McDonald v Sproule Management GP Limited, 2023 ABKB 587
Opinion
Court of King’s Bench of Alberta Citation: McDonald v Sproule Management GP Limited, 2023 ABKB 587 Date: 20231017 Docket: 1601 08624 Registry: Calgary Between: Kevin McDonald Plaintiff - and - Sproule Management GP Limited Defendant _______________________________________________________ Reasons for Judgment of the Honourable Justice M.A. Marion _______________________________________________________ Table of Contents I. ......... Introduction . 3 II. ....... Procedural Background . 4 III. ...... The Record . 5 A. The McDonald Transcript and Rule 6.7 . 6 1.
Exhibits Marked During the Questioning are Part of the Transcript 7 2. Documents Referenced but Not Marked as Exhibits are Not Part of the Transcript Unless the Parties Agree . 8
3. Undertaking Responses are Part of the Transcript, but Documents Produced with the Undertaking Responses Are Part of the Transcript Only if an Integral Part of the Substantive Answer 9 IV. ...... Issues . 11 V. ....... Analysis . 11 A. Is there No Defence to McDonald’s Wrongful Dismissal Claim and No Genuine Issue Requiring a Trial in respect of the Claim or Defence? . 13 1. Has McDonald Discharged his Threshold Burden? . 13 2. Has Sproule Established that there is a Genuine Issue Requiring a Trial? . 14 a. The Legal Framework for Sproule’s Just Cause Defence . 14 i.
Incompetence or Inability to Perform .. 15 ii. Insubordination and Insolence . 16 iii. Employer Condonation . 17 b. Evidentiary Principles and Tools in
Summary Judgment 18 c. The Evidentiary Record for Sproule’s Just Cause Defence . 22 d. In Light of the Record, Does Sproule’s Just Cause Defence Raise Genuine Issues Requiring a Trial? . 28 i. The Nature and Extent of the Misconduct 28 ii. The Surrounding Circumstances . 28 iii. Was Dismissal a Proportionate Response? . 31 e. Is it Possible to Summarily Resolve McDonald’s Claim and, if so, is the Court prepared to Exercise its Judicial Discretion to do so? . 32 B. Is it Possible and Appropriate to Determine Damages Summarily? . 33 1. Is it Possible and Appropriate to Summarily Determine the Notice Period? . 33 a.
The Nature of the Implied Term Requiring Reasonable Notice . 33 b. Is Determining the Reasonable Notice Period Appropriate for
Summary Judgment Generally? . 34 c. Is
Summary Determination of the Reasonable Notice Period Appropriate in this Case? . 35 d. McDonald’s Reasonable Notice Period . 35 2. Is it Possible and Appropriate to Fairly Resolve Sproule’s Mitigation Defence Summarily? . 38 3. Is it Possible and Appropriate to Fairly Calculate McDonald’s Damages Summarily? 39 a. Salary, Vacation Pay and Earned Days . 40 b. Bonuses . 40 c. Benefits . 41 d. Mitigation Costs/Expenses . 43 e.
Summary of Damages for Failure to Provide Reasonable Notice . 43 4. Is it Possible and Appropriate to Fairly Resolve McDonald’s Bad Faith Damages Claim Summarily? . 44 5. Conclusion re Damages . 46 VI. ...... Conclusion . 46 I. Introduction [ 1 ] The Plaintiff, Kevin McDonald ( McDonald ) applies ( Application ) for
summary judgment against the Defendant, Sproule Management GP Limited ( Sproule ), in respect of his claim for wrongful dismissal. McDonald seeks judgment in the amount of $985,799
compensation for lack of reasonable notice and $489,696 in damages for the manner of termination and costs. McDonald asserts there is no merit to, or genuine issue requiring a trial respecting, Sproule’s just cause defence, and that the damages are supported by the uncontradicted evidence. In the alternative, McDonald seeks directions from the court for the scheduling of a
summary trial in the event the court finds that an assessment of damages is not feasible on the record before the court. [ 2 ] Sproule argues that McDonald’s claim is not suitable for
summary judgment because there are material facts in dispute that involve credibility issues and the weighing of evidence. Sproule asserts that it had just cause both at the time of the termination and based on after-acquired cause. Sproule’s position is that, if the court determines McDonald was dismissed without cause, a further hearing is required in connection with the issue of damages. However, it also argues that a notice period of one-month per year of service is appropriate in the circumstances. Sproule advises that if
summary judgment is not granted it expects to bring an application to have the action dismissed for delay. [ 3 ] This Application addresses when the issues of just cause, determination of a reasonable notice period, assessment of damages, and claims of bad faith, are appropriately determined summarily in a wrongful dismissal case, and whether they can be determined in this case. [ 4 ] For the reasons set out below, I find that there is no merit to Sproule’s defence and there are no genuine issues requiring a trial.
I further find that McDonald was wrongfully dismissed, was entitled to an 18-month notice period, and is entitled to damages and judgment in the amount of $379,312.68, plus pre and post judgment interest. McDonald has not proven damages for bad faith or that his bad faith claim has merit. II. Procedural Background [ 5 ] On June 29, 2016, McDonald filed his Statement of Claim alleging, among other things, that his employment was terminated without cause “without any severance” on February 11, 2016.
The Statement of Claim seeks (1) a declaration that he was wrongfully terminated without cause; (2) judgment for his base salary, benefits and other incentives to which he was entitled during a claimed 24- month notice period, plus out-of-pocket expenses incurred to mitigate his damages in seeking alternative employment; (3) judgment in an additional amount of three month’s base salary in respect of Sproule’s bad faith conduct toward McDonald; (4) pre-judgment interest pursuant to the Judgment Interest Act , RSA 2000 c J-1 ; and (5) costs. [ 6 ] On July 28, 2016, McDonald noted Sproule in default.
On August 10, 2016, McDonald filed an application for the determination of damages pursuant to rule 3.37 of the Alberta Rules of Court , Alta Reg 124/2010 ( Rules ). That application did not proceed and, on August 18, 2016, Sproule filed its Statement of Defence ( Defence ). [ 7 ] Sproule’s Defence alleges just cause, and pleads at least 23 specific particulars supporting its cause position. It asserts Sproule paid McDonald all amounts due to him.
In the alternative, Sproule denies a 24-month notice period is appropriate and pleads an approximate 12-month period of notice would be appropriate (less mitigating income). Sproule specifically denies the allegations that Sproule terminated McDonald in bad faith or was dishonest or high-handed. [ 8 ] The parties exchanged Affidavits of Records within 6 months of the action commencing. [ 9 ] On January 13, 2017, McDonald served Sproule with a comprehensive Notice to Admit Facts seeking Sproule’s admission on 195 separate paragraphs.
On February 1, 2017, Sproule filed its Reply to Notice to Admit Facts, which objected to the Notice and provided only three substantive responses. Sproule’s response asserted that the Notice to Admit Facts was not served properly, was improper for various reasons, and that Sproule did not have time to review it. Sproule indicated it would reassess and re-address the Notice to Admit Facts after the questioning process, but there is no indication that it did so. McDonald suggested in argument that Sproule should be deemed to have admitted all the facts set out in the Notice to Admit Facts.
I decline to take that approach. Sproule provided its denials and objections under rule 6.37. If McDonald felt that Sproule’s responses were insufficient he could have applied to have Sproule provide further information regarding its response: MacKenzie v Estate of Michael Gregory , 2022 ABQB 521 . Instead, McDonald chose to press on with his
summary judgment application. In these circumstances, Sproule’s response to the Notice to Admit Facts is better dealt with as a matter of costs at the conclusion of this action. [ 10 ] On July 28, 2017, McDonald filed an application for
summary judgment. In support, McDonald filed a July 28, 2017 affidavit ( McDonald Affidavit ). [ 11 ] A dispute arose between the parties as to whether Sproule was entitled to conduct questioning for discovery under
Part 5 of the Rules before the
summary judgment application was heard. A Master held that Sproule could not do so, and this was upheld by Justice Neufeld on March 7, 2018. Sproule appealed and the Court of Appeal dismissed the appeal: McDonald v Sproule Management GP Limited , 2018 ABCA 295 .
Sproule was not allowed to conduct a questioning for discovery. [ 12 ] Instead, in 2019, Sproule conducted an extensive questioning on the McDonald Affidavit over three days which produced a 504-page transcript ( Transcript ), excluding exhibits and responses to undertakings. [ 13 ] Sproule filed six responding affidavits in June 2019 and one in July 2022 ( Sproule Affidavits ).
