Grant v Electra Sign Ltd, 2018 MBCA 5

Citation: Grant v Electra Sign Ltd, 2018 MBCA 5 Date: 20180125 Docket: AI17-30-08734 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Freda M. Steel Madam Justice Holly C. Beard Mr. Justice William J. Burnett BETWEEN : CLAYTON GRANT ) C. L. Lazar and ) P. A. Mueller ) for the Appellant (Plaintiff) Respondent ) ) D. C. Yale - and - ) for the Respondent ) ELECTRA SIGN LTD. ) Appeal heard: ) October 18, 2017 ) (Defendant) Appellant ) Judgment delivered: ) January 25, 2018 On appeal from 2016 MBQB 131 ; and 2016 MBQB 187 BEARD JA I. ISSUES [ 1 ] This is an appeal and cross appeal of an order by way of

summary judgment granting the claim of the plaintiff, Clayton Grant (Mr. Grant), for damages for wrongful dismissal from his employment with the defendant, Electra Sign Ltd. (Electra Sign). Electra Sign has not appealed the finding that Mr. Grant was wrongfully dismissed and entitled to pay in lieu of notice, and Mr. Grant has not appealed the finding that there was no binding severance agreement. [ 2 ] The issues on this appeal and cross-appeal all relate to the damage award, and they can be summarized as follows: (

i) did the motion judge err in finding that the appropriate period of reasonable notice was 12 months; (ii) did the motion judge err in awarding Mr. Grant $20,417 for the unpaid portion of his 2013 bonus; (iii) did the motion judge err in increasing the period of reasonable notice by two months to compensate Mr. Grant for the manner of dismissal; (iv) did the motion judge err in reducing the reasonable notice period by four months due to Mr. Grant’s failure to take steps to mitigate his loss; (

v) did the motion judge err in the awards that he made in relation to the use of the truck post-termination; and (vi) did the motion judge err in failing to award punitive damages. II. FACTS [ 3 ] Because this matter proceeded as a motion for

summary judgment by Mr. Grant, the evidence consisted of the affidavits filed by and on behalf of each party and the transcripts from the cross-examinations of several of the affiants. The following is a

summary of the facts relevant to the appeal. [ 4 ] Mr. Grant was employed by Electra Sign in a management position for 13 and one-half years. His employment was

terminated on August 26, 2013, at which time he was 62 years old. He was 65 years old at the time of the

summary judgment hearing,and he had neither worked for another employer nor actively looked for other employment between the termination of his employmentand the hearing. Mr. Grant had worked almost exclusively in the sign industry throughout his working career. [5] There was no written employment contract between the parties regarding Mr. Grant’s employment with Electra Sign.

The motion judge found that the terms of employment regarding his salary included a base salary which was $80,000 in 2013, an annualwage top-up of $35,000 from 2007 through to 2013, participation in a pension and benefits plan, and vacation pay at 6 per cent per yearcalculated on both his base salary and wage top-up. In addition, Mr. Grant had the exclusive use of a 2012 Chevrolet Silverado truck thatElectra Sign leased and paid for. [6] The motion judge found that the employer had expressed general satisfaction with Mr.

Grant’s work, performanceand leadership over the years, that he had never been the subject of any formal discipline and that there were no contemporaneouscompany records expressing dissatisfaction with his performance. When the owner of Electra Sign, Ken Devine, told Mr. Grant, onAugust 26, 2013, that his employment was being terminated, he stated that the termination was as a result of the company needing tomake some changes. [7] At that termination meeting, Mr. Grant and Mr. Devine discussed the terms of a severance package, one of the issuesbeing the truck.

