment relationship ended - Therrien returned to practising as a chartered accountant in mid-February 2001 - In Therrien's action for wrongful dismissal, the court found a constructive dismissal on December 15, 2000, and that reasonable notice was 12 months - The defendants raised the issue of what income could be attributed to Therrien during the period of notice - The Alberta Court of Queen's Bench held that Therrien was to be attributed with the income earned through his professional corporation, not just the income that he had paid to himself as salary from the professional corporation - See paragraph 59.

Master and Servant - Topic 7997

Dismissal without cause - Notice of dismissal - Notice - What constitutes - Therrien was a chartered accountant practising in partnership with other chartered accountants - In 1999, Gagnon asked Therrien to work for Gagnon and his group of companies (the defendants) full-time and exclusively - Therrien sold his partnership interest - In January 2000, he began working for the defendants - On December 15, 2000, Gagnon told Therrien he would not be able to employ him full-time after May 1, 2001 - The employment relationship ended - Therrien sued for damages for wrongful dismissal - The court found that Therrien had been constructively dismissed - At issue was the period of notice - The Alberta Court of Queen's Bench rejected Gagnon's assertion that his statement that Therrien's contract would likely change on May 1, 2001, was reasonable notice - That statement was the basis of the constructive dismissal and could not form the basis of notice - See paragraph 45.

Master and Servant - Topic 8000

Dismissal without cause - Notice of dismissal - What constitutes reasonable notice - Therrien was a chartered accountant practising in partnership with other chartered accountants - He had been in practice since 1972, earning approximately $150,000 per year - In 1999, when Therrien was 56, Gagnon asked Therrien to work for Gagnon and his group of companies (the defendants) full-time and exclusively - The two discussed their retirement plans - Therrien said he wanted to work for another ten years - Gagnon said that fitted well with his own plans - Therrien sold his partnership interest - In January 2000, he began working for the defendants for $12,000 per month - On December 15, 2000, Gagnon told Therrien he would not be able to employ him full-time after May 1, 2001 - The employment relationship ended - Therrien sued for damages for wrongful dismissal - The court found a constructive dismissal - At issue was the period of notice - The Alberta Court of Queen's Bench held that reasonable notice was 12 months - Therrien did and was entitled to presume that the employment would be long-term - He had been induced away from a secure position - Therrien's age and the agreement he had entered into with his former partners affected his ability to find other employment - The dismissal had a devastating effect on him - While the employment was short-term, Therrien's age and the practice restraints were aggravating factors - See paragraphs 44 to 50.

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting (incl. bad faith) - [See Master and Servant - Topic 8000 ].

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting (incl. bad faith) - Therrien was a chartered accountant practising in partnership with other chartered accountants - In 1999, Gagnon asked Therrien to work for Gagnon and his group of companies (the defendants) full-time and exclusively - Therrien sold his partnership interest - In January 2000, he began working for the defendants - On December 15, 2000, Gagnon told Therrien he would not be able to employ him full-time after May 1, 2001, and asked Therrien, "What are you going to do?" - Therrien consulted a lawyer - Over lunch on December 22, 2000, Therrien provided Gagnon with a letter prepared by the lawyer - As they returned to the office, Gagnon became angry and told Therrien to "go away" - Therrien asked if they could talk further - Gagnon said, "No, this is blackmail" - The employment relationship ended - In Therrien's action for wrongful dismissal, the court found a constructive dismissal and that reasonable notice was 12 months - At issue was Therrien's request for additional damages for a breach of good faith and fair dealing (Wallace damages) - The Alberta Court of Queen's Bench held that Gagnon's conduct, while not entirely fair, did not equate to bad faith sufficient to entitle Therrien to Wallace damages - See paragraphs 51 to 54.

Master and Servant - Topic 8064

Dismissal without cause - Damages - Mitigation - Therrien was a chartered accountant practising in partnership with other chartered accountants - In 1999, Gagnon asked Therrien to work for Gagnon and his group of companies (the defendants) full-time and exclusively - Therrien sold his partnership interest - In January 2000, he began working for the defendants - On December 15, 2000, Gagnon told Therrien he would not be able to employ him full-time after May 1, 2001 - The employment relationship ended - Therrien returned to practicing as a chartered accountant in mid-February 2001 - In Therrien's action for wrongful dismissal, the court found a constructive dismissal on December 15, 2000, and that reasonable notice was 12 months - At issue was mitigation - The Alberta Court of Queen's Bench held that Therrien had not failed to minimize his damages - The court rejected the argument that Therrien's duty to mitigate meant that he ought to have continued working for the defendants until his accounting practice was up and running - Therrien had been constructively dismissed - His attempt to negotiate his dismissal was refused and he was not paid for work done in December - It was unreasonable for the defendants to assert that he should have continued to provide services to them in those circumstances - See paragraphs 55 to 57.

