Ted Boyachek o/a TJAN Projects Plaintiff - v. -, 2014 SKPC 8

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2014 SKPC 008 Date: January 7, 2014 File: SC# 243 of 2013 Location: Saskatoon _____________________________________________________________________________ Between: Ted Boyachek o/a TJAN Projects Plaintiff - and - K + S Potash Canada General Partnership Defendant D. Z. Braun For the Plaintiff R. J. Frost-Hinz For the Defendant _____________________________________________________________________________ JUDGMENT Q.D. AGNEW , J _____________________________________________________________________________ [ 1 ] There are two issues between the parties which must be decided in this judgment. The first is a matter of

interpretation of

the contract between them, and specifically whether the plaintiff is entitled to pay in lieu of vacation time. The second issue, presuming the first is decided in the plaintiff’s favour, is one of calculating the number of days of unused vacation to which he was entitled, in order to calculate damages. [ 2 ] The parties agree that the parole evidence rule applies in this case. Accordingly, unless I find an ambiguity on the face of the contract, evidence beyond the written terms of the contract itself is not admissible for the purpose of interpreting the meaning of the contract.

Furthermore, both the parties agree that the wording is unambiguous; unfortunately, they are diametrically opposed in what they each say that unambiguous wording means. [ 3 ] First, some context. The contract in question was entered into as of May 1, 2011. It is a nine-page document between the parties, establishing the terms of their relationship. The parties agree, and the document bears out, that the plaintiff was an independent contractor, retained as such by the defendant.

The plaintiff was retained for the purposes of procurement management, or in general terms to handle certain purchasing requirements of the defendant. The uncontradicted evidence is that the plaintiff was contacted by Mike Ferguson of the defendant, who had known the plaintiff through previous association. The terms of the contract were generous by the standards of what the plaintiff had previously had as an independent contractor, and his understanding from Mr. Ferguson was that this “generosity” was due to the difficulty Mr. Ferguson was having in finding persons with the plaintiff’s expertise.

This is of course hearsay, but nothing turns on it in any event. The two terms of particular interest to the plaintiff, and of particular significance to this action, were that the plaintiff would be entitled to three weeks’ paid vacation “in each calendar year”, and that if the defendant chose to terminate the contract without cause, it would do so “only with three month’s [sic] advance written notice” to the plaintiff. [ 4 ] Although the parties were uncertain as to the exact date on which the defendant gave written notice of termination to the plaintiff, they agreed it was approximately April 2, 2012.

The parties agreed that nothing turns on the exact date, given that it would likely be within a day or so of April 2. The parties agree that such termination was without cause, and that as a result the plaintiff was entitled to notice in accordance with the contract. [ 5 ] At that time, the plaintiff was provided written notice of such termination, and was advised that he would not be required to perform any services for the defendant during the three-month notice period.

In due course, he was paid for those three months, and was not in fact required to perform any services during that period. [ 6 ] The plaintiff alleges that he did not take any vacation time during the course of the 11 months in which he actually performed work for the defendant.

He says that under the contract, he was entitled to take paid vacations and that as he did not do so, he is entitled to pay in lieu of that vacation time. [ 7 ] The defendant takes the position that there is no right under the contract for pay in lieu of vacation time; that is, that as the plaintiff did not take his vacation time, he simply lost that entitlement.

Alternatively, the defendant argues that the plaintiff received whatever vacation entitlement he may have had in the three-month notice period, during which he received full payment but was not required to do any work: in essence, a three-month paid vacation rather than a three-week one.

The defendant also argued that the plaintiff did in fact take vacation during the 11 months of his service, but that is a point which I will deal with in calculating damages, if I find in favour of the plaintiff. [ 8 ] Before I begin the analysis, I want to note that I am mindful of the fact that this is not an employment situation. Accordingly the statutory requirements with respect to vacation, notice periods and payment in lieu do not apply.

I am not persuaded that they are even of assistance in interpreting the contract, since presumably the expectations of the parties, and accordingly their intentions in entering into the contract, were not guided by statutory terms of employment. [ 9 ]

Article 6 of the contract deals with the vacation entitlement. In its entirety it reads as follows: 6.1 During the term of his engagement under this Agreement, the Consultant will be entitled to vacation time of at least three weeks in each calendar year. Should the Consultant wish to take two or more vacation weeks at a time, such vacation shall be scheduled at a mutually agreeable time. Vacation time taken in excess of three weeks per year shall be deducted from the subsequent month’s invoice on a weekly pro-rated basis. 6.2 The Consultant agrees to take his vacation at such times as the management of the Company may from time to time direct having

regard to maintaining the smooth operation of the Company. [ 10 ] The “Consultant” is the plaintiff and the “Company” is the defendant. [ 11 ] As can be seen,