The termination was effective at the end of that meeting when Mr. Devine told Mr. Grant to take his things and thetruck and leave. Mr. Devine’s severance proposal included having the truck transferred to Mr. Grant. As there were some detailsregarding the severance agreement to work out, they agreed to meet at a later date. They did have a second meeting, but it was short andnothing further was resolved. The motion judge found that no binding severance agreement had been reached, which decision has notbeen appealed. III. GROUNDS OF APPEAL (

i) Did the motion judge err in finding that the appropriate period of reasonable notice was 12 months? The Motion Judge’s Decision [8] The motion judge applied the factors in Bardal v The Globe & Mail Ltd (1960), (ON SC), 24 DLR(2d) 140 (Ont HC), to determine the period of reasonable notice, which he found would be 12 months. In coming to that conclusion, herejected both Mr. Grant’s position that reasonable notice would be 22 months and Electra Sign’s position that reasonable notice would benine months.

The Parties’ Positions [9] Electra Sign’s position on appeal is that, based on a number of Manitoba authorities, the appropriate notice period inManitoba is two-thirds of a month for each year of service for a total of nine month’s notice, with the result that the 12-month noticeperiod is a manifest error. Alternatively, it argues that the motion judge erred in law by not applying the Manitoba authorities that itprovided without giving a reason. [10] Mr.

Grant’s position is that the motion judge erred by not weighing all of the relevant factors and by failing to givesufficient reasons to permit a review on appeal of his weighing of the factors. These, he argues, are errors of law. Sufficiency of Reasons [11] Both parties argue that the motion judge’s reasons are deficient because they do not adequately explain how and whyhe arrived at his decision regarding the length of reasonable notice.

One of the leading cases dealing with the sufficiency of reasons is Rv REM, 2008 SCC 51, in which McLachlin CJC stated that a trial judge is not required “to set out every finding or conclusion in theprocess of arriving at the verdict” (at para 18) and “need not expound on evidence which is uncontroversial, or detail his or her findingon each piece of evidence or controverted fact, so long as the findings linking the evidence to the verdict can be logically discerned” (atpara 20).

As she explained, “[t]he object [of reasons] is not to show how the judge arrived at his or her conclusion, in a ‘watch me think’fashion. It is rather to show why the judge made that decision” (at para 17). [12] Also important are Charron J’s comments in R v Dinardo, 2008 SCC 24 (at para 30): . . . [T]here is no general requirement that reasons be so detailed that they allow an appeal court to retry the entire case on appeal.

There is no need to prove that the trial judge was alive to and considered all of the evidence, or answer each and every argument ofcounsel. [13] McLachlin CJC stated in REM, “[i]t follows that courts of appeal considering the sufficiency of reasons should readthem as a whole, in the context of the evidence, the arguments and the trial, with an appreciation of the purposes or functions for whichthey are delivered” (at para 16). Thus, it is a contextual analysis – the reasons are not to be read on their own, but in the context of theentire proceeding.

These reasons have been adopted and applied by this Court in the context of civil decisions on many occasions – see,for example, 2129752 Manitoba Ltd v Domo Gasoline Corp, 2014 MBCA 76 at para 27; Kleysen v Her Majesty the Queen in Right ofthe Province of Manitoba, 2015 MBCA 54 at paras 20-24; 5182353 Manitoba Ltd v BNB Real Estates Co Ltd et al, 2015 MBCA 105 atpara 11; Aquila v Aquila, 2016 MBCA 33 at paras 46-47; and Altemeyer v Winnipeg (City) et al, 2016 MBCA 71 at paras 17-23. [14] Finally, as Mainella JA stated in Aquila, “the motion judge is presumed to know the law” (at para 47). [15] Electra Sign argues that the motion judge erred in law when he set the period of notice by departing significantly fromits authorities without explaining why he did so.

The motion judge was clearly aware of those authorities because he listed the cases in

his reasons. Further, he correctly set out the relevant facts of the case and referred to the applicable factors as set out in Bardal. Lookingat the decision as a whole and taking a contextual analysis, the only reasonable conclusion is that the motion judge was of the view that,on the facts of the case as he found them to be, applied to the relevant factors to which he referred, a notice period of nine months wasnot sufficient to compensate Mr. Grant and that the appropriate notice was 12 months.

