Weber v Coco Homes Inc., 2013 ABQB 180

Court of Queen ’ s Bench of Alberta Citation: Weber v Coco Homes Inc., 2013 ABQB 180 Date: 20130320 Docket: 0901 05426 Registry: Calgary Between: Kyla Weber and Goldngirl Investment & Consulting Ltd. Plaintiffs - and - Coco Homes Inc. Defendant Editorial Notice: On behalf of the Government of Alberta personal data identifiers have been removed from this unofficial electronic version of the judgment. _______________________________________________________ Memorandum of Judgment of the Honourable Madam Justice C.S. Phillips _______________________________________________________ 1.

Introduction [ 1 ] The Plaintiffs, Ms. Weber and her holding company, Goldngirl Investment & Consulting Ltd. ( “ Goldngirl ” ) worked in the Defendant ’ s show home selling the Defendant ’ s newly-built and spec residential homes to prospective buyers. Ms. Weber was terminated without notice and claims that she is entitled to outstanding commissions and severance.

2. Facts [ 2 ] The Defendant, Coco Homes Inc. ( “ Coco ” ), builds and sells residential homes around Okotoks, Alberta. Mr. Doug Bennett is the owner of Coco Homes. Ms. Dawnita Magwood was Coco ’ s sales and marketing manager. [ 3 ] Mr. Ted Crawford owned Goldnboy Investment and Consulting Ltd. ( “ Goldnboy ” ). On January 7, 2004, Coco and Mr. Crawford (using his company Goldnboy) contracted for Mr.

Crawford to serve as Coco ’ s area manager in the Cimarron subdivision (the “ Timbercreek Sales Compensation Agreement ” ). (It should be noted the Timbercreek Sales Compensation Agreement mistakenly refers to Timbercreek Homes Inc. of the First Part when it should have referred to Coco. Timbercreek Homes Inc. did not exist at that time and was later owned by Mr. Crawford. Timbercreek Homes Ltd. was a corporation that existed and was owned by Mr. Bennett). [ 4 ] Ms. Weber was a sales associate for Goldnboy.

Between 2005 and 2006 she had a 50% interest in the company, which she had obtained for the nominal price of $1.00. Ms. Weber and Mr. Crawford lived together, worked together, and shared the revenue of Goldnboy. Mr. Crawford described Ms. Weber as his “ business partner ” while they were together. [ 5 ] Through Goldnboy, Ms. Weber began providing services as assistant area manager to Coco in August 2004, which required her to be responsible for assisting with the sale of properties being developed by Coco. Between August 2004 and March 2006, Coco paid her personally by cheque, at Mr. Crawford ’ s request.

In 2004, Ms. Weber received commissions directly from Coco in the amount of $23,939.00 plus GST and in 2005 she received commissions directly from Coco in the amount of $8,273.00 plus GST. From 2004 to early 2006, she was also responsible for the general file management for Mr. Crawford and Goldnboy. [ 6 ] In or about July 2004, Ms. Weber became a real estate agent for Keller Williams, a real estate brokerage. She had a written listing agreement with Keller Williams. Keller Williams paid her commissions through her company Goldngirl, which she created for tax purposes.

She maintained this employment while working for Goldnboy and later Coco. She ceased working for Keller Williams in approximately January 2010. [ 7 ] In March 2006, Mr. Crawford and Goldnboy ceased providing services to Coco. [ 8 ] At this time, Ms. Weber took over the role of area manager with Coco for Cimarron Estates and was paid through Goldngirl. Coco paid Ms. Weber by cheque to Goldngirl. [ 9 ] Ms. Weber worked in Coco ’ s show home. The show home contained an office for Ms. Weber ’ s use. [ 10 ] Ms. Weber understood her duties as area manager included the following: - Ms.

Weber greeted customers that entered the Coco show homes and provided them with information on the lots and pricing. - Ms. Weber was expected to be in the show home during set hours. She could use a replacement person from time to time if she was absent. - Ms. Weber kept the show home clean and tidy and inspected the speculative homes in Coco ’ s inventory. - Ms. Weber filled out sales contracts for buyers.

- Ms. Weber researched leads and kept herself informed of current market conditions and of Coco ’ s competitors in the Cimarron area. [ 11 ] Coco provided Ms. Weber with the supplies necessary for her position. These included, for example: stationary, promotional materials, sales contracts, a computer, a telephone, a desk, business cards identifying Ms. Weber as area manager for Coco, and pricing information for the homes and any upgrades to the homes. Some promotional materials referencing Coco included Ms. Weber ’ s name and her title as area manager for Coco. [ 12 ] Ms.

Weber was expected to work exclusively on Coco matters during her set hours in Coco ’ s show home, with those set hours being Monday - Thursday 2:00 PM to 8:00 PM; and Saturday - Sunday 12:00 PM to 5:00 PM. However, Coco was aware that she also had a second job working as a realtor for Keller Williams. Coco permitted Ms. Weber to give potential and actual Coco customers her realtor information where the opportunity presented itself. At times, Ms. Weber was asked to list spec homes on the MLS (multiple listing service) for Coco.

She and Coco entered into separate written contracts with respect to the MLS listings, and in return Coco was charged a reduced commission. [ 13 ] Ms. Weber attended training on topics pertinent to Coco ’ s business. This included training by Coco ’ s construction managers and trades peoples. [ 14 ] Ms. Weber hired a part-time assistant to help her perform her work for Coco. Ms. Weber paid her assistant an hourly wage. Ms. Weber ’ s assistant was permitted to and did substitute for Ms. Weber in the show home when Ms. Weber was absent. [ 15 ] Ms. Weber was permitted to take time away from the office.

She asked Coco for permission before taking time away. In 2008, she was absent from the show home for more than two weeks. [ 16 ] Ms. Weber met regularly with Coco to report on her progress. She attended weekly meetings, was asked to and submitted a business plan and a written statement of her goals and reasons for working for Coco, and was subject to a secret shopper survey in October 2007, which rated her with an overall assessment of 40/40 and commented “ [a]bsolutely, this is the best service I have received in a very long time ” . [ 17 ] Ms. Weber was paid solely on a commissions basis. When Ms.

Weber sold a home, she earned 3% of the base price of the home less the value of the land, appliances, and GST. She received 60% of her commission when the sale documents were completed, and the remaining 40% upon closing/possession. Ms. Weber calculated her commission based off an excel template that Coco provided to her. Ms. Weber asked Coco to pay her commissions to Goldngirl, and Coco complied with her request. Goldngirl was required to remit any statutory deductions, such as GST, and income tax, directly to the government. [ 18 ] Ms.

Weber did not receive from Coco incentives or benefits, such as: minimum commissions, performance bonuses, source deductions, group benefits, an expense account, pension plan, or stock options. [ 19 ] On June 2, 2008, Ms. Weber was terminated without notice and without cause. No mention of Goldngirl is made in the termination letter. Ms. Weber received a reference letter from Coco dated June 6, 2008 (Exhibit #7). No mention of Goldngirl is made in the reference letter. The reference letter is the first mention that Ms.

Weber had been acting as an “ independent sales associate ” . [ 20 ] The only time Goldngirl is ever mentioned by Coco is on the Statements of Commissions for Jobs 796, 804, 813, and the 2004-2009 Statement of Commissions prepared by Ms. Weber and submitted to Coco. 3. Issues [ 21 ] There are three issues in this case:

22. Is Ms. Weber entitled to outstanding commissions? 23. Was Ms. Weber an employee, dependent contractor, or independent contractor of Coco? 24. Is Ms. Weber entitled to severance? 4. Discussion Issue #1 - Is Ms. Weber entitled to outstanding commissions? [ 22 ] Ms. Weber claims that she is entitled to several commissions that were outstanding when she was terminated. The answer to this depends on whether a written or oral contract applies, as well as the terms of that agreement.

