Wallace v. United Grain Growers Ltd., (1995) 102 Man.R.(2d) 161 (CA)

• Judge: Scott, C.J.M., Lyon and Helper, JJ.A.
• Court: Court of Appeal (Manitoba)
• Case Date: September 08, 1995
• Jurisdiction: Manitoba
• Citations: (1995), 102 Man.R.(2d) 161 (CA);1995 CanLII 6262 (MB CA);[1995] 9 WWR 153;34 CBR (3d) 153;102 Man R (2d) 161;14 CCEL (2d) 41;93 WAC 161

Wallace v. United Grain (1995), 102 Man.R.(2d) 161 (CA);

    93 W.A.C. 161

MLB headnote and full text

Jack Wallace (plaintiff/appellant) v. United Grain Growers Limited carrying on business under the firm name and style of Public Press (defendant/respondent)

(Suit Nos. AI 92-30-01030; AI 93-30-01487)

Indexed As: Wallace v. United Grain Growers Ltd.

Manitoba Court of Appeal

Scott, C.J.M., Lyon and Helper, JJ.A.

September 8, 1995.

Summary:

Wallace sued his former employer for wrongful dismissal without disclosing in the statement of claim that he was bankrupt. After the trial commenced, the employer alleged that it learned of the bankruptcy and moved to amend the statement of defence to raise the bankruptcy.

The Manitoba Court of Queen's Bench, in a decision reported at 82 Man.R.(2d) 253, allowed the amendment. Wallace appealed. The employer moved for a stay of the appeal until the conclusion of the action.

The Manitoba Court of Appeal, in a deci­sion reported at 85 Man.R.(2d) 40; 41 W.A.C. 40, allowed the employer's motion.

The Manitoba Court of Queen's Bench, in a decision reported at 87 Man.R.(2d) 161, awarded the employee 24 months' salary in lieu of notice and damages for mental dis­tress. Wallace appealed the finding respect­ing the effect of his bankruptcy. The employer cross-appealed the award of 24 months' salary in lieu of notice.

The Manitoba Court of Appeal allowed Wallace's appeal and the employer's cross-appeal, holding that Wallace was entitled to 15 months' salary in lieu of notice.

Bankruptcy - Topic 440.5

Property of bankrupt - Damages for lost wages - A bankrupt sued for wrongful dismissal, claiming damages based on a contract of employment that was to con­tinue until retirement, subject only to termination for just cause - Alternatively, the bankrupt claimed that the employment was for an indefinite period - The employer applied to strike out the state­ment of claim to the extent that the relief claimed had vested in the trustee in bank­ruptcy - The trial judge held that the claim for lost wages was a nullity, where in either situation, the contract was the trust­ee's property - The Manitoba Court of Appeal held that the bankrupt's claim for wrongful dismissal was the bankrupt's property and thus, under the control of the trustee - However, the bankrupt had a right of action in the absence of interven­tion by the trustee - See paragraphs 31 to 64.

Estoppel - Topic 1157

Estoppel in pais (by conduct) - Represen­tation - By conduct - Silence or standing by - Detriment - On October 23, 1986, Wallace sued UGG for wrongful dismissal without disclosing that he was bankrupt - In September 1987, Wallace's lawyer sent Wallace's 1986 tax return to UGG's lawyer which indicated that Wallace was bankrupt - UGG alleged that it learned of Wallace's bankrupt status during examination-in-chief when Wallace introduced his 1987 income tax return which indicated his bankrupt status - The trial judge allowed UGG to amend the statement of defence to raise the bankruptcy - Wallace submitted that he was prejudiced by the late raising of the issue - The Manitoba Court of Appeal held that UGG was not precluded from raising the bankruptcy, where UGG's silence did not constitute a representation - See paragraphs 20 to 30.

Estoppel - Topic 1388

Estoppel in pais (by conduct) - Circum­stances where doctrine not applicable - Conduct of person raising estoppel - The Manitoba Court of Appeal stated that "no representation can be relied upon as an estoppel if it is induced by the conceal­ment of any material fact on the part of the person who is relying upon an alleged representation ... This principle has been held to apply even where the conduct amounting to a misrepresentation by the alleged representee has been innocent" - See paragraph 29.

