Carroll v Purcee Industrial Controls Ltd, 2017 ABQB 211

Court of Queen’s Bench of Alberta Citation: Carroll v Purcee Industrial Controls Ltd, 2017 ABQB 211 Date: 20170328 Docket: 1301 14133 Registry: Calgary Between: Matthew Carroll Plaintiff - and - Purcee Industrial Controls Ltd and Purcee Industrial Ltd Defendants _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice Dawn Pentelechuk _______________________________________________________ I. Introduction [ 1 ] The Plaintiff, Matthew Carroll, worked for the Defendant companies in Calgary, Alberta, and later in Madagascar, for four years and eight months. Mr.

Carroll says his employment was terminated without cause and he is entitled to damages in lieu of reasonable notice, unpaid commissions and expenses incurred in repatriating himself and his family to Canada. [ 2 ] The Defendants says Mr. Carroll voluntarily resigned from his employment or alternatively, that he repudiated the employment contract by refusing to continue working in Madagascar. The Defendants also allege that in any event, they had just cause to summarily dismiss Mr. Carroll. [ 3 ] The central issue in this action is whether Mr. Carroll voluntarily resigned from his employment, or whether he was

dismissed. If he did not resign, other issues for determination include: 1. whether the Defendants are entitled to argue repudiation and whether Mr. Carroll’s actions amounted to a repudiation of the employment agreement; 2. whether the Defendants had just cause for Mr. Carroll’s dismissal in any event; 3. what damages, if any, Mr. Carroll is entitled to. II. Background [ 4 ] Purcee Industrial Controls Ltd. (“Purcee Canada”) is a small Alberta company that supplies electrical, communication and mechanical products and services to the energy, mining and oil and gas industries.

In 2008, there were two owners: Les Peterson and Robert Fox. In 2011, Mr. Fox’s ownership interest was purchased by Lyle Bernard. In 2008, Purcee Canada employed approximately five staff including Mr. Carroll. [ 5 ] Mr. Carroll commenced employment with Purcee Canada on October 14, 2008. His responsibilities included sales and business development and he was appointed as the Operations Manager, ensuring things ran smoothly in Purcee Canada’s day-to-day business. He was paid a salary of $100,000 per year plus a $1,000 monthly car allowance. There was no written employment contract between Mr.

Carroll and Purcee Canada. [ 6 ] In late 2009, the parties learned of a business opportunity with Sherritt International, a major participant in the Ambatovy nickel mining project in Madagascar. [ 7 ] Mr. Carroll made his first trip to Madagascar in January 2010 to explore this business opportunity. Shortly thereafter, he received a $2.2 million purchase order for electrical cables, with the potential of more to follow. Mr. Carroll’s role was to source suitable cable manufacturers who could fill the order. He located several such manufacturers in Johannesburg, South Africa.

He stayed in Madagascar seven weeks before returning to Calgary to service his local accounts. [ 8 ] Over the next several months, Mr. Carroll made several more trips to Madagascar on behalf of Purcee Canada. [ 9 ] Sometime in the summer of 2010, he discussed the terms of his remuneration with Mr. Peterson. In addition to his $100,000 salary, Mr. Peterson offered to pay Mr. Carroll five percent commission on gross profit from all sales generated in the Africa and Indian Ocean region. Mr. Carroll accepted this offer.

This was not reduced to writing, and there was no discussion as to when the commissions would be payable or whether commissions earned would continue to be payable after the end of Mr. Carroll’s employment. [ 10 ] Business with the Ambatovy project was steadily increasing and in September 2010, Mr. Peterson asked Mr. Carroll if he would consider working full-time in Madagascar. [ 11 ] Mr. Carroll, his wife and two year old daughter agreed to move. Because of safety concerns with living in Madagascar, Mr. Carroll requested that his family live in Mauritius, an island several hours by plane from Madagascar.

Purcee Canada agreed to this request. [ 12 ] Mr. Carroll was initially granted a two month tourist visa that was extended to six months, permitting him and his family to live in Mauritius. Mr. Carroll regularly commuted between Mauritius and Madagascar, and his living expenses were paid by Purcee while he was in Madagascar. [ 13 ] As Mr. Carroll’s tourist visa was nearing expiration, the parties utilized the services of a consulting company in Mauritius, Matco Limited, which advised Purcee Canada to incorporate in Mauritius and have that corporation enter into an employment agreement with Mr. Carroll.

In May 2011, Purcee Industrial Ltd. (“Purcee Mauritius”) was incorporated for this purpose. Matco Limited provided a generic employment contract between Purcee Mauritius and Mr. Carroll which was signed by both parties, apparently without discussion or negotiation. [ 14 ] The employment contract between Purcee Mauritius and Mr. Carroll was for a period of two years, commencing May 25, 2011. He began receiving a base salary from Purcee Mauritius of $80,000 (USD) and a base salary from Purcee Canada of $18,000 (CDN) per year.

He continued to receive 5% commission for all sales generated in the region on top of his base salary. In addition, Purcee Canada provided health benefits for Mr. Carroll and his family and paid the annual premium of $3888 (CDN). Mr. Carroll’s accommodations in Madagascar continued to be paid by the company. [ 15 ] Mr. Carroll was issued his occupancy permit from the Republic of Mauritius in June 2011. [ 16 ] Mr. Carroll’s efforts in Madagascar were successful. Business was brisk and he generated approximately $28 million in sales in the Indian Ocean Region. Through a combination of salary and commissions, Mr.

Carroll earned $169,480 in 2011 and $215,892 in 2012. However, business started to decline in the latter part of 2012 once the construction phase of the Ambatovy project neared completion. Purcee Canada’s owners wanted to see different results from Mr. Carroll, who in turn felt the owners were ignoring his suggestions for increasing business. [ 17 ] On August 9, 2012, Mr. Carroll tendered his resignation in writing and requested a fair severance package. Mr. Peterson, on behalf of Purcee, rejected his resignation and urged Mr.

