Mutneja v. RRA Trucking Ltd., 2023 BCPC 2

Citation: Mutneja v. RRA Trucking Ltd. 2023 BCPC 2 Date: 20230103 File No: 86312 Registry: Surrey IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Small Claims Court BETWEEN: VIKAS MUTNEJA CLAIMANT AND: RRA TRUCKING LTD. DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE K.J. FERRISS Counsel for the Claimant: S. Sloane Counsel for the Defendant: R. Barreto Place of Hearing: Surrey, B.C. Dates of Hearing: May 24, 25, 26; August 3, 4, 5; and September 2, 2022 Date of Judgment: January 3, 2023

[ 1 ] Vikas Mutneja has brought this lawsuit against RRA Trucking Ltd. for breach of a fixed term employment contract. The term of the contract was for three months at the rate of $8,000 per month, for a total of $24,000. He has also claimed for wrongful dismissal, mental harassment, and reputation damage in the sum of $10,000. [ 2 ] RRA Trucking says that, in fact, it only owes Mr. Mutneja $1,761.75 for February 2020 and $1,474.85 for the period of March 1 to 5, 2020, for a total of $3,236.60 as a result of Mr.

Mutneja’s agreement to pay RRA Trucking for the deductions that were not taken from the payment he received for December 2019 and January 2020. RRA Trucking states that Mr. Mutneja’s termination was not wrongful and that he was dismissed summarily for cause. [ 3 ] RRA Trucking has counterclaimed for the sum of $35,000 for damages for breach of contract and injury to its business and reputation. RRA Trucking alleges that Mr. Mutneja breached both the non-solicitation agreement, failed in his duties at RRA Trucking, and interfered in RRA Trucking’s proposed purchase of a trailer. Background Facts [ 4 ] Mr.

Mutneja was a dispatcher with another trucking company (the “former employer”) and Mr. Sran owned three trucks that he operated through the former employer. At the time, Mr. Mutneja was looking to rent a place to live. Mr. Sran suggested that he could move into the basement of his house, which was partly under construction at the time. Mr. Mutneja accepted that offer and lived there until December 2019. [ 5 ] Mr. Mutneja told Mr. Sran that he was unhappy working for the former employer. Mr. Sran said he wanted to start his own company to which Mr.

Mutneja made the observation that he would need a dispatcher if he did start his own trucking company. [ 6 ] As a result, Mr. Mutneja and Mr. Sran purchased RRA Trucking in October 2019 and the company began operating on or around October 15, 2019. They were equal owners of RRA Trucking, with each owning 50 common shares. Mr. Mutneja had put $13,000 of his own capital into purchasing his half of the company and Mr. Sran did likewise. [ 7 ] Because of Mr. Mutneja’s work experience in the trucking industry as a dispatcher, he had a number of contacts in the industry who knew him and his work.

Several owner operators severed their ties with the former employer to work with Mr. Mutneja. Even though RRA Trucking kept a higher percentage of the profit, the owner operators were confident they would make more money with him as a dispatcher. [ 8 ] Accordingly, RRA Trucking did well. In October 2019, RRA Trucking had Mr. Sran’s three trucks and another truck run by an owner operator from the former employer. Other owner operators started moving over to RRA Trucking after that. By the time Mr. Mutneja was terminated from RRA on March 6, 2020, RRA Trucking had 12 to 13 trucks working for it.

Five or six of those owner operators had originally been working at the former employer’s with Mr. Mutneja. Others were acquired from on-line advertisements. [ 9 ] RRA Trucking’s office was located in Mr. Sran’s home. Mr. Sran managed the paperwork for the company and Mr. Mutneja performed the operational portion of RRA Trucking. Mr. Mutneja said that he felt he was working harder than Mr. Sran was. He did not want to continue in partnership with Mr. Sran, but he did not have enough money to purchase Mr. Sran’s portion of RRA Trucking. [ 10 ] In Mr.

Sran’s view, the main problem with the partnership was that they agreed to each pay the expenses on an equal basis, but Mr. Mutneja did not contribute to the company when it started growing. A few months in, Mr. Sran said he had close to $70,000 invested in the company, but Mr. Mutneja had only contributed the original $13,000. [ 11 ] In January 2020, Mr. Mutneja asked for money from the company, but Mr. Sran said RRA Trucking was not in a positive cash flow. At one point, during the discussions about the company’s finances, Mr.

Mutneja walked off the office premises, which caused the owner operators great concern and they convinced Mr. Mutneja to return to the office. [ 12 ] As a result of these events, Mr. Sran testified that he and Mr. Mutneja agreed they would pay themselves $8,000 per month salary starting in December 2019. A cheque dated Friday, January 14, 2020, in the sum of $16,000 was provided to Mr. Mutneja to cover December 2019 and January 2020. No deductions for federal and provincial taxes or other required deductions, the (“Mandatory Deductions”) were made from that cheque. [ 13 ] On the following Monday, Mr.

Mutneja told Mr. Sran that he no longer wanted to work in trucking. As a result, Mr. Sran said that they decided to put a price on the company and one of them would buy the other out. [ 14 ] They agreed to value the company at $60,000. Mr. Mutneja did not have enough money to pay for Mr. Sran’s shares, so Mr. Sran paid $43,249, which included $30,000 for Mr. Mutneja’s share of RRA Trucking and $13,000 for Mr. Mutneja’s original investment. On January 28, 2020, a Share Purchase Agreement was entered into between Mr. Mutneja and Mr. Sran.

The closing date was agreed to be February 5, 2020. [ 15 ] The Share Purchase Agreement was signed on January 28, 2020, by Mr. Mutneja and on February 5, 2020, by Mr. Sran. On February 5, 2020, Mr. Sran provided Mr. Mutneja with the cheque for $43,249.00. No mention of the Mandatory Deductions was contained in the Share Purchase Agreement. [ 16 ] A Supplemental Agreement was signed on February 5, 2020, as well, under which Mr. Mutneja agreed to work for RRA Trucking as an employee under certain terms, although he had already started as an employee of RRA Trucking on February 1, 2020. Mr.

Mutneja explained that the Supplemental Agreement was signed after he started employment with RRA Trucking because Mr. Sran was not satisfied with the first draft and Mr. Mutneja had to redraft the agreement to include a non-solicitation clause. [ 17 ] According to the Defendant’s Counterclaim, the first draft was rejected because “it did not include clauses relating to the non-

solicitation of employees and independent contractors working for the Defendant and did not contain clauses relating to the continuedemployment of the Claimant as discussed between the parties”. From the evidence, I find that the only clause added was the non-solicitation clause. [18] Mr. Sran stated that he wanted the Supplemental Agreement because he received a call from Mohan Singh Sahota, one of theowner operators around January 20, 2020, who was concerned that Mr. Mutneja had told him that he was leaving RRA Trucking in orderto start his own company. At that point, Mr.

Sran became anxious regarding RRA Trucking’s viability and required the SupplementalAgreement. Two other dispatchers had been hired by RRA, but they were not learning. He testified that he wanted Mr. Mutneja to trainthem. [19] Under the Supplemental Agreement, Mr. Mutneja agreed that he would work for three months, from February 1, 2020, to April30, 2020 as a dispatcher for RRA Trucking. His hours would be 5 days per week, Monday to Friday, for 8 hours per day during that timeperiod.

RRA Trucking was to pay him a salary of $8,000 per month during the term of the Supplemental Agreement, payable within thefirst week of each month for work done in the previous month. [20] The non-solicitation clause is set out at paragraph 15. 2. of the Supplemental Agreement and reads: From the date of this Agreement to July 31, 2020, the Vendor [Mr. Mutneja] will not solicit for employment any person who is anemployee or independent contractor of the Company [RRA Trucking]. [21] There is no mention in the Supplemental Agreement of the Mandatory Deductions that Mr. Sran maintains are owed to RRATrucking.