In my view, while a fuller analysis may have beenhelpful, that finding was clearly open to him and the reasons are not so deficient as to constitute an error of law. [16] Mr. Grant has argued that the motion judge erred in his application of the law by not considering and weighing all ofthe relevant factors or, alternatively, by not giving adequate reasons to explain his weighing of the factors. The two factors of particularconcern to Mr. Grant are the inducement for him to accept employment with Electra Sign and the damage arising from the allegations ofjust cause set out in Electra Sign’s statement of defence.

I will address the allegations of just cause later. [17] While an inducement to accept employment that is subsequently terminated without cause is a factor that can lead to anincrease in the period of notice (see Wallace v United Grain Growers Ltd, (SCC), [1997] 3 SCR 701 at paras 83-85),Iacobucci J, for the majority, noted as follows (at para 85): . . . I . . . recognize that there is a need to safeguard the employee’s reliance and expectation interests in inducement situations. Inote, however, that not all inducements will carry equal weight when determining the appropriate period of notice.

The significance ofthe inducement in question will vary with the circumstances of the particular case and its effect, if any, on the notice period is a matterbest left to the discretion of the trial judge. [18] Mr. Grant was offered employment with Electra Sign, but there is no evidence that he was offered any special jobsecurity or other enticements that were not fulfilled. It is of note that he was employed, without complaint on either side, for over 13years.

This is unlike the situation in Wallace, where the trial judge found that “[the employer] went to great lengths to relieve Wallace’sfears about jeopardizing his existing secure employment and to entice him into joining their company” (at para 86). Given the lack ofany evidence to support the argument regarding the significance or effect of an inducement, it is likely that the motion judge dismissedthe argument on that basis.

Even if the motion judge erred in not making specific reference to this factor, I am of the view, based on thelack of evidence in this case, that that error was not material to his decision and, therefore, this argument should be dismissed.

The Law Regarding the Length of Reasonable Notice [19] In Honda Canada Inc v Keays, 2008 SCC 39, the Supreme Court of Canada confirmed the test for determiningreasonable notice as follows (at paras 28-32): In determining what constitutes reasonable notice of termination, the courts have generally applied the principles articulated by McRuerC.J.H.C. in Bardal, at p. 145: There can be no catalogue laid down as to what is reasonable notice in particular classes of cases.

The reasonableness of the notice mustbe decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant,the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of theservant. These four factors were adopted by this Court in Machtinger v. HOJ Industries Ltd., (SCC), [1992] 1 S.C.R. 986. Theycan only be determined on a case-by-case basis. . . .

The particular circumstances of the individual should be the concern of the courts in determining the appropriate period ofreasonable notice. . . . . . . No one Bardal factor should be given disproportionate weight. In the present case, the trial judge erred in applying one of the factors,alluding to the flat management structure, rather than examining the actual functions of Keays. Despite this error, the 15-month noticeperiod is entitled to deference since, on the entirety of the circumstances here, there is no basis to interfere with the conclusions of thetrial judge.

Keays was one of the first employees hired at Honda’s plant. He spent his entire adult working life with Honda. He did nothave any formal education and suffered from an illness which greatly incapacitated him.

All these factors will substantially reduce hischances of re-employment and justify an assessment of 15 months’ notice. [20] In Wallace, Iacobucci J, for the majority, noted, in applying Bardal, that the factors set out therein are not exhaustiveand that the courts have added additional factors to the list (see para 82). [21] As the principles in Bardal require a judge to weigh a number of factors in the context of the facts of the case todetermine the appropriate length of notice, that decision falls into the category of being a discretionary decision.

Standard of Review [22] The standard of review applicable to discretionary decisions was set out by the Supreme Court of Canada in Elsom vElsom, (SCC), [1989] 1 SCR 1367 (at p 1375): . . . [A]n appellate court will be justified in intervening in a trial judge’s exercise of his discretion only if the trial judge misdirectshimself or if his decision is so clearly wrong as to amount to an injustice. . . .