Carroll to take his planned holiday and provide a proposal which would allow him to continue his work in Madagascar. [ 18 ] On September 17, 2012, Mr. Carroll provided a detailed business proposal to Mr. Peterson and Mr. Bernard outlining his strategies to facilitate Purcee’s transition from servicing the construction phase of the Ambatovy project to servicing operations.

[ 19 ] The owners delayed responding to the proposal but eventually Mr. Peterson met with Mr. Carroll in Calgary in February 2013 and advised that Purcee saw no business efficacy in his proposals and would not be implementing any of the suggested strategies. [ 20 ] Communication between Purcee Canada’s owners and Mr. Carroll became increasingly strained. [ 21 ] On May 31, 2013, Mr. Peterson emailed Mr. Carroll to ask that he compile a list of the Ambatovy project business Mr. Carroll felt would be completed in the coming year and any other business he felt would be proceeding. On that same date, Mr.

Carroll replied stating “My advice as always is to terminate employment on professional terms.” He then outlined his proposed terms of severance. [ 22 ] A Yahoo Messenger chat between Mr. Carroll and Mr. Peterson followed on June 4, 2013. Mr. Carroll advised he would be fully ready to discuss the matter “in a couple days.” In response, Mr. Carroll advised he planned to move back to Canada with his family in July. [ 23 ] Mr. Carroll’s employment ended on June 7, 2013 when Purcee Canada purported to accept his resignation. III. Did Mr.

Carroll Resign his Employment? [ 24 ] Generally, an employment contract can be terminated at any time, for any reason, by either the employee or the employer. If an employee is dismissed, the employer’s obligation is to provide reasonable working notice or pay in lieu of that notice. [ 25 ] An employee who voluntarily resigns has not been dismissed and has no remedy through a wrongful dismissal claim. Because of this, the law recognizes that an effective and binding resignation must be clear and unequivocal.

In determining whether an employee has resigned, the Court applies a subjective and objective test: subjectively, did the employee intend to resign; and objectively, viewing all the circumstances, would a reasonable employer have understood that the employee had resigned: Geddes v Silvestri Holdings Inc , 2014 ABQB 416 , [2014] AJ No 733 (QL) at para 58 , citing Beggs v Westport Foods Ltd , 2011 BCCA 76 , 14 BCLR (5th) 1; see also Robinson v Teamcooper Heat-MQS Canada Inc , 2008 ABQB 409 , 95 Alta LR (4th) 249 at paras 38-42 [ Robinson ]; Evans v Avalon Ford Sales

(1996) Ltd , 2017 NLCA 9 , [2017] NJ No 41 (QL) at paras 23-24 [ Evans ]. [ 26 ] There is no dispute that Mr. Carroll excelled at sales and did an exemplary job servicing the Ambatovy project, generating $28 million in sales during his time in Madagascar. Mr. Carroll was away from his wife and young daughter for long periods, working four weeks in Madagascar, during which time he often made one or two trips to Johannesburg, South Africa, before returning to Mauritius for three to five days. [ 27 ] Mr. Carroll was the “eyes and ears” of Purcee Canada in Madagascar.

He was afforded a fair degree of autonomy, but from review of the Yahoo Messenger exchanges, often appeared defensive or resentful if the owners asked questions. For his part, Mr. Carroll felt he was the recipient of “armchair quarterbacking” and conflicting messages from the two owners, Mr. Peterson and Mr. Bernard. [ 28 ] As an example, Purcee Canada hired John Glasser as its comptroller in the summer of 2011. He was tasked with preparing financial statements, getting the company’s cash flow under control and resolving and reconciling the Madagascar expenses, as Purcee Canada had been advancing Mr.

Carroll funds for his expenses, without any reconciliation of his expenses being completed. [ 29 ] Mr. Glasser described his relationship with Mr. Carroll as “combative.” Having reviewed some of the electronic exchanges, I would agree with that characterization. Mr. Carroll appeared resentful of Mr. Glasser’s requests to document and substantiate expenses or to seek the owners’ approval of those expenses. [ 30 ] Without doubt, communication between Mr. Carroll and Purcee’s owners became increasingly strained once sales started to slow in Madagascar. [ 31 ] Mr.

Carroll’s frustrations emerged with his email of August 9, 2012, wherein he tendered his resignation. He provided three months’ notice so the company could transition appropriately to maintain the business in the area. He stated “I am 100 percent sure that my relocation expenses will not be an issue for Purcee to pay as also a fair severance package based on the last 36 months of business I have generated for Purcee.” Mr.

Carroll testified that he sent the email out of frustration because he was constantly receiving emails from the owners about slowing sales, yet the owners appeared to be ignoring his suggestions for improving business. [ 32 ] Mr. Peterson replied to this email on August 14, 2012 indicating that Purcee would not accept Mr. Carroll’s resignation at that time. He asked that the Plaintiff take his scheduled holiday to consider what he wanted to do going forward and to come up with a proposal acceptable to him to allow him to continue his work in Madagascar. [ 33 ] Mr.

Peterson admitted in cross-examination that it would have been difficult to replace Mr. Carroll at that time and detrimental to Purcee if he left. [ 34 ] In response, Mr. Carroll drafted a detailed business proposal which he sent to the owners September 17, 2012, setting out strategies to allow Purcee to transition from servicing the construction phase of the project to the mine’s operations. His suggestions included signing distribution agreements and opening a small warehouse in Madagascar to keep some inventory on hand. Mr.

Carroll also broached changes to his remuneration, including covering the cost of private schooling for his daughter and the need for an employment contract. [ 35 ] Mr. Peterson admits that he and Mr. Bernard took longer than they should have in responding to this proposal. [ 36 ] Mr. Carroll took a scheduled family vacation to California in February 2013. The owners offered to fly to California to meet with him to discuss his proposal. Mr. Carroll agreed instead to meet Mr. Peterson in Calgary. At this meeting, Mr.