Master and Servant - Topic 1200

Contract of hiring (employment contract) - Duration of contract - Indefinite term - After working for a printing company for 25 years, the plaintiff went to work for a competitor - After 14 years he was sum­marily dismissed - He sought damages for the unexpired term of a fixed term con­tract, basing his claim on pre-hiring dis­cussions that guaranteed him employment until retirement - Indefinite term employ­ment was the company's policy - The trial judge declined to find that there was a fixed term contract, stating that such a contract would have to be in very explicit terms - The Manitoba Court of Appeal affirmed the decision - See paragraphs 65 to 68.

Master and Servant - Topic 7712

Dismissal of employees - Damages for wrongful dismissal - Punitive or vindictive damages - A salesman was summarily dismissed after 14 years' exemplary em­ployment with UGG - His reputation in the trade was ruined by UGG's allegations of just cause and continued harassment - He sued UGG for wrongful dismissal and sought, inter alia, punitive damages - The trial judge did not find that UGG's conduct was sufficiently reprehensible to warrant an award of punitive damages - The Man­itoba Court of Appeal, in affirming the decision, stated that punitive damages also require an independent actionable wrong - See paragraph 109.

Master and Servant - Topic 8000

Dismissal without cause - Notice of dis­missal - Reasonable notice - What consti­tutes - The 59 year old top salesman with a printing company (UGG) was summarily dismissed after 14 years with the company - He sought damages for wrongful dis­missal - UGG alleged just cause and continued the allegations and harassment until the opening day of trial - Despite his efforts, the salesman had difficulty finding work because UGG's actions ruined his reputation in the trade - Eventually, he found part-time work - The trial judge stated that an award at the top of the scale was warranted and awarded the salesman 24 months' salary in lieu of notice - The Manitoba Court of Appeal held that 15 months' notice was appropriate - See paragraphs 70 to 79.

Master and Servant - Topic 8003

Dismissal without cause - Notice of dis­missal - Reasonable notice - Consider­ations affecting - The Manitoba Court of Appeal opined that "the manner of dis­missal and the circumstances surrounding it may well be relevant in determining the appropriate period of reasonable notice where it impacts on the future employment prospects of the dismissed employee. But I doubt it is appropriate to consider its impact by way of a separate, categorized addition to the appropriate notice period; rather it is one of the many factors proper­ly taken into account ... in determining the notice period itself" - See paragraph 77.

Master and Servant - Topic 8063

Dismissal without cause - Damages - Mental distress - A salesman was sum­marily dismissed after 14 years' exemplary employment with a printing company (UGG) - He sought damages, inter alia, for mental distress - UGG did not with­draw its allegations of just cause until the opening day of trial - The salesman's reputation in the trade was damaged, he had difficulty finding work and he suffered from severe depression - UGG submitted that his depression was caused by his financial worries and personal bankruptcy predating the dismissal - The trial judge held UGG liable for damages for mental distress under both contract and tort - The court awarded $15,000 aggravated dam­ages - The Manitoba Court of Appeal held that the award was not justified - See paragraphs 80 to 108.

Practice - Topic 224

Persons who can sue and be sued - Indi­viduals and corporations - Status or stand­ing - Bankrupts - [See Bankruptcy - Topic 440.5 ].

Practice - Topic 2101

Pleadings - Amendment of - General principles - The Manitoba Court of Appeal stated that "amendment to plead­ings may be made at any time to do justice between the parties, with the onus being upon the opposing party to demonstrate on the balance of probabilities prejudice if the motion to amend is granted" - See para­graph 17.

Practice - Topic 2123

Pleadings - Amendment of - Statement of defence - On October 23, 1986, Wallace sued UGG for wrongful dismissal without disclosing that he was bankrupt - In Sep­tember 1987, Wallace's lawyer sent Wallace's 1986 tax return to UGG's lawyer which indicated that Wallace was bankrupt - UGG alleged that it learned of Wallace's bankrupt status during examination-in-chief when Wallace introduced his 1987 income tax return which indicated his bankrupt status - UGG applied to amend the statement of defence - The trial judge allowed the application where (1) no in­justice would be done; (2) there was no prejudice; (3) the delay was not unreason­able having regard to the delayed disclo­sure; and (4) the amendment raised a valid arguable point - The Manitoba Court of Appeal held that the trial judge did not err in the exercise of his discretion - See paragraphs 16 to 19.

Cases Noticed:

Carey v. R. (1982), 28 C.P.C. 261 (Ont. H.C.), consd. [para. 16].

