Charles Colin Haggarty - v. -, 2014 SKPC 125

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Date: May 29, 2014 Citation: 2014 SKPC 125 File: File # 417/13 Location: Regina, Saskatchewan _____________________________________________________________________________ Between: Charles Colin Haggarty - and - Knight Archer Insurance Ltd. Charles Haggarty For the Plaintiff Doug Archer For the Defendant JUDGMENT P.

DEMONG , J Introduction [ 1 ] Charles Colin Haggarty (hereafter ‘ Haggarty ’ ) brings this action alleging that he was dismissed from his employment with Knight Archer Insurance Ltd. (hereafter ‘ Knight Archer ’ ) without notice or cause and in breach of the terms and conditions of an employment contract that the parties entered into when he agreed to start working for them.

Haggarty seeks damages equivalent to the pay that Knight Archer refused to remit for most of his final month worked; another month ’ s pay equivalent to the one month notice that Knight Archer was supposed to provide to him under an employment contract; commissions on new business earned by him prior to his

termination but which were not paid out to him; interest on the above noted amounts; and his costs of this action. [ 2 ] Knight Archer has defended the action alleging that after Haggarty’s termination they discovered misconduct which would constitute just cause for his dismissal (known in law as ‘after acquired cause’).

In the alternative, they deny that Haggarty was entitled to a monthly salary or commissions for new business. [ 3 ] Knight Archer has also counterclaimed for what they allege are overpayments on certain salary draws given to Haggarty against commissions to be earned, but which were not actually earned by him.

They also seek recovery of an outstanding loan made to Haggarty but not repaid; outstanding monthly premiums due and owing under a group benefits plan; further payment to set off the holidays taken by Haggarty but which had not yet been earned; interest on the above noted amounts; and the costs of its defence and counterclaim.

Issues [ 4 ] Was Haggarty wrongfully dismissed or was there just cause for his dismissal? [ 5 ] If Haggarty was dismissed without just cause does the employment contract entered into between the parties define the period of notice to which he is entitled? [ 6 ] If Haggarty was dismissed without just cause what is his measure of damages? [ 7 ] Is Knight Archer entitled to set off any monies otherwise due and owing to Haggarty by virtue of having proven any or all of the allegations set forth in their counterclaim? Preliminary Matters [ 8 ] Both of the parties were self-represented.

Haggarty acted on his own behalf and Doug Archer, a principal of Knight Archer, acted for the Defendant. The trial ran long beyond the scheduled two days set for this trial and as a result the Court invited final argument in written form, which was duly provided to the Court. [ 9 ] In his final argument Haggarty asked for additional relief which was not previously pled.

Specifically he sought punitive damages; his “legal fees” characterized as a percentage sum of money based on a “tariff”; and an order that he not be bound by the non- competition clause set out in the employment contract which was intended to survive that contract. He also sought an order of this Court directing that its judgment be forwarded to the attention of the Insurance Council of Saskatchewan. [ 10 ] I reject Haggarty’s request to amend his pleadings after trial.

His request for punitive damages ought to have been pled at first instance; and in any event, there was no evidence led specifically on this point. [ 11 ] I reject Haggarty’s claim for “legal fees”. He is not a lawyer, there is no tariff binding this Court to some percentage of some proposed monetary sum to which a lawyer might be entitled, and in any event,

section 31 of The Small Claims Act 1997, which governs this Court specifically precludes this Court from awarding “lawyer related” costs. [ 12 ] I do not need to make an order directing that my judgment be forwarded to the attention of the Insurance Council of Saskatchewan. Each of the parties will receive a copy of this judgment and they may, individually or jointly, give notice of it to that Council.

[ 13 ] Finally, I reject Haggarty’s request to amend the terms of his employment contract. Even if I had the jurisdiction to do so, and I doubt that I do, there was no evidence led on this point upon which I could base my reasons. [ 14 ] Knight Archer in turn has invited me to “defer jurisdiction to the self governing body established for the express purpose among others, to review the professional allegations made by the Defendant against the Plaintiff” [Sic].

In so doing it rather candidly states “With respect to the three instances of professional misconduct identified by the Defendant, no evidence was presented to support its position.” [ 15 ] Knight Archer submits that were I to do so, Knight Archer agrees to be bound by any finding regarding misconduct and would acknowledge its obligation to provide the Plaintiff with pay in lieu of notice for the 30 days specified in its employment contract with the Plaintiff. [ 16 ] I reject Knight Archer’s request and proposed deal.

Were it presented into evidence , a finding of misconduct by the Insurance Council of Saskatchewan may have assisted the Court. However, this finding might not necessarily affect the decision of the Court on the issue of wrongful dismissal and the assessment of damages arising thereby.