A) Was there a written or an oral contract?

i) Parties ’ Positions [ 23 ] Ms. Weber argues that the agreement between the parties was based on words and conduct. Ms. Weber admits that she saw the cover of the Timbercreek Sales Compensation Agreement while filing old papers stored by Mr. Crawford, however, she testified that she never read it. Furthermore, she says that at no time did Mr. Crawford ever discuss the transfer of this agreement to her or Goldngirl or, for that matter, Coco. This was a document Coco developed and Mr. Bennett had drafted and therefore Ms.

Weber submits that, at best, it is a document that is largely irrelevant, as it deals with entities that are not parties to this action. [ 24 ] Coco argues that Ms. Weber assumed the contractual arrangements that were in place between Mr. Crawford and Coco when she took over the position of area manager in March 2006. In that regard, Coco submits that the parties understood that the Timbercreek Sales Compensation Agreement applied to them. Coco alleges that although an agreement was never formally reduced to writing, Ms.

Weber either expressly or implicitly agreed that the sale of homes would be governed by an oral agreement whose terms were identical or substantially similar to those contained within the Timbercreek Sales Compensation Agreement.

The Termination Provisions of the Timbercreek Sales Compensation Agreement states, in part (as typed): Upon termination without cause commission will be paid out as follows: - Where at the time of termination an offer has been accepted by Timbercreek and conditions have been removed but construction has not been started, then the Sales Representative shall be entitled to receive 60% or the commission. - Where at the time of termination Timbercreek has accepted an offer but conditions have not been removed, the Sales Representative shall be entitled to receive 60% of the commission if the conditions are removed within 2 weeks of termination. - Where at the date of termination, construction of the home is underway and the date of closing of the purchase agreement is greater than 30 days from the date of termination, then the balance of the commission will not be paid.

The Termination Provisions of the Sales Contract (the agreement that Coco normally uses with its area managers) (Exhibit #8) states, in part (as typed): Upon termination without cause commission will be paid out as follows:

- Where at the time of termination an offer has been accepted by Coco Homes and conditions have been removed but construction hasnot been started, then the Sales Representative shall be entitled to receive 60% or the commission. - Where at the time of termination Coco has accepted an offer but conditions have not been removed, the Sales Representative shall beentitled to receive 60% of the commission if the conditions are removed within 1 weeks of termination. - Where at the date of termination, construction of the home is underway and the date of closing of the purchase agreement is greaterthan 30 days from the date of termination, then the balance of the commission will not be paid. - Where at the date of termination, constructions of the home is underway and the date of closing of the purchase agreement is less than30 days form the date of termination, then the balance of the commission will be paid. [1] As support for its position, Coco points to discussions between Ms.

Weber, Mr. Crawford, and Mr. Bennett that Ms. Weberwould become area manager when Mr. Crawford left in March 2006; the oral agreement between Ms. Weber, Mr. Crawford, and Mr.Bennett that outstanding commissions owing to Goldnboy in March 2006 would be and were paid to Goldngirl; that the commissionprocess, structure, and amount were the same before and after March 2006; and that the area manager services remained the same beforeand after March 2006. Mr. Bennett also testified that he thought Ms.

Weber had signed a contract similar to the Timbercreek SalesCompensation Agreement, and dealt with her on that assumption. ii) Law [2] The essence of a contract is that there is agreement, or a “meeting of the minds”. An alleged agreement must be clearlyexpressed such that an objective reasonable bystander in the position of the parties would have believed and understood that the otherparty was consenting to identical terms: ITT Industries of Canada Ltd v Toronto-Dominion Bank (1988), (AB KB), 90AR 310 at para 21 (QB). iii) Analysis [3] In evidence is a letter dated June 19, 2008 from Ms. Magwood to Ms.

Weber, regarding outstanding commissions, whichstates: “[t]he above has been based on our Sales Contract - page 6 - Termination. I have enclosed this particular page for your reference”.The date on the bottom of the attached page 6 is “6/17/2008”, which is after Ms. Weber was terminated. Coco submits that theTimbercreek Sales Compensation Agreement is essentially the same as the Sales Contract. [4] In an e-mail chain between Ms. Weber and Mr. Bennett, Ms.

Weber wrote on June 19, 2008, and referencing Ms.Magwood’s e-mail of the same day: “...I know what the sales contract states, but I’m hoping that you will over look this because of allthat I gave Coco the past 5 years...”. Ms. Weber says she included this in her e-mail out of respect, but that both parties knew that shenever signed a Sales Contract, as evidenced by the fact the Sales Contract she received from Ms. Magwood is dated on the bottom ofpage 6 after her date of termination. [5] Supporting Ms. Weber’s contention, on June 23, 2008, Ms. Weber wrote to Mr.

Bennett: “...[f]urthermore, you havereferred to the sales agreement, as we both know I was never given an agreement to sign during my time at Coco Homes”. [6] Neither party submitted into evidence an agreement or Sales Contract signed by both parties. Coco did not provideevidence that the Timbercreek Sales Compensation Agreement was brought to Ms. Weber’s attention when she became area manager inMarch 2006. Additionally, page 6 of the Sales Contract also states: “[t]he Sale Representative shall, during the term of this Agreement,work solely for Coco”. This is inconsistent with the evidence that Ms.

Weber worked for both Coco and Keller Williams, with Coco’sknowledge, and without any objection from Coco. Page 5 of the Timbercreek Sales Compensation Agreement and page 6 of the Sales

Contract also refers to the process for termination with cause and termination without cause. In Ms. Weber ’ s case, it is clear that she was terminated without cause and the minimum two weeks written notice as called for in The Timbercreek Sales Compensation Agreement, and on page 6 of the Sales Contract, (which Coco relies on) was not followed. [7] Therefore, I find that there was no written contract or agreement between the parties, and that neither the Timbercreek Sales Compensation Agreement nor any other Sales Contract applies. [8] I find that the agreement between the parties was based on discussions and conduct.

B) Was there an agreement as to whether Ms. Weber earned the full commission upon completion of the sales documents?

i) Parties ’ Positions [9] Ms. Weber submits that the agreement between the parties was that she would receive the Front End Commission (representing 60% of the total commission) when the sale documents were complete and the deposit received, and the Back End Commission (representing 40% of the total commission) upon possession/closing. Ms. Weber claims that the Back End Commission was not conditional on the possession/closing of the property as her commission was already earned, once the sale became firm.

If Coco, in its sole discretion, allowed a purchaser at a subsequent date to walk away from the agreement, without forfeiting his deposit, it was not Ms. Weber ’ s understanding that she would have to pay back the commission that she had earned by making the initial sale. Certainly, it was her impression that even if the purchaser walked away, she would still have received her commission from Coco because she had completed her job. Furthermore, she argues Coco only raised this issue after she was terminated and not before. [10] Ms.

Weber claims that Coco owes her outstanding commissions for Jobs 781, 796, 804, and 813. In her original Statement of Claim she only claimed an outstanding commission for Job 796; the remaining Jobs were added by amendment. [11] Coco objects to Ms. Weber ’ s claims on the basis that the Termination Provisions of the Timbercreek Sales Compensation Agreement or the Sales Contract apply. [12] In the alternative, if this Court finds no written agreement between the parties, then Coco submits that the parties had no verbal agreement with respect to the 60-40 split should Ms.