Carroll was advised that none of his suggestions would be implemented, as the owners felt the proposal was not fiscally sound and they were not keen on

increasing Mr. Carroll’s base salary. [ 37 ] Mr. Carroll felt that if the business formula was not changing, the sales results would not change either. On May 31, 2013, Mr. Peterson emailed Mr. Carroll and asked that he compile a list of the Ambatovy project business Mr. Carroll felt would be completed in the coming year and any other business he felt would be proceeding. On that same date, Mr. Carroll sent the following email in response: So let’s be clear. I have resigned three times from purcee and I have email records that purcee did not accept.

I have a complete business review with no personal gain unless the business was profitable and you did not accept.. Your email is asking me for something I have given you on multiple occasions and even face to face in February this year. I made millions of dollars for this company and put my personal health and my family’s health in jeopardy for the company. My advice as always is to terminate employment on professional terms. So if you want me to be clear. Purcee owes me approx $70K in direct commissions. They would owe me approx. $20K in relocation expenses.

And they should pay me $50K in future business in madagascar as I am the one who laid the ground work. Please keep in mind I spent an average of four days per month with my wife and two to five year old to make Purcee profitable. [ 38 ] I heard no evidence that the Plaintiff resigned on three occasions prior to sending the May 31, 2013 email; only the August 2012 resignation is supported by the evidence before me. [ 39 ] Not hearing from his employer, Mr. Carroll followed up through Yahoo Messenger on June 4, 2013 inquiring when they would be ready to discuss matters. Mr.

Peterson advised he would be “fully ready in a couple days.” The balance of the conversation is worth repeating: Mr. Carroll: what does that mean? Mr. Carroll: I am not waiting anymore. My time in Madagascar and Mauritius has come to an end. Mr. Carroll: I will be moving back to Canada in July with Tiff and Claire. Mr. Peterson: It means that after I have considered your statements and e-mails for a couple more days I will respond and we can discuss it. Mr. Peterson: If that is your final decision then I will respond in that direction after a couple more days of consideration. ... Mr.

Carroll: when you say a couple of days does that mean Thursday or undetermined? Mr. Peterson: It means Thursday. Mr. Carroll: ok. Have you deposited my commissions. I really don’t see how they would be up for any discussion as they are pretty cut and dry with the deal we have? Mr. Peterson: Your commissions are cut and dried and will be dealt with this week as well. The only thing that has held them up is that part of your job is to keep receivables up to date and they were far from it. That appears to have been resolved now. Mr. Carroll: ok Good. Please send me confirmation of when they are deposited. Mr.

Peterson: Will do. [ 40 ] Over the next few days, the owners concluded Mr. Carroll had resigned. They discussed between themselves whether the employment agreement (which had actually expired in May) obliged Purcee to pay one month’s severance. Mr. Bernard wanted to pay Mr. Carroll only two weeks’ salary. Mr. Peterson was concerned with the optics and suggested that a month’s salary be paid. [ 41 ] Mr. Carroll’s employment came to an end on June 7, 2013 when Purcee Canada purported to accept his resignation. In accepting the resignation, Purcee provided the following to Mr.

Carroll: - Payment of all commissions for complete orders in which Purcee had received payment in full as of June 7, 2013; - One month’s salary; - Return airfare to Canada for Mr. Carroll and his family up to a maximum of $15,500; and - Return of Mr. Carroll’s personal items from Madagascar. [ 42 ] I am satisfied that Mr. Carroll clearly intended to leave Madagascar. I am also satisfied that the parties knew he would not be working there indefinitely. Mr.

Carroll testified that he understood that he always had a position with Purcee Canada to return to, but if a position back in Calgary was unavailable, he would be offered a severance package. [ 43 ] He testified to having many discussions about returning to Canada to work during his time in Madagascar. Mr. Peterson, on the other hand, testified the issue of Mr. Carroll’s return to Canada was never discussed and in fact, no job was available to him. [ 44 ] In this regard, I prefer the evidence of Mr. Peterson over that of Mr. Carroll. While I find that there was never an expectation that Mr.

Carroll live and work in Madagascar indefinitely, particularly given that his daughter was scheduled to start school in the fall of 2013, there is no evidence of specific discussions about leaving Madagascar to return to work in Calgary. Had this been Mr. Carroll’s understanding and intention, his correspondence to his employer would have been worded quite differently. Instead of canvassing the

terms of his severance, he would have inquired about a date to return to Canada and his role with the company upon his return. [45] I also find on the evidence that at no time did Purcee make overtures to terminate Mr. Carroll’s employment. All indicationsof severing the employment relationship were initiated by Mr. Carroll himself. [46] Yet, in considering the entirety of the communications between the owners and Mr. Carroll, I conclude that Mr. Carroll didnot intend to resign from his employment without further recourse. [47] It is clear that Mr.

Carroll’s purported resignations were all done from a place of upset and frustration. Mr. Carroll relies onauthority that where an emotionally upset and angry employee purports to quit, whether he or she has resigned in law is not as clear cut.The onus is on the employer to refuse to accept a spontaneous declaration without proper deliberation: Lelievre v Commerce andIndustry Insurance Co of Canada, 2007 BCSC 253, 57 CCEL (3d) 31 at paras 51-52; Evans, at para 25; Robinson, at paras 49-53. [48] This case is distinguishable from the “spontaneous declaration” cases cited above. While Mr.

Carroll’s August 2012resignation was sent from a place of frustration and emotion, it was not the type of spontaneous utterance said in the heat of the momentthat an employer should be expected to receive cautiously. Similarly, the May 2013 email was also clearly sent from a place offrustration and upset, but it too is distinguishable from the “spontaneous declaration” cases. [49] Mr. Carroll’s statement on June 4, 2013 indicating his intention to repatriate his family to Canada in July 2013 cannot be readin isolation, but rather must be interpreted contextually. The discussion in May was initiated by Mr.

Carroll to negotiate the terms of hisdeparture. Had he intended to clearly resign, there would be no need to follow up on June 4. Mr. Peterson’s response that he would be“fully ready in a couple of days” is consistent with someone who is contemplating the proposal outlined by Mr. Carroll in his May 31email. Objectively, no reasonable person in of Mr. Peterson’s position would have considered Mr. Carroll to have resigned. In my view,Mr. Carroll’s statement that he intended to return to Canada with his family was an emotional reaction to once again being stalled by Mr.Peterson. [50] Importantly, each time Mr.