On a review of the bylaws of that Council, which were entered into evidence, I could not identify any right that the Council may have to adjudicate on cases of wrongful dismissal thereby granting to it some sort of concurrent jurisdiction with the Court, let alone deal with the assessment of damages which may be due to Haggarty (especially when the manner of calculating those damages are disputed by Knight Archer), and of course the damages sought by Knight Archer by way of its counterclaim. [ 17 ] Finally, Haggarty had every right to bring his action in this Court and, in my view, it is not open to the Defendant, following the conclusion of this trial, to attempt to have the Court set aside or defer its jurisdiction on a matter with which it is seized.

Analysis 1 - Was Haggarty wrongfully dismissed or was there just cause for his dismissal? [ 18 ] Haggarty is 40 years old and approximately 14 years ago he obtained his licence to be designated as a Canadian Certified Insurance Broker. [ 19 ] An insurance broker acts as an intermediary between people who seek insurance products and insurance companies who offer those products. [ 20 ] Insurance brokers must be familiar with the needs of a current or prospective individual or business client, and must be aware of the particular kinds of insurance coverages that are available in the market place.

Using this specialized knowledge the broker undertakes to place that coverage for his client, and in turn receives a commission for his services, which is generally a percentage portion of the premium that is charged to an insured by the insurance company that provides the insurance contract. [ 21 ] Brokers often times work in loose partnership arrangements with other brokers. Over time, a broker will hope to build his individual book of business, which for the most

part is a list of clients showing the kind of insurance the clients have, the date that insurance was placed, its date of renewal, and its cost and premium payable. [ 22 ] Most brokers are commissioned salespersons, but some of them work on a stated salary basis until, or if, they build their own book of business. As one can readily appreciate, a person starting in the business will be somewhat reliant on his or her employer to “feed” them clients until such time as they become self-sufficient. [ 23 ] I note, for reasons which will become readily evident, that a broker which operates on a full-time commission basis earns money in

three ways. He earns money year after year on those clients that he can retain on a year after year basis; he earns money by trying to offer more expensive or more comprehensive insurance coverage for his existing clients; and he earns more money yet, by building up clientele thereby increasing his book of business.

An insurance broker does not get paid this commission until such time as the premium is collected by the insurance company, at which time the commission is remitted back to the broker by that company. [ 24 ] The Court was made aware of the fact that a broker owes a significant duty of care to its clients to take steps to ensure that the coverages held by the client do not lapse.

If they do, the client may be without insurance when it needs it the most. [ 25 ] Brokers in Saskatchewan are subject to the licencing requirements made pursuant to the laws of this province and the Bylaws of the Insurance Council of Saskatchewan, a semi-autonomous organization which has certain powers, functions, and duties delegated to it by the Superintendent of Insurance for Saskatchewan. [ 26 ] These Bylaws govern the conduct, competence, and proficiencies for licensees and the Council has the authority, among other things, to investigate complaints and impose discipline on its members.

This discipline includes the power to reprimand a broker, impose restrictions on practice, suspension from practice, or cancellation of a broker’s licence. [ 27 ] Haggarty worked briefly in Saskatchewan and then moved to Alberta where he built up a reputation as a talented broker. After a number of years in Alberta, he sought to move back to Saskatchewan in light of what he felt to be a slowdown in work in Alberta and growing opportunities in this province.

He contacted a number of brokerages and in or about the middle of May of 2011, he met with Doug Archer, a principal of the Defendant. [ 28 ] After some preliminary discussions relating to salary expectations and a desire for increased holidays Haggarty entered into a standard form written contract of employment which had been drafted by Knight Archer and introduced into these proceedings as Exhibit P-3.

Neither party disputes that this employment contract was executed by both parties, or that it was intended to identify many of the terms and conditions of Haggarty’s employment. [ 29 ] Haggarty started with Knight Archer in early June of 2011 and almost immediately noted that the office was in a state of disarray. He was, for the most part, reliant on Knight Archer to provide him with clients, and he worked off of the books of business of a number of more senior commercial brokers.

He also worked off of a small book of business that was provided to him, and attended to walk-in clients. [ 30 ] Over the course of the next year or so, significant changes in personnel occurred. One broker passed away and another quit Knight Archer’s employ. Much of Haggarty’s time was spent attending to the immediate needs of those brokers’ clients. [ 31 ] Haggarty was somewhat dismayed that Knight Archer lacked his version of a weekly or monthly group review of production reports, accounts receivable reports, and expiry reports.

He says that this form of management was in place in his former job and it not only kept brokers on track, in the sense that they were kept current on the growth of their business, but it also allowed a broker to ensure timely collection of receivables and ensure that renewals were current. He also indicated that these meetings instilled confidence in the broker group in the sense that they could measure successes and share leads and the like. [ 32 ] Haggarty advised that Knight Archer lacked a handbook on visions and values and the expectations demanded of brokers.