The 2022 affidavit provided, among other things, that one of Sproule’s affiants, Harry Helwerda ( Helwerda ) died in June 2022 and is no longer available to provide evidence. [ 14 ] On March 8, 2022, through his new counsel, McDonald filed the Application. On May 5, 2022, the Application was directed to a special application. [ 15 ] Both parties filed written briefs of argument and I heard the Application on March 16, 2023. Sproule did not file any cross- application. At my request, the parties provided me supplemental written submissions on the question of what records are appropriately
filed as part of a transcript of a questioning on an affidavit pursuant to rule 6.7(b). III. The Record [ 16 ] The sufficiency of the record is critical in a
summary judgment application: Hryniak v Mauldin , 2014 SCC 7 and Weir-Jones Technical Services Incorporated v Purolator Courier Ltd , 2019 ABCA 49 . [ 17 ] In this case, the record consists of: (
a) the McDonald Affidavit; (
b) the 504-page Transcript of the questioning on the McDonald Affidavit. There is an issue between the parties as to what must be filed as part of the “transcript” pursuant to rule 6.7, which I address later in these Reasons. Sproule did not conduct any questioning on McDonald’s undertaking responses; (
c) the Sproule Affidavits, namely: (
i) an affidavit of the chair of Sproule’s board of directors ( Board ) at the time of the termination, Lowy Gunnewiek ( Gunnewiek ). By the time he swore his affidavit, Gunnewiek was no longer affiliated with Sproule; (ii) an affidavit of Sproule’s President and a director at the time of the Termination, Helwerda. Helwerda reviewed the McDonald Affidavit and the Transcript before he swore his affidavit.
By the time he swore his affidavit, he had been retired from Sproule since June 2016; (iii) an affidavit of Sproule’s Senior Vice President, Corporate & Legal and Corporate Secretary at the time of the Termination, Mark Van de Veen ( Van de Veen ). Van de Veen continued to work for Sproule at the time of his affidavit; (iv) an affidavit of Sproule’s Executive Vice President, and director, at the time of the Termination, Douglas Carsted ( Carsted ). Carsted reviewed the McDonald Affidavit, the Transcript, and the Helwerda Affidavit before he swore his affidavit.
By the time he swore his affidavit, Carsted had been retired from Sproule since June 2017; (
v) an affidavit of a consultant engaged by Sproule in 2014 and 2015, Valerie Cade ( Cade ). At the time she swore her affidavit, Cade had no role with Sproule; (vi) an affidavit of a consultant engaged by Sproule to assist with McDonald’s termination, Tony McGrath ( McGrath ).
McGrath had no role with Sproule at the time he swore his affidavit; and (vii) a Van de Veen July 2022 affidavit. [ 18 ] Even though the July 2022 Van de Veen affidavit discloses that Sproule produced “265 separate documents filling three separate four inch binders”, none of the Sproule witnesses appended records to their affidavits other than two short documents exhibited to Cade’s affidavit. [ 19 ] McDonald argues that the Sproule Affidavits are of limited use because they include hearsay, conclusory or self-serving statements, or legal conclusions or opinion.
I address the evidentiary principles associated with this Application later in these Reasons. A. The McDonald Transcript and Rule 6.7 [ 20 ] An issue arose in argument as to what constitutes the “transcript” that must be filed pursuant to rule 6.7. Given the importance of the record in
summary judgment applications, a clear
interpretation of what exactly must be filed is necessary. [ 21 ] Sproule filed the court-reporter-generated transcript of the questioning on the McDonald Affidavit but did not include with it the exhibits that were marked during the questioning, other records put to McDonald in the questioning but not marked as exhibits, or McDonald’s responses to undertakings (or attached records) given during the questioning. I inquired of the parties’ positions as to which, if any, of these documents should be considered part of and filed with the court-reporter-generated transcript.
At my request, they provided supplemental written submissions. There is no judicial consideration or universally adopted practice or position as to what constitutes the transcript in
Part 6, Division 1, of the Rules . [ 22 ] Rule 6.7 provides that a person who makes an affidavit in support of, or in response or reply to, an application may be questioned under oath on the affidavit by a person adverse in interest, and that the “transcript of the questioning must be filed by the questioning party”. Rule 6.20(5) provides that the questioning party must arrange for the questioning to be recorded and to file the transcript unless the court otherwise orders. Rule 6.11(
b) provides that a court may consider a transcript of questioning under
Part 6 of the Rules in deciding an application. “Transcript” is not defined in the Rules . [ 23 ] Rule 6.20 governs the form of questioning and transcript under
Part 6 of the Rules . Rule 6.20(3) provides:
(3) The questions and answers must be recorded word for word by a person qualified to do so (
a) by a method that is capable of producing a written transcript, and (
b) in a manner agreed on by the parties or directed by the Court.
[ 24 ] A person “qualified” to “record and transcribe oral questioning under this Part” includes an official court reporter, an examiner under the Alberta Rules of Court (AR 390/68 ) or a shorthand writer sworn to record the questioning: rule 6.20 . An official court reporter is obligated to honestly and accurately transcribe, and keep in safe custody of, the record of any proceeding or questioning taken by them, and to deliver a copy of the transcript as required by the Rules : rule 13.46 . 1.
Exhibits Marked During the Questioning are Part of the Transcript [ 25 ] Sproule and McDonald agree that exhibits marked in a questioning on an affidavit should be filed along with the transcript in the ordinary course and Sproule did so after oral argument. [ 26 ]
Part 6, Division 1 of the Rules is silent as to whether exhibits marked by the official court reporter during questioning on an affidavit under rule 6.7 are part of the transcript. However, rules governing other questioning are clear. Rule 5.26(3) expressly provides that exhibits produced at discovery questioning under
Part 5 of the Rules should be incorporated in or attached to the transcript or produced at the trial of the action without a notice to produce, unless otherwise agreed by the parties or ordered by the court. Rule 5.32 expressly contemplates that exhibits can be part of a transcript.
Further, rule 6.23 contemplates that exhibits are to be included with the transcript upon return to the clerk of the court when evidence is authorized to be taken outside of Alberta (including in respect of an application). [ 27 ] There is no principled reason why exhibits should form part of a transcript for some types of questioning and not others, and I do not interpret its express inclusion in some rules as intending to exclude them from other rules.
In my view, marked exhibits form an integral part of the transcript and the principles from rules 5.26(3) and 5.32 apply, by analogy pursuant to 1.7(2), to questioning under
Part 6. Accordingly, I interpret the rules to mean that, absent agreement of all parties or other court order, the questioning party must file with the questioning transcript any marked exhibits (whether numbered or lettered exhibits for identification). 2. Documents Referenced but Not Marked as Exhibits are Not Part of the Transcript Unless the Parties Agree [ 28 ] The parties also agree that documents that are referenced in a questioning on an affidavit under rule 6.7, but which are not marked as exhibits, do not form part of the transcript and should not be filed with the transcript.
However, Sproule suggests that, while the court does not have jurisdiction to compel inclusion of those documents with the transcript, the court could strongly suggest that the documents be included failing which the court may draw an adverse inference. [ 29 ] In my view, documents referenced in a questioning on an affidavit, but not marked as exhibits, do not form part of the transcript unless otherwise agreed by the parties or ordered by the court.
I am aware of no legal or evidentiary principle that requires a party putting a record to a witness to invariably mark it as an exhibit even if it has been disclosed in an affidavit of records. There may be instances where it should be marked as an exhibit and would therefore become part of the transcript, however, no such instance was argued on the facts before me. [ 30 ] I do not agree with Sproule that it is the court’s role to comb through transcripts for records referenced that are not marked as exhibits and to then threaten to draw an adverse inference if they are not filed.
It is up to the parties and their counsel to decide how to create the record for the court, including whether to mark a record as an exhibit. If there are disputes about whether a specific record ought to be marked as an exhibit, the court can resolve those disputes. [ 31 ] Parties should be aware that, if documents referenced in a questioning are not marked as exhibits, it may affect the comprehensibility, usefulness or probative value of the questioning evidence in respect of those records. In a
summary judgment application, knowledge of the existence of a record that is not before the court may affect the court’s view about whether the record is sufficient to fairly resolve the dispute summarily.
And, of course, if the records or their contents are not otherwise put into evidence, the court has discretion to draw an adverse inference as part of the fact-finding process, to be determined with reference to all of the evidence and pursuant to well-established principles: Benhaim v St-Germain , 2016 SCC 48 at para 52 ; Baker v Weyerhaeuser Company Limited , 2022 ABCA 83 at para 36 ; Chateauvert v Chateauvert , 2018 ABQB 2 at paras 182 , 192-93, 204; Howard v Sandau , 2008 ABQB 34 at paras 39 and 44 ; Stikeman Elliott LLP v 2083878 Alberta Ltd , 2019 ABCA 274 at paras 87-88 (Slatter JA in dissent); Potash Corporation of Saskatchewan Inc v HB Construction Company Ltd , 2022 NBCA 39 at para 302 ; R v AM , 2022 ONCA 154 at para 34 ; Singh v Reddy , 2019 BCCA 79 at paras 1 ,9, 10. [ 32 ] Parties are encouraged to reach agreement as to whether records disclosed in an affidavit of records and put to a witness in questioning become part of the questioning transcript even if not marked as an exhibit.