Carroll offered to resign his employment, the offer was coupled with an invitation to negotiate theterms of his departure, including a severance package. There is no evidence before me to demonstrate that Mr. Carroll ever indicated anintention to resign on a specific date without reference to a severance package. This is important in two respects. First, it is difficult insuch a circumstance to argue that the resignation is clear and unequivocal when it is tied to a proposal for terms of severance.

Butsecondly, it calls into question an employer’s ability to accept that resignation, if in fact it is valid, if the employer does not also acceptthe terms proposed by the employee. Here, Mr. Carroll’s resignation was not accepted as offered by Mr. Carroll in his May 31, 2013email. It was purportedly accepted on completely different terms: Oxman v Dustbaine Enterprises Ltd (1988), 32 OAC 154, 23 CCEL157 (Ont CA) at paras 6-7. [51] At any time following receipt of Mr. Carroll’s offer to negotiate the terms of his departure, Mr. Peterson could haveconfirmed whether Mr.

Carroll truly intended to resign, or otherwise negotiate the terms of his departure. Instead, Mr. Peterson’s June 7,2013 letter purports to accept Mr. Carroll’s resignation without further discussion and on completely different terms than those offeredby Mr. Carroll. [52] Considering all of the circumstances before me, I conclude that Mr. Carroll has satisfied the onus of proving that he wasdismissed.

His resignation was not clear and unequivocal, but rather an invitation to discuss the terms of his exit from the Defendantcompanies and in any event, the employer purported to accept his resignation on completely different terms. IV. Did Mr. Carroll Repudiate or Abandon hisEmployment? [53] In the alternative, the Defendants argue that Mr. Carroll repudiated the employment contract by refusing to continue workingin Madagascar – an essential part of his job duties.

In such a situation, the employer is entitled to accept the repudiation and treat theemployment relationship as terminated because there is no longer an agreement between the parties as to the fundamental terms of thecontract: Roden v Toronto Humane Society (2005), (ON CA), 259 DLR (4th) 89, 202 OAC 351 (CA) [Roden]. [54] Mr. Carroll objects to repudiation being raised at trial, as this was never pleaded by the Defendants in their Statements ofDefence. [55] The Defendants did plead in the alternative that Mr.

Carroll “had abandoned his employment with [Purcee] entirely in respectof any number of his duties within the employment”. [56] While there are similarities between the two, abandonment and repudiation are distinct concepts in the employment lawcontext. [57] Repudiation occurs when the employee, viewing the circumstances objectively, unequivocally refuses to perform essentialelements of their job going forward: Roden at para 46.

In this way, repudiation could be characterized as an unequivocal intention by theemployee to engage in “future insubordination”, so accordingly many of the same considerations that underpin terminations for cause arealso relevant when considering repudiations of the employment contract by the employee: Stacey Reginald Ball, Canadian EmploymentLaw (Toronto: Thomson Reuters, 1996) (loose-leaf release No 67, September 2016), ch 8 at 8:20.

For example, an indication by anemployee that they will not abide by certain directions and instructions given by the employer may constitute repudiation of theemployment contract: Roden. [58] Abandonment occurs when the employee unequivocally, through their words or actions and viewing the circumstancesobjectively, abandons the contract of employment: Fitzgibbons v Westpres Publications Ltd (1983), (BC SC), 50

BCLR 219, 3 DLR (4th) 366 (SC) at paras 26-27 ; Smith v Mistras Canada Inc , 2015 ABQB 673 , 28 Alta LR (6th) 137 at para 33 ; Pereira v Business Depot Inc (cob Staples Business Depot) , 2011 BCCA 361 , 93 CCEL (3d) 74 at para 47 .

For example, it is an implied term of every employment contract that the employee attend work, so an employer may take the position that the employee has abandoned their employment if they fail to attend work for an extended period without reasonable excuse or explanation. [ 59 ] A cause of action itself need not be pleaded, only the factual situation that discloses the cause of action: Tu v Huang , 2006 ABCA 263 , [2006] AJ No 1152 (QL) at para 5 . Rule 13.6 of the Alberta Rules of Court , Alta Reg 124/2010 is consistent with that.

The Rules do not suggest that causes of action must be pleaded, only “the facts on which a party relies, but not the evidence by which the facts are to be proved”: Rule 13.6(2) (a). The content of pleadings is addressed in

Part 13 of the Rules . Rule 13.6(2) states:

(2) A pleading must state any of the following matters that are relevant: ... (

b) a matter that defeats, or raises a defence to, a claim of another party; [ 60 ] On the plain reading of Rule 13.6(2), an alleged repudiation of the employment contract should be pleaded as this is “a matter that defeats, or raises a defence to, a claim of another party”.

As noted above, repudiation is distinct from abandonment, so the reference to abandonment in the Statements of Defence is inadequate to constitute a pleading for repudiation. [ 61 ] Rule 13.6(3) states “[a] pleading must also include a statement of any matter on which a party intends to rely that may take another party by surprise.” The subsection goes on to list examples of such matters. Repudiation of a contract is not listed, but the list is not exhaustive.

The paramount factor that governs whether or not a matter must be pleaded is if the matter may take another party by surprise. [ 62 ] In my view, repudiation of an employment contract is not so routine that it would be anticipated in any employment dispute. Rule 13.6(3) is consistent with the approach to litigation long endorsed by the courts: parties are entitled to know the case they must meet in advance of trial.

Further, proper pleadings assist the trial judge and a judgment based on an issue not pleaded is improper: Paniccia Estate v Toal , 2012 ABCA 397 , 539 AR 349 at para 32 . [ 63 ] At no time did the Defendants apply to amend their Statements of Defence. I conclude the issue of repudiation of the employment contract by Mr. Carroll should have been pleaded and since it was not, the issue cannot be considered. [ 64 ] Even if repudiation had been properly pleaded, the facts show that Mr. Carroll did not repudiate his employment contract. Mr.