He called a former broker with Knight Archer to the stand whom he had mentored, and whom had left Knight Archer in late 2011 or early 2012. This broker for the most

part confirmed Haggarty’s allegations of a brokerage in upheaval and disarray, and one which lacked the kinds of supports identified above. [ 33 ] Haggarty advised the Court that in early 2013 he was approached by a new owner/manager, by the name of Van Ginkel, who had been brought on board at Knight Archer. This gentleman sought to have Haggarty sign a new employment contract which, to Haggarty’s mind, changed the essential pay structure that had previously been arranged.

Haggarty testified that he was not necessarily adverse to signing it, but rather wanted the opportunity to review those production reports that might justify this new pay arrangement which envisaged him being offered a rather substantial book of business.

[ 34 ] Haggarty stated that he had a number of conversations with Van Ginkel over the course of the next six months or so and on each occasion Van Ginkel promised, but did not deliver, this information to him. Therefore, Haggarty continued to decline signing of the new agreement. [ 35 ] In or about August of 2013, Haggarty took some holidays to return to Alberta to visit his children.

The Court listened to a significant amount of evidence of this regard, specifically as to whether or not it had been approved, particularly in light of the fact that Haggarty was, by this time, significantly overdrawn on holidays he had already taken but not yet earned. [ 36 ] Upon his return from holidays, he continued to work until the 25 th of September 2013, when he was called into a boardroom where Van Ginkel handed him an envelope which contained a termination letter. The letter was short and to the point.

It gave little reason for his termination nor did it refer at all to his written employment contract. [ 37 ] The letter, marked in these proceedings as Exhibit P-6, was signed by Gloria Archer, the president of Knight Archer. It indicated that effective September 25, 2013 his services would no longer be required.

It advised that he would receive his final pay within 14 days less any amount owed by him for his overdrawn holidays. [ 38 ] Haggarty says that he had a short conversation with Van Ginkel who in turn indicated to him that he “wished it wasn’t this way” and noted, without more, that “there was a personality conflict”. Haggarty stated that Van Ginkel said that he would be happy to give a reference and that a potential employer shouldn’t hesitate to contact him. [ 39 ] Fourteen days passed and Haggarty did not receive any final pay. He contacted Sask Labour to investigate, which they did.

Some time later, when Haggarty had secured alternative employment and sought to transfer his licence, he was advised by the Council that Doug Archer had made a complaint to the Insurance Council alleging professional misconduct. [ 40 ] Haggarty has been granted a conditional licence pending the Sask Labour investigation and at the date of trial that investigation had not yet been concluded.

Haggarty is newly employed with another brokerage at a reduced salary, but more generous commission levels. [ 41 ] Haggarty stated at trial that he was not made aware of the reasons for his dismissal until he received the dispute note file by the Defendant in January of 2014.

He denies that he did anything wrong at his job and he has, more by inference than anything else, concluded that he was dismissed because either; he did not get along particularly well with the office manager of Knight Archer who was Doug Archer’s daughter; or that they were dissatisfied generally with his performance as a broker; or arguably, because he didn’t sign off on a new employment agreement; or arguably, they were trying to reduce personnel following a number of new hires that Van Ginkel introduced into the business when he arrived. [ 42 ] Haggarty insists that he was never made aware of any concerns that Knight Archer may have had with his performance up until the time of his termination.

As a result of his termination, he was denied his salary for the month of September of 2013, refused his payout for commissions he says he earned, and was not paid salary in lieu of one month’s notice.

He says that this failure to remit payment caused significant financial pressures as he was unable to pay child support or provide for his daily living expenses in any meaningful way. [ 43 ] Haggarty asks that in assessing the relevant period of notice required to be given by Knight Archer this Court give effect to the termination provisions of the employment contract entered into between the parties (Exhibit P-3), which reads: TERMINATION OF THIS AGREEMENT This agreement may be terminated by you or by Knight Archer Insurance at any time within 30 days written notice.

However, it is acknowledged that the sections titled ‘Confidentiality’ and ‘Maintenance of Brokerage Business’ shall continue in full force and effect.

[44] In an action for wrongful dismissal, an employee claiming wrongful dismissal need only show that he was an employee at the timeof the dismissal and that he had been dismissed without sufficient notice. The Ontario Supreme Court, in Daniels v.

Canadian Gift andTableware Association, (ONSC) discussed the onus of proof in a wrongful dismissal action at page 23: It is trite law that although the employee, as Plaintiff, has the ultimate burden of proving on a balance of probabilities, that he or she waswrongfully dismissed, in those increasingly rare cases where the employer not only pleads just cause, but conducts a vigorous defence onthat issue, the employer has the burden of proving just cause according to the same standard.

As a result, the employee need only showtermination without notice, leaving the task of showing that the termination was nevertheless justified by the employer. [45] On my review of the evidence I am satisfied that by the time Haggarty had closed his case, he had met this relatively nominalburden, and made out a prima facie case that he had been dismissed without reasonable notice and as such, it was incumbent on KnightArcher to show that his termination without notice was nevertheless justified. [46] Knight Archer concedes that it did not give any formal reasons to Haggarty as to why he was dismissed other than to point outthat his services were no longer required.

