Pro Cabinet Design Limited Appellant And: Cristopher Lawis First Respondent And: Coastal Marine Limited Second Respondent, 2021 NLSC 63

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Pro Cabinet Design Limited v. Lawis , 2021 NLSC 63 Date : May 10, 2021 Docket : 201801G7646 Between: Pro Cabinet Design Limited Appellant And: Cristopher Lawis First Respondent And: Coastal Marine Limited Second Respondent Before: Justice David F. Hurley Judgment: Daniel M. Boone On Appeal From: A Decision of the Provincial Court of Newfoundland and Labrador, Small Claims Division, File # 2018 NLPC 0117 C00574, rendered October 15, 2018. Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: June 26, 2019

Summary: The Appellant appealed from the decision of a Small Claims Court judge awarding damages to the First Respondent for wrongfuldismissal. The Court found that the contextual

interpretation of the employment contract by the trial judge was a decision on a questionof mixed fact and law, and it was not shown to have been based on palpable or overriding error. Therefore, the appeal was dismissed. Appearances: Judy M. Manning Appearing on behalf of the Appellant Cristopher Lawis Appearing on his own behalfNo Appearance On behalf of the Second Respondent Authorities Cited: CASES CONSIDERED: Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53; Lawis v. Pro Cabinet Design Limited and CoastalMarine Limited (2018), 298 A.C.W.S. (3d) 91, 2018 CarswellNfld 376 (N.L. Prov. Ct.)); Nugent v.

Midland Doherty Ltd. (1989), (BC CA), 41 B.C.L.R. (2d) 249, 65 D.L.R. (4th) 694 (C.A.) STATUTES CONSIDERED: Judicature Act, R.S.N.L. 1990, c. J-4; Small Claims Act, R.S.N.L. 1990, c. S-16 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Boone, J.: INTRODUCTION [1] Cristopher Lawis is a Philippine national who worked in that country as a cabinet maker. He came to St. John’s as atemporary foreign worker under a federal immigration program. He was sponsored by Pro Cabinet Design Limited, the Appellant, alocal company. He signed an employment contract in July 2013.

The employment contract had a two-year term, starting from August11, 2014. Mr. Lawis worked for Pro Cabinet from that date until August 20, 2015 when Pro Cabinet terminated his employment. ProCabinet gave notice of termination to Mr. Lawis on August 13, 2015, citing lack of work. [2] Mr. Lawis performed most of his work for Coastal Marine Limited, a company affiliated with Pro Cabinet. [3] Mr. Lawis sued Pro Cabinet in Small Claims Court claiming damages for wrongful termination and for nonpayment of otheremployment benefits. In an oral judgment following trial, a Provincial Court Judge found in favour of Mr.

Lawis. The Provincial CourtJudge decided that Mr. Lawis’ employment contract was for a fixed term of two years and that Mr. Lawis was entitled to damages equalto the salary he would have earned from the date of his termination until the end of the term. The Provincial Court Judge dismissed theother claims. Mr. Lawis’ salary from the date of termination to the end of the contract term exceeded the $25,000 monetary limit ofSmall Claims Court, and therefore the Provincial Court Judge awarded him damages in that amount. [4] Pro Cabinet appeals from the judgment.

It says that the Provincial Court Judge erred in law in his

interpretation of theemployment contract because he failed to give any meaning to a one-week notice period referenced in the contract. [5] Mr. Lawis says that this Court can only overturn the decision if it was based on a palpable and overriding error made by thetrial judge. He says that the Provincial Court Judge did not make such an error. [6] The Appeal was heard by Justice David F. Hurley, who reserved his decision. Sadly, Justice Hurley passed away before hecould render his decision. The parties both applied to the Court for an Order pursuant to the Judicature Act, R.S.N.L. 1990, c.

J-4, s.32(1)(a), that the Appeal be reheard by another Justice of this Court. I granted this Order and the Chief Justice assigned me to rehear theAppeal. Having heard from the parties as to the manner of rehearing, I ordered, pursuant to the Judicature Act, s. 32(2), that I wouldrehear the matter by reviewing the Factum filed by each party, the transcript of one day of trial, the audio recording of the remainingdays of trial, and the audio recording of the Appeal hearing before Justice Hurley.