Weber be terminated and commissions had not yet been fully paid. For an agreement to be found that supports Ms. Weber ’ s position, Coco argues that this Court would have to find that the parties agreed that upon the completion of the sales documents Ms. Weber was entitled to the full commission, which would be paid in separate installments. However, Mr. Bennett testified that his understanding was that the Front End Commission was an advance, and that the Back End Commission was only to be paid upon possession/closing. Mr. Bennett testified that he permitted Ms.

Weber to keep the Front End Commissions, where appropriate, because he wanted to be fair and felt that she had substantially completed the work that would have triggered the 60% commission. [13] The parties ’ positions with respect to the Jobs are as follows: Job 781 (DOWELL) [14] Ms. Weber submits that the sale documents for the buyers (the Dowells) were completed on March 17, 2007. Around April 20, 2007 she received a Front End Commission of $5,993.30 plus GST, which Coco asked to be repaid after Ms. Weber was terminated in June 2008. Ms.

Weber claims that the buyers without her knowledge or participation, but with Coco ’ s consent, cancelled the purchase agreement for the home without penalty months later. Ms. Weber did not receive the Back End Commission despite she claims earning such amount upon completion of the sales documents. She also disputes Coco ’ s demand for repayment of the Front End Commission which she claims was earned and paid upon completion of the Dowells ’ sales documents. Furthermore, this repayment demand by Coco had never occurred before and it was only made after she was terminated; something she says she never agreed to.

On Job 781, Ms. Weber now seeks $3,995.53 plus GST of $239.73 for a total Back End Commission of $4,235.26.

[15] Coco claims that this property was sold by another realtor on June 20, 2008, after Ms. Weber was terminated. Therefore, Coco submits Ms. Weber is not entitled to the Back End Commission, and further she should repay the Front End Commission as she had not resold this home. Coco subsequently accounts for this repayment by way of an offset against commissions owing to Ms. Weber on Job 796 (Grasza-Ferguson) discussed below. Job 796 (GRASZA-FERGUSON) [16] Ms. Weber submits that the sale documents for the buyers (the Graszas) were completed on August 8, 2007.

She received a Front End Commission of $8,680.81 plus GST on September 28, 2007. Ms. Weber claims that the Graszas, without her participation but with Coco ’ s consent, cancelled the purchase of the home without penalty. Within days of this happening, Ms. Weber, and not another realtor as was the case for Job 781, then resold the property to new buyers (the Fergusons) for a higher price, which would have resulted in an increased Front End Commission and Back End Commission. The Fergusons took possession on July 30, 2008. Ms.

Weber claims that she did not receive the increased Front End Commission or the Back End Commission despite earning such amount on the completion of the sale documents. [17] There was a dispute between the parties during oral argument regarding Ms. Weber ’ s claim for Job 796. The amount listed in her Amended Statement of Claim is $6,438.79 plus GST. During trial, Ms. Weber and her counsel submitted that this number is incorrect. She now claims a greater amount set out below. At closing of the trial, I allowed an amendment to Ms.

Weber ’ s Amended Statement of Claim to reflect this greater amount claimed. [18] Ms. Weber did not have a statement of commissions for the Ferguson sale, and used her knowledge of the commission structure to estimate the amount owing. During trial, Ms. Weber estimated that the lot price was $120,000.00 based on her note that this was the lot price for the Grasza property. However, Coco ’ s counsel pointed to the Ferguson ’ s purchase contract, which lists the lot price as $133,000.00.

I find that the lot price stated on the Fergusons ’ purchase contract, i.e. $133,000.00, is the correct number for calculating the Back End Commission for that property. [19] Ms. Weber claims $8,598.40 plus GST using the following calculation: Adjusted Purchase Price of the Property Sold to the Fergusons (before GST) (Exhibit #9) $717,077.02 Less the Value of the Land - $133,000.00 Less the Value of the Appliances - $ 8,103.42 TOTAL $ 575,973.60 Time 3% Commission Rate $ 17,279.21 60% Front End $ 10,367.53 40% Back End $ 6,911.68 [20] Ms.

Weber submits that the difference between the Grasza Front End Commission and the Ferguson Front End Commission is $10,367.53 plus GST - $8,680.81 plus GST = $1,686.72 plus GST. This difference ($1686.72 plus GST) plus the 40% Back End Commission for Ferguson ($6,911.68 plus GST) totals the claimed amount of $8,598.40 plus GST. [21] There is an e-mail in evidence from Mr. Bennett to Ms. Weber, dated June 26, 2008, (Exhibit #10), which states that because

the Dowells backed out of Job 781, this would trigger the repayment of the “ advanced commission ” of $5,993.30. Mr. Bennett explains this repayment by stating the following: “ the re-sale of the dowel home at $425,000.00 GST included and was achieved with the assistance of outside realtors. Coco Homes also incurred costs to Revive the Fireplace Mantel, Redo Interior Painting and finally adding a deck.

The net impact to Coco after consideration of the offsetting deposit is a Negative $30,970.00 from original sale not including the interest charges, this would, as you [are] aware trigger the repayment of the advanced commission on this job which was $5,993.30. ” Mr. Bennett goes on to say: “ [t]he Ferguson has a back half commission payable of approximately $8,508.38. I believe it is appropriate to offset the repayment of Dowell against this total leaving a balance of $2,515.08. It is also my understanding Erica has had two meetings so far with a third booked to review final documentation.

I believe an amount of $750.00 compensation will be fair for her activities on the account. I will authorize a final payment on this of $1,765.08 on this project. ” It is unclear where “ $8,508.38" came from as there is no numerical accounting that I can see from Exhibit #10. I note, however, that it is close to the calculation of $8,598.40 plus GST as calculated in para 44 above. Coco made a payment to Ms. Weber of $1,765.08 plus GST on July 4, 2008. This brings Ms.

Weber ’ s claim to $8,598.40 plus GST minus the $1,765.08 plus GST, for a total of $6,833.32 plus GST. [22] Coco submits that the date of closing was not until July 30, 2008, which was more than 30 days after her termination date, so, as per the Termination Provision, no further commissions are owing. Job 804 (FAROUGH) [23] Ms. Weber submits that the sale documents for the buyers (the Faroughs) were completed on May 13, 2008. She received the Front End Commission of $5,516.91 plus GST. The possession date was August 29, 2008.

She claims that she was never paid the Back End Commission and seeks as per the Amended Statement of Claim $3,677.94 plus GST. (i.e. Total commission of $9,194.85 plus GST less $5,516.91 plus GST of Front End Commission). [24] Coco submits that the Termination Provision applies because more than 30 days had passed between her termination and possession, and that therefore no Back End Commission is owing. Job 813 (KULISZ) [ 25 ] Ms. Weber submits that the sale documents for the buyers (the Kuliszs) were completed on May 15, 2008. She received a Front End Commission of $7,080.03 plus GST.

She claims that she was never paid the Back End Commission and seeks $4,720.02 plus GST. [ 26 ] Coco submits this property closed in March 2009, that the Termination Provision applies, that more than 30 days past between termination and possession, and that therefore no Back End Commission is owing. ii) Analysis [ 27 ] I have already found that there is no written agreement between the parties. Therefore, the issue is whether the parties had a verbal agreement regarding payment of the 60-40 split after termination of Ms. Weber by Coco. [ 28 ] In a June 10, 2008 e-mail, Ms. Weber wrote Mr.