This is a common practice as a matter of expediency and efficiency, which will often be consistent with rule 1.2. Any such agreements should be put on the record to avoid misunderstandings or disputes and should expressly reference the parties’ agreement that those records are to be treated as exhibits to, or otherwise part of, the transcript. In those circumstances, those referenced records should be filed with the transcript unless the parties otherwise agree that they are not necessary. 3.
Undertaking Responses are Part of the Transcript, but Documents Produced with the Undertaking Responses Are Part of the Transcript Only if an Integral Part of the Substantive Answer [ 33 ] The parties disagree as to whether responses to undertakings given in a questioning on an affidavit under rule 6.7 are part of, or should be filed with, the transcript. Neither party produced any jurisprudence on this issue. [ 34 ] Undertakings are only specifically contemplated in the context of questioning for discovery under
Part 5 of the Rules . Those rules may provide some guidance on how to approach the issue under rule 6.7. [ 35 ] Rule 5.30 provides:
Undertakings 5.30(1) If, during questioning, a person answering questions (
a) does not know the answer to a question but would have known the answer if the person had reasonably prepared for questioning, or if as a corporate representative the person had reasonably informed himself or herself, or (
b) has under the person’s control a relevant and material record that is not privileged, the person must undertake to inform himself or herself and provide an answer, or produce the record, within a reasonable time.
(2) After the undertaking has been discharged, the person who gave the undertaking may be questioned on the answer given or record provided. [ 36 ] Rule 5.30 is an extension of the discovery process: Alderson v Wawanesa Life Insurance Company , 2020 ABCA 243 at para 16 . [ 37 ] Rule 5.31 provides that, in certain circumstances, a party may use (or read-in) the evidence of the other party in a transcript of questioning under rules 5.17 or 5.18.
Part 5 of the Rules does not specifically address whether undertaking answers form part of the transcript of questioning. There is an issue whether undertaking answers must be questioned upon under rule 5.30(2) (and presumably marked as an exhibit to the questioning) in order for them to become part of the
Part 5 questioning transcript. In Signalta Resources Limited v Canadian Natural Resources Limited , 2021 ABQB 867 , at para 20 , Justice Sidnell noted that undertakings “are part of the questioning which is given under oath” and that “allowing read-ins from testimony or responses to undertakings at trial contributes to trial efficiency and at the same time maintains the reliable evidence safeguard by requiring such evidence to be given under oath”. [ 38 ] I agree with Justice Sidnell that undertaking requests are part of the questioning.
In my view, the answers are also part of the questioning which are responded to later but nonetheless still subject to the oath. While rule 5.30(2) provides a mechanism to allow questioning on the undertaking answers (which could allow them to be marked as an exhibit), in my view it is not necessary to do that in order to have the undertaking answers form part of the transcript so they may be read-in at trial. Undertaking answers are part of the transcript of questioning under
Part 5 of the Rules whether or not they are questioned upon because they form the belated answers to the questions that the witness was not able to answer at the time. In my view, while rule 5.30(2) is an important mechanism to explore, test, challenge or clarify the undertaking answers, it would be inefficient and impractical to require the questioning party to have the witness reattend for questioning in every case so that the answers could be marked as an exhibit. [ 39 ] As noted, there is no provision like rule 5.30 in
Part 6 of the Rules . It is well-established that undertaking requests may be appropriate in limited circumstances in a questioning on an affidavit, including where the deponent relied on documents or information in making the affidavit, or where the undertakings relate to an important issue in the application and it would not be too onerous to respond: Kostic v Scott Venturo Rudakoff , 2022 ABQB 188 at paras 24 and 25 (h); Edmonton v Gosine , 2020 ABQB 546 at para 17 ; Rieger v Plains Midstream Canada ULC , 2019 ABQB 666 at para 7 ; Dow Chemical Canada Inc v Shell Chemicals Canada Ltd , 2008 ABQB 671 at para 5 .
Of course, it is also always open to a party to agree to provide requested undertakings (for example, to streamline the litigation process). [ 40 ] In my view, even if rule 5.30 does not technically apply to questioning under
Part 6 of the Rules , it applies by analogy pursuant to rule 1.7(2) , as modified by the jurisprudence noted above that restricts its use in questioning on an affidavit. Further, I see no principled basis to differentiate between
Part 5 questioning or
Part 6 questioning when determining what forms part of the transcript. [ 41 ] Accordingly, I find that, unless otherwise agreed or ordered by the court, undertaking answers form part of the transcript to a questioning on an affidavit pursuant to rule 6.7 and should be filed with the transcript. Records produced as part of the undertaking answers should be filed as part of the transcript where they form an integral part of a substantive factual answer to the question asked, but do not need to be filed where they are only produced in response to an undertaking request to produce records.
This latter exclusion avoids filing of potentially large bundles of records produced in response to a procedural undertaking request to do something , namely producing documents, as opposed to a substantive undertaking request to answer a factual question.
If the questioning party wishes to have such procedurally produced records part of the evidentiary record, they should conduct a follow-up questioning on the undertaking answers and associated records. [ 42 ] Concern has been expressed about the practice that undertaking answers are often produced with the assistance of third parties, or counsel, and that parties may use the undertaking answer as a trojan horse to include additional information or to couch the answer in strategically crafted language.
Those concerns can be addressed by applying to have the superfluous, inappropriate or non- responsive undertaking answer struck from the record, by arguing that the non-responsive or irrelevant portions of the answer should be given little or no weight, or by questioning on them. Parties are encouraged to discuss and reach agreement on the contents of the transcript to be filed pursuant to rule 6.7 wherever possible. [ 43 ] In this case, McDonald’s counsel provided me a letter dated July 30, 2019 which included the portions of the undertaking answers and associated records on which McDonald relies.
At my request, the full undertakings and produced records were provided to me pending my decision on whether they needed to be filed. Sproule’s counsel is directed to file McDonald’s undertaking responses as part of the McDonald transcript.
With respect to the records produced as part of the undertaking answers, only the records associated with Undertakings #4 and #8 are integral to the answer to a substantive factual question that was asked and should be included with the filed transcript. [ 44 ] In this application, I have only considered the undertaking answers (all of them) and the records provided in respect of undertakings #4 and #8. IV. Issues
[ 45 ] The issues in the Application are: (
a) Is there no defence to McDonald’s wrongful dismissal claim and no genuine issue requiring a trial in respect of that claim ? In particular: (
i) Has McDonald met his threshold burden to show no defence and no genuine issue for trial? (ii) Has Sproule met its burden to establish to establish a genuine issue for trial? (iii) Is it possible to summarily resolve McDonald’s claim and, if so, is the court prepared to exercise its judicial discretion to do so? (
b) If necessary, is it possible or appropriate to summarily determine damages? (
c) What is an appropriate order in this case? V. Analysis [ 46 ] Rules 7.3(1)(
a) and 7.3(1)(
c) together provide that a plaintiff may apply for
summary judgment in respect of all or part of a claim where there is no defence to a claim or part of it, or where the only real issue is the amount to be awarded. [ 47 ]
Summary judgment cannot be granted if the application presents a genuine issue for trial: Hannam v Medicine Hat School District No 76 , 2020 ABCA 343 at para 13 ; Clearbakk Energy Services Inc v Sunshine Oilsands Ltd , 2023 ABCA 96 at para 5 . [ 48 ] There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for
summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result: Hryniak at para 49 ; Weir-Jones at para 21. [ 49 ] The proper approach to
summary dispositions in Alberta has been laid out by the Court of Appeal in Weir-Jones at para 47 (emphasis in original): [47] The proper approach to
summary dispositions, based on the Hryniak v Mauldin test, should follow the core principles relating to
summary dispositions, the standard of proof, the record, and fairness. The test must be predictable, consistent, and fair to both parties. The procedure and the outcome must be just, appropriate, and reasonable. The key considerations are: (
a) Having regard to the state of the record and the issues, is it possible to fairly resolve the dispute on a
summary basis, or do uncertainties in the facts, the record or the law reveal a genuine issue requiring a trial? (
b) Has the moving party met the burden on it to show that there is either “no merit” or “no defence” and that there is no genuine issue requiring a trial? At a threshold level the facts of the case must be proven on a balance of probabilities or the application will fail, but mere establishment of the facts to that standard is not a proxy for
summary adjudication. (
c) If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record that there is a genuine issue requiring a trial. This can occur by challenging the moving party’s case, by identifying a positive defence, by showing that a fair and just
summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring a trial. If there is a genuine issue requiring a trial,
summary disposition is not available. (
d) In any event, the presiding judge must be left with sufficient confidence in the state of the record such that he or she is prepared to exercise the judicial discretion to summarily resolve the dispute. To repeat, the analysis does not have to proceed sequentially, or in any particular order. The presiding judge may determine, during any stage of the analysis, that
summary adjudication is inappropriate or potentially unfair because the record is unsuitable, the issues are not amenable to
summary disposition, a
summary disposition may not lead to a “just result”, or there is a genuine issue requiring a trial. [ 50 ] The court has a duty to take a “hard look” at the merits of the claim or defence on a
summary judgment application: Weir- Jones at para 44. A.