By way of amended Dispute Note however, they rely on what is generally described in law as“after acquired cause”, and note at paragraph 4 of their Dispute Note that: ...it was suspected, at the time of termination, and subsequently determined, that there were grounds to dismiss him with cause. [47] At first glance it may appear unreasonable to dismiss an employee without giving reasons, but there is no common lawobligation on an employer to state the grounds for dismissal or give reasons. In McIntyre v.

Hockin (1889), 16 O.A.R. 498 the OntarioCourt of Appeal stated at paragraph 10: It is now settled law that if a good cause for dismissal really existed it is immaterial that at the time of dismissal the master did not act orrely upon it, or even did not know of its existence, or that he acted upon some other cause in itself insufficient. The main question alwaysis were there at the time of the dismissal facts sufficient in law to warrant it .... .

This principle is subject to a few obvious qualifications. [48] First, if the employer was aware of the conduct which justified the dismissal but chose not to act upon it, then the evidence attrial may show that the employer condoned the conduct complained of, and cannot thereafter rely on that conduct as a basis fortermination (See McIntyre, supra). [49] Second, and as noted by many Courts, a certain level of caution is called for in the application of this doctrine to assure theCourt that after acquired cause is not used as an illegitimate excuse for the termination, and therefore, the introduction of these reasonsmay affect the weight to be given to this evidence (See generally Baumgartner v.

Jamieson, 2004 BCSC 1540 ). [50] Third, the reasons relied upon must give rise to a breakdown in the employment relationship such that the misconductcomplained of was fundamentally or directly inconsistent with the employee’s obligations to his or her employer (See generallyMcKinley v. B.C. Tel, 2001 SCC 38 , [2001] 2 S.C.R. 161)). [51] It is clear that the onus rests with the employer on a balance of probabilities to satisfy the Court that the employee conduct met thethreshold referred to above.

It is then incumbent on the Court to determine whether the nature and the degree of such conduct warrantsdismissal in the specific context of the case, having regard to all of the prevailing circumstances. The Court must make this inquiry inorder to give effect to the concept of proportionality which demands that there be an effective balance between the severity of anemployee’s misconduct and the sanction imposed (See McKinley, supra).

[52] The examination of the nature and extent of the misconduct is factually driven based on the evidence. In considering thesurrounding circumstances, the Court must consider such factors as the employee’s age, employment history, seniority, role, andresponsibilities in relation to the employer’s type of business, its policies and practices, and the degree of trust it placed on theemployee. In assessing whether or not dismissal is warranted, the Court is obligated to assess whether or not the misconduct isreconcilable with sustaining the employment relationship.

Are the proven reasons for dismissal sufficiently serious that they would giverise to a breakdown in the employment relationship? (See generally Dowling v. Ontario (Workplace Safety and Insurance Board), (ONCA)). [53] Knight Archer makes the following allegations in its Dispute Note: 5. Also in reply to paragraph 4, following the Plaintiff’s termination, the Defendant became aware of a number of incidents ofprofessional misconduct by the Plaintiff under the Bylaws of the General Insurance Council of Saskatchewan:

a) A client came into the office to make a payment on her renewal, meaning the client had been without insurance forapproximately one year. She indicated she had previously spoken to the Plaintiff about her coverage.

b) Two lapse notices and a cancellation notice were received by the Plaintiff on a client’s policy for non-payment. The Plaintiff didnot renew the policy, leaving the client without insurance for more than a year.

c) A client complained that the Plaintiff did not return his calls regarding a condominium association policy. The policy waseventually cancelled with the Defendant because the Plaintiff did not provide renewal terms to the client and did not attend the client’sboard meeting to present those terms. 6. Further in reply to paragraph 4, following the Plaintiff’s termination, the Defendant became aware of a number of incidents thatdemonstrated the Plaintiff’s failure to meet minimum job performance standards as set out in the Plaintiff’s contract of employment:

a) The Plaintiff failed to collect insurance premiums on new business and renewals, causing unhappiness among clients who wantedbetter service.

b) During the last month of his employment, the Plaintiff lost a number of large accounts for the Defendant due to poor service.

c) Due to poor service from the Plaintiff, a property management client cancelled numerous condominium association policies withthe Defendant. [54] There is quite a distinction between mere allegations set forth in pleadings and submitting evidence which proves the existence ofthose allegations. [55] When cross-examined by Doug Archer, Haggarty conceded that he saw receivable reports on a regular basis and had theopportunity to access these reports online or through inquiry to his manager. Mr.

Archer also asked him questions in relation to holidaystaken, the makeup of the commercial department, and the receipt of a book of business in or about early winter of 2013. [56] Mr. Archer forced Haggarty to concede that he did in fact have overdue accounts receivable, and that Haggarty was aware ofthe company’s policies on receivables. Specifically he had Haggarty review Exhibit D-2 to show that a number of his receivables weredue and owing over thirty days.

