Indexed as:

Drybrough v. Prestressed Systems Windsor Ltd.

Between

Donald A. Drybrough, plaintiff, and

Prestressed Systems Windsor Limited, defendant

[1982] O.J. No. 960

No. 46060/79

Ontario Supreme Court - High Court of Justice

Windsor Non-Jury

Anderson J.

Heard: September 22 and 23, 1982.

Judgment: October 7, 1982.

(11 pp.)

Counsel:

Robert J. McComb, for the plaintiff.

R.G. Colautti, for the defendant.

1 ANDERSON J.:-- This is an action for damages for wrongful dismissal. The statement of claim alleges that the defendant agreed to employ the plaintiff as its general manager. The statement of defence alleges that the plaintiff was hired by Collavino Incorporated to act as general manager of its wholly-owned subsidiary, the defendant in this action. In the argument of the case, no point was taken with respect to these differences. I propose to deal with the matter as though the contract of employment were with the defendant and the liability, if any, that of the defendant.

2 The plaintiff holds a degree in engineering a and in business administration and a diploma with respect to concrete technology. He is forty-five years of age, married and has four children. Prior to the events giving rise to this action, he was employed in a number of different capacities by several employers engaged in one aspect or another of the production of concrete. Immediately before his engagement with the defendant he was employed by Stanley Structures Limited at Brampton, Ontario. He had been employed by Stanley or a related company for some fourteen years prior to his engagement by the defendant. His last employment with Stanley was as manager, field operations. In that capacity he was responsible for the delivery and installation at job sites throughout southern Ontario of pre-cast concrete products manufactured in plants at Belleville and Brampton.

3 In the spring of 1978 he became aware, through the medium of a newspaper advertisement, that the defendant was seeking a general manager for its business of producing prestressed pre-cast concrete. As I have already indicated the defendant is a subsidiary of Collavino Incorporated. Also mentioned in the evidence is a third company, Hollow Core Systems Michigan, Inc. The latter is the corporate arm through which a business similar to that carried on by the defendant in Ontario is carried on in the United States of America. In my view, nothing turns on this particular corporate structure.

4 The initial contact by the plaintiff with anyone acting on behalf of the defendant was an interview with Michael W. Prince, its vice-president. This was followed by a subsequent meeting attended by the plaintiff, Prince and Mario Collavino. Collavino is obviously the real power in the corporations which have been mentioned. There was a further meeting between the plaintiff and Prince.

5 It is common ground that the result of these meetings was that the plaintiff was hired as general manager. The enterprise to be carried on by the defendant was then in its formative stages. Among the responsibilities assumed by the plaintiff was to manage the inception of this new business. His employment commenced in April, 1978, and he entered upon his duties shortly thereafter.

6 His employment was terminated by a letter dated May 7, 1979, which is in the following terms:

1. I regret that I must inform you the Board of Directors of Collavino Incorporated have decided that it would be in our mutual best interests if your employment with Prestressed Systems Windsor Limited were terminated effective immediately.

2. It is our sincerest wish that this action will permit you to find other employment which will be both meaningful and personally gratifying.

7 The defence as originally framed alleged dismissal for cause and alleged also that the plaintiff, at the time of his employment, had misrepresented his abilities to carry out duties expected of him. There was a counter-claim for $150,000 based upon the allegation that the plaintiff was unwilling or unable to manage the defendant's business in a good, prudent and business-like manner. At some time prior to opening of the trial the defence of dismissal for cause and the counterclaim were both abandoned.

8 I was advised at the opening of the trial that the only issue to be decided was the length of notice of dismissal of the plaintiff which was appropriate in the circumstances. After hearing all of the evidence and the arguments of counsel I am satisfied that that is the only issue. Because of success in efforts to mitigate his damages the plaintiff has elected, quite properly, in my view, to limit his claim to the period intervening between his termination and September of 1979 when his efforts to mitigate resulted in other and different employment.

9 The evidence adduced on behalf of the defendant was confined almost entirely to showing that the performance of the plaintiff had been unsatisfactory. Strenuous objection was taken by counsel for the plaintiff to the introduction of such evidence in view of the abandonment of the defence of dismissal for cause. In the course of the trial I ruled that I would admit the evidence, subject to objection. It was the contention of counsel for the defendant that the evidence with respect to performance was relevant to the length of notice. Authorities in that regard were referred to, to which I shall have to make further reference. In substance, the complaints with respect to the plaintiff's performance related to the losses incurred by the business in the first year of its operations. When the results of those operations became apparent from the financial statements for the fiscal period ended February 28, 1979, an almost immediate consequence was the termination of the plaintiff's employment.