Carroll’s proposed business plan submitted in September 2012, clearly contemplated that he remain in Madagascar for an extended period of time, as evidenced by his request that Purcee begin paying his daughter’s school fees in Mauritius in the fall of 2013. At that point, Mr. Carroll clearly intended to remain in his position and perform his assigned job duties. He testified that he continued to work up until receiving the June 7, 2013 letter. He cannot be said to have repudiated his contract of employment as there was no indication that he was unwilling to continue performing his job duties going forward.

When Purcee rejected his business plan, Mr. Carroll was placed in an untenable position – he had no clear direction from his superiors regarding what his job was to entail beyond the summer of 2013. In these circumstances, it is not objectively reasonable to conclude that Mr. Carroll, on his own volition, had unequivocally stated he was no longer willing to continue performing his job duties, as is required to substantiate repudiation. [ 65 ] Similarly, the facts do not support the Defendants’ contention that Mr. Carroll abandoned his employment.

He continued to perform his job duties up until the date he received notification that Purcee purportedly accepted his resignation. Also, I found as fact that Mr. Carroll’s statement to Purcee’s owners that he intended to repatriate his family to Canada in July 2013 was made from a place of upset and frustration. Objectively viewed, a reasonable employer in receipt of that communication would not conclude that Mr. Carroll had abandoned his employment or had otherwise unilaterally terminated his employment contract. Mr.

Carroll was clearly willing to continue working if his business proposal was accepted, or if a suitable agreement was reached. Failing that, he wished to negotiate the terms of his departure. At no point did Mr. Carroll objectively evince an intention to abandon his employment in these circumstances. V. Did the Defendants dismiss Mr. Carroll for cause? [ 66 ] In the alternative, the Defendants plead just cause existed and therefore, they were entitled to summarily dismiss Mr. Carroll. [ 67 ] If termination is for cause, no notice or payment in lieu is required. There is no “near cause” in law.

Cause justifying termination is a strict standard and there may be many legitimate and reasonable reasons why an employer might terminate employment but which the law does not recognize as amounting to cause: Styles v Alberta Investment Management Corporation , 2017 ABCA 1 , 36 CCEL (4th) 16 at para 33 . [ 68 ] Cause generally involves real and serious incompetence or misconduct. The Defendants did not allege cause at the time they purported to accept Mr. Carroll’s resignation in June 2013.

They raised it, for the first time, when Statements of Defence were filed in February 2014. [ 69 ] The onus of proving cause for dismissal rests with the employer. During closing argument, the Defendants conceded that the evidence was insufficient to prove cause existed. In light of the limited evidence before me, this was an entirely appropriate concession. [ 70 ] Having found that Mr. Carroll was dismissed from his employment without cause, the analysis now turns to the damages he is entitled to. VI. Damages

a. What is the reasonable notice period? [71] It is agreed that the written contract of employment entered into between Mr.

Carroll and Purcee Mauritius dated May 25,2011 did not address the issue of working notice or pay in lieu of notice upon termination without cause. [72] Accordingly, reasonable notice is determined primarily by four considerations: the employee’s age; length of service; positionin the company; and the availability of commensurate employment: Bardal v Globe and Mail Ltd, (ON SC), 24 DLR(2d) 140, [1960] OJ No 149 (QL) at para 21 (Ont H Ct J); cited with approval in Machtinger v HOJ Industries Ltd, (SCC), [1992] 1 SCR 986 at 998; Wallace v United Grain Growers Ltd, (SCC), [1997] 3 SCR 701 at para 81. [73] Mr.

Carroll suggests a period of reasonable notice is 12 to 14 months. The Defendants argue it is 12 weeks. [74] Mr. Carroll was 41 years of age at the time of his dismissal. He was employed with the Defendants for a total of four yearsand eight months. [75] Although there was some debate as to Mr. Carroll’s position at Purcee Mauritius, business cards were printed showing histitle as Regional Manager. [76] In Madagascar, Mr. Carroll had few people reporting directly to him. His main role was generating sales through theAmbatovy project and servicing Sherritt.

While he had some oversight of two Purcee employees in Madagascar and oversight of thehousehold staff, his true managerial functions were limited: he could not hire, fire or discipline, he had no exclusive authority oversetting profit margins, and he had limited ability to incur expenses without the owners’ approval. [77] Nonetheless, it is clear Mr. Carroll was afforded a great degree of autonomy. He was the eyes and ears of Purcee Canada inMadagascar. [78] The final factor in considering a reasonable notice period is the availability of commensurate work. Upon returning to Canada,Mr.

Carroll obtained employment October 1, 2013, albeit at a lower annual salary of $85,000 per year, but with a company car andhealth benefits. [79] Ultimately, reasonable notice is meant to provide the employee with the means to bridge the gap between periods ofemployment. In my view, all of the Bardal factors must be considered, but not necessarily on an equal basis. Mr. Carroll was relativelyyoung at the time of his dismissal, with many working years ahead of him.

Indisputably, he was and remains an extremely talented salesperson, which is a skill transferrable to many industries, notwithstanding his experience has been within the electrical manufacturingrealm. [80] Logically, it would take Mr. Carroll somewhat longer to re-establish business connections having been away from Alberta foralmost three years. [81] Having considered all of these factors, an appropriate period of notice, in my view, is seven months. [82] Since Mr.

Carroll’s total remuneration was based on a combination of salary and commissions, the next issue is calculation ofhis total compensation at the time of dismissal for the purposes of payment in lieu of notice. [83] Mr. Carroll suggests it is appropriate to calculate his total salary at the time of dismissal by taking an average of his basesalary plus commissions and the annual cost of his expatriate health insurance and averaging those two amounts for the years 2011 and2012, to arrive at expected earnings for 2013. While part of Mr.