Ranjoy Sales and Leasing Ltd. et al. v. Deloitte, Haskins & Sells (1990), 63 Man.R.(2d) 248 (C.A.), appld. [para. 17].

Yates v. Yates (1992), 76 Man.R.(2d) 224; 10 W.A.C. 224 (C.A.), appld. [para. 17].

Scotsburn Co-Operative Services Ltd. v. Goodwin (W.T.) Ltd., [1985] 1 S.C.R. 54; 57 N.R. 81; 67 N.S.R.(2d) 163; 155 A.P.R. 163, consd. [para. 22].

Johnston v. Law Society of Prince Edward Island (1985), 53 Nfld. & P.E.I.R. 181; 156 A.P.R. 181 (P.E.I.C.A.), consd. [para. 24].

Algoma District Medical Group et al. v. Southam Press (Ontario) Ltd. (1978), 84 D.L.R.(3d) 595 (Ont. H.C.), consd. [para. 25].

Whitechurch (George) Ltd. v. Cavanagh, [1902] A.C. 117 (H.L.), refd to. [para. 29].

Doey v. London and North Western Rail­way Co., [1919] 1 K.B. 623, refd to. [para. 29].

Ruben v. Great Fingall Consolidated, [1906] A.C. 439 (H.L.), refd to. [para. 29].

Ranch des Prairies Ltée (Prairie Ranch Ltd.) and Denis v. Bank of Montreal et al. (1988), 53 Man.R.(2d) 308 (C.A.), refd to. [para. 32].

Chippendall v. Tomlinson (1785), 4 Dougl. 316; 99 E.R. 900, refd to. [para. 38].

Jameson & Co. v. Brick and Stone Co. (1878), 4 Q.B.D. 208 (C.A.), refd to. [para. 38].

Giroux, Re (1983), 45 C.B.R.(N.S.) 245 (Ont. S.C.), refd to. [para. 38].

Marzetti v. Marzetti (Bankrupt), [1994] 2 S.C.R. 765; 169 N.R. 161; 155 A.R. 340; 73 W.A.C. 340, refd to. [para. 38].

Neilson v. Vancouver Hockey Club Ltd., [1988] 4 W.W.R. 410 (B.C.C.A.), leave to appeal dismissed (1988), 92 N.R. 240 (S.C.C.) consd. [para. 39].

Bailey v. Thurston & Co., [1903] 1 K.B. 137 (C.A.), consd. [para. 39].

Wenlock v. Moloney (1967), III Sol. Jo. 437 (C.A.), refd to. [para. 39].

Lough v. Digital Equipment of Canada Ltd. (1986), 57 O.R.(2d) 456 (H.C.), refd to. [para. 39].

Chetty v. Burlingham Associates Inc. et al. (1995), 125 Sask.R. 249; 81 W.A.C. 249; 121 D.L.R.(4th) 297 (C.A.), consd. [para. 40].

Cohen v. Mitchell (1890), 25 Q.B.D. 262 (C.A.), consd. [para. 43].

Hill v. Settle, [1917] 1 Ch. D. 319 (C.A.), refd to. [para. 44].

Lewis v. St. Paul Fire & Marine Insurance Co. (1966), 9 C.B.R.(N.S.) 63 (Man. Q.B.), refd to. [para. 45].

Chisick, Re (1967), 11 C.B.R.(N.S.) 161 (Man. C.A.), refd to. [para. 45].

Robins v. Kuttner et al. (1990), 40 O.A.C. 55; 80 C.B.R.(N.S.) 10 (Div. Ct.), refd to. [para. 45].

Pascoe, Re, [1944] 1 All E.R. 281 (C.A.), consd. [para. 46].

Davies v. Levy (1994), 27 C.B.R.(3d) 133 (Ont. Gen. Div.), refd to. [para. 50].

Dyster v. Randall & Sons, [1926] Ch. 932 (C.A.), refd to. [para. 50].

Webb v. Fox (1797), 7 Term Rep. 391; 101 E.R. 1037, refd to. [para. 52].

Laroche v. Wakeman (1777), 1 Peake 140; 170 E.R. 125, refd to. [para. 52].

Kitchen v. Bartsch (1805), 7 East. R. 53; 103 E.R. 21, refd to. [para. 52].

Cumming v. Roebuck (1816), Holt (N.P.) 172; 171 E.R. 203, refd to. [para. 52].