It also contains no reference to training the new dispatchers. [22] On February 28, 2020, Mr. Sran, Mr. Mutneja and RRA Trucking entered into a Release Agreement. The Release Agreement isstated to contain the entire agreement between the three parties. It was signed by Mr. Mutneja on January 28, 2020, and by Mr. Sran onFebruary 28, 2020. He also signed it on behalf of RRA Trucking, presumably on the same day. [23] On March 5, 2020, Mr. Mutneja had a telephone conversation on his cell phone while in the yard of Mr. Sran’s home, which wasalso the location of RRA Trucking’s office. Mr.

Sran overheard that conversation and came to the conclusion that Mr Mutneja wassoliciting owner operators from RRA Trucking for his own business and in contravention of the Supplemental Agreement. [24] Mr. Sran terminated Mr. Mutneja’s employment with RRA Trucking on March 6, 2020. Issues [25] There is no issue that the non-solicitation clause was reasonable in the circumstances. The issues in this case are as follows: A. Did Mr. Mutneja and Mr. Sran agree to repay the Mandatory Deductions to RRA Trucking from their February 2020, pay chequesand does Mr. Mutneja continue to owe RRA Trucking for that money? B.

Has Mr. Mutneja proven the amount owing to him under the Supplemental Agreement has not been paid? C. Has RRA Trucking proven on a balance of probabilities that they had cause to terminate the Supplemental Agreement? D. Is there a duty to mitigate under a fixed term employment contract and, if so, has Mr. Mutneja mitigated his damages? E. Was the Supplemental Agreement valid? F. Has RRA Trucking proven that Mr. Mutneja caused harm to it and, in particular, that he breached the non-solicitation clause in theSupplemental Agreement? G. Has Mr.

Mutneja proven his claim for mental harassment and reputation damages, such that aggravated damages should beawarded? H. Did RRA Trucking’s Reply and Counterclaim proceed through trial with no reasonable basis for success such that I may order RRATrucking should pay Mr. Mutneja up to 10% of its $35,000 Counterclaim under the Small Claims Rules? Authorities [26] Mr. Mutneja has provided me with the following cases: Damages arising from the early termination of fixed-term contracts: 1. Howard v. Benson Group Inc., 2016 ONCA 256 2. Neilson v. Vancouver Hockey Club Ltd., (BC CA), [1988] BCJ No. 584 (QL) 3. Payne v.

The Kimberley Academy Ltd., 2020 BCSC 506 4. Quach v. Mitrux Services Ltd., 2020 BCCA 25 Cause: 5. F.H. v. McDougall, 2008 SCC 53

6. George v. Cowichan Tribes, 2015 BCSC 513 7. McKinley v. BC Tel, 2001 SCC 38 8. Plester v. Polyone Canada, 2011 ONSC 6068 Aggravated and Punitive Damages: 9. Bhasin v. Hrynew, [2014] S.C.R. 494 10. Honda Canada Inc. v. Keays, 2008 SCC 39 , [2008] 2 S.C.R 362 11. Nazerali v. Mitchell, 2018 BCCA 104 12. O.W.L. (Orphaned Wildlife) Rehabilitation Society v. Day, 2019 BCSC 1900 Breach of Non-solicitation Clause 13. Genesis Fertility Centre v. Yuzpe, 2019 BCSC 233 [27] RRA Trucking provided the following cases: 1. Edward Jones v. Mirminachi, 2011 BCCA 493 2. Valley First Financial Service Ltd. v.

Trach, 2004 BCCA 312 3. 853947 BC Ltd. v. Source Office Furniture & Systems Ltd., 2016 BCSC 2233 4. National Bank Financial Inc. v. Canaccord Genuity Corp., 2018 BCSC 857 5. MacCormac Camp Caterers Ltd. v. Industrial Caterers Ltd., (BC CA) 6. Oswald v. Start Up SRL, 2020 BCSC 205 7. Animal Welfare International Inc. v. W3 International Media Ltd., 2013 BCSC 2193 8. Cotter v. Point Grey Golf and Country Club, 2016 BCSC 10. [28] I will refer to the relevant cases when discussing each of the issues. A. Did Mr. Mutneja and Mr.

Sran agree to repay the Mandatory Deductions to RRA Trucking from their February 2020 paycheques and does Mr. Mutneja continue to owe RRA Trucking for that money? [29] Mr. Sran testified that the $16,000 payment they each received from RRA Trucking was not a dividend. RRA was not bringing inenough revenue to pay dividends. The payment was salary. He said there was an agreement between them that their February 2020cheques would be reduced in order to pay the mandatory deductions for December and January salary payments. [30] Mr.

Mutneja maintained that the $16,000 cheque was a dividend and he claimed the payment as self-employment income on hisIncome Tax Returns for 2019 and 2020. He provided proof by way of his income tax documents. [31] A series of text messages was provided to the court in which Mr. Sran asked for Mr. Mutneja’s Social Insurance Number onJanuary 14, 2020, the same day as the cheque was issued. He also sent two text messages that attach copies of two paystubs – one for themonth of December 2019 and one for the month of January 2020. After deductions, each paystub shows a total of $5,883.86.

Mr.Mutneja said that he did not open those attachments because they appeared to be addressed to Mr. Sran. [32] Mr. Mutneja never did pay the difference between $8,000 and $5,883.86 to RRA Trucking. He testified that he found out aboutthe T4s that RRA Trucking had issued for that amount when he looked at his Canada Revenue Agency account in the course ofpreparing for the trial. [33] At paragraph 4(

b) of the Share Purchase Agreement, which was entered into subsequently, Mr. Sran, as the purchaser, agreedthat Mr. Mutneja had no liability or responsibility with respect to RRA Trucking. Mr. Sran agreed to indemnify Mr. Mutneja “againstany loss or damage sustained by . . . [Mr. Mutneja] directly or indirectly by reason of any liability of . . .[RRA Trucking] – whether suchliability existed before or after the Closing Date – including but not limited to any liability connected to employee and/or taxationmatters.” The Share Purchase Agreement is stated to be the whole agreement between Mr. Mutneja and Mr.

Sran regarding the purchaseand sale of the shares. [34] Under the terms of the Release Agreement, Mr. Sran and RRA Trucking released and discharged Mr. Mutneja “from any causesof action they may have for or by reason of or arising out of any cause, matter or thing whatsoever occurring or existing up to the date ofthese presents”. [35] RRA Trucking submits that under the BC Corporations Act, s. 70, that RRA Trucking could not have issued a dividend becauseit would have rendered RRA Trucking insolvent.

Section 70 reads as follows: 70. . .

(2) A company may declare or pay a dividend under subsection (1) (

b) unless there are reasonable grounds for believing that (

a) the company is insolvent, or (

b) the payment of the dividend would render the company insolvent. . . . . .

(4) A dividend is not invalid merely because it is declared or paid in contravention of subsection (2). [36] The BC Corporations Act governs decisions made within a corporation. Mr. Sran and Mr. Mutneja agreed to pay themselves$16,000 each, despite RRA Trucking’s cash flow issue. Subsection (4) is clear that the dividend would not be invalid even if it weremade in a situation of insolvency. Therefore, the BC Corporations Act, s. 70 is irrelevant to the issue at hand. [37] I find that the Release Agreement released and discharged Mr. Mutneja from any cause of action RRA Trucking or Mr.

Sran mayhave had against him, including any repayment of the Mandatory Deductions. Accordingly, whether there was an agreement or notbetween RRA Trucking, Mr. Sran, and Mr. Mutneja regarding reimbursement of the Mandatory Deductions, Mr. Mutneja was releasedfrom any obligation he may have had in that regard. B. Has Mr. Mutneja proven the amount owing to him under the Supplemental Agreement has not been paid? [38] There is really no dispute that Mr. Mutneja has not been paid the amount owing, $24,000, under the Supplemental Agreement.Mr.