(See, for example, Homestead Properties (Canada) Ltd v Sekhri et al , 2007 MBCA 61 at para 13 ; Perth Services Ltd v Quinton et al , 2009 MBCA 81 at paras 24-28 ; and Penner v Niagara (Regional Police Services Board) , 2013 SCC 19 at para 27 .) [ 23 ] A misdirection can involve a question of law, a question of fact or a question of mixed fact and law.

A question of law will be reviewed on the standard of correctness, while a question of fact or of mixed fact and law will be reviewed on the standard of palpable and overriding error (see Housen v Nikolaisen , 2002 SCC 33 at paras 8 , 10, 37; Homestead Properties at para 13; and Perth at paras 22-23). [ 24 ] As this Court noted in Perth , that standard has been universally applied in areas of criminal, civil and administrative law (see para 26).

In my view, it applies equally when an appellate court is reviewing a trial judge’s determination of the period of reasonable notice for the termination of employment without just cause.

Analysis and Conclusion [ 25 ] Electra Sign is relying on this Court’s decisions in Wiebe v Central Transport Refrigeration (Man) Ltd , 1994 CarswellMan 130 (CA) ; and Gorman v Westfair Foods Ltd , 1997 CarswellMan 250 (CA) , for the proposition that the Manitoba courts have applied restraint in setting the length of the period of reasonable notice and have adopted a policy of granting two-thirds of a month for each year of employment.

It argues that this should have led to a period of notice of nine months in this case, with the result that the award of 12 months is excessive and a manifest error. [ 26 ] That application of the admonition of restraint in Wiebe and Gorman was squarely before this Court in Northwood v Bristol Aerospace Ltd , 2004 MBCA 162 , wherein Michel Monnin JA, for the Court, stated (at paras 9, 11): Notwithstanding the eminently reasonable caution expressed by Kroft J.A., those words cannot be considered in a factual vacuum.

The circumstances and background of each individual claimant must be considered and reviewed, although in the light of the concerns expressed by Kroft J.A. Wiebe and Gorman do not set an inflexible cap on notice awards in Manitoba. They are meant to remind one and all of the purpose and principles of such awards. I do not consider that in the circumstances of this case the trial judge offended those principles in setting the notice period at 18 months. He did so in a considered and reasoned manner and amply justified his decision on the facts of the situation before him.

I am satisfied that his award, although bordering on the high side, was still within a reasonably acceptable range. [ 27 ] The motion judge applied Bardal and considered the factors set out therein. He made no errors of fact in his

summary of the facts of the case, including the circumstances of Mr. Grant’s employment, the termination of that employment and his personal circumstances. He also referred to, and listed, those cases provided by Electra Sign and accurately summarized its position. Taking all of that into account, he concluded that the reasonable notice period was 12 months. That decision is entitled to deference. [ 28 ] A look at the outcomes in Wiebe and Gorman is of assistance in determining when a finding is so unreasonable that an appellate court should intervene.

In Wiebe , the Court agreed that the notice awarded of 12 months should be reduced to six months – a reduction of 50 per cent. In Gorman , on the other hand, while the Court endorsed the call for restraint in Wiebe , there was also a finding that “[i]f this were simply a case where the trial judge allowed for 15-months’ notice when I would have opted for 12, then appellate intervention would not be justified” (at para 15).

This supports a finding in this case that, if nine months is appropriate and the trial judge awarded 12 months, this Court should not intervene. [ 29 ] The motion judge did not misdirect himself in the law or on the facts and, in my view, the award of 12 months was not so clearly wrong as to amount to an injustice. It is, therefore, entitled to deference. [ 30 ] Mr. Grant argues that, taking into account his age, length of service, the inducement to leave his previous employment and the unlikely prospects of him obtaining other comparable employment, the notice period should be 22 months.