Bennett: “ I am requesting the payout of commissions on Ferguson (Job 796), Farough (Job 804) and Kulisz (Job 813). Could you advise me of when this would be ready for pick-up? ” . It should be noted Ms. Weber makes no mention of payout of commissions on Dowell (Job 781). [ 29 ] In a June 17, 2008 e-mail, Mr. Bennett wrote Ms. Weber: “ Kyla all commissions due and payable are based on the sales compensation agreement if you are expecting something outside of that I would appreciate understanding what that is and why ” . [ 30 ] Ms. Magwood sent a letter to Ms.

Weber on June 19, 2008, describing the Jobs and commissions outstanding and stating, “ [t]he above is based on our Sales Contract - page 6 - Termination. ”

[ 31 ] On June 19, 2008, Ms. Weber wrote to Mr. Bennett: I have received the letter of outstanding commissions. I am hoping that you will reconsider paying me the back end of commission of Job 796...I know what the sales contract states, but I ’ m hoping that you will over look this because of all that I gave Coco the past 5 years, and all of the work for this deal was taken care of except taking the customers through their home for the last month of construction. [ 32 ] On June 26, 2008, Mr. Bennett wrote in an e-mail to Ms.

Weber: “ ...this would, as you aware trigger the repayment of the advanced commission on this [the Dowell] job which was $5,993.30 ” [ 33 ] On July 23, 2008, Ms. Weber wrote Mr. Bennett: ...The Dowell Spec was sold, I did the front end work and fully deserved the first part of commissions. I dealt with those difficult customers...I earned that commission. There should be no commissions holdback on this home as it was sold June 20th, 2008. The payout of commissions on Job 796...is unacceptable to me. I did 99% of the work for Job 796 and in all fairness need to be compensated accordingly.

I am requesting the 40% back end. I sold [...] Cimarron Springs Road home first to Grasza, and was never properly paid out on the first 60% of commissions owing after Ferguson took over the contract. I am requesting this pay as well. I did nothing to deserve to be terminated at Coco, my Consumer Shop Assessment from October 2007 (93% score), sales record and your letter of recommendation reflect this. Furthermore, you have referred to the sales agreement, as we both know I was never given an agreement to sign during my time at Coco Homes. [ 34 ] On July 28, 2008, Mr.

Bennett replied: The agreement in place with Ted [Mr. Crawford] encompassed you as an associate, Coco was also requested to adjust the agreement from Ted to you, Golden Boy to Golden Girl. It is Coco ’ s understanding you were in agreement given you were renumerated under its structure for the past four years. The structure of the agreement is commissions payable for sales - the advances from the front end of a sale are done with the anticipation of a close. Dowell did not close.

The agreement also address the issue of termination of activities and timing. [ 35 ] I find that the parties had an agreement that the Front End Commission would be paid on completion of the sales documents and payment of the deposit, and that the Back End Commission would be paid upon possession/closing. However, taking into account the testimony and evidence presented at trial, I find that the parties did not have an agreement as to the situation where Ms. Weber was terminated before possession/closing occurred.

There was no meeting of the minds as to what would happen in respect of outstanding commissions after termination. [ 36 ] While Coco submits that it believed the parties operated pursuant to the Timbercreek Sales Compensation Agreement, or alternatively through the Sales Contract (Exhibit #8), the evidence is that there was no signed agreement between the parties. Mr. Bennett testified that Coco had dealt with other situations where the deal fell through before possession/closing and in those instances its sales representatives did not receive the Back End Commission.

I believe and accept that this was Coco ’ s practise, but that was not a practise ever accepted by nor discussed with Ms. Weber prior to her termination.

[ 37 ] However, I do have some concerns with Ms. Weber ’ s position. [ 38 ] First, Mr. Crawford and Goldnboy ceased working for Coco in March 2006. Unlike the case before me, there was an oral agreement between those parties that any outstanding commissions owing to Goldnboy as of March 2006 would be paid to Goldngirl. Ms. Weber testified that this included payments for work that she performed, and for work that Mr. Crawford performed, through Goldnboy for Goldngirl. At this point, Ms.

Weber was or ought to have been aware that outstanding commissions could be paid to someone else or to some other entity after a party terminated its relationship with Coco, and that perhaps this was something that would need to be addressed by the parties in terms of what would happen if she left Coco or was terminated. [ 39 ] Second, Ms. Weber only claimed an outstanding commission for Job 796 in her original Statement of Claim. Her claims with respect to the remaining outstanding commissions were added by amendment. A letter sent from Ms. Magwood to Ms.

Weber, dated June 19, 2008, lists the status of commissions for Jobs 781, 796, 804, and 813. Therefore, she knew or ought to have known when she filed her original claim that she may have had a claim with respect to Jobs 781, 804, and 813. This raises the issue that after consulting a lawyer, Ms. Weber may have believed at the time when she originally filed her claim, that she was not owed outstanding commissions on Jobs 781, 804, and 813, but that it was only through questioning that she realized that she may have an opportunity to make additional claims.

This is relevant as it may indicate that her understanding as to the terms of the agreement changed over the course of these proceedings. [ 40 ] In the correspondence between Ms. Weber and Coco, Mr. Bennett asked Ms. Weber to explain why she felt she deserved more than was stated in the Sales Contract. Ms. Weber does not refer to a verbal agreement. Rather, she references the hard work that she put into her job.

However, the verbal agreement between the parties, as I found earlier, was that during the course of the parties ’ relationship, the Front End Commission was paid on completion of the sales document, and the Back End Commission was paid on possession/closing. Therefore, her work ethic, admirable as it may have been, was not a factor in her remuneration as she had initially understood it. [ 41 ] Given this, I cannot conclude that Ms.

Weber has proven on a balance of probabilities that her commission was earned entirely on the completion of the sales documents and payment of the deposit, and was to be paid to her in two instalments (i.e. by way of the Front End Commission and the Back End Commission) regardless of when she was terminated from Coco. In fact, there was no agreement as to this issue. [ 42 ] In the absence of a meeting of the minds with respect to this issue, I find that Ms.

Weber was entitled only to commissions that came owing to her during the two months ’ reasonable notice period following her termination (that I will find later on in this judgment). This would include the Back End Commission on Job 796 of $ 6,833.32 plus GST of $341.67, for a total of $7,174.99, as it had a possession date of July 30, 2008 and therefore falls within the two months ’ notice period.

It would not include the Back End Commissions for Job 804 (Farough) and Job 813 (Kulisz) as these sales had a possession/closing of August 29, 2008 and March 2009, respectively, both of which are outside of the two months ’ reasonable notice period. Further, it would not include the Back End Commission for Job 781 (Dowell) as the possession/closing under the sale documents Ms. Weber had signed up with the Dowells never occurred, as that transaction was cancelled and the home was sold by another realtor to another party on June 20, 2008. This is unlike Job 796, where Ms.

Weber, and not another realtor, resold the home to the Fergusons. [ 43 ] Also, in the case of Job 781 (Dowell) that means Ms. Weber was not obligated to repay the Front End Commission, notwithstanding Coco had agreed to cancel the Dowell purchase without her knowledge and participation and then have it resold by another realtor on June 20, 2008, more than 15 months after Ms. Weber had completed the Dowells ’ sales documents and obtained a deposit from them.

In other words, it was not appropriate, in the absence of any agreement, for Coco to offset the repayment of the Job 781 (Dowell) Front End Commission against Job 796 (Grasza/Ferguson), as it had already been earned and properly paid to Ms. Weber in April 2007 following completion of the Dowell sales documents in March 2007, while she was still selling homes for Coco. Issue #2 - Was Ms. Weber an employee, dependent contractor, or independent contractor of Coco? [ 44 ] Ms. Weber claims that she is owed severance.