Sran testified that he tried to pay him the monthly amount for February 2020, but Mr. Mutneja refused to accept it. Mr. Mutneja saidhe would not accept the payment for February 2020 because the Mandatory Deductions were deducted and it therefore was not in thecorrect amount. In the result, no payment has been made. [39] For the reasons above, I have rejected RRA Trucking’s submissions that the Mandatory Deductions for December 2019 andJanuary 2020 should come off of the February 2020 cheque. He has also not been paid for the time he worked in March 2020. C.

Was there consideration for the non-solicitation clause in the Supplemental Agreement? The Law regarding employment terms entered into after commencement of employment [40] In National Bank Financial, two employees of the Plaintiff commenced employment and signed an employment agreement withthe Plaintiff. A few days later, one of the employees signed a document indicating that he would “accept to read” the Plaintiff’s Code ofConduct and Ethics. The second employee was asked to sign an employment contract with a 2 year non-solicitation agreement about amonth after he started working.

The Court found that there was no consideration for the additional terms. The Court relied on the case ofHobbs v. TDI Canada Ltd, (ON CA), [2004] O.J. No. 4876, and found: [41] In reaching this conclusion, Rosenberg J.A. was careful to distinguish Francis, as well as a decision of the British Columbia Courtof Appeal to the same effect: Watson v. Moore Corp. (1996), (BC CA), 21 B.C.L.R. (3d) 157.

He wrote at para. 26: Where there is no clear prior intention to terminate that the employer sets aside, and no promise to refrain from discharging for anyperiod after signing the amendment, it is very difficult to see anything of value flowing to the employee in return for his signature. Theemployer cannot, out of the blue, simply present the employee with an amendment to the employment contract, say, ‘sign or you’ll befired’ and expect a binding contractual amendment to result without at least an implicit promise of reasonable forbearance for someperiod of time thereafter.

Analysis and Decision [41] This issue was not strongly argued by Mr. Mutneja. Certainly the Supplemental Agreement was signed after Mr. Mutnejabecame an employee with RRA Trucking on February 1, 2020. However, it was not clear from the evidence whether or not they hadverbally agreed to that term before Mr. Mutneja had commenced work as an employee. Mr. Mutneja had the agreement changed and hepresented it to Mr. Sran for RRA Trucking’s acceptance on February 5, 2020, the same date that Mr. Sran signed the Share PurchaseAgreement. Mr.

Mutneja had signed the Share Purchase Agreement on January 28, 2020. [42] In my view, on a balance of probabilities, the parties had agreed to the non-solicitation clause prior to February 1, 2020 andfinalized it in the by way of the Supplemental Agreement on February 5, 2020. D. Has RRA Trucking proven on a balance of probabilities that they had cause to terminate the Supplemental Agreement?

The Law regarding Termination for Cause [43] Where cause for termination is alleged by an employer, the onus is on the employer to prove that there was cause on a balance ofprobability. [44] In the George decision, the plaintiff was an employee of the Cowichan Tribes. The Cowichan Tribe dismissed her withoutnotice. With the exception of two or so years, when she obtained her high school diploma and a social work degree, Ms. George wasemployed by the Cowichan Tribes between 1980 and 2013. Throughout her career she had been an exemplary employee.

However, shewas a functioning alcoholic and had an altercation at a pub. A complaint was made to the Cowichan Tribes by the person on the otherside of the altercation. [45] After noting Justice Wong’s decision of Ogden v. Canadian Imperial Bank of Commerce, 2014 BCSC 285, at paragraph 216, inwhich Justice Wong states that dismissal for cause is referred to as the “capital punishment” of employment law and “only the mostegregious misconduct can justify it”, Justice Skolrood summarizes the Supreme Court of Canada’s decision in McKinley v. BC Tel, 2001

SCC 38 as follows: [112] Two key principles emerge from McKinley:

a) in considering whether cause has been established, the court must engage in a contextual analysis of all of the relevant facts and circumstances; and

b) the objective of the contextual analysis is to determine whether the misconduct is such that it has led to a breakdown of the employment relationship or is otherwise irreconcilable with the continuation of that relationship. [ 46 ] In the George case, the Court found that there was not sufficient cause for

summary dismissal of Ms. George. It was an isolated incident, away from work and wholly out of character. The Cowichan Tribes failed to establish the reasons they relied upon to dismiss her summarily, failed to follow the principle of proportionality, and failed to strike a balance between the misconduct and the sanction. [ 47 ] In Plester , the Plaintiff made a serious error at work and then failed to report his error, despite a clear corporate policy of which he was well aware. He had been employed at Polyone for 17 years and was a line supervisor.

He was a good employee with a limited record of past discipline. He was summarily dismissed. [ 48 ] At paragraph 33, the court summarizes the McKinley test as a three step analysis. The court must consider: 1. The nature and extent of the misconduct; 2. The surrounding circumstances for both employer and employee; and 3. Whether the dismissal was warranted as a proportional response. [ 49 ] In that case, the court found that both the conduct and the failure to report were serious. The court compared other similar incidents that had occurred at Polyone and found that Mr.

Plester’s dismissal was not in keeping with other disciplinary actions. The Court determined that he was entitled to notice, as well as vacation pay and lost group benefits. Analysis and Decision [ 50 ] On March 6, 2020, Mr. Sran, on behalf of RRA Trucking, summarily dismissed Mr. Mutneja when he wrote a letter, the (“Termination Letter”) to Mr. Mutneja informing him that his employment with RRA Trucking was terminated for cause, effective immediately. The cause alleged in the letter is as follows: Your employment contract has been terminated because you were in gross violation of company policy.

Your lack of professionalism in handling confidential information related to our company and verbalization of threats to harm the company’s assets have forced us to make this decision. Your coworkers have repeatedly reported your threatening behaviour towards them by refusing to collaborate and causing severe disruption in the workplace. Moreover, your disputes with colleagues have further worsened the situation and have resulted in a negative and mentally disturbing workplace.

To maintain the safety of our employees and to immediately stop the damage, you are continuously causing our company; we have decided to terminate your employment. This decision is not reversible. We wish you good luck with your future endeavors. [ 51 ] In both the Termination Letter as well as its Reply and Counterclaim, RRA Trucking alleged many reasons why Mr. Mutneja was terminated for cause. The Termination Letter is not particularly specific, but it was fleshed out during cross-examination of Mr. Sran. [ 52 ] Mr. Sran was questioned regarding RRA Trucking’s company policy.

He stated that there was one in place about respectful workplaces, but acknowledged it was not produced at trial or provided in disclosure to Mr. Mutneja, despite the order for disclosure of all documents by January 31, 2022, made by Judge Albert in this matter on December 7, 2021. [ 53 ] With respect to the allegation that Mr. Mutneja lacked professionalism in handling confidential information, Mr. Sran said that he did make a note, which again was not produced under Judge Albert’s order or at trial. [ 54 ] Mr.

Sran was also questioned about RRA Trucking’s claim that there were repeated complaints from co-workers about Mr. Mutneja’s threatening behaviour. He said that he wrote it down in his journal, which was also not produced. However, he testified specifically only about one incident, which occurred on February 5, 2020. [ 55 ] Finally, when asked about the statement that RRA Trucking terminated Mr. Mutneja to “immediately stop the damage” his behaviour he was causing RRA Trucking, Mr. Sran said it referred to his understanding that Mr.

Mutneja was planning to start his own company and bring RRA Trucking’s sales down. [ 56 ] I will deal with each of the allegations individually. Failure to Train the New Dispatchers [ 57 ] The Supplemental Agreement specifically states that Mr. Mutneja will be employed for the three months as a dispatcher. There is no mention of Mr. Mutneja’s responsibilities for training the new dispatchers. The Termination Letter as well makes no reference to Mr. Mutneja’s deficiencies in training the new dispatchers. [ 58 ] In RRA’s Counterclaim, RRA Trucking says that Mr.