That said, Haggarty was quick to point out that at no time did Archer (his manager for a significantperiod of time) ever challenge Haggarty’s management of those receivables, nor did Archer explain whether or not the amount of thosereceivables were higher or lower than other brokers of equivalent age and experience.

[ 57 ] Other than this line of inquiry, Doug Archer did not cross-examine Haggarty in relation to any of the allegations of misconduct set forth in paragraph 5 (a) (

b) or (c), nor did he cross-examine him on the allegations set forth in paragraph 6 (

b) or (c). [ 58 ] While it is, of course, open for a Defendant to identify the manner in which it conducts its case, I would have thought, having regard to the seriousness of the allegations made, the Defendant would have spent some considerable time dealing with these several issues in cross-examination, if for no other reason than to highlight Haggarty’s understanding of his role and the expectations of him as a broker. [ 59 ] Knight Archer called four witnesses. The first was Doug Archer. He gave his history as an insurance professional.

He discussed the people generally employed by him in the commercial department of Knight Archer and he confirmed that he was the acting manager of that department when Haggarty first arrived. [ 60 ] He reiterated to a large extent the disarray in the commercial group in the year 2011 and the significant problems it was facing both in terms of personnel and catching up on accounts receivable that had been left in a state of disrepair by the two brokers I referred to earlier. He mentioned the retention of Mr.

Van Ginkel, and the ensuing challenge to incorporate all the new people into the commercial department which he described as a very busy time resulting in a very heavy workload for everyone up to and through May of 2013. [ 61 ] Doug Archer spoke of his hiring of Haggarty and what he thought were the salary and vacation arrangements and he candidly admitted that he advised the Insurance Council of what were purported to be matters of possible professional misconduct allegedly engaged in by Haggarty. In passing, the Court does not cast any aspersions whatsoever against Mr. Archer in taking this step.

When a broker changes jobs, the previous employer is obligated to advise of the reasons why that broker has left, particularly when that broker intends on taking up a broker position elsewhere. Mr. Archer was asked by the Council if there were any concerns regarding Haggarty’s suitability for future employment, and it was only then, under his obligation as Haggarty’s employer, that Doug Archer investigated and responded to the Council.

It is important to note however that the original response from Archer to the Council’s request was simply that Haggarty “did not fit the office environment”. [ 62 ] That stated, on October 31 st of 2013, Mr. Archer sent an e-mail to the Council explaining the reasons for termination and included with some slight clarification, those allegations set forth in the Dispute Note.

This e-mail was tendered into evidence not for the proof of the allegations that were set forth therein but rather as proof of the fact that the allegations were brought to the attention of the Council . [ 63 ] Doug Archer concluded his evidence by speaking to matters generally relating to the nature of Haggarty’s book of business and his salary and holidays, and the essential features of Knight Archer’s counterclaim for damages. [ 64 ] I note that with the exception of evidence in relation to delinquent receipt of accounts receivable, Mr.

Archer did not present any evidence to establish the allegations set forth in Knight Archer’s Dispute Note. [ 65 ] The Defendant next called Jacob Zaba who was the human resources officer for Knight Archer. His evidence was confined to issues relating to the taking of holidays. He made no mention of the allegations set forth in the Defendant’s Dispute Note. [ 66 ] The Defendant next called Greg Van Ginkel and the Court learned that Mr.

Van Ginkel had been brought into Knight Archer as a part owner and manager on the commercial lines division of the organization in or about January of 2013 to improve professionalism within the department, to improve processes, and to hire more qualified people.

When Van Ginkel arrived, Haggarty began to report directly to him. [ 67 ] Van Ginkel explained to the Court that when he arrived, the environment was unstructured, the organization didn’t have sufficient staff, there were numerous outstanding accounts receivable, the organization lacked a robust renewal process, and there was a general lack of motivation and knowledge about the industry. (I would point out in passing that this evidence is consistent with Haggarty’s evidence generally, and further points to an organization which was having problems with collecting accounts receivable and dealing with renewals, two of the key issues which Knight Archer alleges are attributable to Haggarty specifically, but which, according

to Van Ginkel, was endemic on the commercial side of the organization). [ 68 ] Mr. Van Ginkel indicated that he spoke with Haggarty on several occasions regarding the transfer of a significant book of business to him if he signed a new employment contract. Van Ginkel says there would have been at least four occasions when he spoke to Haggarty about this, but on each occasion Haggarty deferred. [ 69 ] Mr. Van Ginkel did comment on the reasons for Mr. Haggarty’s termination, but in my view did so in a very

summary fashion. Some of the reasons clearly do not meet what the law would consider to be a fundamental breakdown of the employment relationship as that test is described in McKinley , supra . For instance, he described Haggarty as “unpolished”- someone who would occasionally use profanity in the workplace. He was warned about this and indicated that he would not do so again.