Is there No Defence to McDonald’s Wrongful Dismissal Claim and No Genuine Issue Requiring a Trial in respect of the Claim or Defence? [ 51 ] At common law, an employer has a right to terminate an employment contract without cause, subject to an implied term of the contract which imposes a duty on the employer to provide reasonable notice; if reasonable notice is not provided, the employee is entitled to damages for breach of contract: Matthews v Ocean Nutrition Canada Ltd , 2020 SCC 26 at paras 38 and 43 ; Honda Canada Inc v Keays , 2008 SCC 39 at para 50 [ Keays ]. [ 52 ] McDonald asserts that Sproule breached his employment contract by failing to give him reasonable notice of the termination of his employment and is entitled to damages in lieu of notice. [ 53 ] Sproule’s primary defence is that it had just cause to terminate McDonald’s employment and it therefore was not obligated to provide him reasonable notice.
1. Has McDonald Discharged his Threshold Burden? [54] A plaintiff applicant for
summary judgment has the initial burden to provide the factual elements of its case (that is, the factson which it relies), on a balance of probabilities, that there is no defence, and that there is no genuine issue requiring a trial: Weir-Jonesat paras 31-35 and 47(b); Giustini v Workman, 2021 ABCA 65 at paras 22- 24; P & C Lawfirm Management Inc v Sabourin, 2020ABCA 449 at paras 38-39; Hannam at paras 145-151. [55] In the context of a wrongful dismissal claim, the
summary judgment analysis must recognize that the allocation of the civilburden is more complicated, with the plaintiff having the burden to show their employment was terminated, the defendant having theburden to establish just cause or lack of mitigation, and the plaintiff having the burden to prove condonation of misconduct by theemployer: Haack v Secure Energy (Drilling Services) Inc, 2021 ABQB 82 at para 110; Rudichuk v Genesis Land Development Corp,2019 ABQB 133 [Rudichuk QB] at paras 37-40, affirmed 2020 ABCA 42 [Rudichuk CA]. [56] Accordingly, it will usually be sufficient for a wrongful dismissal
summary judgment plaintiff-applicant to meet its initialthreshold to establish that there is no genuine issue respecting the terms of their employment contract and that they were dismissedwithout notice or payment in lieu of notice: Rudichuk QB, at paras 37-40. The plaintiff-applicant does not need disprove positivedefences for which the defendant has the onus of proof, such as a just cause defence or failure to mitigate defence: JBuck and Sons Inc vResource Land Fund V, LP, 2023 ABKB 308 at paras 7, 8; Cicalese v SSMPG Integrating Services Inc, 2020 ABQB 605 at paras 207-08. The identification of positive defences is one way that a defendant-respondent can meet its burden in resisting
summary judgment:Weir-Jones at para 35. [57] In my view it is also important that courts do not make the threshold burden and responding burden analysis overly-complicated or formalistic because, as pointed out by the Court of Appeal, the court’s key considerations set out at paragraph 47 of Weir-Jones need not be followed sequentially or in any particular order, and the applicant will always have the ultimate burden to show that aclaim or defence has no merit and there are no genuine issues requiring a trial: Weir-Jones at para 35 and 47. [58] The McDonald Affidavit established that his employment with Sproule (or its related successor corporations) commenced inDecember 2003 and that he was terminated in February 2016 without notice and without payment in lieu of notice.
Those undisputedfacts are sufficient for McDonald to discharge his threshold burden. In any event, the McDonald Affidavit went further: it specificallyprovided positive evidence denying every Defence just cause allegation. [59] McDonald met the Weir-Jones threshold burden and Sproule has the burden to establish a genuine issue requiring a trial. 2. Has Sproule Established that there is a Genuine Issue Requiring a Trial? [60] To meet its evidentiary burden and resist
summary judgment, Sproule must put its best foot forward and demonstrate from therecord a positive defence or a genuine issue requiring a trial: Weir-Jones at paras 32, 35 and 47(c); Geophysical Service Incorporated vPlains Midstream Canada ULC, 2023 ABCA 277 at para 14. [61] Sproule alleges numerous facts supporting just cause, based on insubordination (and possibly disobedience), insolence, sub-standard performance, incompetence, and inability to perform. [62] Sproule also asserts that there are genuine issues requiring a trial of its just cause defence because there are conflicts in theevidence and credibility issues. a.
The Legal Framework for Sproule’s Just Cause Defence [63] Terminating an employee for just cause has been referenced as the “capital punishment” of employment of law: Ross v IBMCanada Limited, 2015 ABQB 563 at para 30.
The onus is on the employer to prove just cause: Haack at para 110; Whitford v AgriumInc, 2006 ABQB 726 Whitford at para 30. [64] A finding of misconduct does not, in and of itself, give rise to just cause for termination of employment - the employee’sbehaviour must be such that gave rise to the breakdown of the employment relationship so that the employment relationship could nolonger viably subsist: Baker at para 28, citing McKinley v BC Tel, 2001 SCC 38 , [2001] 2 SCR 161 at paras 29, 48-49.
Thecore question is whether the employee has engaged in sufficiently serious misconduct that is incompatible with the fundamental terms of,that strikes at the heart of, or is a repudiatory breach of, the employment relationship: Baker at para 28, citing Dowling v Ontario(Workplace Safety and Insurance Board) (2004), (ON CA), 192 OAC 126; Haack at para 409; Smith v VauxhallCo-op Petroleum Limited, 2017 ABQB 525 at para 12 [Vauxhall]. [65] The McKinley framework involves a factual inquiry to be determined by a contextual examination of the nature andcircumstances of the misconduct: Baker at para 28; Dowling at para 49.
It involves consideration of (1) the nature and extent of themisconduct; (2) the surrounding circumstances; and (3) whether dismissal is a proportional response: Baker at para 28. [66] At the first step, an employer is entitled to rely on after-discovered wrongdoing: Baker at para 28; Lake Ontario PortlandCement Co v Groner, (SCC), [1961] SCR 553, at 563-64; Haack at para 414.
However, the employer cannot rely on theemployee’s conduct after the termination: Baker at para 28; Haack at para 415; Underhill v Shell Canada Limited, 2020 ABQB 341 atpara 48; Gillespie v 1200333 Alberta Ltd, 2012 ABQB 105 at para 29. [67] The second step considers the particular circumstances of the employee (including age, employment history, seniority, roleand responsibilities) and the employer (including its type of business, relevant policies or practices, the employee’s position within theorganization, and the degree of trust reposed in the employee): Baker at para 28. [68] The third step, proportionality, is an assessment of whether the misconduct is reconcilable with sustaining the employment
relationship, which requires a consideration of the proved conduct, within the employment context, to determine whether the misconductis sufficiently serious that it would give rise to a breakdown in the employment relationship: Baker at para 28; Vauxhall at paras 119-20;Jegou v Canadian Natural Resources Limited, 2021 ABQB 401 at para 255; [69] Given the identity and self-worth individuals frequently derive from their employment, an effective balance must be struckbetween the severity of an employee’s conduct and the sanction imposed: McKinley at 52-53.
Except for the most serious circumstances,an employer should use progressive discipline or alternative sanctions before terminating an employee for misconduct: Mack v UniversalDental Laboratories, 2020 ABQB 738 at para 101; Underhill at paras 100-01; OWL (Orphaned Wildlife) Rehabilitation Society v Day,2018 BCSC 1724 at para 144; Henson v Champion Feed Services Ltd, 2005 ABQB 215 at paras 34, 56; Cumberland v MaritimeCollege of Forest Technology, 2023 NBKB 65 at para 69. [70] As discussed below, in the application of the McKinley framework over time, certain principles have developed to furtherguide or refine the contextual analysis in respect of different types of employee misconduct. i.
Incompetence or Inability to Perform [71]
Summary dismissal based on incompetence requires more than employer dissatisfaction with the work, or that the employeewas careless or indifferent: Bogden v Purolator Courier Ltd, , 182 AR 216 (QB) at para 59; Haack at para 419. [72] Where an employer alleges cause for incompetence, the employer must show: (1) the level of job performance that it requiredand that the level required was communicated to the employee; (2) the employer gave suitable instruction to enable the employee to meetthe standard; (3) the employee did not meet or was incapable of meeting the standard, for reasons that were within the employee’scontrol; and (4) there had been a warning to the employee that failure to meet the standard would result in his dismissal: Haack at paras418-419; Whitford at paras 35-37; Mitran v Guarantee RV Centre Inc, 1999 ABQB 276 at para 94. [73] If specific instances of incompetence are insufficient to justify cause on their own, the employer may allege cumulative cause.In those instances, the employer must prove that: (1) the employee was given express and clear warnings about his performance; (2) theemployee was given a reasonable opportunity to improve their performance after the warning was issued; (3) notwithstanding theforegoing, the employee failed to improve their performance; and (4) the cumulative failings “would prejudice the proper conduct of theemployer’s business”: Lowery v Calgary (City of), 2002 ABCA 237 at para 3; Motta v Davis Wire Industries Ltd, 2019 ABQB 899 atpara 41; Rutkowski v Edmonton Transit Mix & Supply Co Ltd, 2007 ABQB 277 at para 92; Whitford at para 38. ii.