Carroll’s base salary from Purcee Mauritius was payable in USD, theparties have agreed that no adjustment should be made to account for the exchange rate between CDN and USD since the two currencieswere generally at parity at the material time. [84] Employing this methodology, Mr. Carroll’s total remuneration for 2011 was $173,368.01 and $219,780.26 for 2012. Theaverage of these amounts is $196,574.14. [85] Unfortunately, there is insufficient evidence before me to accurately predict Mr. Carroll’s anticipated commissions for salesthat could have been generated during the notice period.

I note that the evidence discloses that Mr. Carroll’s sales were dropping in2012 up to the date of termination, but the extent of the decline is unclear. I am mindful that using Mr. Carroll’s total remuneration from2011 and 2012 as the basis for imputing Mr. Carroll’s income during the notice period would lead to a windfall, as this would notaccount for his declining sales output. The difficulty is further compounded by the fact that Purcee’s practice was to calculatecommissions in June, reflecting commissions earned and payable for the 12 months prior. Therefore, Mr.

Carroll’s 2011 tax returnincludes commissions earned from sales generated in 2010, and his 2012 tax return includes commissions earned from sales generated in2011. Overall, there is insufficient evidence before me to determine how much Mr. Carroll’s sales had declined. Given the limitedevidence, I will apply a 15% reduction to Mr. Carroll’s total income from 2011 and 2012 for the purpose of accounting for his decliningsales output. The average of Mr.

Carroll’s total income from 2011 and 2012 less 15% is $167,088.02. [86] Furthermore, I decline to include the cost of the expatriate medical premium as requested by Mr. Carroll. I was provided withno authority to suggest that adding the employer portion of health and dental benefits to the employee’s salary is appropriate. Mr.Carroll’s income for 2011 and 2012 is to be reduced by $3888 (reflecting the employer portion of health and dental benefits). Accordingly, the average income for 2011 and 2012 is $163,200.02. Using this amount as Mr.

Carroll’s estimated total compensationfor one year, seven months of compensation is $95,200.01. This amount reflects the base salary Mr. Carroll is entitled to for the noticeperiod, plus commissions on sales he could have generated had he remained employed for those seven months. [87] It is agreed that the Defendants paid Mr. Carroll one month of base salary upon termination in the amount of $8167. The onemonth of salary paid by Purcee must be deducted from the seven months of imputed compensation set out above. It is further agreed

that, commencing October 1, 2013, Mr. Carroll mitigated his damages when he earned the sum of $7,083 gross per month for threemonths after he obtained new employment, for a total of $21,249. This too must be deducted from the seven months of imputedcompensation set out above. Accordingly, Mr. Carroll is entitled to $65,784.01 in pay in lieu of notice, subject to appropriate andapplicable remittances. b. Commissions [88] Mr. Carroll also claims for commissions earned up to June 30, 2012 and for commissions earned for the period July 1, 2012to June 7, 2013.

While the Defendants acknowledge commissions are owed to Mr. Carroll, they dispute the amount claimed. At the heartof the dispute is whether Mr. Carroll is entitled to commissions for sales generated prior to his dismissal, but paid after July 7, 2013. [89] There is no dispute that commissions are payable to Mr. Carroll upon completion of the sales cycle – that is, if and whenPurcee Canada received payment from the customer. This was an innate understanding by the parties and is consistent with industrystandard. However, the point at which Mr.

Carroll became entitled to the commission payment was not specifically discussed by theparties. Similarly, the parties did not discuss payment of commissions if Mr. Carroll’s employment ceased. While Mr. Carroll concedesthat Purcee paid him commissions after Purcee received payment for sales he effected, he argues that his entitlement to eventuallyreceive commissions crystallized at the time the sales were effected.

Accordingly, he argues he is entitled to receive commissions forsales that he effected prior to his dismissal, regardless of whether payments were received by Purcee before or after the date oftermination. [90] Purcee argues that Mr. Carroll’s entitlement to receive commissions crystallized at the date of payment. Accordingly, Purceeargues Mr. Carroll is not entitled to receive commissions for sales effected prior to the date of termination if the customer had not paidfor the order until after the date of dismissal. [91] Mr.

Peterson testified that Purcee Canada’s policy was not to pay commissions to employees after the end of theiremployment. This was confirmed by Benilda Parra, Purcee Canada’s long-time bookkeeper. She too testified that employees are paidcommissions once Purcee Canada received payment and they must be employed in order to receive their commissions. She said noexception was made for Mr. Carroll to this structure. [92] For his part, Mr.

Carroll testified that in the electrical supply industry it is typical to receive commissions owing even if thesales cycles are outstanding at termination. [93] No doubt, if a written employment contract between the parties unambiguously states the employee is not entitled to receivecommissions if payment is not received at the date of termination, the employer would be entitled to rely on that contractual provisionunless the employee could prove that, in law, the employer is estopped or otherwise prevented from relying on the plainly-wordedcontract: Styles at paras 22-23.

That is not the case here, since the written contract (which had expired in any event) is silent on the issueof Mr. Carroll’s entitlement to commissions post-termination. [94] In the case of silence on this issue, two distinct lines of authority have developed.

The first line of authority originates with theSupreme Court of Canada decision in Grover v Stirling Bonding Co, (SCC), [1935] 3 DLR 481, [1935] SCJ No 50(QL) (SCC) at para 34, which states “[i]mplication of a term in a contract ought to be made only where it is necessary in order to give thetransaction such efficacy as both parties must have intended it to have and to prevent such failure of consideration as cannot have been inthe contemplation of either party.” This has come to be known as the “business efficacy” rule – where an unwritten term may be impliedif the contract could not otherwise operate without it: MJB Enterprises Ltd v Defence Construction

(1951) Ltd, (SCC), [1999] 1 SCR 619 at para 27.

In applying the business efficacy test to the facts in that case, the Court in Grover concluded thatthe commissions should not be payable after termination unless there is an express term to that effect. [95] The test outlined in Grover was applied in Bixby v B & K Carpet Warehouse Co, (NL SC), 63 Nfld &PEIR 232, [1987] NJ No 95 (QL) (Nfld Sup Ct) where it was held that absent an express term in the commission salesman’s contract ofemployment respecting payment of commissions for sales completed after termination, there must be some factual basis to justify theimplication of such a term.