In addition Haggarty lost his temper on at least one occasion leading to a screaming match with one of the office managers, but for which he later apologized. [ 70 ] These isolated incidents aside, it was not until after the Council sought particulars of Haggarty’s suitability for future employment, that Mr. Van Ginkel was charged with reviewing Haggarty’s work and identified those factors which the Defendant relies on in its support of “after-acquired cause”. [ 71 ] I have carefully reviewed the evidence of Mr.

Van Ginkel and note that while many allegations are asserted, there has been little in the way of factual evidence provided which would tend to prove on a balance of probabilities that they occurred, and if they did, how it fundamentally contributed to a breakdown in the employment relationship. [ 72 ] The Defendant alleges that Haggarty failed to collect insurance premiums on new business and renewals causing unhappiness among clients who wanted better service.

The Court however, was advised that the accounts receivable in the commercial division were generally in a state of delayed recovery and that was precisely why Van Ginkel was hired on. How many were not collected? What proportion of Haggarty’s receivables were not collected? How did this impact on the business generally? Were his uncollected accounts worse than the average in the department? How did this leave clients unhappy? Does an uncollected account even leave a client unhappy?

I did not hear from any of these clients expressing unhappiness. [ 73 ] The Defendant alleges that in the last month of Haggarty’s employment he lost a number of large accounts due to poor service. What kind of poor service? Specifically what was the nature of that service? How did it fall below the service of other brokers in the office? How often do clients leave a broker in any event? In what proportion to an entire book of business?

Again, the Court heard no evidence from these clients. [ 74 ] The Defendant alleges that a condominium client called to complain about the failure of Haggarty to return calls or attend a board meeting and in the result did not renew a lucrative contract. Van Ginkel took that call he says in August of 2013. If this was such a serious matter, and if the reason is as Van Ginkel suggested, why did he not immediately confront Haggarty and explain that he would be terminated for this reason. Does a missed call generally lead to cancellation of a policy? How does the Court know the reason for the cancellation?

The only evidence presented dealt with hearsay, that is to say that Van Ginkel says that someone said that they cancelled for that reason. How often do clients, large or small, cancel policies and move to other brokers? More importantly, on cross- examination it was conceded that this client was not even listed as one of Mr. Haggarty’s clients on the book of business tendered into evidence as belonging exclusively to Haggarty. [ 75 ] The Defendant alleges that a client came into the office to make a payment on her renewal policy meaning apparently that she had been without insurance for one year.

Was she without insurance for one year? This information presumably was drawn from a note inputted on the Defendant’s computer system. When was the note made? By who? Is it accurate? Was it created by an individual who disliked Haggarty? Why was this person not called to explain what occurred? [ 76 ] The Defendant finally alleges that two lapsed policy notices and a cancellation notice were received by Haggarty on a client’s policy for non-payment. Haggarty apparently did not renew the policies leaving the client without insurance.

This is a serious allegation because the lack of insurance clearly has serious consequences. But the Court did not hear from that client and has no way of knowing if it obtained insurance from another brokerage firm in the interim. In addition, and perhaps more tellingly, this policy lapsed after and not before Haggarty was terminated. Arguably, it would not have done so if Haggarty had stayed on.

[ 77 ] I have taken some time to review these allegations of “after acquired cause” because in the instant circumstances I agree with those Courts that suggest these kinds of ex post facto justifications should be considered in the terms of the weight that should be accorded to them. In the instant circumstances I attach only nominal weight to these allegations. If true, they would be compelling, but in my view, some of them are based on hearsay, notwithstanding that the Defendant had every opportunity to call evidence which may have substantiated them. Other allegations are predicated on the suggestion that Mr.

Haggarty had predominant control over the client, which has not been proven to be the case. Others arise by virtue of the fact that Haggarty had already been dismissed from his employment and could not therefore deal with the very allegation made against him before his termination. [ 78 ] I am satisfied that Knight Archer felt that Haggarty was a poor performer. That in and of itself does not, on this evidence, suggest that the employment contract was irreparably broken. Knight Archer had every opportunity in that event to terminate his employment in accordance with the terms of the employment contract.

Having failed to do so, I am of the view that Haggarty was dismissed without just cause and is entitled to damages arising therefrom. 2 - If Haggarty was dismissed without just cause, does the employment contract define the period of notice to which he is entitled? [ 79 ] The employment contract was freely entered into between both parties. There was no undue influence exerted and in my view, both parties were sophisticated in business. The agreement mandated a 30 day notice of termination. The Defendant did not comply with that term.

I am of the view that Knight Archer was obligated to provide 30 days notice of termination (or pay in lieu) and they failed to do so. 3 - If Haggarty was dismissed without just cause what is his measure of damages? [ 80 ] The parties spent more time during this trial dealing with the nature of Mr. Haggarty’s remuneration than they did with the issue of just cause. [ 81 ] Haggarty submits that his salary was $84,000.00 ($7,000.00 paid monthly), together with a 10 % commission on all premiums earned on new business that he brought to Knight Archer. [ 82 ] Knight Archer submits that it was not quite this simple.