Insubordination and Insolence [74] Wilful disobedience, insubordination and insolence are sometimes equated, used-interchangeably, conflated or consideredtogether; the label attached to the category of misconduct informs but does not override the contextual determination which is alwaysbased on the McKinley framework: Thomas v Saskatchewan Indian Gaming Authority Inc, 2021 SKCA 164 at para 25, cited withapproval in Baker at para 29; Henry v Foxco, 2004 NBCA 22 at para 13. [75] Wilful disobedience has been held to involve the wilful defiance of an employee of lawful, reasonable and clear orders orinstructions of a superior, or refusal to carry out well-known and necessary policies or procedures, that effectively repudiates theessential condition of the employment relationship that employees must obey their employer’s instructions: Motta at para 107; Karmel vCalgary Jewish Academy, 2015 ABQB 731 at para 16; Wilson v KP Manufacturers (Calgary) Ltd, , 225 AR 205(QB) at paras 10-11; Beaudoin v Agriculture Financial Services Corporation, 2018 ABQB 627 at para 47. [76] Insubordination has been described more broadly as any refusal to follow instructions, and any other conduct that constitutes achallenge to persons in authority or their policies: Hoffert v Golder Associates Ltd, 2017 ABQB 341 at paras 91, 117. [77] The court must assess all relevant circumstances to determine if wilful disobedience or insubordination justifies
summarydismissal: Motta at paras 14-16; Hoffert at para 90; Amos v Alberta, , 166 AR 146 (QB) at paras 42-44. [78] Insolence towards the employer is treated similarly to insubordination, although it engages slightly different considerations:Motta at para 54; Henry at para 34.
Insolence has been defined as the use of “insulting, abusive, threatening or unreasonably violentwords”: Partridge v Botony Dental Corporation, 2015 ONSC 343 at para 32 affirmed 2015 ONCA 836; as “haughty and contemptuousor brutal behaviour or language”: Mellquist v Lake of the Rivers (Rural Municipality), , 62 Sask R 165 (QB) at para21; or as “derisive, contemptuous or abusive language or conduct directed by an employer at his/her employer”: Bennett v Cunningham,2011 ONSC 28 at para 15.
In this case, Sproule pleads that McDonald was belligerent (“inclined to or exhibiting assertiveness, hostility,or combativeness”; “waging war”: Merriam-Webster Dictionary, online: Merriam-Webster.com https://www.merriam-webster.com/dictionary/belligerent) and bellicose (“favoured or inclined to start quarrels or wars”: Merriam-Webster Dictionary,online: Merriam-Webster.com https://www.merriam-webster.com/dictionary/bellicose). In my view those allegations involve similarconsiderations as insolence. [79] Insolence can justify
summary dismissal of an employee if: (1) the employee and superior are no longer capable ofmaintaining a working relationship; (2) the incident undermined the supervisor’s credibility in the workplace and, relatively, their abilityto supervise effectively; or (3) that because of the incident, the employer suffered a material financial loss, a loss of reputation or itsbusiness interests were seriously prejudiced: Motta at para 53; Henry at para 111.
Context and proportionality govern, including wherestrong exchanges have been a tolerable part of the culture of the workplace: Motta at para 54; Dawson v Bridge Brand Food ServicesLtd, 2007 ABQB 15 at para 39. iii. Employer Condonation [80] Even if misconduct is proven, an employee may argue that an employer has condoned the employee’s conduct and therefore
cannot rely on it to terminate for cause. The employee has the onus to prove condonation: Haack at para 423; Vauxhall at para 130;Cicalese v Saipem Canada Inc, 2018 ABQB 835 at para 36. [81] When an employer becomes aware of the misconduct sufficient to justify dismissal, the employer may elect to dismiss theemployee or may overlook the fault: Foerderer v Nova Chemicals Corporation, 2007 ABQB 349 at para 124; Acumen LawCorporation v Ojanen, 2019 BCSC 1352 at para 35, affirmed 2021 BCCA 189.
If the employer knowingly accepts misconduct, itconstitutes condonation and the employer is generally prohibited from relying upon such behavior as grounds for dismissal: Mitran atpara 102, citing Hardie v Trans-Canada Resources Ltd (1977), , 2 AR 289 (CA). [82] Condonation can be inferred from the circumstances of the case and the omissions or commissions of the employer: Cicalesev Saipem at para 38; Mitran at para 102; Foerder at para 125. [83] Condonation may result by omission if the employer fails to warn an employee within a reasonable time that the behaviour isunacceptable, or if the employer allows the employee to continue in his or her position for a considerable period of time: Cicalese vSaipem at para 37; Vauxhall at para 129; Foerder at para 125; Mitran at paras 100, 102; Clarke v Syncrude Canada Ltd, 2013 ABQB252 at para 46. [84] Condonation may also result from the employer’s positive conduct, for example by giving the employee a promotion, raise orpositive performance reviews: Bogden at para 60; Mitran at para 102; Barnard v Testori, 2000 PESCTD 43, 194 Nfld & PEIR 119 atpara 58; Meaney v Agnes Pratt Home, , 74 Nfld & PEIR 18 at para 35; Lambe v Irving Oil Ltd, ,219 Nfld & PEIR 183 at para 109. [85] However, the court is entitled to take the cumulative effect of an employee’s record into account when determining whetherdismissal is justified: Poliquin v Devon Canada Corporation, 2009 ABCA 216 at para 73.
The cumulative impact of a number ofinstances of unacceptable conduct may justify dismissal, even where some of those earlier instances were condoned, becausecondonation is subject to an implied condition of future good conduct: Mack at para 96, citing Chambers v Omni Insurance Brokers, (ONCA), [2002] OJ No 2063 (QL) at para 45; Mitran at para 103 (and cases cited therein). b. Evidentiary Principles and Tools in
Summary Judgment [86] The Sproule Affidavits raise numerous facts that dispute McDonald’s evidence and, on their face, create credibility issuesbetween McDonald and the Sproule witnesses. Those affidavits provide some detailed and direct factual background of some matters, butthey also include numerous undocumented or unsupported bald assertions, conclusory statements, vague references, personal opinions,and hearsay (including hearsay from other Sproule affiants). [87] The traditional understanding, that a dispute about a material fact disqualifies an action from the
summary judgment process,is no longer valid: Hannam at para 147.
Summary judgment is not limited to cases where the facts are not in dispute: Hannam para 147;Weir-Jones at para 21. A
summary judgment court should not be reluctant to make material fact findings, but before it does so it shouldask if it constitutes a genuine issue requiring a trial: Hannam at paras 148-149. As noted in Weir-Jones at para 47(a), the court does thisby asking: “[h]aving regard to the state of the record and the issues, is it possible to fairly resolve the dispute on a
summary basis, or douncertainties in the facts, the record or the law reveal a genuine issue requiring a trial?” [88] In my view, in order to honour the guiding principles set out by the Supreme Court of Canada and Alberta Court of Appeal,including supporting the public policy of improved access to justice,
summary judgment courts must distill the record to remove,disregard or give little weight to inadmissible, inappropriate or unhelpful evidence to get to the core of the matter and determine whetherthere are any “genuine” issues requiring a trial (as opposed to a party’s views, positions, arguments, allegations, speculation, conjecture,interpretation, opinions, beliefs, hopes or desires). As stated by the Ontario Court of Appeal in Kawartha-Haliburton Children’s AidSociety v MW, 2019 ONCA 316 at para 80, courts “must conduct a careful screening of the evidence to eliminate inadmissible evidence.The court should not give weight to evidence on a
summary judgment motion that would be inadmissible at trial.” [89] If, after screening, there remains a dispute on material facts, or one depending on issues of credibility, it is a marker that theremay be genuine issues regarding a trial: Hannam at para 149; Weir-Jones at paras 35 and 38. [90] It is helpful to summarize some of these screening principles, together with other evidentiary principles that guide courts inassessing a
summary judgment application. [91] First, with respect to applicant affidavits, they should generally be based on personal knowledge: rule 13.18(3): MagnusonEstate, 2023 ABKB 305 at paras 35-38; Consolidated Civil Enforcement Inc v Shipalesky, 2022 ABKB 718 at para 30; Moore vWetaskawin Friends and Horizons Training, 2022 ABKB 617 at para 34; Van Grinsven v Kortbeek, 2022 ABQB 138 at para 32;Malkhassian Estate v Scotia Life Insurance Company, 2020 ABQB 173 at para 40; From Estate, 2019 ABQB 988 at para 103; ClarkBuilders and Stantec Consulting Ltd v GO Community Centre, 2019 ABQB 706 at para 40; DD v Calgary Counselling Centre, 2017ABQB 95 at para 44; Attila Dogan Construction v AMEC Americas Limited, 2015 ABQB 120 at para 52 affirmed 2015 ABCA 406. [92] However, there is some flexibility in the application of rule 13.18(3) in the context of
summary judgment applications –sometimes evidence not based on personal knowledge can be admitted.