Torts - Topic 5208

Interference with economic relations - Contracts - Inducing or procuring breach of contract - Therrien was a chartered accountant practising under his professional corporation's name in partnership with other chartered accountants - In 1999, Gagnon asked Therrien to work for Gagnon and his group of companies (the defendants) full-time and exclusively - Therrien agreed and sold his partnership interest - Therrien and Gagnon agreed that the defendants would be invoiced for Therrien's hours through Therrien's professional corporation - In January 2000, he began working for the defendants - On December 15, 2000, Gagnon told Therrien he would not be able to employ him full-time after May 1, 2001 - The employment relationship ended - Therrien sued for damages for wrongful dismissal - The defendants counterclaimed, asserting, inter alia, that Therrien had induced his private corporation to breach the contract - The Alberta Court of Queen's Bench dismissed the counterclaim - Therrien was wrongfully dismissed - There was no foundation for the defendant's claim that Therrien had induced his corporation to breach the contract - See paragraph 58.

Cases Noticed:

Co-operators Insurance Association v. Kearney, [1965] S.C.R. 106, refd to. [para. 30].

Montreal (City) v. Montreal Locomotive Works Ltd., [1947] 1 D.L.R. 161; [1946] 3 W.W.R. 748 (P.C.), refd to. [para. 30].

Armstrong v. Mac's Milk Ltd. (1975), 7 O.R.(2d) 478; 55 D.L.R.(3d) 510 (H.C.), refd to. [para. 31].

Talbot v. Pan Ocean Oil Corp. (1980), 23 A.R. 618; 11 Alta. L.R.(2d) 383 (Q.B.), refd to. [para. 32].

Bird v. Warnock Hersey Professional Services Ltd. (1980), 25 B.C.L.R. 95 (S.C.), appld. [para. 38].

Reynolds v. First City Trust Co. (1989), 27 C.C.E.L. 194 (B.C.S.C.), refd to. [para. 40].

Farber v. Compagnie Trust Royal, [1997] 1 S.C.R. 846; 210 N.R. 161, refd to. [para. 41].

Sylvester v. British Columbia, [1997] 2 S.C.R. 315; 212 N.R. 51; 91 B.C.A.C. 124; 148 W.A.C. 124, refd to. [para. 44].

Bardal v. Globe & Mail Ltd., [1960] O.W.N. 253 (H.C.), refd to. [para. 44].

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. 44].

JKC Enterprises Ltd. et al. v. Woolworth Canada Inc. et al. (2001), 300 A.R. 1 (Q.B.), appld. [para. 45].

Tse v. Trow Consulting Engineers (1995), 14 C.C.E.L.(2d) 132 (Ont. Gen. Div.), dist. [para. 48].

Hyland v. Royal Alexandra Hospital (2000), 267 A.R. 329; 2000 ABQB 458, affd. (2003), 327 A.R. 306; 296 W.A.C. 306; 2003 ABCA 153, dist. [para. 48].

Crawford v. Rice Financial Group Inc. (2003), 176 Man.R.(2d) 157; 2003 MBQB 216, dist. [para. 48].

Koor v. Metropolitan Trust Co. of Canada (1993), 48 C.C.E.L. 216 (Ont. Gen. Div.), refd to. [para. 49].

Burns v. Oxford Development Group Inc. (1992), 128 A.R. 345 (Q.B.), refd to. [para. 49].

Canadian Crude Separators Ltd. v. Jacobson (1998), 226 A.R. 171; 66 Alta. L.R.(3d) 312 (Q.B.), refd to. [para. 49].

Christianson v. North Hill News Inc. (1993), 145 A.R. 58; 55 W.A.C. 58 (C.A.), refd to. [para. 55].

Diachinsky v. Cree Lake Air Inc. (2005), 270 Sask.R. 22; 2005 SKQB 435, refd to. [para. 55].

Michaels et al. v. Red Deer College, [1976] 2 S.C.R. 324; 5 N.R. 99, refd to. [para. 55].

Counsel:

Hervé H. Durocher, for the plaintiffs;

F. Albert X. Lavergne, for the defendants.

This action was heard on November 6, 2006, by Sulyma, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for judgment on May 11, 2007.