Article 6 is silent as to the effect of the plaintiff not taking the full vacation time to which he is entitled. The plaintiff’s position is that he is entitled to pay in lieu of that time; the defendant’s, that he either had to use it or lose it. Both take the position that their

interpretation is obviously correct, and that if the contrary was intended, there must be an explicit statement to that effect in the contract; as there is not, their

interpretation is the correct one. Obviously, they cannot both be right. [ 12 ] It is my view that either of these options, or indeed any other

interpretation of the contract, requires the Court to read an implicit term into the contract. It is not at all uncommon in the

interpretation of contracts for courts to do so. The parties cannot conceive of every possible situation, and it would be an impossibly-long contract which attempted to cover every contingency. The law instead has the Court consider what the parties would, as reasonable persons, have intended about the particular situation had it been brought to their attention prior to the contract being signed. [1] [ 13 ] The suggestion that the plaintiff must use his holidays or lose his entitlement to them is, in my view, untenable. I cannot possibly conclude that, had the parties addressed their mind to that issue, this would have been their intention. Such an

interpretation would be an unreasonable one, and I do not accept it. [ 14 ] Although it is not necessary to my

interpretation, which is based strictly on the reasonableness of the

interpretations of the clause, I am strengthened in my view by the actual course of conduct between the parties. The defendant says that paragraph 6.1 allowed the plaintiff to take vacation arbitrarily, at whatever time he chose, provided that he did not do so in a block of two weeks or more. Accordingly, according to the defendant, it is the plaintiff’s fault that he did not take his holidays; the defendant should not have to pay for that.

This position ignores one important fact. [ 15 ] The defendant’s position, that the plaintiff could take less than two weeks’ holidays without the permission of the defendant, does not correspond with the defendant’s conduct. The uncontradicted evidence before me is that the plaintiff sought to take a one-week holiday at one point during the term of the contract, and was denied that holiday time by the defendant’s representative, Michael Khouri. If the defendant’s position is correct, Mr. Khouri would not have been able to take that stance.

This inconvenient fact put defence counsel in the uncomfortable position of either having to abandon this argument, or argue that his client had denied the plaintiff a week of holidays in defiance of his contractual right to it: that his client, in other words, violated the contract. He chose to make the latter argument; I prefer to believe that the parties conducted themselves in accordance with the contract. [ 16 ] The defendant next argues that the plaintiff in fact received his holiday entitlement by virtue of the fact that he did not work during the course of the three-month notice period.

In other words, the defendant argues that it can use the notice period to also use up the plaintiff’s vacation entitlement. [ 17 ] I choose to leave open the question of whether or not the defendant could force the plaintiff to use his vacation time during the notice period, because I do not need to deal with it. The defendant’s ability to force the plaintiff to take holidays is defined in paragraph 6.2, which specifies that the plaintiff will take holidays “at such times as the management of [the defendant] may from time to time direct”.

There is no evidence that the defendant ever directed the plaintiff to take holidays. Accordingly, even if I were to decide that the plaintiff could be required to take holidays to use up part of the notice period, this could only be done by the defendant directing the plaintiff to do so. There is no evidence that the defendant actually directed the plaintiff to do so, and accordingly the defendant is not able to avail itself of this argument in any event. [ 18 ] The final issue remaining is to calculate the unused vacation time to which the plaintiff is entitled.

According to paragraph 6.1, the plaintiff accumulated vacation at the rate of three weeks per “calendar year”. Notwithstanding that this could be interpreted to mean a total of six weeks, being three weeks in 2011 and three weeks in 2012, the plaintiff was content to argue for an

interpretation that he earned three weeks every 12 months. I therefore do not have to decide whether the enlarged

interpretation is correct.

[ 19 ] It is common ground that the plaintiff provided services to the defendant from May 1, 2011 to the date he was given notice, April 1 or April 2, 2012, a period of 11 months. He was then given three months’ notice. It is my view that he is entitled to accumulate vacation days during the notice period. [ 20 ] During the notice period pursuant to paragraph 8.2, termination by the defendant without cause is with “three month’s [sic] advance written notice”. I interpret this to mean that the company is entitled to insist on performance of the contract by the plaintiff during the three months following notice.

The only reference in the Agreement to the services to be provided by the plaintiff is found in paragraph 1.2, which states that the plaintiff is to “undertake and perform such assignments and responsibilities for [the defendant] as he may from time to time be delegated”. According to the evidence, at the time the plaintiff was given notice, he was also advised that the defendant would not require him to provide any services during the notice period. Under paragraph 1.2, this is the defendant’s prerogative. Nonetheless, the contract remained in full force and effect for those three months.