It argues that the $84,000.00 to be paid would be paid on a monthly basis as a draw on commission earned in the course of his employ. If, as in the case at hand, Haggarty had not earned commissions in excess of his draw up until the time of termination, then Knight Archer would be owed money and not the other way around.

In fact, Knight Archer alleges that when they terminated Haggarty, he had drawn $59,321.05 but only earned $48,467.30 in commissions and therefore, on termination, Haggarty owed them $10,853.75. [ 83 ] Obviously the parties are at odds regarding just how Haggarty was to be paid, and in the result it is incumbent on the Court to determine this issue. I am satisfied that in so doing I can look to the correspondence and e-mails passing between the parties before the execution of the employment contract as well as the employment contract to ascertain the true intentions of the parties, even if that means that the

interpretation as ascertained is different than either of the

interpretations presented to the Court, provided that the

interpretation is in harmony with the words used by the parties. [ 84 ] Mr. Haggarty received the offer of employment by correspondence sent to him by Doug Archer on May 15, 2011. It identified the compensation scheme and commissions to be paid: Your compensation will be $84,000.00 annually to be paid monthly at the rate of $7,000.00 per month. Commissions will not be paid until such time as your commissions earned equal or exceed your annual compensation. [emphasis added]. You will receive commissions at the rate of 40% of company commissions payable to Knight Archer... for all new and renewal business.

[ 85 ] On May 18, 2011 an e-mail thread between Haggarty and Doug Archer expanded on this arrangement. Among other things, Haggarty asked for four weeks vacation instead of three and asked for confirmation that once the gross revenue ( gross commission ) of his book of business is $84,000.00 or greater he would be eligible for commission splits. [Emphasis added] [ 86 ] Doug Archer replied that he confirmed each of those points, and then clarified these points and stated that he was prepared to “provide an enhancement to help you start”. He then noted: 1.

Salary/draw of $84,000/year or $7,000/mo until commission on new sales and renewals exceeds $84,000/yr or $7,000/mo. [Emphasis added] 2. After new and renewal commission (calculated at 40% for new and renewal) exceed $84,000/yr or $7,000/month, then your compensation will be based solely on commissions earned at 40% for new and renewal commissions. [Emphasis added] 3. In addition to the above, we will pay an additional 10% commission on new business only until you reach the limit of $84,000 in new and renewal commission as per 1 above.

This means that you will get $7,000 per month until your commissions exceed $84,000. In addition, we will pay you a 10% commission on your new sales. We will do this only until you reach the $84,000 level of new and renewal commission. I hope I have been able to explain this well enough. I look forward to hearing from you. [Emphasis added] [ 87 ] In my view it is important to note that both parties made it abundantly clear to the Court that commission is not paid until it has been received.

To earn the commission, the broker must do more than sell the product, Knight Archer must also receive the commission due for the product sold. [ 88 ] In 2011, Haggarty was paid $7,000.00 per month and his commissions earned did not approach that amount. In 2012, he was paid for 12 full months at $7,000.00 per month and his commissions earned did not come close to that amount. In 2013 and up until the time of his termination he was paid at the rate of $7,000.00 (January through August) but earned commissions of some eight to ten thousand dollars less than that.

When terminated he was not paid for the month of September, nor was he paid the equivalent of one month’s salary pursuant to the employment contract. [ 89 ] The reason for this, Knight Archer asserts, is that in early 2013, he was given a book of business with a proven track record of earning more than $84,000.00 per year and a new contract to sign which, although not signed by Haggarty, was presumably in effect, at least insofar as Knight Archer was concerned.

Knight Archer says that the transfer of this book of business gave effect to the “REMUNERATION provisions of the first employment contract which reads: Knight Archer Insurance will pay broker commission on new and renewal business. Such commissions will be negotiated with each broker. On some instances, a new broker may be given a base salary or a base salary plus commission.

If this is the case, out intent will be to provide initial support and then move to a full commission pay arrangement. [ 90 ] Knight Archer therefore insists that this provision, when considered in the context of the references to 40% commissions in his earlier correspondence, and the fact that the book was transferred to Haggarty, all mean that effective January 1 of 2013, even though Haggarty was receiving a draw of $7,000.00 per month, his salary, after January 1 of 2013 was entirely dependent on the commissions that he would earn on that new book of business. [ 91 ] Haggarty is adamant that this was not his understanding of the manner in which he was to receive income.