[7] I find that the

interpretation of the employment contract by the Provincial Court Judge was a question of mixed fact and lawfrom which no extricable error of law has been identified, and in respect of which no palpable or overriding error has been shown. Therefore, the Appeal is dismissed. ISSUES 1. What is the standard of review that this Court ought to apply to the

interpretation of the contract adopted by the Provincial CourtJudge? 2. Was the decision of the Provincial Court Judge based on reviewable error? ANALYSIS Standard of Review [8] The Small Claims Act, R.S.N.L. 1990, c. S-16, s. 14, provides that a party to a Small Claims proceeding may appeal to thisCourt from a judgment in that proceeding. [9] An appeal is not a retrial or a forum merely to seek a different opinion from the trial judge on the same evidence. The role ofthe appellate court is to review the initial decision on established standards of review.

The standard of review to be applied varies withthe nature of the error that the trial judge is said to have made. An error of law is reviewable on a standard of correctness. An error offact may only be overturned if it resulted from palpable and overriding error. The standard of review applied to a decision on a questionof mixed fact and law (which usually involves the application of a legal standard to a set of facts) is considered to fall along a spectrumdepending on whether the question is closer to a matter of fact or of law. [10] The Supreme Court of Canada in Creston Moly Corp. v.

Sattva Capital Corp., 2014 SCC 53, has definitively dealt with thequestion whether the

interpretation of a contract should on appeal be considered an issue of law or an issue of mixed fact and law. In sodoing, the court, at paragraph 50, rejected the traditional approach that

interpretation of a contract is invariably a question of law,reviewable on a standard of correctness: “With respect for the contrary view, I am of the opinion that the historical approach should beabandoned. Contractual

interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractualinterpretation are applied to the words of the written contract, considered in light of the factual matrix.” [11] Therefore, the standard of review on an appeal from a judgment interpreting a contract depends on where along the spectrumbetween pure law and pure fact a decision rests. In that regard, the Supreme Court in Sattva (at para. 55) noted that appellate courtsought to be careful generally, and particularly in contract

interpretation cases, in extricating pure questions of law from mixed questionsof fact: Although that caution was expressed in the context of a negligence case, it applies, in my opinion, to contractual

interpretation as well.As mentioned above, the goal of contractual

interpretation, to ascertain the objective intentions of the parties, is inherently fact specific.The close relationship between the selection and application of principles of contractual

interpretation and the construction ultimatelygiven to the instrument means that the circumstances in which a question of law can be extricated from the

interpretation process will berare. … [12] One of the primary reasons that the Supreme Court in Sattva endorsed the move away from the traditional approach thattreated contract

interpretation as a question of law was that the modern method of contract

interpretation does not focus solely on thelanguage used by the parties, ascribing universal and immutable meaning to words, but involves consideration of the surroundingcircumstances in order to determine the parties’ intentions: 46 The shift away from the historical approach in Canada appears to be based on two developments. The first is the adoption of anapproach to contractual

interpretation which directs courts to have regard for the surrounding circumstances of the contract — oftenreferred to as the factual matrix — when interpreting a written contract (Hall, at pp. 13, 21-25 and 127; and J. D. McCamus, The Law ofContracts (2nd ed. 2012), at pp. 749-51). The second is the explanation of the difference between questions of law and questions ofmixed fact and law provided in Canada (Director of Investigation & Research) v. Southam Inc., (SCC), [1997] 1S.C.R. 748 (S.C.C.), at para. 35, and Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 (S.C.C.), at paras. 26 and 31-36. 47 Regarding the first development, the

interpretation of contracts has evolved towards a practical, common-sense approach notdominated by technical rules of construction. The overriding concern is to determine “the intent of the parties and the scope of theirunderstanding” (Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21, [2006] 1 S.C.R. 744 (S.C.C.), atpara. 27 per LeBel J.; see also Tercon Contractors Ltd. v. British Columbia (Minister of Transportation & Highways), 2010 SCC 4,[2010] 1 S.C.R. 69 (S.C.C.), at paras. 64-65 per Cromwell J.).

To do so, a decision-maker must read the contract as a whole, giving thewords used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time offormation of the contract. Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can bedifficult when looking at words on their own, because words alone do not have an immutable or absolute meaning: No contracts are made in a vacuum: there is always a setting in which they have to be placed....

In a commercial contract it is certainlyright that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of thetransaction, the background, the context, the market in which the parties are operating.

(Reardon Smith Line, at p. 574, per Lord Wilberforce) 48 The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and the natureof the relationship created by the agreement (see Geoffrey L. Moore Realty Inc. v. Manitoba Motor League, 2003 MBCA 71, 173 Man.R. (2d) 300 (Man. C.A.), at para. 15, per Hamilton J.A.; see also Hall, at p. 22; and McCamus, at pp. 749-50). As stated by LordHoffmann in Investors Compensation Scheme Ltd. v. West Bromwich Building Society (1997), [1998] 1 All E.R. 98 (U.K.