This would be an award of 1.63 months for each year of employment. He has not, however, provided any precedents with facts similar to this case that support his position. In my view, such an award would be excessive and would offend the admonition to show restraint that was adopted in Wiebe – there is simply no basis in the facts to support such an award. [ 31 ] I would dismiss the grounds of appeal related to the length of notice. (ii) Did the motion judge err in awarding Mr.

Grant $20,417 for the unpaid portion of his 2013 bonus? [ 32 ] The determination of the amount of the unpaid bonus was a question of fact which is to be reviewed on the standard of palpable and overriding error. This figure represents Mr. Grant’s calculation of the amount owing to him. He was not cross-examined at all as to how he arrived at this amount, and Electra Sign did not provide any evidence of its own to support another amount. It was open to the motion judge to accept Mr. Grant’s evidence in this regard, and he made no palpable and overriding error in doing so.

I would dismiss this ground of appeal. (iii) Did the motion judge err in increasing the period of reasonable notice by two months to compensate Mr. Grant for the manner of dismissal? [ 33 ] Bastarache J, for the majority, explained the principles underlying an award to compensate for the manner of dismissal in Keays . Damages in an action for wrongful dismissal are confined to the loss suffered as a result of the employer’s failure to give proper notice but not for the actual loss of the job and/or for any pain or distress suffered as a consequence of the job loss (see para 50).

The normal distress and hurt feelings resulting from dismissal are not compensable (see para 56). Damages from the manner of

dismissal are only available where the employer engages in conduct during the course of the dismissal that is unfair or is in bad faith bybeing, for example, untruthful, misleading or unduly insensitive (see para 57).

Damages, if proven, are not to be awarded through anarbitrary extension of the notice period, but through an award that reflects the actual damage and harm (see para 59). [34] Bastarache J provided some examples of the type of conduct that could attract an award of damages for the manner ofdismissal, being: an attack on the employee’s reputation by declarations made at the time of dismissal; misrepresentation regarding thereason for the decision to dismiss; or a dismissal meant to deprive the employee of a pension benefit or other right, such as permanentstatus (at para 59). [35] The motion judge clearly erred in compensating for the manner of dismissal by extending the notice period by twomonths – this type of award was declared to be inappropriate in Keays.

This raises the question of whether any award to compensate forthe manner of dismissal was appropriate. [36] The setting of damages, absent an error of law, is either a question of fact or of mixed fact and law – both of which arereviewed on the standard of palpable and overriding error. [37] The motion judge premised this award on the fact that Electra Sign based its defence of just reason for the terminationon allegations of harassment by other employees that were made after Mr. Grant’s employment had already been terminated.

The motionjudge found that “[t]hey are the type of allegations that can damage reputation, harm one’s ability to secure employment and impactpersonal self worth” (at para 63). [38] Electra Sign argues that the motion judge erred in awarding any damages for the manner of dismissal because there wasno evidence that the manner of dismissal caused any actual damage or harm.

Its position is that the motion judge’s finding that theallegations found in the defence could cause damage was unfounded speculation, given the lack of evidence of actual damage,particularly given his finding that there was no bad faith on the part of the employer. It states that there was a basis in the evidence tosupport the defence, and it should not be punished for advancing a reasonable defence. [39] Mr. Grant argues that the facts support an award of damages to compensate for the manner of dismissal and that there isno requirement for medical evidence to prove that there was actual damage.

He states that, if the motion judge erred in the manner ofsetting those damages, then this Court should substitute a monetary award, which should be increased from the value of the motionjudge’s award. [40] I agree that, while there is no requirement for medical evidence to prove that the employee suffered damage arisingfrom the dismissal, there has to be some evidence. The only evidence on this point was that of Mr. Grant. During his cross-examination,Mr.

Grant was asked about his reaction to the termination of his employment, to which he replied that he was neither shell-shocked noranxious, only “[d]isappointed with Ken.” There was no evidence to suggest that Mr. Grant suffered any damage or harm as a result ofthe allegations in the statement of defence. In my view, this comes nowhere close to meeting the test in Keays for the awarding ofdamages for the manner of the dismissal.