10 I shall return to the admissibility of this evidence and its relevance to the length of notice. For the moment I assume that it is admissible for that purpose and assess it accordingly. In my view, it falls short of establishing any deficiency in performance by the plaintiff in any material respect. The projections made for the business at or before its inception forecast a loss in the first year. The loss was substantially greater than had been forecast. The plaintiff had no connection with the business in subsequent years. It thereafter performed very much as had been anticipated. On the evidence I would conclude and find as a fact that the financial difficulties being encountered during the first year, while they were undoubtedly apparent to the plaintiff, were also apparent to Prince and to Collavino. The evidence does not show any effective intervention on their part to resolve the difficulties. Since they were both superior to the plaintiff, such intervention would have been reasonable had the difficulties been susceptible of ready resolution. The evidence is not cogent in any event that the difficulties encountered were attributable to the efforts or lack of efforts of the plaintiff. Aside from some criticism of the pricing policies of the plaintiff, any conclusion that the magnitude of the losses in the first year was his fault rests almost entirely upon inference from the fact of the losses and the fact that they were not experienced in the years following the plaintiff's departure. I am not prepared to draw any such inference. In particular, it would be quite inconsistent with the letter of recommendation which the plaintiff was given after termination.

11 When the unsatisfactory results of the first year's operations became known, upon the production of the financial statement, there was apparently no reasoned discussion of the matter involving the plaintiff. Instead his employment was promptly terminated.

12 Assuming, without deciding, that evidence with respect to performance may be relevant to length of notice, I would not be prepared to find on the evidence before me any deficiency in performance which could have any material result.

13 I should make explicit at this point that in my view there can be no other conclusion but that the hiring of the plaintiff was for an indefinite term and that a term with respect to reasonable notice ought to be implied. An argument was advanced that until the results of the first year's operations became known the term of employment of the plaintiff was in some sense tentative or uncertain. In my view, the evidence does not support such a conclusion. It would, in my view, be unreasonable having regard for the nature of the employment which the plaintiff abandoned in order to take employment with the defendant. His position with his former employer was secure. Comparable positions were limited in number. Had it been intended that the plaintiff's employment was dependent upon performance, and terminable upon short notice if the defendant deemed performance unsatisfactory, such a provision should have been clear and express. It was not. It is also to be noted that, although Collavino undoubtedly approved the hiring, the details were apparently left to Prince, who is no longer employed by the defendant, and who was not called as a witness.

14 I should make clear that I do not doubt that Collavino entertained in good faith the views which he expressed concerning the terms of the plaintiff's employment and performance. I should judge him to be a man of business who is not only successful, but reliable. However, my conclusions must have regard for the position of both parties to the contract and must be based on the evidence as a whole. In any event, as I view the evidence, even of Collavino, the emphasis on performance was related to the possibility of some acquisition by the plaintiff of ownership of a portion of the enterprise, rather than to duration of employment.

15 As indicated at the outset the sole question for determination of the case is the length of notice which was appropriate in the circumstances. The criteria for the determination of this were given by McRuer C.J.H.C. in Bardal v. Globe & Mail Limited (1960), O.W.N. 253 at 255, 24 D.L.R.(2d) 140 at 145. They are expressed in the following terms:

16 There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.

17 Taking these to be the appropriate criteria it is difficult to see how any argument concerning the nature or quality of the servant's performance during his employment could be relevant in determining the length of notice. The genesis of the concept that it is so relevant appears to be in a judgment of the Supreme Court of Nova Scotia, Smith v. Dawson Memorial Hospital and Flood, 29 N.S.R. (2d) 277. This case was subsequently approved and applied by Sheard, County Court Judge, in Housepian v. Work Wear Corp. of Canada Ltd. The matter appears to be one of first impression in this court. In the view which I take, and have already expressed, concerning the evidence of the plaintiff's performance, it is unnecessary that I express any further view as to its relevance on this issue.

18 In arriving at my conclusions I have not overlooked the evidence that at the time he accepted employment with the defendant the plaintiff was seeking to expand his occupational horizons. Nor have I ignored the evidence concerning some delay and reluctance to relocate his home in Windsor.

19 In my view, the length of notice required was well in excess of the period to which the claim of the plaintiff, as put forward at trial, is limited. Any determination of the period is therefore unnecessary. Lest it should be of concern elsewhere, I would fix the period at nine months. It also becomes unnecessary to determine precisely the value to the plaintiff of the car and of certain fringe benefits. The plaintiff's counsel in argument was content to put the damages at $10,250 with interest at 12% calculated at 12% from June 20, 1979, amounting to $4,400, for a total of $14,650. I have no doubt that upon determination of a proper period of notice the damages to be awarded the plaintiff, if not mitigated, would have exceeded that amount. He will have judgment for $14,650 and costs upon the party and party scale.

ANDERSON J.

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