I can find no reason why every provision of the agreement would remain in effect except paragraph 6.1; rather, I consider that the only reasonable

interpretation of the contract is that every provision remains in effect during the notice period. The fact that the defendant chose not to utilize the plaintiff’s services during that three-month period was a choice that it was entitled to make; however, it was not entitled to change his compensation during those three months.

It is clear from review of the contract that accumulating paid vacation time is part of the compensation package, and accordingly vacation continues to accrue during the three months’ period. [ 21 ] Under paragraph 6.1 the plaintiff accumulated vacation time at the rate of three weeks per year, or one week per four months, or .5 weeks per two months. As the total period for which vacation is to be calculated is 14 months, he is entitled to 3.5 weeks of vacation. [ 22 ] The next question is how much vacation time he actually took during the course of those 14 months.

The plaintiff testified he took no vacation time. There is no evidence before that the defendant ever directed the plaintiff to take vacation time pursuant to paragraph 6.2. The only evidence that the plaintiff took any vacation time came from a co-worker of his, Sylvia Goertzen. She worked in conjunction with the plaintiff for the period of approximately June through December, 2011. Entered into evidence were extracts from her computerized calendar, which contained entries which showed the plaintiff to be on “vacation”. [ 23 ] During the course of Ms.

Goertzen’s testimony, it emerged that this was in essence a shorthand entry for any time period during which the plaintiff would be unavailable for contact by Ms. Goertzen for work purposes. That is, these were periods when the plaintiff would be out of the office and Ms. Goertzen would need to contact someone else for something that she would normally seek out the plaintiff for.

The plaintiff never told her that he was going to be on holidays on those days, and there is some evidence, which I accept, that on at least some of the days in question the plaintiff was or may have been performing the defendant’s business, but was out of touch with Ms. Goertzen and the office. In other words, despite the fact that Ms. Goertzen’s calendar says “vacation”, there is no evidence that the plaintiff was in fact on vacation on any of the days or portions of days which have that notation in Ms. Goertzen’s calendar.

It is clear on the evidence that “vacation” was simply a notation meaning “unavailable”; Ms. Goertzen could just as easily have written “out of office” in her calendar, and it would have conveyed exactly the same amount of information to me: the plaintiff was unavailable during that period of time, for unknown or unspecified reasons. I am therefore faced with, on the one hand, the plaintiff’s testimony that he never took any vacation time, and on the other hand Ms.

Goertzen’s calendar, which may well be reliable for the fact that the plaintiff was out of contact, but is clearly not reliable to establish that the plaintiff was in fact on vacation when her calender shows “vacation”. [ 24 ] There was also evidence regarding notations by Ms. Goertzen about number of hours worked by the plaintiff. Her evidence made it clear that the figures she used were arbitrary, and not reflective of the plaintiff’s actual work hours. The program she was using required her to enter hours.

She did so, but was candid that they were not accurate and were not intended to be: she simply had to put something in. The notations regarding hours were therefore of no assistance to me. [ 25 ] Accordingly, the only evidence I have which I am prepared to accept is that of the plaintiff, indicating that he took no holidays during the 14 months at issue. He is therefore entitled to compensation for the full 3.5 weeks of holidays. According to paragraph 3.1, his compensation is $20,000.00 per month.

Assuming 4.3 weeks per month (52 weeks divided by 12 months) the plaintiff was entitled to be compensated $4,651.16 per week for vacation time. Multiplying this by 3.5 weeks gives a total of $16,279.07. [ 26 ] Paragraph 3.1 of the Agreement refers to the monthly fee of $20,000.00 per month plus “GST/HST”. I note that the plaintiff’s Statement of Claim, in the prayer for relief, asks for three weeks of vacation time for 2011 totaling $15,000.00, with no mention of GST or HST, and the same for 2012. Accordingly, I am not awarding GST or HST, it not having been pled or claimed by the plaintiff. Given

the intricacies of GST reporting and the potential for a court award being dealt with in a different manner than payment from the defendant in the course of the Agreement, I am in any event left with some uncertainty as to whether or not it would be appropriate to award it, and accordingly I would decline to do so in any event. [ 27 ] The plaintiff has also claimed pre-judgment interest, which I award from June 30, 2012, that being the end of the notice period and therefore the date by which vacation pay should have been paid to the plaintiff.

I also award the plaintiff the cost of issuing the summons, in the amount of $100.00. [ 28 ] There will accordingly be judgement in favour of the plaintiff in the amount of $16,279.07, with pre-judgment interest on that amount from June 30, 2012, and costs of $100.00. __________________________ Q.D. Agnew, J [1] Waddams, S.M., The Law of Contracts (6 th ed.): Toronto, Canada Law Book Inc., 2010, para. 495.