In that case, the Court heard evidence that established the company’s policy was not to pay commissions aftertermination for uncompleted sales and that this policy was well-known amongst the staff. Accordingly, the salesman was not entitled tocommissions for sales effected where payments were received after the date of termination. [96] A similar approach was followed in Swartz v Shragge, (MB CA), [1932] 1 WWR 797, 40 Man R 242 (CA),a case which predates Grover.

In that case, the evidence from the employer’s manager that the commissions were payable “just whilethe plaintiff was in their employment” was sufficient grounds to defeat the plaintiff’s claim for commissions.

Citing the England Courtof King’s Bench decision in Marshall v Granville, [1917] 2 KB 87, the Court found that “[u]nless there are words in the contractsshowing with reasonable clearness an intention of the parties to continue the commission on trade done after the date of termination theplaintiff cannot succeed”: at para 10. [97] In Miller v MacCam Ltd, (SK CA), [1948] 3 DLR 732, [1948] 2 WWR 240 (Sask Sup Ct (App Div)), theCourt interpreted an employment contract with a car salesman which contained a term specifying that “[n]o sale shall be consideredmade and no commission due to the plaintiff until the purchaser has taken delivery of the vehicle.” The Court found that this languagewas sufficiently clear to deny the plaintiff recovery for commissions on vehicles sold but not delivered at the date of termination, andthere was no basis to imply a term to the contrary. [98] A second line of authority flows from the leading English case of Sellers v London County’s Newspapers, [1951] 1 KB 784,[1951] 1 All ER 544, where it was decided that absent a term to the contrary, an employee is entitled to commissions on sales effected byhim but not payable until after the termination of his employment. [99] Sellers was followed in Manson v Fleming-Pedlar Ltd, (MB KB), 3 WWR (NS) 241, [1951] MJ No 21(QL) (KB) at para 23 [Manson]:

In the instant case there was clearly no express term in the contract that the plaintiff's right to commission should end with thetermination of the contract. Further, I can see no point of distinction between a situation where orders have been placed duringemployment and one where orders are ultimately placed by reason of the efforts of the plaintiff during his period of employment.

If itwere otherwise, the employer could, in any case, conveniently terminate the employment prior to the placing of orders and thus avoidliability for commission. [100] While Sellers was not explicitly cited, Micallef v Image Processing Systems Inc, (ON SC), 46 CCEL (2d)9, [1999] OJ No 3053 (QL) (Sup Ct J) [Micallef] essentially adopted the same approach (at para 15): Based on the evidence of MacMaster, however, there was in place a basis for calculating commission on sales.

To the extent, therefore,that sales were consummated by the plaintiff, I am of the view that he is entitled to the appropriate commission on those sales. I rejectthe position taken by the defence, however, that the plaintiff had to be in the employ of the defendant at the time payment was receivedin order to be paid the commission. Absent some explicit policy to that effect, and there is no evidence to that effect, the distinction mustvalidly be made between the time a commission is earned and the time that it becomes payable.

It is perfectly reasonable for anemployer to say that a commission will not become payable until the account is paid; it is quite another thing to say that thecommission will not be paid simply because an employee was not in its employ at the time the account was paid, notwithstandingthe fact the sale was the result of the employee's efforts. [Emphasis added.] [101] A similar approach was followed in Hawkins v Mack Maritime Distributors Ltd, (NB CA), 2 NBR (2d)427, [1970] NBJ No 36 (QL) (SC (App Div)) [Hawkins], where the Court found that the employee’s right to payment for commission ona sale crystallized when nothing further remained to be done by the employer to collect on the sale: at 428-29.

Since the sale could beattributed to the sole efforts of the terminated employee, that gave rise to an entitlement to the commission from that sale (absent a clearterm in the employment contract to the contrary). [102] In Avery v Calgary Freightliner Ltd, 2008 ABQB 244, 48 BLR (4th) 258, the employment contract contained an express termstating the employee would be paid commissions for vehicles sold payable at the end of the month following delivery of the vehicle.

Following Micallef, the Court found that the timing of the commission’s payment in the contract was not determinative of whether theemployee’s entitlement to the commission had crystallized at some point earlier: at para 37. Rather, the Court found that the employee’sentitlement to payment for commissions crystallized at the date the sale was concluded, even if payment for the commission was notmade until sometime thereafter.

Since the contract was otherwise silent on whether the employee was entitled to commissions earnedbut not paid at the date of termination, the Court found that the plain meaning of the contract entitled the employee to commissionsearned, even if the payment was not to be made until sometime after the date of termination. [103] In Gill v Navigate Capital Corp, 2013 BCSC 1479, [2013] BCJ No 1796 (QL) [Gill], the Court cited Manson, Micallef, andHawkins with approval (at paras 76-78), but ultimately distinguished these cases on the basis that the employee’s commissions in Gillwere earned on the basis of the overall profitability of the firm as opposed to sales effected.

Once his employment was terminated, itbecame impossible for him to earn further commissions since he could no longer claim to have contributed to the company’s profitabilityin subsequent months. [104] It appears, from review of the case authority, the courts have not hesitated to imply a term in employment contracts requiringthe employer to pay terminated employees commissions for sales effected but not concluded prior to the termination.

In Rowles v Al-wood Manufacturing Ltd (1979), (AB KB), 17 AR 306, 9 Alta LR (2d) 61 (Dist Ct), Decore J, after providing athorough review of the authorities, found that implication of a term in the employment contract was clearly applicable and the employeewas entitled to commissions on sales he effected while employed, the invoices for which were sent out after his employment wasterminated. [105] In rationalizing these apparently diverse lines of authority, I consider the following factors to be germane. It is clear from theevidence that Mr. Carroll completed his role for all of the commissions claimed.