Sran “signed the Release [Agreement] on behalf of the Defendant [RRA

Trucking] on the understanding that the Claimant would train new staff hired by the Defendant as dispatchers . . .” and that the “Claimant failed or refused to properly train the Defendant’s new employees as dispatchers.” Mr. Sran gave similar evidence in his testimony at court, stating that he spoke to Mr. Mutneja about it. He conceded that Mr. Mutneja was doing a good job as a dispatcher. His complaint was that he refused to pass his skills onto the new dispatchers. [ 59 ] Mr. Amandeep Arya, who testified on behalf of Mr. Mutneja, said that Mr. Muteja was to train him in dispatch and he felt that Mr.

Mutneja had done a good job of that. He said that Mr. Sran had fired him due to lack of punctuality after Mr. Mutneja left, although Mr. Arya felt he was punctual. He disagreed that he was fired because of his lack of production. [ 60 ] Mr. Sran himself did not know much about dispatching and was learning that part of the business himself. He admitted it was not in his expertise to train the new dispatchers. [ 61 ] As of March 6, 2020, Mr. Mutneja had only been working with the two new dispatchers for a little more than a month. Mr. Arya was still on probation and it is fair to assume that Mr. Lail was as well.

Mr. Sran felt that, based on Mr. Mutneja’s experience as a dispatcher, one month would had been sufficient time to train the new dispatchers, although his evidence was that no deadline had been set. There was no evidence that Mr. Mutneja’s failure to adequately train the new dispatchers was discussed with him prior to his termination. [ 62 ] I find that Mr. Mutneja was hired as a dispatcher for the three month term because RRA would not have been as viable without him as a dispatcher.

Instructing the new dispatchers may have naturally taken place when he was working with them, but it was not part of his stated duties in the Supplemental Agreement. There is no ambiguity in the Supplemental Agreement and RRA Trucking has not argued fraud, duress or mutual mistake. Therefore no reason to consider the parol evidence provided by Mr. Sran. [ 63 ] The fact that the Termination Letter does not mention his failure to train as one of the causes for termination leads me to find that failure to train the new dispatchers had no bearing on his dismissal at that time he was terminated. Mr.

Mutneja Verbally Threatened and Insulted Fellow Employees of RRA Trucking [ 64 ] Mr. Sran further testified that on February 5, 2020, he was told of an argument between Mr. Mutneja and one of the new dispatchers, Harmanjot Singh Lail. Mr. Lail has since passed away. [ 65 ] The alleged argument occurred at a time when Mr. Sran was not in the office. Only Mr. Mutneja and the two new dispatchers, Mr. Lail and Mr. Arya were. They were arguing when Mr. Sran returned to the office, but it quieted down. He testified that Mr. Arya reported that Mr. Mutneja was physically pushing Mr. Lail. Mr.

Sran said he was going to have to “write it up” because it had become physical. [ 66 ] On February 7, 2020, Mr. Sran testified that he provided Mr. Mutneja with a disciplinary notice of the same date which states: This letter is further to our meeting held on February 5, 2020. The purpose of this meeting was to investigate complaints of assault reported by Harmanjot Singh Lail and Amandeep Singh Arya, employees of RRA trucking [sic] on February 5, 2020. During the meeting, you admitted that you were involved in initiating an altercation with Harmanjot.

You confirmed that the altercation happened due to Harmonjot asking you questions about loads and paperwork. You also admitted that during this altercation, you mentioned to him that you are not scared of Gursewak [Mr. Sran]. If you want, you can bring our company down to only 3 trucks (company-owned) and take all owner-operators with you to a new company. You have acknowledged that this was said in the heat of argument between you and Herman.

Taking all factors into consideration and your past verbal warnings, I have determined that you will receive a written warning, and a letter will be placed on your employee file as a record that this behaviour is unacceptable. I will not endorse any such misbehaviour again, which can ruin the reputation of our company in the worst possible way. A repeat of this or other inappropriate behaviour may result in further disciplinary action up to and including termination. [ 67 ] The disciplinary letter was not signed by Mr. Mutneja. [ 68 ] Mr. Sran testified that there had been continual verbal warnings to Mr.

Mutneja regarding the constant arguments between him, Mr. Lail, and another part-time employee. He said that Mr. Mutneja had acknowledged the conflict on February 5, 2020. When he gave the letter to Mr. Mutneja on February 7, 2020, he said that Mr. Mutneja simply said, “If that’s what it is, that’s what it is”. [ 69 ] Mr. Sran further testified that after the meeting on February 7, 2020, Mr. Mutneja told Mr. Lail that he had “got written up” and Mr. Lail told him he deserved it. Mr. Sran said that he was informed of this exchange by Mr. Lail and Mr. Arya. Mr. Sran told Mr.

Lail it was inappropriate and he should apologize. [ 70 ] Messages from RRA Trucking’s WhatsApp Group from February 7, 2020, show that Mr. Lail apologized to Mr. Mutneja for his actions that day, said he needed to work on his own anger management skills, and asked Mr. Mutneja for forgiveness. Mr. Sran thanked Mr. Lail for the apology and Mr. Mutneja responded, “Its ok. Take care”. [ 71 ] Mr. Mutneja’s version of events is quite different. Mr. Mutneja stated that he and Mr. Sran had a meeting on February 5, 2020, in order to have the Supplemental Agreement signed.

He said they used to have regular meetings about work, but the only specific topic in this meeting was the Supplemental Agreement. There was no mention of disciplinary actions, nor had there been any assaults of other employees. He said that there was no discussion of his conduct at the meeting at all. [ 72 ] He stated that he never received the letter from Mr. Sran on February 7, 2020. He said he had gotten into a verbal argument with Mr. Lail, who had used “bad words” towards him on February 7, 2020. The February 7, 2020, WhatsApp conversation was Mr. Lail’s apology to him. Mr.

Mutneja said that he had discussed the argument with Mr. Sran, but was not very concerned. The apology resolved

the issue. [ 73 ] Mr. Arya testified that while he was working at RRA Trucking, he interacted with Mr. Mutneja every day. He did not interact with Mr. Sran very often because Mr. Sran was seldom in RRA Trucking’s office. On February 5, 2020, Mr. Arya was working at RRA Trucking, but he did not recall any interaction between Mr. Mutneja and Mr. Lail at that time. He also denied making any allegation of harassment against Mr. Mutneja. [ 74 ] There is no proof that there was an altercation in RRA Trucking’s office, other than Mr.

Sran’s hearsay evidence and the disciplinary letter that was neither signed nor acknowledged in any way by Mr. Mutneja. While Mr. Arya’s evidence was not very convincing, he corroborated Mr. Mutneja’s evidence to some extent and the hearsay evidence Mr. Sran relied upon came from Mr. Arya himself. [ 75 ] Further, the Supplemental Agreement regarding the terms of employment was signed on February 5, 2020, apparently at the same meeting where Mr. Sran told Mr. Mutneja he would have to “write it up”. The Supplemental Agreement does not have any mention of Mr.

Mutneja’s behaviour or an agreement to correct it. [ 76 ] Given the lack of evidence, I find that Mr. Sran has not proven he gave Mr. Mutneja the disciplinary letter on February 7, 2020, and I find that the altercation between Mr. Lail and Mr. Mutneja, if there was one, did not arise to the seriousness alleged by Mr. Sran on behalf of RRA Trucking. [ 77 ] Even if I am wrong, the incident complained of by RRA Trucking occurred a month prior to Mr. Mutneja’s termination and, according to Mr. Sran, was dealt with by way of the disciplinary letter. There was no further evidence of later altercations involving Mr.