For example, courts may be more flexible where the applicant isa corporation or estate, where there are no people left with personal knowledge, or where the evidence would be admissible at trial as anexception to hearsay: Magnuson Estate at para 38; Moore at paras 35 and 38-40; Spady v Spady Estate, 2022 ABQB 591 at para 56;Barry v Industrial Alliance Insurance and Financial Services Inc (IAF), 2022 ABQB 265 at para 53; Pure Environmental WasteManagement Ltd v Lonquist Field Service (Canada), ULC, 2022 ABQB 30 at para 47; Saito v Lester Estate, 2021 ABCA 179 at paras11-12; County of Vulcan v Genesis Reciprocal Insurance Exchange, 2020 ABQB 93 at paras 70-71; Goodswimmer v Canada(Attorney General), 2017 ABCA 365, leave to appeal ref’d [2018] SCCA No 1 at para 33; Klein v Wolbeck, 2016 ABQB 28 at para 15;Attila Dogan at paras 64-75; Murphy v Cahill, 2012 ABQB 793 at paras 26-30.
[93] Second, with respect to respondent affidavits, they may include hearsay evidence based on information and belief, providedthe source of the information is disclosed: rules 13.18(1)(
b) and 13.18(2); Magnuson Estate at para 42; Van Grinsven at para 32;Malkhassian Estate at para 40; From Estate at para 103; DD at para 43; Clark Builders at para 40; Murphy v Cahill at para 26. [94] However, admission of the evidence is not necessarily enough - just because hearsay can be included in respondent affidavitsdoes not mean it will or should be accepted by the court or given weight: Malkhassian Estate at para 41; McDonald v Brookfield AssetManagement Inc, 2016 ABCA 375 at para 18, leave to appeal to SCC refused 37438 (1 June 2017) [Brookfield]; ANC Timber Ltd vAlberta (Minister of Agriculture and Forestry), 2019 ABQB 653 at paras 21 and 58; Murphy Oil Company Ltd v Predator CorporationLtd, 2006 ABCA 69 at paras 38-40.
For example, respondent hearsay evidence may not be accepted or given weight in respect of thesubstantive issues to be decided on the
summary judgment application, unless the hearsay evidence can be brought within an exceptionto the hearsay rule such that it would be admissible at trial: Magnuson Estate at para 39; Moore at para 37; Barry at paras 57-59;County of Vulcan at paras 76-77; ANC Timber at para 58. Hearsay may also possibly be admissible if the respondent can “justify someexpansion of the rules governing admissibility” in the context of the
summary judgment application, for example, if the opposing partyhad a fair chance to challenge the hearsay evidence: JBuck at paras 47-50 (relying on Drummond v Cadillac Fairview, 2019 ONCA 447at para 24). [95] Third, hearsay evidence in questioning on affidavits is presumptively inadmissible: Fitzpatrick v The College of PhysicalTherapists of Alberta, 2020 ABCA 164 at para 22; ANC Timber, at para 60; Mitchell v Pytel, 2021 ABQB 403 at para 23. [96] Fourth, bald, conclusory, argumentative or self-serving statements, personal opinion, allegations, speculation, conjecture orassertions made in affidavits or questioning transcripts, in the absence of detailed facts and supporting evidence, should be given little orno weight and cannot establish a genuine issue requiring a trial: Fitzpatrick at para 23; Wetaskiwin Animal Clinic Ltd v Hartley, 2021ABQB 144 at para 41; Murray v Ford Motor Company of Canada, 2020 ABQB 729 at para 103; Rudichuk QB at paras 16-17 and 21;Clark Builders at para 157; County of Vulcan at para 81; Stankovic v 1536679 Alberta Ltd, 2019 ABCA 187 at para 46; ANC Timberat paras 32 and 98; Goodswimmer at paras 38-45; Malhotra v 1743134 Alberta Ltd, 2017 ABQB 34 at para 32; Shefsky v CaliforniaGold Mining Inc, 2016 ABCA 103 at para 113; Brookfield at para 18; Rau v Edmonton (City), 2015 ABCA 5 at para 19; R FlodenServices Ltd v Solomon, 2015 ABQB 450 at para 23; Guarantee Co of North America v Gordon Capital Corp, (SCC), [1999] 3 SCR 423 at para 31; Attila Dogan at para 52; Minex Minerals Ltd v Walker, 2019 ABQB 460 at para 148; PyrrhaDesign Inc v Plum and Posey Inc, 2016 ABCA 12 at para 22; Kudzin v APM Construction Services Inc, 2023 ABKB 425 at para 121;Spady at para 57. [97] Fifth, the court will assume that each party has put their best foot forward and presented all the relevant evidence for theapplication: Canada (Attorney General) v Lameman, 2008 SCC 14 at para 19 [Lameman]; Weir-Jones at para 37; Bilg v UnifundAssurance Company, 2015 ABQB 779 at paras 29, 59; Milavsky v Milavsky, 2011 ABCA 231 at para 16; Beier v Proper CatConstruction Ltd, 2013 ABQB 351 at paras 67, 70; Mraiche Investment Corporation v McLennan Ross LLP, 2012 ABCA 95 at para 5;Grivicic v Alberta Health Services (Tom Baker Cancer Centre), 2015 ABQB 811 at para 12; Axcess Mortgage Fund Ltd v 1177620Alberta Ltd, 2018 ABQB 626 at paras 42, 43; Van Grinsven at paras 60, 108; Amik Oilfield Equipment & Rentals Ltd v BeaumontEnergy Inc, 2018 ABCA 88 at para 8; Pyrrha Design at paras 23, 26; Merritt v Tigercat Industries, 2016 ONSC 1214 at para 28; TaggIndustries v Rieder, 2018 ONSC 5727 at para 11. [98] Thus, while a party is not required to question on affidavits, and while the court is not bound to accept evidence that has notbeen the subject of cross-examination, a party’s failing to question on admissible evidence runs the risk that the evidence will effectivelybe unchallenged or uncontradicted for the purposes of the application, which may detract from the strength of the other party’s case:Spady at para 67; R v Hobbs, 2020 ABCA 156 at para 25; 1216808 Alberta Ltd (Prairie Bailiff Services) v Devtex Ltd, 2014 ABCA 386at para 33; Sticks and Stones Communications Inc v Hole's Greenhouses & Gardens Ltd, 2015 ABQB 774 at paras 58-61; CWBMaxium Financial Inc v 2026998 Alberta Ltd, 2021 ABQB 137 at paras 73-77; Drummond, at para 24. [99] Similarly, a respondent to a
summary judgment application chooses what evidence it wishes to adduce and is not obligated tofile a response affidavit or to address every point of evidence of the applicant: Weir-Jones at para 35; Kudzin at para 174.
However, arespondent that fails to respond to or address admissible evidence in their responding evidence runs the risk that the court will infer thatthe responding party does not have contradictory evidence and the applicant evidence will be accepted as unchallenged oruncontradicted. [100] Sixth, even if there remain conflicts in the evidence after these principles are applied, this does not necessarily end the inquiry.Courts have tools to assist their assessment of whether conflicting evidence raises a genuine issue requiring trial. For example, courtsmay, in appropriate cases: (
a) find that the conflict is not really factual but rather a conflict of the litigants’ opinions or positions: Sandhu v Siri GuruNanak Sikh Gurdwara of Alberta, 2015 ABCA 101 at para 81, leave denied, (SCC); (
b) draw inferences based on admitted facts, undisputed evidence, the conduct of the parties, and corroborating evidence (suchas documents with objective reliability): Goodswimmer at para 39; Weir-Jones at paras 21, 38 and 63; Rudichuk QB at para 31;Malhotra at para 31; Guarantee Co at para 30; Lameman at para 11.