He was directly involved in each and every one of thesales in question, and the sales can be primarily attributed to his efforts (similar to the case in Micallef). Further, it is clear on theevidence that the Defendants have now been paid for all of the sales, although specific dates of payment are not in evidence. While therewas evidence from the Defendants that their policy was not to pay commissions following termination of employment, there is noevidence before me that this policy was ever brought to the attention of Mr. Carroll, nor was he ever asked whether he was aware of thispolicy. Ms.

Parra’s testimony supports that a general policy was in place, but her testimony does not prove that Mr. Carroll wassubjectively aware of the policy. [106] Even if it is not reduced to writing, credible evidence establishing the existence of a term precluding employees from collectingcommissions earned post-termination may well justify denial of commissions on sales paid after termination, as was the case in Bixby.Further, it is open to the parties to lead evidence as to a widely known and accepted industry standard.

No such conclusive evidence isbefore me. [107] Furthermore, the fact that commissions were typically paid only after payment was received from the purchaser does notnecessarily imply that such commissions are not payable following termination. Following Micallef, a term in an employment contractrequiring that an order be paid before the salesperson receives his commission does not necessarily imply that the salesperson’sentitlement to that commission crystallizes at the date the customer pays the invoice.

Rather, it is entirely reasonable to conclude thatthe employee’s entitlement to receive a commission crystallized at the date the sale was effected, even if payment is delayed untilsometime thereafter. At that point, the employee’s job has been performed, and the employer is set to reap the benefit of the employee’slabour once the customer remits payment. [108] In my view, this

interpretation properly applies the business efficacy test as set out by the Supreme Court in Grover and MJBEnterprises. The Court should imply terms that are necessary to give effect to the consideration agreed to between the parties. In thiscase, Purcee agreed to pay Mr. Carroll a base salary plus commissions in exchange for Mr. Carroll effecting sales on Purcee’s behalf. It

is reasonable to imply a term that Mr. Carroll’s entitlement to commissions crystallized at the moment the sale was effected, because thatbest gives effect to the consideration agreed to between the parties. At that point, Mr. Carroll had performed his duties, and he is entitledto the compensation for his labour that he bargained for. To find otherwise would lead to a windfall for Purcee. [109] This, in my view, is also consistent with what I term the “modern approach” to this issue.

After all, it is recognized that wherean employee’s compensation is based in whole or in part on commissions, a dismissed employee will be compensated for the loss of theopportunity to earn commissions over the applicable notice period.

Sparling v DH Howden & Company, 68 CLLC 573, [1968] OJ No399 (QL) (H Ct J); Sublett v Facit-Addo Canada Ltd, (1977) (ON SC), 16 OR (2d) 791, 79 DLR (3d) 286 (H Ct J);Goldberg v Western Approaches Ltd, (BC SC), 7 CCEL 127, [1985] BCJ No 937 (QL) (BCSC). [110] I conclude where an employee has been dismissed and the employment contract is silent on this issue, absent evidence ofknown company policy or accepted industry standard, a Court should not hesitate to imply a term that commissions earned on salesgenerated before termination but paid to the employer after termination, should still be paid to the employee. [111] Accordingly, Mr.

Carroll is entitled to commissions for sales generated, including on sales paid after his termination. [112] Ms. Parra, Purcee Canada’s bookkeeper, prepared a detailed spreadsheet which was placed in evidence. The parties agree thatunpaid commissions up to June 30, 2012 total $17,742.64. [113] Correspondence in evidence from Lyle Bernard, the other director of Purcee Canada, to Ms. Parra raises the possibility that Mr.Carroll was overpaid for commissions earned in December 2011 and December 2012. Ms. Parra was not questioned on this issue, andtherefore I am unable to conclude Mr.

Carroll was in fact overpaid. [114] Having determined that Mr. Carroll is entitled to commissions earned and paid following his termination, the parties agree thatthat amount for the period July 1, 2012 to June 7, 2013 is $54,077.94 for total unpaid commissions of $71,820.58. c. Relocation Expenses [115] Mr. Carroll claims $10,719.72 in relocation expenses which are outlined in a spreadsheet and supported by invoices. I amsatisfied that the expenses incurred are reasonable in the circumstances.

I decline to award the airfare incurred June 15, 2013 in theamount of $622.81 as no invoice was produced. [116] The Defendants took exception to a $1194.64 expense incurred when Mr. Carroll rented a car for one month following hisfamily’s return to Calgary. In light of Mr. Carroll’s evidence that he was not in the position, due to his unemployment, to immediatelybuy a replacement car, I find this expense to be reasonable. Mr. Carroll is awarded total relocation expenses in the amount of $10,096.91. VII. Joint and Several Liability of Defendants [117] The Defendants concede that they were “common employers” of Mr.

Carroll at the time of his termination because PurceeCanada and Purcee Mauritius are related entities and there is an element of common control over both: Downtown Eatery

(1993) Ltd vOntario, (ON CA), 54 OR (3d) 161, [2001] OJ No 1879 (QL); Shamac Country Inns Ltd v Sandy’s Oilfield HaulingLtd, 2015 ABQB 518, 24 CCLT (4th) 154. I am satisfied that Purcee Canada and Purcee Mauritius are “common employers” of Mr.Carroll, and are accordingly jointly and severally liable for the damages awarded to Mr. Carroll. VIII. Conclusion [118] Mr. Carroll has proven on a balance of probabilities that he was dismissed from his employment with the Defendants withoutcause and is entitled to the following damages:

a) Payment in lieu of reasonable notice: $65,784.01

b) Commissions: $71,820.58

c) Relocation expenses: $10,096.91

d) Total: $147,701.50 [119] If the parties cannot agree, costs may be spoken to within 60 days of the date of this judgment. Heard on the 21st day of February, 2017. Dated at the City of Calgary, Alberta this 28th day of March, 2017.

Dawn Pentelechuk J.C.Q.B.A. Appearances: Simon McCleary Jensen Shawa Solomon Duguid Hawkes LLP for Mr. Carroll David Barker Bokenfohr Connolly for the Defendants