1986 S.H. NO. 59705 IN THE SUPREME COURT OF NOVA SCOTIA TRIAL DIVISION BETWEEN: Gin Legorburu and Det Norske Veritas Defendant GLUBE C.J.T.D.: This is an action for wrongful dismissal. The plaintiff seeks an award which includes: loss of income for twenty‑four months less any amounts paid by the defendant or earned by the plaintiff; loss of vacation; loss of automobile allowance; plus interest on the foregoing amounts; and general damages for mental distress. Det Norske Veritas (DNV) is classification society with rules and regulations for number of functions including construction and design of vessels and offshore platforms. it is the Norwegian equivalent of Lloyds Registry of Shipping. Jon Legorburu, age 53; born in Spain, moved to France and then during the war to Britain, where he became British subject. He is now Canadian citizen. He received B.Sc (naval architecture) from the University of Durham and an M.Sc (ship building technology) from the University of Strathclyde. In 1965, after serving as lieutenant in the Royal Navy for three years (Short Service Commission) Mr. Legorburu joined Lloyds Registry of Shipping as surveyor. In 1974, he joined DNV as Station Manager at Inverness, Scotland. His duties included examination of newly constructed ships, ships in service, and oil platform construction and commissioning. From 1974 until December 31, 1986 he was continuously employed by DNV, holding various positions including Senior Surveyor and Station Manager in Aberdeen, Scotland from 1978 to 1980, and Regional Manager for Argentina, Uruguay and Paraguay from 1980 to 1982. In his first position with DNV in Inverness, Scotland, Mr. Legorburu had local status. Local status means his terms of employment such as salary, pension and benefits are under the local conditions of Scotland. When he went to Argentina to establish an office for DNV, he became an expatriate on four year term. As an expatriate, he received fully paid home leave for himself and his family after two years, along with free accommodation, motor vehicle, telephone and newspaper. His salary was in United States dollars and was tied to inflation. When the Falklands crisis occurred in 1982, British subjects were advised to leave Argentina. Mr. Legorburu and his family returned to the United Kingdom but after short time, he returned to try to run the office from Montevideo. This quickly proved impractical. DNV then gave Mr. Legorburu the option of going back to Glasgow or to Montreal or to Halifax. He chose Halifax, where there was an opportunity to set‑up new office for DNV, recruiting staff and organizing activities in Atlantic Canada. He considered that he was coming to vibrant area to which he was bringing offshore expertise. On June 30, 1982 he received minimum two year appointment as an expatriate and became District manager of the East Coast Area with duties which included dealing with ships in service, marketing and business development and advising on oil rigs in service. The letter outlining the terms and conditions of his employment provided additional benefits including company car with fixed monthly reimbursement to cover personal use, housing and furnishings with percentage payback plus the cost of utilities for his personal use, and four weeks annual vacation with free home leave every two years if the assignment continued beyond two year period. In early 1984 at the peak of the Halifax operation, eight surveyors were employed. Mr. Legorburu reported to Jan‑Erik Hagen, the Regional Manager of DNV in Canada. Initially, Mr. Legorburu was also responsible for Newfoundland. As more and more movement of offshore oil went to Newfoundland, an exclusive office was opened in St. John's with the person in charge reporting directly to Mr. Hagen. At all times during his employment in Halifax, Mr. Legorburu was informed by either Mr. Hagen or others at DNV who were in higher positions, that he was doing good job for the defendant company. Documentation was introduced into the trial to that effect. Throughout, he received regular salary increases. On March 27, 1984, Mr. Legorburu was advised by letter, that an expatriate contract was for specified duration following which an employee was to be repatriated to "home division", offered new expatriate terms in foreign country or converted to local status. The latter was "conditional on the employer's agreement to maintain staff at given location". He was advised that DNV wanted to retain him in Halifax and was prepared to give him "grace period" during which he would continue to receive certain expatriate benefits. They wanted him to convert to local status by January 1, 1985. Until that time, he would continue to have car leased by DNV, one free telephone with reimbursement of trunk business calls and one free daily newspaper. In 1984, he began to sense that the Halifax conditions were going down hill. He testified that he looked at the various options that were presented to him, while at the same time acknowledging he was concerned about keeping his children in one location until they finished school. As family, he considered local status or home division; on bachelor basis, he looked at the possibility of foreign posting (expatriate position). After confirming certain information with Mr. Hagen including the fact that he was not obliged to make final decision on converting to local status until approximately three months from the end of the year, he signed new expatriate agreement dated March 29, 1984. This agreement did not provide any housing allowances. Early in April he was notified of his promotion to Principal Surveyor effective May 1, 1984. In April 1984, Mr. Legorburu wrote to Mr. Hagen asking for information, indicating "it is very likely" he would convert to local status. Mr. Hagen responded advising what local status in Region Canada would entail, including that Mr. Legorburu would continue his position as District Manager in Halifax "provided work prevails...", which at trial he acknowledged he understood. The plaintiff and Mr. Hagen discussed the issue of changing to local status, including salary and additional benefits. The plaintiff denies that there was ever any discussion with him concerning termination of his employment. On July 23, 1984 Mr. Legorburu was advised by letter that his salary was adjusted to $67,389.00. The letter also praised his contributions to the growth of DNV. In August, 1984, Mr. Legorburu asked Mr. Hagen what positions were available in the United Kingdom and was told it was basically his responsibility to investigate. Although he did that, he learned there was nothing available for his qualifications and experience. He was advised to remain in Canada. An agreement dated February 13, 1985, signed by Mr. Hagen and the plaintiff and effective January 1, 1985, changed Mr. Legorburu from expatriate to local status. It confirmed his continued employment as Manager of the Halifax Office with responsibility for Nova Scotia and New Brunswick, his personal title as Principal Surveyor, and that his basic annual salary was not affected. Further clauses provided benefits including an unlimited use of leased company car with reimbursement to DNV for