Mutneja and other RRA Trucking staff between February 5, 2020 and March 6, 2020, other than Mr. Sran’s comment that they were like cat and dog. Therefore, the alleged on-going disputes were not a ground for termination. Allegation that Mr. Mutneja failed to distribute loads among the drivers equitably [ 78 ] There was no evidence provided regarding the allegation that Mr. Mutneja failed to distribute loads evenly. The allegation was not specifically mentioned in the Termination Letter and it was apparently never brought to Mr. Mutneja’s attention while he was employed with RRA Trucking. [ 79 ] Mr.

Mohan Singh Sahota gave evidence on behalf of RRA Trucking. He has significant experience in the trucking industry. He has been in the industry since 1992 and is currently an owner operator with RRA Trucking. [ 80 ] Prior to October 2019, he worked for the former employer as an owner operator for nine months, during which time Mr. Mutneja was the dispatcher. Mr. Sahota spoke quite highly of Mr. Mutneja’s skills as a dispatcher. In fact, he found him so skilled that when Mr.

Mutneja offered to pay him 10% rather than the 12% he was receiving, he decided to leave the former employer and join RRA Trucking when offered a contract. He trusted that Mr. Mutneja would help make him more money. [ 81 ] He testified that eight to ten other drivers also joined RRA Trucking from the former employer. He said that Mr. Mutneja was “nicely behaved” at the former employer’s business, and that, when they worked together at RRA Trucking, Mr. Mutneja acted in a friendly manner towards him. [ 82 ] Mr. Sran testified that some truck drivers left RRA Trucking stating that Mr. Mutneja was rude to them.

Again, this was hearsay evidence and I place no weight on Mr. Sran’s evidence regarding this allegation. Accordingly, I cannot find that unequal distribution of loads amounted to cause for termination. Allegation that Mr. Mutneja attempted to sabotage the purchase of a trailer by RRA Trucking [ 83 ] Mr. Sran gave evidence that RRA Trucking wished to purchase a trailer from one of the owner operators, Santok Singh, who had followed Mr. Mutneja from the former employer. He said that Mr. Mutneja interfered with the purchase of the trailer by telling Mr.

Singh that he wanted to buy it from him and not to sell it to RRA Trucking. He had learned it was for sale and that RRA Trucking wished to purchase it in early 2020. Mr. Mutneja denied that conversation with Mr. Singh. He said that Mr. Singh was still an employee of RRA Trucking in March when he was terminated. [ 84 ] Again, Mr. Sran did not produce Mr. Singh as a witness and all evidence led with respect to the trailer was hearsay. There was no admissible evidence that Mr. Mutneja interfered in that purchase. Allegation that Mr.

Mutneja breached the non-solicitation clause in the Supplemental Agreement Law regarding Breach of Non-solicitation Clause [ 85 ] In Genesis, the plaintiff was an incorporated fertility clinic with four principle shareholders who were all doctors. Three of the shareholders determined that they could no longer work with the fourth shareholder and, under the terms of the shareholders’ agreement, their shares were purchased by the remaining shareholder.

The departing shareholders continued to be employees, directors and officers of Genesis for the sixty days after the remaining shareholder gave notice of her intention to buy them out and before the purchase closed. Under the terms of the agreement, the departing shareholders could not see patients other than those at Genesis during that time. [ 86 ] Once the remaining shareholder gave notice of the buyout, the departing shareholders began to make plans to establish a new clinic at which they would provide the same types of services as they had at Genesis.

In doing so, ten Genesis employees signed employment contracts with the new company or the departing shareholders. [ 87 ] The departing shareholders incorporated a new company and set up a temporary office in the same building as Genesis was located. They also sent out an announcement to referring physicians that they were continuing their clinical practices at the new location

and booking patients, effective immediately. The court found that they did not see patients until after the 60 days had expired. [ 88 ] The Court placed some weight on the rights of patients to choose their physician and their right to be notified of where their physician’s practice had moved. However, the Court found that the departing shareholders did not provide medical services through the new company within the 60 day period and the notice to referring physicians was not sent out until two weeks before the 60 day period had ended. No patients were booked in until after the 60 day notice.

The departing shareholders were entitled to secure premises in which to continue their practice prior to the end of the 60 day period. [ 89 ] The Court also found that the employees who left Genesis to move to the new clinic did sign contracts with the departing shareholders prior to the expiration of the 60 day period, but they did so of their own volition because they wanted to work with the departing shareholders and were concerned about Genesis’ viability. They had not been solicited away by the departing shareholders.

Analysis and Decision [ 90 ] The non-competition clause in the Supplemental Agreement meant that Mr. Mutneja could not solicit RRA Trucking’s employees to work for him before July 31, 2020. Mr. Mutneja testified that he did not hire anyone from RRA Trucking during that time. [ 91 ] There are five occurrences that RRA Trucking relies upon to establish the allegation that Mr. Mutneja breached the non- solicitation clause. 1. The Telephone Call [ 92 ] In its Counterclaim, RRA Trucking said that it became aware on March 5, 2020, that Mr.

Mutneja “stated that he intended to approach employees and drivers of the Defendant through a third party to lure them to work for him at a new business he was establishing”. [ 93 ] RRA Trucking led evidence that on that day, Mr. Mutneja had private conversation on his cell phone while in the yard of Mr. Sran’s home, which was also the location of RRA Trucking’s office. Mr. Sran overheard Mr. Mutneja’s side of the conversation when he went out to get something from the tool shed.

After the conversation, he returned to his house and obtained the surveillance video and audio recordings from his security system in order to obtain more information about the telephone call. [ 94 ] I did not allow Mr. Sran to put the recording into evidence because neither Mr. Mutneja nor the unknown other party to the conversation had consented to the call being recorded. In fact, it was Mr. Sran’s evidence that Mr. Mutneja did not know that he was in the shed. A transcript of the call was translated and entered as an exhibit, but as I said at trial, I am putting no weight on the transcript. Mr.

Sran made no attempt to find out who Mr. Mutneja was speaking to and he never asked Mr. Mutneja about the call. Mr. Mutneja denied knowing who he was speaking to on his cell phone and said he did not recall the conversation. [ 95 ] Mr. Sran was able to testify as to what he had overheard. Mr. Sran said that he overheard Mr. Sran say words to the effect that he was going to bring over the owner operators from RRA Trucking. He acknowledged he was restricted from doing so, but felt his partner would not be. Mr. Sran said he was frustrated and, in his view, Mr.

Mutneja was not asking the unknown person for advice. [ 96 ] I can put little weight on the reliability of this evidence from Mr. Sran. The person on the call with Mr. Mutneja is unknown. He could have been asking for advice and if it were advice from a lawyer it could be privileged. Alternatively, Mr. Mutneja could simply have been blowing off steam. [ 97 ] Nothing concrete came about as a result of the call. There was no proof that Mr. Mutneja solicited the operators and no proof that he had an operational company. There was evidence from both parties and Mr.

Sahota that setting up a trucking company takes time. 2. The Text Messages with Mr. Ali Askar [ 98 ] As part of this allegation, Mr. Sran also produced text messages between Mr. Ali, a driver who drove one of Mr. Sran’s trucks for RRA Trucking, and Mr. Mutneja. Mr. Sran provided hearsay evidence from Mr. Askar that Mr. Mutneja had called Mr. Askar and offered him a job. Mr. Sran said that he did not take any notes of this conversation because he spoke to Mr. Askar over the telephone. Mr. Askar did not tell him the name of any company offering to hire him. RRA Trucking did not disclose the text messages to Mr.

Mutneja prior to trial and Mr. Sran said he did not believe he had to despite the disclosure order. [ 99 ] Mr. Mutneja testified that in June 2020, he received a text dated May 24, 2020, from Mr. Ali Askar, who had worked with Mr. Mutneja at RRA Trucking. Mr. Askar said he had had a difficult time trying to find Mr. Mutneja’s contact information. Mr. Askar said that he had a friend in Alberta that was looking for work and asked if Mr. Mutneja knew of anyone hiring. Mr. Mutneja testified that he told Mr. Askar to wait a few days and he would ask. At some point after that, Mr. Mutneja sent Mr.