He says rather,

that the arrangement clearly stipulated that he was to receive an annual salary of $84,000.00 per year until such time as his earned commissions exceeded $84,000.00 in that year. At that point, then, he would have some assurance that the book of business given to him would be viable, and at which time, and from then on, and into subsequent years he would move to a straight 40% commission basis of remuneration. [ 92 ] As I review all of the evidence presented I am satisfied that Haggarty’s understanding is in harmony with the terms of his employment, as drafted by and set out by Doug Archer. In so doing, I accept, as a now rather trite statement of contractual

interpretation, that if a term of a written agreement is ambiguous and capable of two reasonable

interpretations, the agreement will be interpreted in a manner that best gives effect to the

interpretation advanced by the party who did not draft it, and against the party that did. [ 93 ] In favouring Haggarty’s

interpretation I note that the correspondence which spelled out the salary terms speaks in a future tense. That is to say, the monthly (yearly) draw will continue until the annual salary is earned ; the commission only provision will arise after commission exceeds the yearly draw; once the gross commission is $84,000.00 or greater . [ 94 ] Haggarty says (and the evidence submitted) confirms, that the book of business given to Haggarty was only prepared in its final form in April, 2013.

Was it supposed to operate retroactively? [ 95 ] Haggarty was presented with a new written contract for his execution in the late spring of 2013 and he refused to sign it. He did so, he says, specifically because he had no assurance that the book would in fact return in excess of the salary he was earning when he started.

It was, he says, for precisely this reason that he continued to call for production reports which might validate Knight Archer’s assertions that he could earn much more. [ 96 ] If I were to agree with Knight Archer’s different assertion, then I would have to ignore all of the contingent wordings used by Doug Archer. I would have to conclude that Knight Archer could, at any given time amend Haggarty’s pay structure by simply asserting that he had the capacity to earn more.

I would have to ignore the termination letter which clearly indicated that Haggarty would “receive his final pay within 14 days”, and I would have to operate on the assumption that a potentially mischievous employer in this situation could terminate a broker’s employment to its clear advantage if it knew that a very large commission was in the offing but not payable until five weeks following a termination because the commission, having not been received by the broker while employed, would not have yet earned it. [ 97 ] For all of the foregoing reasons, I am satisfied that Haggarty’s salary at the time of his termination was $84,000.00 per year to be paid by installment at the rate of $7,000.00 per month.

As Haggarty had not, by the date of his termination received commissions in excess of that amount, he is entitled to his pay at that rate for the month of September 2013, together with the equivalent of that amount for the thirty day notice period required under the original signed contract of employment. Because he was terminated on September 25 of 2013, he was entitled to be paid for 25/30ths of that month plus one further month of salary and I calculate his damages under this heading in the sum of $12,833.33. [ 98 ] Haggarty was also to be paid for new business that he brought into the company.

At trial he identified new client commissions in the sum of $2,311.48. In coming to this number I have considered, but discounted, his assertion that he brought on, as new business, an account referred to as “Lehich”.

In my view Knight Archer has persuaded the Court that this account was a Saskatoon account that Haggarty may have worked on, but which was not, technically speaking, new business. [ 99 ] In total therefore, Haggarty ’ s damages equate to the sum of $15,144.81. 4 - Is Knight Archer entitled to set off any of the money otherwise due and owing to Haggarty by virtue of its counterclaim? [ 100 ] Knight Archer advanced Haggarty monies with which to participate in a retirement savings plan on the understanding that this loan was to be paid back.

Haggarty acknowledges that $1,000.00 remains owing on that loan and therefore this sum will be set off against the damages awarded. [ 101 ] Haggarty was obligated to participate in the Defendant’s group benefits plan at the rate of $259.71 per month. Haggarty

acknowledges this obligation and I find that it would properly continue for the month of September and this amount will also be offset against the damages awarded. [ 102 ] Finally, it became abundantly clear at trial that Haggarty was overdrawn on his holidays. Haggarty conceded this, and took only slight issue with that number suggesting that four of them were of dual purpose because he was on holidays but also travelling to Alberta to deliver papers to clients.

I reject his dual purpose argument because he had already booked the holidays and the papers in question could quite easily have been sent by mail or courier. [ 103 ] In total he was overdrawn 13.37 days at the date of his termination. I calculate the per diem value of those holidays by dividing his $7,000.00 monthly salary and dividing it by 22 working days per month for a value of $318.18 per day. Since Haggarty should have received 30 days notice of termination, he lost, as a fringe benefit, the opportunity to earn holidays for the month of October, at the rate of 1.66 days per month.

In the result, his 13.37 overdrawn days would reduce to 11.71 and the amount due and owing to Knight Archer would equate to $3,725.88. [ 104 ] In total, the Defendant is successful on its counterclaim to the extent of $4,985.60. Damages [ 105 ] In total I award general damages to the Plaintiff in the sum of $15,144.81.

That sum shall be reduced by the value of the Defendant’s counterclaim in the sum of $4,985.60 for a total damages award of $10,159.21 [ 106 ] I award pre-judgment interest on that sum from September 25, 2013 which equates to the sum of $50.35. [ 107 ] In addition, I award to the Plaintiff costs in the sum of $110.00 constituting the cost of issuing the summons and service of documents. [ 108 ] In total the Plaintiff shall have judgment against the Defendant in the amount of $10,319.56. Paul Demong, J