Thus, I would find that the motion judge made a palpable and overriding error in making anyaward in this regard. [41] A word about Electra Sign’s claims of just cause in its statement of defence. Although the motion judge found thatthere was no just cause for the dismissal, there was, clearly, evidence to support those allegations. It is for this reason that the motionjudge found that there was no bad faith on the part of the employer.

When considering a defence of this sort, it is important to keep inmind the following statement by Gillese JA, for the Court, in Mulvihill v Ottawa (City), 2008 ONCA 201 (at paras 49, 51): . . . The mere fact that cause is alleged, but not ultimately proven, does not automatically mean that Wallace damages are to beawarded. So long as an employer has a reasonable basis on which to believe it can dismiss an employee for cause, the employer has theright to take that position without fear that failure to succeed on the point will automatically expose it to a finding of bad faith.

So, for example, if an employer has no reasonably plausible basis on which to dismiss an employee for cause but, nonetheless,terminates the employment relationship on the basis of just cause, the employer’s conduct may be found to amount to unfair or bad faithtreatment.

That is because baseless, unfounded or fabricated allegations of misconduct sufficient to constitute cause are, by definition,untruthful, misleading and insensitive -- the very descriptions of bad faith or unfair conduct given in Wallace. (See also Cassady v Wyeth-Ayerst Canada Inc (1998), (BC CA), 163 DLR (4th) 1 at para 44 (BC CA); andClendenning v Lowndes Lambert, 2000 BCCA 644 at para 83.) [42] While the grounds for dismissal were not raised until after Mr. Grant was dismissed, that is because the employees onlyapproached Mr. Devine with their complaints after Mr. Grant had been dismissed.

That does not change the application of the law as setout in Mulvihill. Given the employee complaints that were made, Electra Sign had a reasonable basis on which to advance a defence ofjust cause. The fact that Electra Sign’s defence of just cause was not successful does not lead to a finding, in the circumstances of thiscase, that its actions in raising that defence were untruthful, misleading or insensitive.

Thus, the fact of the unsuccessful defence in thiscase does not support the granting of compensation for the manner of dismissal. (iv) Did the motion judge err in reducing the reasonable notice period by four months due to Mr. Grant’s failure to take steps tomitigate his loss? [43] The motion judge found that Mr. Grant did not look for any work, undertake any job training or take any careercounselling following his dismissal. He also found that Mr. Grant’s sales skills and experience were transferable to different industries. On that basis, he held that Mr.

Grant had failed to mitigate his loss, and he reduced the notice period by four months. [44] Mr. Grant argues that the motion judge misapplied the law in coming to his decision. His position is that the onus is not

on the employee to show that he or she took steps to find alternate employment, but, rather, it is on the employer to show that theplaintiff failed to take reasonable steps to mitigate his or her loss and that he or she could likely have obtained alternative employment. [45] The legal principles regarding the onus of proof in relation to the mitigation of damages are set out by Howard A Levitt, The Law of Dismissal in Canada, 3rd ed (Toronto: Thomson Reuters, 2017) (loose-leaf updated April 2017) ch 10 at 10-3 to 10-4 (atpara 10:20.10): The onus is on the employer to prove the following: • failure to mitigate on the employee’s part; and • that the employee would have likely found another comparable position if one had been searched for. [footnotes omitted] (See Red Deer College v Michaels, (SCC), [1976] 2 SCR 324 at 331-32, 346; Evans v Teamsters Local Union No 31,2008 SCC 20 at paras 30, 99-100; and Southcott Estates Inc v Toronto Catholic District School Board, 2012 SCC 51 at para 24.) [46] Mr.