Askar a photo of a truck with the caption, “This is the truck if your friend wants to drive it.” [ 100 ] Given that Mr. Mutneja’s evidence is consistent with the text messages and all of Mr. Sran’s evidence is hearsay, I accept Mr. Mutneja’s rendition of the facts. 3. Mr. Sahota’s Evidence [ 101 ] Mr. Sahota said that Mr. Mutneja quit the company in January 2020. He told the people who came over from the former employer that he was going to start a new company and they could come over to join him. Mr. Sahota candidly admitted that he did not know at that time that he would have to testify at court.

He did not recall when Mr. Mutneja made this statement. He believed that Mr. Mutneja spoke about this numerous times, but did not recall the month, except he thought the conversations occurred in April or May 2020. [ 102 ] Mr. Mutneja offered him employment at his new business, told him he would run it better than RRA Trucking, and said the

drivers from the former employer would come with him too. [ 103 ] Mr. Sahota also testified that Mr. Mutneja asked him if he knew if there was an existing company for sale. Mr. Sran explained that it was easier to start a trucking business using the name of an existing company because the cost of insurance was less. Mr. Sahota said he told Mr. Mutneja that he had registered a trucking company in Alberta that he could give him. However, Mr. Mutneja never did obtain the existing company from Mr. Sahota. [ 104 ] Mr. Sahota did not know the name of any company that Mr. Mutneja operated.

At one point he received a telephone call from Mr. Mutneja from “Standard something” which I find was Standard Freight and Trucking, Mr. Mutneja’s employer starting in the last week of July. 4. Four owner operators leave the employ of RRA Trucking [ 105 ] Mr. Sran testified that, of the six owner operators who left the former employer to work with RRA Trucking, Mr. Sahota was the only one who remained. He said that one left to go into a different line of work, but four of them left in May 2020. Mr. Sran said that the four who left told him they were putting their trucks in Mr.

Mutneja’s new company, but he did not follow up with them and he did not know the name of the company they went to. He took no steps to confirm where they went and I am left with only Mr. Sran’s hearsay evidence. 5. RRA Trucking’s’ decline in income [ 106 ] Mr. Sran produced RRA Trucking’s financial statement which indicated a loss of income starting in April 2020. He said that he had to park his own trucks to keep the owner operators busy. He attributed the decline in income to Mr. Mutneja’s actions, although he conceded that the owner operators may have doubted RRA Trucking’s ability to keep them busy once Mr.

Mutneja left the company. [ 107 ] There are issues with Mr. Sran’s evidence on this point. Firstly, it is all based on hearsay. RRA Trucking did not call any of the departing owner operators as witnesses and so I must disregard his hearsay evidence of what he was told by the four departing owner operators. [ 108 ] Secondly, the reasons for the reduction in corporate income is based purely on speculation by Mr. Sran. He provided no link between Mr. Mutneja’s actions and the reduction income, which was more than likely a result of RRA Trucking’s termination of Mr. Mutneja.

Analysis and Decision regarding the nature and extent of Mr. Mutneja’s misconduct [ 109 ] The fact that Mr. Mutneja, in a telephone call to an unknown person, suggested that an unknown partner could solicit owner operators away from RRA Trucking Ltd. during the time that the non-solicitation clause was in effect is not sufficient evidence to prove breach of the non-solicitation clause. Mr. Mutneja had the right to plan his own future and to obtain advice. The non-solicitation period only lasted until the end of July and Mr. Mutneja was clearly not someone who could live without a paycheque for a long time.

I find that Mr. Mutneja’s actions were no more than planning ahead, much like the departing shareholders in the Genesis decision. Accordingly, I do not find that the telephone call was proof that Mr. Mutneja was in breach of the non-solicitation clause. [ 110 ] With respect to the text messages with Mr. Askar, I accept Mr. Mutneja’s version of events. The text messages do not persuade me that Mr. Mutneja was in breach of the non-solicitation clause. [ 111 ] Finally, with respect to Mr.

Sahota’s evidence, I note that the non-solicitation clause contained in the Supplemental Agreement was not signed until February 5, 2020. His employment with RRA Trucking started February 1, 2020, but, as Mr. Sahota stated, he announced his intentions to leave in mid-January 2020. Mr. Sahota’s evidence is consistent with Mr. Sran’s evidence of the reports from other owner operators that Mr. Mutneja was going to leave and form his own company. In fact, that was the reason that Mr. Sran insisted on adding the non-solicitation clause to the Supplemental Agreement. [ 112 ] Mr.

Sahota’s recollection of conversations taking place in April or May 2020, centred on Mr. Mutneja’s desire to purchase a trucking company. Mr. Mutneja denied calling Mr. Sahota before May 2021. But even if Mr. Sahota recalled the dates correctly, Mr. Mutneja only made comments that he would hire him at the new company. There was no company to Mr. Sahota’s knowledge. Planning for his future was not a breach of the non-solicitation clause. Analysis and Decision regarding the surrounding circumstances [ 113 ] I will now consider the surrounding circumstances at the time that Mr.

Mutneja’s employment was terminated. [ 114 ] Mr. Mutneja was instrumental as a dispatcher for RRA Trucking and, without him as a dispatcher, the viability of RRA Trucking was threatened. [ 115 ] While RRA Trucking needed him, the relationship between Mr. Sran and Mr. Mutneja had broken down completely. Mr. Sran was hopeful that Mr. Mutneja would train the new dispatchers, who were learning at a pace that was slower than Mr. Sran would have liked. Mr. Sran was concerned that, having reaped the benefit of Mr.

Mutneja’s skills and contacts, the rug could be pulled out from under his feet because of the owner operators’ confidence in Mr. Mutneja. [ 116 ] On the other hand, RRA Trucking was doing well financially, a non-solicitation clause was in place, and Mr. Mutneja was performing his duties as a dispatcher well. There was little persuasive evidence of the allegations made by Mr. Sran and most of the allegations were not substantiated except through hearsay. [ 117 ] Taking all of the surrounding circumstances into account, I cannot come to the conclusion that RRA Trucking had cause to summarily terminate Mr. Mutneja.

Analysis and decision regarding the proportionality of RRA’s actions [118] Finally, I must assess whether Mr. Mutneja’s dismissal was warranted as a proportional response to the circumstances. [119] RRA Trucking had options available to it other than summarily dismissing Mr. Mutneja. For instance, Mr. Sran’s evidence wasthat he had given a disciplinary letter to Mr. Mutneja and that appeared to have had a positive effect on the relationships within the officein that there were no further physical altercations. [120] Mr.

Sran could have investigated his concerns further with respect to the non-solicitation clause, such as asking who Mr. Mutnejawas speaking to, obtaining further information from the owner operators, or speaking to Mr. Mutneja himself. He did not do so. [121] Finally, RRA Trucking could have terminated Mr. Mutneja’s contract and paid him for the full term of the contract. [122] Accordingly, I find that, even if some of Mr. Sran’s allegations were true, there were other avenues he could have taken anddismissing Mr. Mutneja in the fashion he did was not proportionate. E.

Is there a duty to mitigate under a fixed term employment contract and, if so, has Mr. Mutneja mitigated his damages?

Law Regarding Damages Arising from the early termination of fixed-term contracts [123] In the Howard case, the only issue was whether “an employee who is employed under a fixed term employment contract that doesnot provide for early termination without cause is entitled to payment of the unexpired portion of the contract on early termination of thecontract”: para. 3. [124] The Ontario Court of Appeal held that an employee is entitled to the contractual sum in the amount equal to their salary andbenefits for the unexpired term of the employment contract in that situation: para. 4. [125] The Quach decision of the BC Court of Appeal summarizes the law in British Columbia regarding the duty to mitigate under afixed term contract from paragraph 36 to 41: [36] The leading authority in British Columbia in a Howard sort of situation, however, is Neilson v.