The answer to this depends on whether she was an employee, dependent contractor, or independent contractor.

A) Parties ’ Positions [ 45 ] Ms. Weber submits that she was an employee, or alternatively a dependant contractor of Coco between 2004 and 2008. Ms. Weber submits that there was no written contract, but an oral contract based on discussion and prior conduct. [ 46 ] Coco submits that Ms. Weber is an independent contractor, or alternatively a dependant contractor. Coco alleges that the Timbercreek Sales Compensation Agreement or a similar Sales Contract applies.

B) Law [ 47 ] In 671122 Ontario Ltd v Sagaz Industries Canada , 2001 SCC 59 at para 46 , 2 SCR 983 , a case concerning vicarious liability, the Court found that there is no one conclusive test which can be universally applied to determine whether a person is an employee or an independent contractor. The Court explains at paras 47-48: The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In making this determination, the level of control the employer has over the worker's activities will always be a factor.

However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker's opportunity for profit in the performance of his or her tasks. It bears repeating that the above factors constitute a non-exhaustive list, and there is no set formula as to their application.

The relative weight of each will depend on the particular facts and circumstances of the case. [ 48 ] The Alberta courts have adopted the notion of dependent contractor, generally being referred to as falling into the intermediate category: Drew Oliphant Professional Corp v Harrison , 2011 ABQB 216 at para 75 , 56 Alta LR (5th) 233 : ...a line of case law has developed in which the courts have found a contracting party to be neither an employee nor an independent contractor, but instead to fall into an "intermediate" category that of dependant contractor.

Typically these cases involve an individual corporation having a long standing relationship with the other contracting party, often with a degree of exclusivity in the contract. The rationale behind the development of this third category was set out recently by the Ontario Court of Appeal in McKee v Reid's Heritage Homes Ltd., 2009 ONCA 916 (Ont.

C.A.) ... [ 49 ] The Court in McKee v Reid's Heritage Homes Ltd , 2009 ONCA 916 , 256 OAC 376 (CA) explained the proper approach to a query as to whether a worker is an employee, independent contractor, or dependant contractor at para 34: ...the proper initial step is to determine whether a worker is a contractor or an employee, for which the Sagaz/Belton analysis...controls. Under that analysis, the exclusivity of the worker is listed as a factor weighing in favour of the employee category ( Belton 's first principle).

The next step, required only if the first step results in a contractor conclusion, determines whether the contractor is independent or dependent, for which a worker's exclusivity is determinative, as it demonstrates economic dependence. Therefore, exclusivity might be a "hallmark" of the dependent contractor category vis- à -vis the broader category of contractors.

However, it continues also as a factor in determining whether the worker is not a contractor at all, but rather an employee, in the first-step analysis. [ 50 ] The factors in Belton v Liberty Insurance Co of Canada , 2 OR (3d) 81 at paras 11 , 15 (CA) are as follows: 1. Whether or not the agent was limited exclusively to the service of the principal; 2. Whether or not the agent is subject to the control of the principal, not only as to the product sold, but also as to when, where and how it

is sold; 3. Whether or not the agent has an investment or interest in what are characterized as the "tools" relating to his service; 4. Whether or not the agent has undertaken any risk in the business sense or, alternatively, has any expectation of profit associated withthe delivery of his service as distinct from a fixed commission; 5. Whether or not the activity of the agent is part of the business organization of the principal for which he works.

In other words, whosebusiness is it? [51] The Court in Drew at para 76 considered the following in determining whether the worker was a dependent or anindependent contractor: To determine the true character of the relationship a broad range of criteria may be examined.... These factors are: (

i) Duration/Permanency of the Relationship. The longer the duration of the relationship or the more permanent it is militates in favour ofa reasonable notice of requirement. Amongst other evidence, the purchase and maintenance of inventory, which contains a permanencyaspect, should be considered: (ii) Degree of Reliance/Closeness of the Relationship. As these two inter-related sub-factors are increased the more likely it is therelationship falls on the employer/employee side of the continuum.

Included in this factor is whether the sale of the Defendants productsamounted to a significant percentage of the Plaintiffs revenues: (iii) Degree of Exclusivity. An exclusive relationship favours the master/servant classification. None of these factors are by themselves conclusive and not every factor need be present in order to classify a relationship as onerequiring notice to terminate. [52] These tests are largely fact-driven. As noted in Lone Star Reality Inc v RJ Stone Homes Ltd (1999), 1999 ABQB 284, 241 AR 283 at para 37 (QB), there is a degree of overlap between the factors. Ms.

Weber’s counsel directed me to McKee vReid's Heritage Homes Ltd (2008), 78 CCEL (3d) 163 (ONSC) [the McKee Trial] for its facts, while Coco’s counsel directed me toconsider JKC Enterprises Ltd v Woolworth Canada Inc, 2001 ABQB 791, 300 AR 1 and Lone Star for their facts. [53] In the McKee Trial the defendant hired the plaintiff to sell 69 homes. The defendant supplied the plaintiff with the stationaryand forms she required to complete her job; she was given the title “sales manager”; she was paid through her corporation; and she hired,trained and managed her own subagent.

At para 58, the trial judge applied the Belton principles to the case: In the present case, there was a tacit agreement, carried out in practice for almost twenty years, that the plaintiff would sell "exclusively"for the defendant. The defendant assigned particular subdivisions to the plaintiff, built model homes and told her which lots she couldsell. The defendant told her when she could sell, and maintained control over how the lots were sold. The defendant set the prices andconditions of sale, and retained the right to set the hours that the model homes were open.

Here, as defence counsel points out in hiswritten submissions, "the principle tool was the model home — provided by Reid's Heritage Homes". The plaintiff here had no risk inthe business and was paid on a strictly commission basis. Finally, the plaintiff's activity in the present case is part of the business of the

defendant. Selling the homes is the most integral part of the defendant's business. It is the defendant's business in which the plaintiff is engaged. [ 54 ] The trial judge ultimately found that the plaintiff was an employee on that basis, and this finding was upheld on appeal. [ 55 ] In JKC the Court found that the relationship fell in the intermediate category and that the plaintiff was a dependant contractor.

The Court was persuaded by the permanency of the relationship (16 years); that the business relationship was an exclusive and interconnected trucking services arrangement in which each placed complete reliance upon the other; and that the plaintiff was economically dependent on the revenues it earned from the defendants: JKC at paras 90-92.

The plaintiff, a trucking company that provided trucking services for the defendants, was entitled to reasonable notice of termination. [ 56 ] In Lone Star, the plaintiff was a realtor initially with Remax and then with his own brokerage, Lone Star Realty, who sold homes for the defendant.

The Court held that the plaintiff was an independent contractor because, among other things, he was an independent realtor who functioned through his own real estate company at all times and, who did not regard himself as, nor was he ever perceived as, an in house salesman for the defendant; the defendant allowed the plaintiff to operate independently, with little interference or guidance; the plaintiff was only paid by way of sales commission and although it was acknowledged that the overwhelming bulk of the plaintiff ’ s revenue resulted from his association with the defendant, his real estate company through other realtors, had the option to expand business to other markets; and the plaintiff received no benefits of any kind other than monetary benefits (i.e. commissions): Lone Star at paras 36-47.