H.L.): The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of itswords. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using thosewords against the relevant background would reasonably have been understood to mean. [p. 115] The Standard of Review Applied to this Case [13] The First Respondent claimed for wrongful dismissal, which is, of course, a claim for breach of contract. The impugnedfinding of the trial judge (Lawis v.

Pro Cabinet Design Limited and Coastal Marine Limited (2018), 298 A.C.W.S. (3d) 91, 2018CarswellNfld 376 (N.L. Prov. Ct.)), at paragraph 21, is as follows: In Mr. Lawis’s case, it would be unreasonable to interpret the clause in such a way that it allowed the employer to terminate theagreement without cause on one weeks’ notice. Considering all the facts and specifically that the agreement was for a term of two yearsand involved the employee leaving his current employment and traveling from the Philippines at his own expense.

The clause does notspecify any notice period and as a result must be read as not setting out a notice period. I find as a result that Mr. Lawis is entitled to bepaid the balance of the unexpired term of the agreement. [14] The clause of the contract to which the trial judge was referring is the following: NOTICE OF TERMINATION OF EMPLOYMENT 19. The EMPLOYER must give written notice before terminating the contract of the EMPLOYEE if the EMPLOYEE has completed3 months of uninterrupted service with the EMPLOYER and if the contract is not about to expire.

This notice shall be provided at leastone week in advance. [15] Pro Cabinet argued that the decision of the trial judge was an error of law because his decision that the contract did not containa notice period ignored the clause, “[t]his notice shall be provided at least one week in advance.” As the Supreme Court noted in Sattvaat paragraph 57, the words of the contract must prevail and evidence of the surrounding circumstances cannot be used in a manner to“deviate from the text such that the court effectively creates a new agreement.” The failure to account for a critical factor would, ProCabinet argues, amount to an error of law. [16] The problem with that argument is that the words of the agreement are not as clear as Pro Cabinet suggests.

The phrase saysthat notice should be provided at least one week in advance. However, it does not specify the event in advance of which notice must beprovided. If the event from which the notice is to be measured is the effective date of termination, then Pro Cabinet would be correct;however, if the event is the beginning of the written notice period required, then Pro Cabinet would be wrong. [17] Therefore, I cannot accede to this argument that the decision of the trial judge was based on an error of law. [18] The exercise in which the trial judge engaged was the approach approved in Sattva.

He considered the meaning of the wordsof the contract by reading the words used by the parties against the relevant background in order to ascertain what the parties would havereasonably understood the words to mean, and in his decision described the context within which the agreement had to be interpreted. He recognized the First Respondent’s vulnerability resulting from his status as a temporary foreign worker, a status that depended on theFirst Respondent’s continued employment.

He also noted that the First Respondent left a secure job in the Philippines to work in thisprovince at his own expense on the Appellant’s promise of a two-year job. [19] The

interpretation adopted by the trial judge was a decision of mixed fact and law. No question of law can be extricated fromthat question. The Appellant has not demonstrated that the decision on that mixed question was based on palpable or overriding, orindeed any, error. [20] Once the trial judge had decided that the contract did not include a provision for one-week notice of termination, then hedecided that the Appellant was required to pay the First Respondent to the end of the two-year term. He relied on a British ColumbiaCourt of Appeal decision, Nugent v.

Midland Doherty Ltd. (1989), (BC CA), 41 B.C.L.R. (2d) 249, 65 D.L.R. (4th)694 (C.A.), in coming to that conclusion. The trial judge did not consider whether in the absence of an express notice period the contractmight have been terminable on reasonable notice. However, the appellant did not appeal from that decision of the trial judge. [21] The Appellant did raise a further point on appeal that it had also raised before the trial judge.

The Appellant argued that theFirst Respondent’s damages ought to have been limited to the remuneration that he would have earned from the date of notice toNovember 27, 2015 because the First Respondent’s work permit expired on that day.

However, this position of the Appellant fails toaccount for the possibility that the work permit could have been extended if the First Respondent had remained employed with theAppellant, or the fact established by the evidence at trial that the First Respondent remained in Canada at least up until the date of trialthat was held more than two years after the end of his contract term. Therefore, the trial judge did not err by failing to give effect to thisargument.

CONCLUSION AND DISPOSITION [ 22 ] Therefore, the Appeal is dismissed. The First Respondent is entitled to his costs taxed on Column III of the Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch. D . The amount of $25,000 paid into Court by the Appellant by Order of McGrath J. is to be paid to the First Respondent. _____________________________ Daniel M. Boone Justice