Vancouver Hockey Club Ltd. (1988), (BC CA), 51 D.L.R. (4th) 40, (B.C.C.A.), not referred to in either Howard [Howard v. Benson Group Inc. (TheBenson Group Inc.), 2016 ONCA 256, leave to appeal ref’d [2016] S.C.C.A. No. 240] or Bowes [Bowes v. Goss Power Products Ltd.,2012 ONCA 425]. Rather than approaching the damages issue from the singular question whether the contract is for a fixed term, asHoward does, Neilson distinguishes between a fixed-term contract without a termination clause and a contract with a termination clauseproviding for payment of a fixed amount.

Observing that employment law is governed by the law of contract, Mr. Justice Seaton inNeilson closely analyzed the status of the contract once the employee is refused continuing employment. He observed that theemployee’s action then is for damages, not remuneration, and that the employee is not entitled to treat the contract as subsisting. JusticeSeaton then turned to the issue of mitigation.

Without resolving whether there is a duty to mitigate, an issue on which there areconflicting authorities based on competing theories, Justice Seaton concluded that unless the contract provides otherwise, the employerderives the benefit of mitigation, even in a fixed-term contract. For this conclusion, he relied on Cockburn v. Trusts & Guar. Co. (1917), (SCC), 55 S.C.R. 264, 37 D.L.R. 701, which held at 703 that even where an employee is under no duty to mitigate, “theactual diminution of his loss may be taken into account”. After referring to Br. Westinghouse Elec. & Mfg. Co. v. Underground Elec.

Ry.Co. of London, [1912] A.C. 673 (H.L.), Justice Seaton stated the general principle that applies in British Columbia: [14] On this question I conclude that whether or not the plaintiff was bound to mitigate is irrelevant.

He cannot recover for avoided lossin any case. [37] At the same time as stating the general principle applicable to contracts that do not have fixed provisions for termination, JusticeSeaton recognized that the parties can agree to a term that compels a different result on the effect of mitigating earnings, referring to acontract that “may provide otherwise”. [38] Neilson has been followed by this court in Mosher v. Epic Energy Inc., 2001 BCCA 253, and Alsip v. Top Rollshutters Inc. dbaTalius, 2016 BCCA 252. In addition, Neilson was relied upon by Justice Major in Wells v.

Newfoundland, (SCC),[1999] 3 S.C.R. 199 at para. 65, for the proposition that in a contractual claim, whether arising from a fixed-term contract or not, theusual rules of mitigation of damages apply. [39] The result of these authorities, in my view, is that in British Columbia, on the authority of Neilson, the fixed-term nature of acontract does not entitle the employee to damages in the full amount of unpaid wages for the balance of the term without deduction ofmonies earned elsewhere during the term, absent a provision otherwise.

In this way Neilson is at odds with Howard but not Bowes. [40] I mention all of this lest the judge’s reference to Howard, and our silence on it, be taken as agreement with the conclusion that in allcases of fixed-term contracts, mitigation of damages may not be considered. Instead, I suggest the jurisprudence is to the effect thatconsideration of mitigated damages will depend on the particular termination provisions of the contract at issue. [41] In this case, of course, the contractual language in clause 4.1(

b) expressly establishes the amount of the payment owing to theemployee by the employer immediately upon termination of the employment by the employer.

For that reason, and applying the notionof “otherwise provided” allowed in Neilson, the judge’s conclusion that the employee is entitled to damages equal to one full year ofearnings provides the correct remedy under the Fixed-Term Contract. [126] Whether or not there is a duty to mitigate in the case of a fixed term employment contract, the burden of proving an employee hasfailed to mitigate rests on the employer and the onus is a heavy one: George, paragraph 230, citing Smith v. Aker Kvaerner Canada v.Kvaerner Power Inc., 2005 BCSC 117 at paragraph 32.

Analysis and Decision regarding Duty to Mitigate [127] RRA Trucking did not argue this issue very strongly. The onus is on RRA Trucking to prove that Mr. Mutneja failed to mitigatehis damages. I find that they have not met that onus. [128] Mr. Mutneja testified after he was terminated he tried to obtain work through his contacts but the COVID-19 restrictions that wentinto effect shortly after he was terminated made it difficult to find work. As a result, he was unemployed for close to four months, despitethe many calls he made.

In the last week of July 2020, after almost four months, he obtained a new position with Standard Truck andCrane as a dispatcher. [129] In May 2020, he incorporated his own company, Vik Logistics, but he testified it did not become operational until the beginningof May 2022. [130] The onus was on RRA Trucking to prove that Mr. Mutneja had failed to mitigate his damages on the balance of probabilities andthey have not met that hurdle. F. Has Mr. Mutneja proven his claim for mental harassment and reputation damages, such that aggravated damages should beawarded?

Law Regarding Aggravated and Punitive Damages [131] In Bhasin v. Hrynew, the Supreme Court of Canada surveyed the state of contract law in Canada and determine that: . . . there is an organizing principle of good faith that underlies and manifests itself in various more specific doctrines governingcontractual performance.

That organizing principle is simply that parties generally must perform their contractual duties honestly andreasonably and not capriciously or arbitrarily. [para. 63] [132] In Honda Canada, another decision of the Supreme Court of Canada, aggravated damages were available where the parties havecontemplated, at the time of the contract, that a breach in certain circumstances would cause the employee mental distress [para. 55].However, the normal distress that the loss of a job would cause is not compensable [para. 56].

At paragraph 57, the Court confirms that: [57] Damages resulting from the manner of dismissal must then be available only if they result from the circumstances described inWallace [Wallace v.

United Grain Growers Ltd., (SCC), [1997] 3 S.C.R. 701], namely where the employer engages inconduct during the course of dismissal that is “unfair or is in bad faith by being, for example, untruthful, misleading or undulyinsensitive” (para. 98). [133] The Court set out the difference between punitive and aggravated damages at paragraph 62: …Damages for conduct in the manner of dismissal are compensatory; punitive damages are restricted to advertent wrongful acts that areso malicious and outrageous that they are deserving of punishment on their own.

This distinction must guide judges in their analysis. [134] In Nazerali, a case regarding defamation, the BC Court of Appeal sets out that an award of aggravated damages should not exceedthe amount of general damages except for cases explicitly found to be extraordinary: para. 86. Citing Hill v.

Church of Scientology ofToronto, (SCC), paragraphs 191 and 192, the court found that aggravated damages were appropriate where the conductof the defamers was high-handed and caused the defamed humiliation and anxiety over and above that which he would naturally havesuffered as a result of being defamed. [135] Paragraphs 191 and 192 of Hill are as follows: [191] There are a number of factors that a jury may properly take into account in assessing aggravated damages. For example, was therea withdrawal of the libellous statement made by the defendants and an apology tendered?

If there was, this may go far to establishingthat there was no malicious conduct on the part of the defendant warranting an award of aggravated damages. The jury may also considerwhether there was a repetition of the libel, conduct that was calculated to deter the plaintiff from proceeding with the libel action, aprolonged and hostile cross-examination of the plaintiff or a plea of justification which the defendant knew was bound to fail. Thegeneral manner in which the defendant presented its case is also relevant.

Further, it is appropriate for a jury to consider the conduct ofthe defendant at the time of the publication of the libel. For example, was it clearly aimed at obtaining the widest possible publicity incircumstances that were the most adverse possible to the plaintiff? . . . . [192] In this case, there was ample evidence upon which the jury could properly base their finding of aggravated damages. The existenceof the file on Casey Hill under the designation "Enemy Canada" was evidence of the malicious intention of Scientology to "neutralize"him.