C) Analysis [ 57 ] In order to determine whether Ms. Weber was an employee, a dependent contractor, or independent contractor, I will examine the factors set out in the legal tests. Remuneration/Benefits [ 58 ] In the case at bar, I find that the manner of remuneration paid to Ms. Weber was solely payment by commission based upon sales performance. Coco paid her by cheque through her corporation Goldngirl. Ms. Weber collected GST on her commission payments and remitted that to the government herself, together with any other statutory payments, such as income tax, that were required to be made. Ms.

Weber did not receive other financial or non-monetary benefits from Coco, although Coco did have a group benefits plan for health and dental for its own employees between 2006 and 2008. [ 59 ] Ms. Weber claims that she was entitled to two weeks of vacation per year. She claims this based on her work experience pre- March 2006, and on the basis that Ms. Magwood confirmed this to her orally. Ms. Weber alleges that she always felt that she needed Coco ’ s permission before she took vacation. Ms.

Weber submitted an undated letter (Exhibit #5) into evidence, which she testified was written April 8, 2008, that she allegedly wrote to Mr. Bennett. In her letter, she wrote: “ She [Ms. Magwood] said that I am allowed 2 weeks holidays per year. I told her that nobody has ever really told me that but I had assumed as much ” . The same letter goes onto state: “ I told Dawnita [Ms. Magwood] that you [Mr.

Bennett] had covered the show home the year I started, as Ted [Crawford] & I didn ’ t have another assistant and the subject of paying for vacation time had never been brought up ” . [ 60 ] Coco submits this was not the case, as demonstrated by the fact that Ms. Weber took more than two weeks off in 2008, and also that she was paid by commission, so a reference to vacation, which is generally paid leave, does not make sense. Coco notes that its employees must fill out a vacation request form before taking vacation, which Ms. Weber never did. Ms.

Weber could neither confirm nor deny whether she had ever filled out this form. [ 61 ] I find that the parties agreed that Ms. Weber was entitled to take extended periods away from the show home, but she was not entitled to two weeks paid vacation that an employee of Coco ’ s, who filled in a vacation request form, would have received. However, Ms. Weber did have to ask for and receive Coco ’ s approval to be away from the show home for extended periods of time. I find this accords with the parties ’ expectation that Ms. Weber or someone hired on her behalf would be in the show home the majority of the time.

Exclusivity [ 62 ] Ms. Weber claims that she had an exclusive agreement with Coco as she was only allowed to sell new homes for Coco in Cimarron Estates, the area specifically designated to her. Coco concedes that there is some nature of exclusivity in the agreement as the expectation was that Ms. Weber would not sell new homes for anyone else. However, Coco submits that this is not the same as the situation in the McKee Trial , where the plaintiff was exclusively engaged in the defendant ’ s business, as Ms. Weber had a second successful job as a realtor.

I agree and find that this was a partially exclusive agreement. I also note that Ms. Weber ’ s non-exclusivity worked for Coco ’ s benefit, as she listed Coco ’ s home ’ s on the MLS for a reduced commission. Control [ 63 ] Ms. Weber argues that Coco had a high degree of control over her as Coco built the show home, set the hours that she was to be present in the show home, and told her what, when, how, and for how much she could sell Coco ’ s homes. Ms. Weber claims that she did not have authority to accept an offer; rather, she always had to bring it to Mr. Bennett for approval. Ms.

Weber submits that her situation is analogous to that in the McKee Trial where the defendant assigned particular subdivisions to the plaintiff, told the plaintiff which homes she could sell, maintained control over how the lots were sold, and retained the right to set the hours that the model home was open. [ 64 ] Coco acknowledges that it exercised some control over Ms. Weber as it set the hours that Ms. Weber was to work in the show home. However, Coco submits that its expectation was that Ms.

Weber would be there the majority of the time and that she could be absent so long she found someone to cover for her. [ 65 ] Coco claims that it gave no direction as to where or when Ms. Weber's tasks would be performed. However, Coco did have a secret shopper complete a survey on Ms. Weber, demonstrating that it was concerned with how she conducted herself on the job. [ 66 ] Coco highlights the fact that Ms. Weber made the decision to hire and fire her own assistant, Ms. Olson, and her company Goldngirl was responsible for paying Ms. Olson as well.

While there is some confusion regarding whether Coco asked for or demanded a copy of the assistant ’ s resume, and whether this occurred before or after Ms. Weber hired her assistant, based on the evidence, it appears to me that Ms. Weber had full control over this process, with the exception that Coco permitted it. [ 67 ] The parties dispute whether the training sessions made available at Coco ’ s cost, and which Ms. Weber attended, were “ strongly encouraged ” or “ mandatory ” . At times, Ms.

Weber described them as strongly encouraged, and neither party submitted evidence of implied or expressed consequences if Ms. Weber failed to attend these sessions. Therefore, I find that they were strongly encouraged and not mandatory. However, I do note Ms. Weber was required to attend weekly area manager meetings held by Mr. Bennett or Ms. Magwood of Coco. Ms. Weber was at the majority of those meetings unless she was ill, or had a personal appointment, or was on vacation. [ 68 ] In

summary, I find that Ms. Weber was subject to Coco ’ s control. Coco provided Ms. Weber with the product to sell and the prices to sell it at. Ms. Weber ’ s task was to sit in the show home, or arrange for someone to sit in the show home, and attract potential purchasers. Ms. Weber had control over how she acted during her show room hours, but the secret shopper survey shows that Coco was interested and made efforts to monitor her disposition and the sales techniques that she used with potential and actual Coco customers. However, Ms.

Weber ’ s control over hiring, training, delegating tasks to, paying, and ultimately firing her assistant, Ms. Olson, shows that she had some independence from Coco. Tools [ 69 ] Ms. Weber claims that the show home was one of the principal tools that she used for selling Coco ’ s homes, and that this was provided by Coco. Within the show home, Ms. Weber was provided with an office - a place to work. Ms. Weber submits this is analogous to the McKee Trial where the trial judge found that the principal tool was the model home.

[ 70 ] I agree that the show home was a principal tool used by Ms. Weber for the purposes of selling homes on behalf of Coco. Coco supplied Ms. Weber with all promotional materials and office supplies and the like, necessary to complete her role as area manager for Coco. Ms. Weber had no significant capital tied up in Coco ’ s business. Therefore, I find that Coco controlled and owned the tools that Ms. Weber used in performing her job as area manager for Coco. Risk and Opportunity [ 71 ] Ms. Weber alleges that she had no risk in Coco ’ s business and was paid strictly on a commission basis.

She submits this is the same as in the McKee Trial . [ 72 ] Coco argues that Ms. Weber had some risk, for if she did not sell homes, she did not get paid. Also, Coco submits that, through her job in Coco ’ s show home, Ms. Weber had an additional opportunity to supplement her income as she met customers of Coco ’ s that might need help selling their existing homes, and she had the opportunity to get the listing agreement on that sale. [ 73 ] I find that the situation here is not the same as in the McKee Trial . While Ms.

Weber was paid strictly on a commission basis, her work at Coco presented her with additional opportunities to supplement her income as a realtor with Keller Williams. This also worked to Coco ’ s benefit as Ms. Weber listed existing homes of Coco ’ s customers and spec homes of Coco ’ s on the MLS at a reduced commission. Whose Business [ 74 ] Ms. Weber submits that selling homes is the most integral part of Coco ’ s business. It is Coco ’ s business in which she was engaged in. She notes that when asked: “ ...[i]t ’ s an important part of the Coco business that homes are sold? ” , Mr.