Grant’s evidence was that he did not look for alternative employment because he believed, from his experience inthe sign business in Manitoba, that nothing comparable would be available. Electra Sign did not provide any evidence at all to show thathe would likely have found another comparable position, either within or outside of the sign business, if he had looked. [47] The motion judge did not make any reference either to the employer’s onus in relation to its claim that Mr.

Grant failedto mitigate his loss or to its failure to provide any evidence regarding the availability of alternative comparable employment. In my view,this was an error in law that had a material effect on his decision.

Further, given the complete lack of any evidence to support ElectraSign’s position regarding the failure to mitigate, that claim should have been dismissed, with the result that the motion judge erred inreducing the notice period due to a failure to mitigate. [48] I would allow this ground of appeal and set aside the four-month reduction in the notice period related to the failure tomitigate damages. (

v) Did the motion judge err in the awards that he made in relation to the use of the truck post-termination? [49] The parties asked the motion judge not to deal with the truck as part of the original

summary judgment proceeding, butthey filed written arguments regarding the truck following the release of the motion judge’s decision. The motion judge then orderedthat Mr.

Grant return the truck to Electra Sign by November 30, 2016, that Electra Sign receive a set-off from amounts otherwise owingfor one-half of the lease payments from the end of the notice period until September 30, 2016, and for the entire amount of the leasepayments from October 1, 2016, until the return of the truck. [50] Electra Sign has appealed that order, arguing that it should receive a credit for the entire amount of the lease paymentsfrom the date of the termination of employment on the basis that the truck was used primarily for work purposes and, therefore, was notan employment benefit.

It argues, in the alternative, that it should receive the full amount of the lease payments from the end of theperiod of reasonable notice on the basis of unjust enrichment, being that Mr. Grant had no entitlement to the use of the truck thereafterand he has been unjustly enriched by the value of the lease payments paid by Electra Sign. [51] Mr. Grant argues that the motion judge did not have jurisdiction to order any set-off for the lease payments becauseElectra Sign did not request that relief in its pleadings.

He does not contest the return of the truck, but he argues that the set-off creditsordered in favour of Electra Sign should be set aside. Electra Sign argues, in reply, that issues related to the truck were properly beforethe motion judge as a result of the written arguments that both parties filed to deal with the truck and, as a result, the motion judge hadthe jurisdiction to deal with both the truck and the lease payments. [52] In my view, the motion judge had jurisdiction to deal with the truck because it formed part of Mr.

Grant’s employmentbenefits, the value of which was one of the issues he had to resolve and, also, because the parties asked him to deal with the truck in theirwritten arguments. [53] Further, because Mr. Grant’s use of the truck was an employment benefit, he was entitled to continue using the truckduring the 12-month notice period without compensating Electra Sign for the lease and insurance costs as part of those employmentbenefits. Mr. Grant knew, however, that monthly lease payments were required and that, to obtain clear title, the lease or loan on thetruck would have to be paid out.

He retained counsel immediately following his dismissal and his counsel knew that he had no right tothe free use of the truck after the notice period. With this knowledge, Mr. Grant chose to keep and use the truck. If he had returned thetruck, he would have had to lease or purchase another vehicle. He had the benefit of the truck, and he should be required to pay for itsuse. [54] Stated otherwise, while Electra Sign was required to compensate Mr. Grant during the notice period for the employmentbenefit associated with the use of the truck, it did so by making the monthly lease and insurance payments.

There is no legal basis on

which to require Electra Sign to make any payments beyond the end of the notice period. [ 55 ] For these reasons, I am of the view that Electra Sign should receive a credit for the full amount of the lease and insurance payments from August 26, 2014, until the date on which the truck was returned to Electra Sign. (vi) Did the motion judge err in failing to award punitive damages? [ 56 ] While Mr. Grant included a claim for punitive damages in his statement of claim, that issue was not addressed at all in the motion judge’s decision.