Inferences must be reasonable, and they must be based on provenfacts, and in considering whether to draw the invited inference the trier of fact must also consider other reasonable or plausible theories“based on logic and experience”, not speculation: Lameman at para 11; Guarantee Co at para 30; Haack at para 112; R v Villaroman,2016 SCC 33 at para 23; Axcess Mortgage at paras 173, 188; Sticks and Stones at para 32; (
c) resolve issues based on the portions of the affidavits that are not in dispute, where appropriate, including because theconflicting evidence is not on an essential element of the claim or defence or not material to the outcome: Sandhu at para 81; Minex atpara 147; Seymour Resources Ltd v Hofer, 2004 ABQB 303 at para 20; Lydian Properties Inc v Chambers, 2009 ABCA 21 at para 22-23; Malhotra at para 31; (
d) balance the weight and perceived reliability of evidence because it is inconsistent with the balance of the record or the
litigation history: Goodswimmer at para 40; Shefsky at para 113; Dagher v Glenn, 2016 ABCA 38 at paras 30-32; and (
e) assume as true the relevant facts asserted by the party opposing
summary judgment and determine whether the law permitsjudgment on those facts, including because those assumed facts do not support that party’s claim or defence: Weir-Jones at para 38;Arndt v Banerji, 2018 ABCA 176 at para 36(b); Goodswimmer at para 40; Sherwood Steel v Odyssey Construction, 2014 ABCA 320 atpara 8; 776826 Alberta Ltd v Ostrowercha, 2015 ABCA 49 at para 10; Third Eye Capital Corporation v Tobber, 2022 ABQB 536 atpara 5; O’Mhaoinigh v United Safety International Ltd, 2020 ABQB 672 at para 14; Lydian Properties at paras 2, 22-23. [101] In the context of wrongful dismissal cases, courts[1] have used these evidentiary principles and tools in the context of theMcKinley framework and have granted wrongful dismissal plaintiff-applicants
summary judgment, even in the face of just causedefences, where: (
a) the employer did not provide evidence of particulars of the alleged just cause: Kubersky v Pomeroy (Pomeroy Group), 2021ABQB 173 (Master) (Kubersky-Master) at para 43 affirmed in Kubersky v Pomeroy Hospitality Ltd, 2021 CarswellAlta 3387(Kubersky-Justice) at paras 21-22); Hinke v Thermal Energy, 2011 ONSC 5345 13-22; Merritt at para 26; (
b) if the employer’s alleged conduct is accurate or assumed as accurate, the employer failed to provide or document a requiredwarning or condoned the conduct: Bomford v Wayden Transportation Systems Inc, 2010 BCSC 1506 at paras 6-7; Duxbury v Crook,2018 SKQB 353 at para 26 affirmed 2020 SKCA 43 at para 6; Seykora v Rural Municipality of Lake Lenore #399, 2019 SKQB 225 atpara 9; Jasnoch v Provincial Plating Ltd, 2000 SKQB 44 at para 18; Grant v Electra Sign Ltd, 2016 MBQB 131 at paras 45-47,affirmed 2018 MBCA 5; Volpé v Province of NB, 2017 NBQB 109 at paras 41-42; 59; Tagg Industries at para 27; and (
c) if the employer’s alleged conduct is accurate or assumed to be accurate, it is not conduct that would support
summary dismissal of the employee: Carr v Fama Holdings Ltd, , 63 DLR (4th) 25 (BCCA) at 8-9; Caudle v Louisville, 1999SKQB 276 at paras 19-21; Grant v Electra at para 48; Sinnathamby v The Chesterfield Shop Limited, 2016 ONSC 6966 at paras 112-13; Tagg at para 29; Cuconato v Parker Auto Care Ltd, 2018 ONSC 2803 at paras 23, 25 ;Volpé at para 65 Johar v Best Buy Canada,2016 ONSC 5287 at para 24. [102] I now turn to the record in this case. c.
The Evidentiary Record for Sproule’s Just Cause Defence [103] I have screened the affidavit evidence and Transcript pursuant to the principles noted above, to disregard inadmissible orinappropriate evidence. Even after doing so, credibility issues and significant evidentiary conflicts remain on numerous matters,including McDonald’s alleged conduct and performance. [104] In these circumstances, to determine whether there is a genuine issue requiring trial, I must disregard McDonald’s evidencewhere there are disputed material facts and assume Sproule’s evidence is correct.
Further, given the credibility issues, and given thatMcDonald did not question on the Sproule Affidavits, I disregard McDonald’s evidence on any contentious material facts even whereSproule’s witnesses did not specifically address them. Effectively, to determine whether there is a genuine issue requiring trial, I mustassume Sproule’s best case and only consider Sproule’s admissions in the Defence, agreed facts, McDonald’s unchallenged evidence onnon-contentious matters, McDonald’s admissions against his interest from his questioning, and Sproule’s evidence on disputed materialfacts. [105] A
summary of such admissions and evidence is set out below (recognizing that McDonald disputes much of the following): (
a) in the early 1980s, McDonald obtained his commerce degree and became a chartered accountant. He worked with accountingfirms until he joined Sproule as its Controller in December 2003. In 2010, his title changed to Chief Financial Officer (CFO). There is noevidence that Sproule had any written job descriptions for McDonald’s roles. There is no evidence of any issues with McDonald’sconduct or performance prior to 2014; (
b) in September 2014, a Sproule employee complained to Sproule’s President, Helwerda, alleging harassment and bullying byone of McDonald’s direct reports (Paulson). Sproule retained Cade to conduct an initial investigation of all HR/Administration Staff.Cade confirmed Paulson’s serious bullying to Helwerda, Carsted and Van De Veen. She did not interview McDonald but reported thatstaff noted McDonald did not address the reported bullying and was defensive, dismissive, and controlling; (
c) McDonald was not involved in the investigation. Helwerda, Carsted and Van de Veen met with McDonald to discuss Cade’sreport (October 2014 Meeting). McDonald denied being approached about the bullying. McDonald became angry, disagreed with andwould not discuss Cade’s findings, was against terminating Paulson for cause, expressed unwillingness to support Cade’srecommendations, called Helwerda, Carsted and Van de Veen “stupid”, said that they did not understand how women interacted, that hehad more experience with respect to these issues, and proposed that he should conduct an interview of all of the staff in order to come upwith a solution to the problem complained of; (
d) Sproule decided that McDonald should also be terminated based on his conduct at the October 2014 Meeting, but he was notbecause the next day he apologized for his behaviour and confirmed his support for terminating Paulson. McDonald was advised at thetime he was being given a second chance with the hope his behaviour would change. McDonald undertook to change his behaviour goingforward. Paulson was terminated for cause on October 31, 2014. McDonald’s father died within two weeks of Paulson’s termination; (
e) in 2014, McDonald was asked to prepare financial statements for Sproule’s subsidiaries (Financial Statement Request),which he had not satisfactorily completed by June 2015. There is no direct or detailed evidence that Sproule specifically raised this issuewith McDonald or warned him about it; (
f) in a November 2014 with the Board and its audit committee to discuss Sproule’s share structure, McDonald was very
dismissive of the Board and audit committee’s ability to understand some complicated calculations. There is no direct or detailed evidence that Sproule specifically raised this issue with McDonald or warned him about it; (
g) McDonald was not the lead on some business modelling and share valuation modelling work Sproule conducted from mid April 2014 to April 2015, as part of Sproule’s efforts to grow its international consulting business. Gunnewiek, as Chair of the Board, was of the view that this illustrated McDonald’s inability to perform at the CFO level, but there is no direct or detailed evidence that Sproule specifically raised this issue with McDonald or warned him about it (other than possibly at his June 2015 performance review ( Performance Review )); (
h) in 2015, the executive group was concerned about McDonald’s attitude and behaviour because some of them had been informed that McDonald had continued to express, to Sproule staff including insubordinates, his disagreement with the decision to terminate Paulson. At least partly because of McDonald’s conduct, in May 2015 Sproule retained Cade to survey staff and conduct group staff training ( May 2015 Training ).
McDonald was reluctant to participate but did so at Helwerda’s insistence, but in Cade’s view he was closed, dismissive, sarcastic, displayed apparent defiance, and left her the impression he was not willing to lead as an executive. She reported to Sproule management that McDonald had an attitude challenge; (
i) in June 2015, Helwerda conducted McDonald’s annual Performance Review. Helwerda rated McDonald’s overall job performance as “above average”, but also provided specific feedback: (1) he would like McDonald to be more engaged in meetings/seminars so that he does not portray himself as being disinterested, non-supportive and not a team player;
(2) McDonald did not command the respect of his peers; (3) as a member of the executive, he needed to be unified on all executive decisions (with specific reference to the Paulson termination);
(4) McDonald’s sarcastic remarks to direct reports are not well received; and
(5) McDonald needs “to be of [sic] a CFO rather than a lead accountant”; McDonald “does the basics and I need him to be more innovative”. McDonald disagreed with all the comments and refused to sign the performance appraisal. There is no evidence that McDonald was given a warning that if any of the feedback items from the Performance Review were not addressed, or that if he did not sign the Performance Review, McDonald’s employment was at risk of termination; (
j) in October 2015, Gunnewiek asked McDonald to prepare a
summary of Sproule’s insurance coverage and to conduct a gap analysis ( Insurance Request ). When Gunnewiek followed up in January 2016, McDonald responded that the insurance was adequate and that McDonald was too busy to provide a
summary. There is no direct or detailed evidence that Sproule raised this issue with McDonald or warned him about it; (
k) at a Board meeting ( October 2015 Board Meeting ): (1) in response to a question about a project deliverable that was outstanding, McDonald stated that Gunnewiek was deliberately trying to embarrass McDonald;
(2) McDonald was unable to answer several questions that required follow up and became defensive; and (3) when presenting the 2015 audited financial statements, McDonald highlighted the increased expense of the independent directors (including Gunnewiek) but did not provide a report ( KPMG Review ) that praised the Board and management; (
l) at a Board meeting (likely the October 2015 Board Meeting), in response to questions, McDonald told Gunnewiek or the Board something along the lines of “you mind your business and I will mind my business”. Also at a Board meeting, McDonald stated “I don’t want to be here” with his arms crossed and an unhappy demeanour. There is no direct or specific evidence Sproule raised these specific comments or behaviour or warned McDonald about them. There is no evidence that McDonald ever failed to attend a Board meeting he was required to attend; (
m) at the November 2015 annual general meeting ( AGM ) of Sproule’s employee shareholders, McDonald presented the audited financial statements, but failed to present or circulate the KPMG Review. However, there is no direct or specific evidence that he was asked or authorized to provide the KPMG Review to shareholders. There is no specific evidence Sproule raised this issue with McDonald or warned him about it; (
n) in addition to the Financial Statement Request and the Insurance Request, Gunnewiek provided evidence of his concerns over McDonald’s inability or refusal to prepare, provide or explain financial reporting information, including financial forecasting, business modelling, Class D share reporting, shareholder capital calculation, share structure, and his inability to explain financial matters at Board meetings. There is also evidence of concerns about McDonald’s failure to implement, update or use appropriate financial systems, including in relation to online banking, cheque deposits and cash management.