Cook v. Whellock (1890), 24 Q.B.D. 658 (C.A.), refd to. [para. 52].

Buchan v. Hill, [1888] W.N. 233, refd to. [para. 52].

Drayton v. Dale (1823), 2 B. & C. 293; 107 E.R. 393, refd to. [para. 52].

Herbert v. Sayer (1844), 5 Q.B. 965; 114 E.R. 1512, appld. [para. 54].

Graham v. McKernan (1877), 47 U.C.R. 368 (Q.B.), refd to. [para. 57].

Holley v. Smith (Gifford) Ltd. and Marshall Children's Foundation (1986), 14 O.A.C. 65; 54 O.R.(2d) 225 (C.A.), refd to. [para. 58].

Holley, Re - see Holley v. Smith (Gifford) Ltd. and Marshall Children's Foundation.

McNamara v. Pagecorp Inc. (1989), 76 C.B.R.(N.S.) 97 (Ont. C.A.), consd. [para. 59].

Brisson v. Long et al., [1992] 5 W.W.R. 185; 131 A.R. 99; 25 W.A.C. 99 (C.A.), consd. [para. 59].

Beckham v. Drake (1849), 2 H.L. Cas. 579; 9 E.R. 1213, refd to. [para. 62].

Mutch v. Wade (Norman) Co. (1987), 17 B.C.L.R.(2d) 185 (S.C.), refd to. [para. 67].

MacDonald v. White Rock Waterworks Co. (1973), 38 D.L.R.(3d) 763 (B.C.S.C.), refd to. [para. 67].

Durrant v. British Columbia Hydro and Power Authority (1990), 49 B.C.L.R.(2d) 263 (C.A.), refd to. [para. 67].

McClelland v. Northern Ireland General Health Services Board, [1957] 2 All E.R. 129 (H.L.), refd to. [para. 67].

Adams v. Comark Inc. (1992), 81 Man.R.(2d) 119; 30 W.A.C. 119 (C.A.), refd to. [para. 68].

Campbell v. MacMillan Bloedel Ltd., [1978] 2 W.W.R. 686 (B.C.S.C.), refd to. [para. 68].

Speck v. Greater Niagara General Hospital (1983), 43 O.R.(2d) 611 (H.C.), refd to. [para. 69].

Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R.(2d) 140 (Ont. H.C.), refd to. [para. 71].

Wiebe v. Central Transport Refrigeration (Man.) Ltd. (1994), 95 Man.R.(2d) 65; 70 W.A.C. 65 (C.A.), consd. [para. 73].

Trask v. Terra Nova Motors Ltd. (1995), 127 Nfld. & P.E.I.R. 310; 396 A.P.R. 310 (Nfld. C.A.), refd to. [para. 76].

Gillman v. Saan Stores Ltd. (1992), 132 A.R. 144; 45 C.C.E.L. 9 (Q.B.), refd to. [para. 76].

Lojstrup v. British Columbia Buildings Corp., [1989] 4 W.W.R. 605 (B.C.C.A.), refd to. [para. 76].

Addis v. Gramophone Co., [1909] A.C. 488 (H.L.), refd to. [para. 81].

Peso Silver Mines Ltd. v. Cropper, [1966] S.C.R. 673, refd to. [para. 82].

Vorvis v. Insurance Corp. of British Col umbia, [1989] 1 S.C.R. 1085; 94 N.R. 321; 58 D.L.R.(4th) 193; [1989] 4 W.W.R. 218; 36 B.C.L.R.(2d) 273; 90 C.L.L.C. 14,035; 25 C.C.E.L. 81, consd. [para. 83].

Jarvis v. Swans Tours Ltd., [1973] 1 Q.B. 233 (C.A.), refd to. [para. 85].

Jackson v. Horizon Holidays Ltd., [1975] 1 W.L.R. 1468 (C.A.), refd to. [para. 85].

Silberman v. Silberman (1910), 10 S.R.(N.S.W.) 554 (C.A.), refd to. [para. 85].

Hadley v. Baxendale (1854), 9 Exch. 341, refd to. [para. 85].

Heywood v. Wellers (a firm), [1976] 1 All E.R. 300 (C.A.), refd to. [para. 85].

Cox v. Philips Industries Ltd., [1976] 3 All E.R. 161 (Q.B.), refd to. [para. 85].

Bliss v. South East Thames Regional Health Authority, [1987] I.C.R. 700 (C.A.), refd to. [para. 86].