While this is an error on his part, his decision makes sufficient factual findings for this Court to determine that claim. [ 57 ] The Supreme Court of Canada undertook a comprehensive examination of the principles that found a claim for punitive damages in Whiten v Pilot Insurance Co, 2002 SCC 18 . Those principles, which are summarized by Binnie J for the majority as part of a suggested jury charge (at para 94), were confirmed by the Court in Keays (at para 62 ).

The principles that are relevant to this case are: - punitive damages are very much the exception, rather than the rule; - punitive damages are imposed only if there has been high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour; - punitive damages are generally given only where the misconduct would otherwise be unpunished or where other penalties are or are likely to be inadequate to achieve the objectives of retribution, deterrence and denunciation; - their purpose is not to compensate the plaintiff, but to give the defendant and others his or her just desert (retribution), to deter the defendant and others from similar misconduct in the future (deterrence), and to mark the community’s collective condemnation (denunciation) of what happened; and - punitive damages are awarded only where compensatory damages, which to some extent are punitive, are insufficient to accomplish these objectives, and they are given in an amount that is no greater than necessary to rationally accomplish their purpose. [ 58 ] In Keays , Bastarache J explained that the type of conduct that merits punitive damages “must be ‘harsh, vindictive, reprehensible and malicious’, as well as ‘extreme in its nature and such that by any reasonable standard it is deserving of full condemnation and punishment’” (at para 68). [ 59 ] Mr.

Grant argues that there were two types of conduct that showed bad faith and warranted compensation: first, Mr.

Devine took advantage of him by initially appearing to offer a severance package and later reneging on the offer, increasing his financial burden and increasing the hardship related to the termination of the employment; and, second, Electra Sign wrongfully attacked his reputation and intentionally humiliated him by putting forward unfounded allegations as the basis for its defence of just cause, which were of a nature that would cause damage to his reputation, lower his self-esteem and undermine his ability to find alternate employment. [ 60 ] Dealing first with the failed discussions about a severance package, the motion judge found that it was only following the initial discussion of a severance package that Mr.

Devine received the information, which he believed to be true, that formed the basis of the defence – both the information that Electra Sign’s financial situation was worse than previously thought and that other employees were alleging that they had been treated in an inappropriate manner by Mr. Grant ( 2016 MBQB 131 at paras 17-18 ). There is no evidence to support the suggestion that Electra Sign undertook the settlement discussions in bad faith, for an improper motive, or with the intention to delay or to mislead Mr. Grant.

Thus, the change in position does not constitute conduct that meets the standard of being high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour. [ 61 ] I have already addressed the claim of just cause in the statement of defence. There was credible evidence from other employees to support this defence.

While the defence was not successful, the fact that it was raised, in the circumstances of this case, does not, in my view, meet the high standard required to attract punitive damages. [ 62 ] In coming to this conclusion, I accept the motion judge’s finding of fact that he was “not prepared to find there [was] bad faith on the part of Electra Sign in dealing with [Mr.] Grant” ( 2016 MBQB 131 at para 63 ). In my view, there is no basis in the evidence to support a claim for punitive damages, and I would dismiss this ground of appeal. IV.

DECISION [ 63 ] For the reasons set out above, I would determine the appeal and cross-appeal as follows: (

i) I would confirm the motion judge’s finding that the period of reasonable notice should be 12 months; (ii) I would confirm the motion judge’s award for the 2013 bonus of $20,417; (iii) I would set aside the award of two months’ pay in lieu of notice as compensation for the manner of dismissal; (iv) I would set aside the award reducing the period of reasonable notice by four months as compensation for Mr. Grant’s failure to mitigate his loss; (

v) I would set aside the award to Electra Sign of a set-off for one-half of the lease payments for the truck from the end of the period of reasonable notice until September 30, 2016, and order that it receive a credit for the full amount of the lease and insurance payments from August 26, 2014, until the date on which the truck was returned to it; and (vi) I would dismiss Mr. Grant’s cross-appeal for punitive damages.

[ 64 ] As the parties have had mixed success on appeal, I would make no order as to costs on the appeal. JA I agree: JA I agree: JA