Gunnewiek’s conclusion was that McDonald was set in his ways, was resistant to change, and lacked operational transparency such that Gunnewiek considered McDonald to be a high risk to Sproule’s sustainable operations. Other than as might be included in the Performance Review feedback, there is no specific evidence Gunnewiek or Sproule specifically raised these performance issues and concerns with McDonald or warned him about them; (
o) Gunnewiek spoke to McDonald about the necessity of ensuring that the accounting department would continue to function if something were to happen to McDonald ( Succession Protocol ). McDonald was encouraged and directed to create a Succession Protocol, but it was not prepared by the date of his termination. There is no evidence as to when this request was made, when it was requested to be completed, or of any warning of the consequences if it was not completed; (
p) at the November 2015 AGM, Sproule announced a corporate reorganization ( Reorganization ). Prior to the AGM, Helwerda explained the new structure to McDonald and the reasons for it, including Helwerda’s concerns that McDonald was not performing the role of CFO. Helwerda explained that McDonald’s title was changing to Controller and he would now be reporting to Van de Veen as Senior Vice President of Corporate Services and Legal.
McDonald was disappointed and refused to acknowledge the criticism, asserted he was performing his role, and that the change of title was constructive dismissal. [2] McDonald refused to accept Van De Veen as his direct supervisor and was not prepared to change. McDonald was advised that he was required to acknowledge the new structure and report accordingly; (
q) Sproule had a bonus policy. Bonuses were at the discretion of Sproule’s executive and according to Sproule’s financial position. The policy described that the bonus “will reflect the Executive’s assessment of each individual during the past fiscal year” in the areas of “contribution, management, marketing and attitude.” The bonuses were determined by the Board after the audit following
the end of the fiscal year and McDonald would receive a list of the bonuses. Therefore, sometime in fall 2015, the Board approved a FY2015 bonus for McDonald of $93,570 (38% of his salary). McDonald’s questioning evidence was that this was likely determined in December 2015, but Sproule’s witnesses provided no evidence of the precise date the bonus was declared or announced. The FY2015 bonus was less than his bonuses for FY2013 ($197,681.64) and FY2014 ($253,055.07). There is no evidence that McDonald was provided any reasons for why he was given a FY2015 bonus or why it had decreased from previous years; (
r) on December 8, 2015, Van de Veen met with McDonald ( December 2015 Meeting ) to discuss his role and their interaction moving forward. McDonald advised Van de Veen that Van de Veen’s involvement would not be welcome, and that McDonald had been successfully managing his team for many years. McDonald also advised that Helwerda had told McDonald that Van de Veen’s position was just a box that needed to be filled to validate the new structure. McDonald’s view was that his continued employment was predicated on his own version of how the new structure would work and his reporting relationship remaining the same.
Van de Veen advised McDonald that “it would be good to rethink his attitude going forward” ( December Advice ); (
s) following the December 2015 Meeting, McDonald stayed on as Controller. There is no evidence as to whether or how McDonald’s roles and responsibilities changed with the title change. Sproule admits in its Defence that, at McDonald’s insistence, as Controller, McDonald continued to meet with Helwerda on a weekly basis to provide him with an update on any significant accounting matters. After the December 2015 Meeting, there is no specific evidence of McDonald failing to meet with or report to Van de Veen, or of Sproule specifically raising, or warning McDonald about, a failure to recognize the Reorganization; (
t) in 2015, without obtaining advance authorization, and unbeknownst to management and the Board, McDonald engaged KPMG to work on a Sproule shareholder tax savings project ( Tax Savings Project ) and incurred $50,000 without Board approval. The Tax Savings Project was presented at the December Board 2015 meeting and McDonald endorsed its recommendations. The Board did not approve the recommendations. There is no evidence of McDonald’s spending authority or whether the Tax Savings Project fell outside the scope of his duties. There is no direct or specific evidence of Sproule specifically raising, or warning McDonald about, his conduct with respect to the Tax Savings Project; (
u) in addition to the specifics noted above, there is generalized evidence that McDonald’s behaviour in Board meetings starting in about October 2015 became increasingly belligerent, combative, disrespectful, indifferent, despondent, disconnected, disruptive, critical of management, and non-responsive, and was deteriorating over the fall 2015. Van de Veen was told and believed that both Helwerda and Gunnewiek were going to speak to McDonald about his conduct at Board meetings, but neither of them provided any specific evidence of doing so until Helwerda met with McDonald in January 2016 (described below).
There is no evidence that Sproule specifically raised, or warned McDonald about, his conduct at Board meetings between the time of the Performance Review and Sproule’s January 2016 board meeting ( January 2016 Board Meeting ) (
v) at the January 19, 2016, Board Meeting, McDonald acted with “intransigent and insubordinate behaviour through his mood and body language”. No other specifics were provided about McDonald’s behaviour at that meeting, but McDonald did not deny that he crossed his arms, scowled and was negative at that meeting, or that he was followed up with after the meeting; (
w) Helwerda followed up with McDonald on January 20, 2016 ( January 20 Meeting ) to find out why McDonald behaved the way he did and to suggest that his behaviour would not be accepted. McDonald told Helwerda that McDonald did not want to attend Board meetings and he feared being embarrassed by Gunnewiek; (
x) at the January 20 Meeting, Helwerda stated the following ( January Advice ): I also informed Mr. McDonald .... that I could possibly be stepping down from the President’s role sooner than he may have anticipated (although no formal announcement had been made) and that the current Chairman of the Board, [Gunnewiek], could possibly become the next President and CEO. I advised McDonald that in his own best interest it was important for him to change his attitude and his insubordinate behaviour and begin acting in a more professional manner especially in his interactions with [Gunnewiek]... (
y) there is no evidence of McDonald’s conduct between the January 20 Meeting and his February termination about three weeks later. For example, there is no evidence as to whether he ever attended another Board meeting or had any further dealings with Board members; (
z) on February 10, 2016, the Board unanimously agreed to terminate McDonald. The Board considered whether to terminate McDonald for cause and, for a variety of reasons, decided to terminate him for cause; (aa) on February 11, 2016, McDonald was terminated. He met with Gunnewiek, Helwerda, Carsted and Sproule’s Chief Operating Officer. He was either requested or provided the opportunity to resign and was presented paperwork for his resignation. He did not resign and was terminated for cause.
There is no evidence that the reasons for his termination were explained at the meeting, or in the termination letter he was later provided on February 16, 2016; (bb) after the termination meeting, the Sproule executives left and McGrath met with McDonald. McDonald made inappropriate and threatening comments toward Sproule and Helwerda in particular, which caused Sproule to contact the police.
McDonald spoke to other Sproule directors or employees as he was leaving or on the street after he left, and told them about a study he had made about the lack of net financial contribution of Sproule’s executives; and (cc) after McDonald’s termination, Sproule reviewed its accounting practices to make the accounting group more efficient and identified and immediately implemented improvements.
Sproule also retained an independent consultant to review Sproule’s financial records including its share structure and share payments to ensure all monies were properly accounted for and to support Sproule’s new VP Finance in understanding Sproule’s complicated financial structure and accounting processes. [ 106 ] I now turn to apply the McKinley proportionality framework using these facts to see if Sproule’s just cause defence raises any genuine issues for trial.
d. In Light of the Record, Does Sproule’s Just Cause Defence Raise Genuine Issues Requiring a Trial? i. The Nature and Extent of the Misconduct [ 107 ] The undisputed and assumed record illustrates two broad problems with McDonald’s conduct: first, deteriorating performance and incompetence and, second, an attitude problem. [
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