The press conference was organized in such a manner as to ensure the widest possible dissemination of the libel. Scientologycontinued with the contempt proceedings although it knew its allegations were false. In its motion to remove Hill from the search warrantproceedings, it implied that he was not trustworthy and might act in those proceedings in a manner that would benefit him in his libelaction. It pleaded justification or truth of its statement when it knew it to be false.

It subjected Hill to a demeaning cross-examination and,in its address to the jury, depicted Hill as a manipulative actor. [136] In O.W.L., Justice Walker found that there was never any basis for the Plaintiff’s claim that the Defendant received unauthorizedpayments and the Plaintiff’s claims were inconsistent with the evidence of its own witnesses. He found that the Defendant had provenher claim for wrongful dismissal. The Defendant in that case sought an order for special costs. [137] The Court set out that the

summary of Justice Gropper regarding the principles to be considered in awarding special costs inWestsea Construction Ltd. v. 0759553 B.C. Ltd., 2013 BCSC 1352, paragraph 73 as follows:

. . .

a) the court must exercise restraint in awarding specials costs;

b) the party seeking special costs must demonstrate exceptional circumstances to justify a special costs order;

c) simply because the legal concept of “reprehensibility” captures different kinds of misconduct does not mean that all forms of misconduct are encompassed by this term;

d) reprehensibility will likely be found in circumstances where there is evidence of improper motive, abuse of the court’s process, misleading the court and persistent breaches of the rules of professional conduct and the rules of court that prejudice the applicant;

e) special costs can be ordered against parties and non-parties alike; and

f) the successful litigant is entitled to costs in accordance with the general rule that costs follow the event. Special costs are not awarded to a successful party as a “bonus” or further compensation for that success. [ 138 ] Justice Walker also considered whether special costs and aggravated costs, both based on litigation conduct, would be double compensation to the Defendant and he reduced the total of special costs accordingly.

He awarded aggravated damages on the basis that the Plaintiff had inadequately investigated its claim that the Defendant had misappropriated funds, even in the face of its own documents. It had advanced unfounded claims until the end of trial. Analysis and Decision Regarding Aggravated Damages [ 139 ] I have been unable to find that Mr. Mutneja received any disciplinary notice prior to receiving the Termination Letter. When providing Mr. Mutneja with the Termination Letter, Mr.

Sran told him that he was not going to pay him for the month of February 2020 or for the days he had worked in March 2020, and he has not paid the amounts he acknowledged were due. I find that Mr. Sran was aware of Mr. Mutneja’s financial situation. [ 140 ] The Counterclaim made Mr. Mutneja feel distressed to the point he could not sleep many nights and he said he was anxious. He acknowledged that his reputation has not been damaged to his knowledge. [ 141 ] I also note that RRA’s reasons for termination changed as time passed.

The Termination Letter was vague and did not set out the same reasons for cause of termination as contained in the Reply and Counterclaim. [ 142 ] Considering the evidence as a whole, I find that the real reason for the termination was Mr. Sran’s suspicions arising from the overheard telephone conversation and his fear that the owner operators could easily be enticed away from RRA Trucking by Mr. Mutneja. RRA Trucking had been the recipient of Mr. Mutneja’s skills and ability to attract owner operators from the former employer, but Mr. Sran feared that they would also leave with Mr.

Mutneja. [ 143 ] However, the overheard telephone call was not proof that Mr. Mutneja was acting in breach of the non-solicitation clause. Mr. Mutneja had the right to put into motion his plans to set up his own company while waiting for the non-solicitation clause to expire. The owner operators had a right to go with Mr. Mutneja if they wished. [ 144 ] In my view, the Termination Letter was vague because Mr. Sran knew he did not have the required proof of cause for termination. Once Mr.

Mutneja filed his Notice of Claim, RRA Trucking sought to bolster its defence by filing the Reply and Counterclaim setting out different reasons for the termination. [ 145 ] Additionally, Mr. Sran recorded a private conversation that Mr. Mutneja had, without the consent of either party and without the knowledge of Mr. Mutneja. [ 146 ] Accordingly, I find that aggravated damages should be awarded to Mr. Mutneja in the sum of $8,000. G.

Did RRA Trucking’s Reply and Counterclaim proceed through trial with no reasonable basis for success such that I may order RRA Trucking to pay up to 10% of its $35,000 Counterclaim under the Small Claims Rules? The Law Regarding Rule 20(5) of the Small Claims Rules [ 147 ] Rules 20(5) and (6) set out: A judge may order a penalty (5)A judge may order a party to pay the other party up to 10% of the amount claimed or the value of the claim or counterclaim if the party made a claim, counterclaim or reply and proceeded through trial with no reasonable basis for success. Compensation for unnecessary expenses

(6) A judge may order a party or witness whose conduct causes another party or witness to incur expenses to pay all or part of those expenses. [ 148 ] In the decision in Fenelon v. Ford Motor Company of Canada , 2014 BCPC 287 , Judge Arthur-Leung considered Rules 20(5) and (6) in awarding a penalty against the Claimant in that case. At paragraphs 10 and 12, she states: [10] Legal fees are not recoverable in a Small Claims Court action; however, when a court action proceeds through this court process on a number of court appearances that continues to be frivolous and vexatious and without merit, despite judges and this court providing a

claimant extensions and opportunities to produce reports, an extension of deadlines to provide documentation, and repeated offers in writing from 2011 and 2012 free of charge to have a vehicle inspected, this is a misuse of the court process.

There is no expert report, no documentation, no evidence as to the value; no opinion or medical documentation to support a portion of the claim for emotional, medical pain and suffering, and psychological harm. . . . . [12] While I appreciate that everyone is entitled to their day in court and everyone is entitled to be heard, I am convinced that this is a very frivolous claim. I am convinced, and the facts support it, that Mr.

Fenelon has been afforded opportunity by many judges throughout this process of extension, additional time and, in fact, even a delay of a no evidence motion to allow him to present his claim, and all taking into consideration that he is self-represented and yet he proceeded to continue with his claim. [ 149 ] Judge Arthur-Leung ordered the claimant in that case to pay close to 10% of the claim ($2,500) to Ford Motor Company plus $1,000 to Dams Lincoln Mercury.

Analysis and Decision [ 150 ] Despite the order made by Judge Albert that both parties disclose the relevant documents for this case prior to January 31, 2022, there were multiple instances where documents were not disclosed until the day of trial as noted above. There were times where he said he had recorded events in notes, but had not provided the notes to Mr. Mutneja. [ 151 ] Mr. Sran did not provide proper evidence in multiple instances, instead relying on hearsay statements he said were made by others.

In fact, much of the pertinent evidence he provided was inadmissible hearsay. [ 152 ] As a result, none of RRA Trucking’s allegations were supportable on the basis of Mr. Sran’s evidence and, in my view, he proceeded through trial with no reasonable basis for the Counterclaim.

As a result of delays relating to lack of document disclosure and the production of hearsay evidence which did not support RRA Trucking’s Counterclaim, the trial that was originally set for five took seven days. [ 153 ] Additionally, none of the case law provided by RRA Trucking was relevant to the issues at hand, except for National Bank Financial. [ 154 ] Accordingly, I find that this is a case where Rule 20(5) is applicable and I find that RRA Trucking must pay a penalty to Mr. Mutneja in the sum of $3,500.

Summary [ 155 ] With respect to Mr. Mutneja’s Claim, I find that RRA Trucking owes him $24,000 in unpaid salary. RRA Trucking also owes him $8,000 in aggravated damages and $3,500 as a penalty under Rule 20(5). [ 156 ] RRA Trucking’s counterclaim is dismissed. [ 157 ] Any out of pocket expenses incurred by Mr. Mutneja are to be paid by RRA Trucking. I will leave it to counsel to determine those costs, with leave to bring the matter back before me if they are unable to do so. _____________________________ The Honourable Judge K.J. Ferriss Provincial Court of British Columbia