Bennett of Coco confirmed “ [t]hat would be correct ” . In other words, as to the question: whose business is it? Ms. Weber contends that it is clearly Coco ’ s business for which she was engaged in. I agree. Duration [ 75 ] In terms of permanency, Ms. Weber submits that the working relationship started in August 2004, and at the latest in March 2006. Therefore, Ms. Weber claims that the Court should consider that the relationship had a duration of approximately four years. [ 76 ] Coco argues that the parties had a transitory relationship. For example, Coco highlights that Ms.

Weber was the area manager for Cimarron Estates, which had a limited number of properties and once those homes were all sold, it would have had no further obligation to Ms. Weber. Also, Coco submits that the parties never discussed (to which Ms. Weber agreed), what would happen to Ms. Weber's position once Coco completed work in Cimarron Estates. [ 77 ] Comparing the facts in this case to the case law, I find that the duration of Ms. Weber ’ s/Goldngirl ’ s and Coco ’ s relationship is on the shorter side.

Even if I determined that the relationship was four years, this is significantly shorter than that in the McKee Trial (18 years), JKC (16 years), and Lone Star (10 years). I also find that the parties did not discuss Ms. Weber ’ s role with Coco once the Cimarron Estates properties were sold. Dependence [ 78 ] In terms of income, Ms. Weber submits that: - In 2006, she earned an income from Coco of $173,066;

- In 2007, she earned an income from Coco of $179,763, and from her second job an income of $91,262; and, - In 2008, she earned an income from Coco of $63,540, and from her second job an income of $89,380; [ 79 ] Ms. Weber became Coco ’ s area manager in March 2006, and was terminated in June 2008, which helps explain why her income from her second job might be relatively higher in 2008. What is clear is that while Ms. Weber relied on Coco for her income, she was not completely dependent on Coco; she had financial success in her second job as a realtor. Nevertheless, Ms.

Weber believed that she was an employee of Coco as in her mind she was treated the same as all of the other Coco employees and attended employee functions, such as the Coco Christmas Party. [ 80 ] Taking all of these factors into account and given my finding that Ms. Weber had a partially exclusive agreement with Coco for the selling of its homes in Cimarron Estates (unlike in the McKee Trial where there was a finding that the plaintiff would sell “ exclusively ” for the defendant), I have determined that Ms.

Weber was not an employee of Coco ’ s but falls into the category of a contractor. [ 81 ] The next step is to determine whether Ms. Weber is a dependant contractor or an independent contractor. Again, taking all of the foregoing factors into account, in my view Ms. Weber was more dependent overall than the plaintiff in Lone Star , and did not have the degree of independence to operate independently, with little interference or guidance as the plaintiff did in Lone Star. Ms. Weber had a relationship with Coco much like the plaintiff had with its defendant in JKC .

Her relationship with Coco is best described as that of a dependent contractor, and she is thus entitled to some degree of reasonable notice; albeit less than what an employee would be entitled to. Issue #3 - Is Ms. Weber entitled to severance? [ 82 ] Having found that Ms. Weber was a dependent contractor, I will now determine the amount of severance she is entitled to, if any, as it is clear she was terminated without cause or reasonable notice.

A) Parties ’ Positions [ 83 ] Ms. Weber submits that she was employed by Coco in August 2004, or in the alternative March 2006, and was terminated in June 2008. Ms. Weber claims that she is entitled to one month of severance for each year of service, for a total of four month ’ s severance. However, Ms. Weber only claims three month ’ s severance in her Amended Statement of Claim, due to admitted concerns with her mitigation duties.

Based on her average commission earned between 2006 and 2008, she claims a total of $40,000.00 in damages for wrongful dismissal in her Amended Statement of Claim (or $13,000.00 per month for three months). [ 84 ] Coco submits that Ms. Weber worked for it between March 2006 to June 2008, a period of two years and three months. Coco claims that if she was an employee, this would have entitled her to a notice period of slightly more than 2 months ’ notice.

However, Coco alleges that the notice period for a contractor is less than that for an employee and that, therefore, the proper notice period is less than two months. In terms of damages, Coco notes that the house sale market fluctuates annually and that Ms. Weber has not provided this Court with market evidence to support her income claim. Coco highlights that this is especially relevant as the housing market fell dramatically in late 2008. [ 85 ] Coco submits that Ms. Weber made approximately $50,000.00 plus GST in the first five months of 2008, which is approximately $10,000.00 per month.

Coco then assumes that if two months is reasonable notice in the circumstances that would result in approximately $20,000.00 plus GST in damages. Coco argues that any commissions that Ms. Weber received post-termination in July 2008 should be deducted from a damage award because Ms. Weber would have received these commissions even if Coco had given reasonable notice, and to hold otherwise would result in double recovery to her. Coco claims that Ms. Weber received $14,362.00 plus GST in commissions post-termination: $1,765.00 plus GST for Job 796, $5,517.00 plus GST for Job 804, and $7,080.00 plus GST for Job 813.

These payments received by Ms. Weber appear to be correct and supported by the evidence earlier referred to. Coco submits

that this would leave Ms. Weber with a claim of approximately $5,000.00 (actual amount is $4,920.00) plus GST in damages; althoughby my calculation if you deduct $14,362.00 from $20,000.00 that would give Ms. Weber a claim for damages in the amount of $5,638.00plus GST. [86] In addition, Coco claims that Ms. Weber failed to mitigate her damages. Coco alleges that this Court should draw an adverseinference against Ms. Weber’s lack of documented evidence of efforts to find new suitable employment. [87] Ms.

Weber disputes Coco’s submission that she made approximately $50,000.00 plus GST in the first five months of 2008.Rather, using Coco’s own methodology, Ms. Weber submits that her income for the first five months of 2008 should be calculated as$50,000.00 plus GST plus the $14,362.00 plus GST in commissions earned but not paid to her until after termination in July 2008, minus$3,442.00 plus GST in commissions paid to her on January 11, 2008 (see Exhibit #13 - Job 772) for a home sold in 2007 with a latepossession date in December 2007, for a total of $60,920.00 plus GST. [88] Furthermore, Ms.

Weber argues that these commissions she received post termination in July 2008, totalling $14,362.00 plusGST, should not be deducted from a damage award as this is not a double recovery situation. She had already earned these commissionson Jobs 796, 804, and 813 prior to her termination and the fact Coco paid out those commissions after her termination in July 2008 ismerely an administrative detail. Ms. Weber argues that she should not be penalized for something Coco had decided it wouldunilaterally do after her termination. By way of analogy, Ms.

Weber submits that you would not deduct an employee’s wages earnedprior to his termination but not paid until after his/her termination from any damages amount awarded to that employee, in lieu ofreasonable notice. Similarly, there is no logical reason to do so in her case.

B) Law [89] In an employment contract, there is an implied term that an employer will give an employee reasonable notice of termination:Noble v Principal Consultants Ltd (Trustee of) (2000), 2000 ABCA 133 , 261 AR 82 at para 8 (CA). The court may also implya term requiring reasonable notice to terminate a relationship with a dependent contractor in situations where the governing agreementdoes not contain express terms governing the required length of notice to terminate such agreement: Pennock v United Farmers ofAlberta Co-Operative Ltd, 2008 ABCA 278 at para 14, 433 AR 285: Drew at para 72. [90] The minimum notice periods set out in the Employment Standards Code, RSA 2000, c E-9, s 56(

b) require that an employeeof between two - four years or more is entitled to termination notice of at least two weeks.