Hayes v. Dodd (James and Charles)(a firm), [1990] 2 All E.R. 815 (C.A.), refd to. [para. 86].

Watts v. Morrow, [1991] 4 All E.R. 937 (C.A.), refd to. [para. 89].

Branchett v. Beaney, [1922] 3 All E.R. 910 (C.A.), refd to. [para. 89].

R. v. Investors Compensation Scheme Ltd., [1994] 1 All E.R. 525 (Q.B.), refd to. [para. 89].

Brown v. Waterloo Regional Board of Police Commissioners (1982), 37 O.R.(2d) 277 (H.C.), varied (1983), 43 O.R.(2d) 113 (C.A.), consd. [para. 92].

Pilon v. Peugeot Canada Ltd. (1980), 29 O.R.(2d) 711 (H.C.), refd to. [para. 101].

Backman v. Hyundai Auto Canada Inc. (1990), 100 N.S.R.(2d) 24; 272 A.P.R. 24 (T.D.), refd to. [para. 101].

Swain v. Northern Fortress Ltd. (1993), 131 N.B.R.(2d) 342; 333 A.P.R. 342 (T.D.), refd to. [para. 101].

Ribeiro v. Canadian Imperial Bank of Commerce (1989), 67 O.R.(2d) 385 (H.C.), varied (1992), 13 O.R.(3d) 278 (C.A.), leave to appeal denied (1993), 157 N.R. 400; 65 O.A.C. 79 (S.C.C.), refd to. [para. 101].

Taylor and Schiffner v. Gill (1991), 113 A.R. 38 (Q.B.), refd to. [para. 102].

Gourlay v. Osmond (1991), 104 N.S.R.(2d) 155; 283 A.P.R. 155 (T.D.), refd to. [para. 102].

Dooley v. Weber (C.N.) Ltd. (1995), 80 O.A.C. 234 (C.A.), refd to. [para. 102].

Francis v. Canadian Imperial Bank of Commerce (1994), 75 O.A.C. 216; 21 O.R.(3d) 75 (C.A.), refd to. [para. 102].

Greenberg v. Montreal Trust Co., Meffert and Melfi (1985), 9 O.A.C. 69; 7 C.C.E.L. 152 (C.A.), refd to. [para. 106].

Greenberg v. Meffert - see Greenberg v. Montreal Trust Co., Meffert and Melfi.

Truckers Garage Inc. v. Krell (1993), 68 O.A.C. 106; 3 C.C.E.L.(2d) 157 (Ont. C.A.), refd to. [para. 106].

Wilkinson v. Downton, [1897] 2 Q.B. 57, refd to. [para. 108].

Rahemtulla v. Vanfed Credit Union, [1984] 3 W.W.R. 296 (B.C.S.C.), refd to. [para. 108].

Hill v. Church of Scientology of Toronto and Manning (1995), 184 N.R. 1; 84 O.A.C. 1 (S.C.C.), refd to. [para. 109].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 2 [para. 32]; sect. 10, sect. 11, sect. 40 [para. 36]; sect. 67(c), sect. 67(d) [para. 31]; sect. 68 [para. 34]; sect. 71(2) [para. 33]; sect. 99(1) [para. 35]; sect. 133(1) [para. 5].

Authors and Works Noticed:

Ball, Stacey, Bad Faith Discharge (1994), 39 McGill L.J. 569, generally [para. 104].

Halsbury's Law of England (4th Ed. 1983), vol. 3, para. 633 [para. 55].

Levitt, Howard A., The Law of Dismissal in Canada (2nd Ed. 1994), generally [para. 102].

McGregor on Damages (12th Ed. 1961), p. 44 [para. 90].

Robson, A Treatise on the Law of Bank­ruptcy (7th Ed. 1894), p. 634 [para. 62].

Spencer-Bower, G., and Turner, A.K., The Law Relating to Estoppel by Represen­tation (3rd Ed. 1977), p. 4 [para. 21].

Counsel:

W.P. Riley, Q.C., and G.J. Orle, Q.C., for the appellant;

J.M. Scurfield, Q.C., R.W. Schwartz and D.G. Joynt, for the respondent.

This appeal was heard on May 9 and 10, 1995, before Scott, C.J.M., Lyon and Helper, JJ.A., of the Manitoba Court of Appeal. On September 8, 1995, Scott, C.J.M., delivered the following judgment for the court.