Neither party in this case argued that theywere relying on the Code. [91] As stated in Lone Star in para 50, the measure of damages in cases where reasonable notice must be given on terminationwould be the loss of net income or profit that would have been earned in the notice period. [92] The reasonableness of the notice is a question of fact that must be decided with reference to each particular case, havingregard to the character of the employment, the length of service, the age of the employee, and the availability of similar employment, andhaving regard to the experience, training and qualifications of the employee: Bardal v Globe & Mail Ltd (1960), (ONSC), 24 DLR (2d) 140 at para 21 (Ont HC); Bagby v Gustavson International Drilling Co (1980), 1980 ABCA 227 , 24 AR 181at para 20 (CA).

This list is not exhaustive: Wallace v United Grain Growers Ltd, (SCC), [1997] 3 SCR 701 at para 82. [93] Ms. Weber’s counsel directed me to Anstead v Park Royal Homes Inc, 2009 ABQB 179 at paras 41- 44, 470 AR 124. In thatcase, the plaintiff worked for the defendant as a new home sales consultant for two and a half years. Her income from the defendant wascommissions on sales. She signed a one year agreement when she was initially hired, but when she refused to renew it, she wasdismissed without cause.

The Court held that the clause in the agreement granting one week’s notice could not be upheld as it violatedthe minimum notice requirements in the Code. The Court went on to review the common law and, after reviewing the Bardal factorsnoted above, determined that a notice period of two and a half years was reasonable in the circumstances. [94] As in any breach of contract action, a wrongfully dismissed employee has a duty to take reasonable steps to mitigate herdamages and reduce the amount payable by the employer: Red Deer College v Michaels et al, (SCC), [1976] 2 SCR 324at para 10.

What constitutes sufficient effort to mitigate one’s damages depends on the facts of the case. The duty of mitigation does notrequire a wrongfully dismissed employee to take any job that comes along.

C) Analysis [ 95 ] I have found that Ms. Weber was a dependent contractor. She was entitled to some period of reasonable notice as she was terminated without cause. [ 96 ] I find that she was a dependent contractor for Coco from March 2006 - June 2008, a period of approximately two years and three months. I reject Ms. Weber ’ s submission that she was employed by Coco commencing 2004. Ms. Weber was an assistant area manager before March 2006, and the relationship between the parties was different then. At that time, Mr. Crawford had a contract with Coco, and Mr. Crawford first hired Ms.

Weber to assist him with his responsibilities, and then she was a 50% shareholder and partner in Mr. Crawford ’ s company, Goldnboy. Her contractual relationship, therefore, was with Mr. Crawford/Goldnboy and not Coco prior to March 2006. [ 97 ] Ms. Weber did not provide her age. However, she is under 50 years old, and is not at the point where the issue of notice should be bridging her into retirement. [ 98 ] Ms. Weber testified that she had her Alberta real estate licence and had studied business management at Mount Royal University.

She attended training seminars by the Professional Home Builders Institute of Alberta and by Coco ’ s construction managers. [ 99 ] After Ms. Weber ceased working for Coco, she asked Mr. Bennett for a reference letter. He provided one and a copy is submitted in evidence, dated June 6, 2008. I believe Mr. Bennett ’ s testimony that no prospective employers have contacted him regarding the resume. [ 100 ] Between June 2, 2008 and approximately December 2008, Ms.

Weber claims that she submitted her resume to different companies in an effort to find alternate employment; however, she kept no record of this. [ 101 ] Ms. Weber admitted that in the summer of 2008 she was offered a sales position with a home builder in Okotoks, Alberta, but that she declined it. She also admitted that she was offered a position with a home builder in Calgary, Alberta, but she declined that position as well. She claims that she declined these positions because the pay was much lower than what she would have received from Coco.

However, the Court was not given the exact date when the offers were made, the details of those offers, evidence of the alleged pay difference, nor evidence of any efforts on Ms. Weber ’ s part to negotiate better pay or conditions. [ 102 ] Ms. Weber must have sent out at least two resumes as she was offered positions by two different companies. However, no evidence was presented to this Court to support Ms. Weber ’ s testimony that she sent out additional resumes or made additional efforts to seek out work, after she was terminated by Coco. [ 103 ] Ms. Weber submits that she met her husband in 2007.

She admitted to going on a week-long vacation to Los Angeles in the summer of 2008, as well as trips in July and October. Ms. Weber states that in approximately December 2008 she stopped looking for work in Alberta. In approximately January 2009 she moved to Chicago to be with her husband. It would appear Ms. Weber sought new work for approximately six months, while taking three trips during this six month period. I have serious concerns as to whether Ms. Weber was making reasonable efforts to find another job and thus mitigate her damages.

I am prepared to accept that she made some efforts but frankly from the evidence before me or lack thereof, her efforts were minimal. [ 104 ] Given my finding that she was a dependent contractor for Coco from March 2006 to June 2008, who was dismissed without cause, and my foregoing observations, I find that Ms. Weber is entitled to two months ’ notice. [ 105 ] I accept that in determining damages, I must look at the loss of prospective income that Ms. Weber would have earned over the two months ’ notice period. Coco raised the argument that only the first five months of 2008 should be considered when determining

Ms. Weber ’ s income loss. Coco submitted that in this type of business what would be appropriate in terms of income fluctuates from year to year. I agree and therefore reject Ms. Weber ’ s submission that in assessing damages for wrongful termination, it is appropriate to take all of the income she earned from Coco from 2006 to 2008 and then average it out. Accordingly, I will look at Ms. Weber ’ s income earned from Coco for the period January 1, 2008 to May 31, 2008 and then average it out to determine her income on a monthly basis. [ 106 ] Regarding damages, I accept Ms.

Weber ’ s submission that her income for January to May 2008 should be calculated as $60,920.00 plus GST, as this properly includes all of her earned income for the first five months of 2008, regardless of the fact that $14,362.00 plus GST of that income was paid to her after termination in July 2008. This means that, based on an income of $60,920.00 for these five months of 2008, Ms. Weber made $12,184.00 per month plus GST. (i.e. $60,920.00 ÷ 5 = $12,184.00). [ 107 ] Ms.

Weber and Coco have provided me with a damages range of $24,368.00 to $26,000.00 over two months. [ 108 ] Given this, I find that total damages are $25,000.00 plus GST, or $26,250.00. I have not deducted for any commissions earned by Ms. Weber prior to termination but not paid by Coco until July 2008, which is post termination and during the two months ’ notice period. I reject Coco ’ s submission that if I did not make this deduction, it would create a double recovery scenario. In that regard, I accept the reasons articulated by Ms.

Weber in paragraph 112 above as to why such a deduction should not be made, as it would unfairly penalize her. [ 109 ] However, given Ms. Weber ’ s minimal effort to obtain employment and thereby mitigate her damages, I deduct $5,000.00 from her damage award. While I acknowledge that this is somewhat arbitrary, this reflects the evidence and its deficiencies with respect to Ms. Weber ’ s job searching efforts. Her total damage award is therefore $21,250.00. 5. Conclusion [ 110 ] Ms.

Weber will have judgment for damages for wrongful dismissal in the amount of $21,250.00 and unpaid commissions in the amount of $7,174.99 (as per paragraph 66 above) for a total of $28,424.99. Ms. Weber is entitled to pre-judgment interest pursuant to the Judgment Interest Act , RSA 2000, c J-1 s 2. 6. Costs [ 111 ] The parties may arrange to address me with regard to costs within 30 days of the date hereof at a time mutually agreeable to all, if they are unable to agree on the matter of costs. Heard on the 7 th day of January, 2013. Dated at Calgary, Alberta this 20 th day of March, 2013.

C.S. Phillips J.C.Q.B.A. Appearances: Joshua D. Sadovnick, Norton Rose LLP for the Plaintiffs Matthew James, Machida Shewchuk James LLP for the Defendant