personal use, reimbursement by DNV of basic telephone rentals and cost of company trunk calls, daily free newspaper, four weeks paid vacation and pension. All of these clauses had been discussed before the agreement was signed. The clause which is in dispute is as follows: "7. The mutual notice of termination of this Agreement is three (3) months following the end of the calender month in which termination notice is given in writing." The plaintiff says this clause was not discussed with him nor read to him, however, it did not unduly worry him because it was in line with normal DNV policy, namely, that in moving employees from one station to another, it was normal to receive three months notice before the move was effected. (This is contained in DNV's document entitled "Expatriate Employment Policies".) On the other hand, surveyor looking to move outside DNV usually gave the company three months notice. In his mind, this clause did not refer to termination of his employment by DNV, it related to termination of the agreement. He said it was unnecessary for him to take the agreement to lawyer as he did not perceive it as way to fire him. He signed and returned copy on February 25, 1985. In cross‑examination, Mr. Legorburu stated he believed that he could leave the company on three months notice, but that the company had no right to give him three months notice of termination. In his discovery evidence, he acknowledged that either party could terminate on three months notice. At trial, he explained saying, this meant termination of the agreement, and not termination of his employment. He denied that his view of this agreement had changed or altered as result of reading the opinion of his expert witness, Professor Christopher L. Rigg. The down turn in the economy and the bottom falling out of oil prices caused dramatic reduction in the work of the Halifax Office. Mr. Legorburu realized that the Halifax office was gearing down to one or two man operation which would not be fulfilling for him. Towards the end of 1985, he started applying for expatriate positions with the defendant. He applied to number of locations in February, March and April 1986 without success. In June 1986 he was notified that there would be freeze on salaries at least until the end of September of that year without any guarantee of change at that time. Mr. Hagen advised by letter that this was not to be perceived as negative evaluation" of his performance during the previous year. On September 29th, 1986, he was advised by telephone followed by letter of the same date, that his employment was terminated effective December 31st, 1986. He was told that the Halifax Office would be closed and his services would no longer be required. He was advised that DNV was prepared to offer him the agency as non‑ exclusive surveyor to DNV in the Maritimes if he was interested in setting up on his own in Halifax. Verbally, he was advised that the company was following up possible position for him in Australia. During meeting on October 8th, 1986 with Mr. Hagen, he discussed the agency proposal, the Australia position and repatriation to the United Kingdom, as well as alternatively requesting compensation along the lines of what was being offered in Norway. Mr. Hagen advised that the compensation was unlikely, but he would raise it with head office in Houston, Texas. Mr. Legorburu said that although several draft agreements were presented to him for the agency position, the terms were not acceptable as he was not permitted to do work for other classification societies, and if he did not do DNV work when it came up, he would lose some of the guaranteed income which was being offered for the first few months. He believed there would be virtually no other surveyor work in Halifax. He concluded that the several proposals could end up costing him money, and found none of these were acceptable. further portion of the plaintiff's discovery was read which asked why he took issue with the letter of September 29th which terminated his employment on December 31, 1986. His discovery response was that he did not take issue with that letter as far as the three months notice was concerned, he took issue with it on the basis that because of his seniority, he believed there would be alternative employment. At trial he explained that he was always given to understand that because of his seniority and the number of years of experience, he did not have to worry about DNV finding him other work. Mr. Legorburu testified that at meeting held in Calgary towards the end of 1985, Mr. Gudmundur Sigurthorsson (then the Executive Vice‑President, Field Division The Americas located in Houston, Texas) told him not to worry as they would find him other employment. The plaintiff claims this was also said to him by Mr. Sigurthorsson in telephone conversation early in 1986. Mr. Sigurthorsson cannot recall either of these conversations. Mr. and Mrs. Legorburu both testified about his mental state following September 29, 1986. He said he was quite devastated by the turn of events, and as result he went into deep depression. Mrs. Legorburu, who is nurse, said she was extremely concerned about him, as he was not functioning normally. Although he refused to see doctor, she was so concerned that she arranged for Dr. Michael P. Quigley to make house call which occurred on October 10th, 1986. The doctor prescribed tranquilizers and the further support of psychotherapy. Dr Ouigley's report relates agitation, restlessness, lack of self‑worth, feelings of hopelessness and crying which lasted over an eight to ten week period. Mr. Legorburu required an anti‑anxiety‑anti‑depressant medication until January 1987. The total treatment period was four months. Mr. Legorburu was off work until October 27th, 1986. He then returned to work until mid‑December when he was advised that he need not come into the office any longer. He received vacation pay and his regular pay until December 31, 1986. After receiving the notice of termination, the plaintiff registered with the Provincial and Federal Civil Service and he contacted Australia to see if there was position available. He wrote to the Technical University of Nova Scotia. He applied for position that had been advertised with Halifax Industries. When he was interviewed, the salary was more than $20,000.00 less than what he was earning, and he felt he could do better. He received two interviews with the Province concerning particular position which eventually was not filled. He had interviews with the Coastguard and the Department of National Defence in Halifax, however, by the time he was offered work he had already accepted new employment with Indal Technologies Inc. (Indal) in Mississauga, Ontario at salary of $55,000.00. This was lower salary than his departing salary from DNV which was $67,389.00. Also, in his first year with Indal, he only received six days vacation, moving to three weeks for the next four years. Again this was less than he received from DNV. He received funds from Indal for temporary location and relocation. He commenced this employment March 1st, 1987. As result of the reduction in his salary, his wife was obliged to supplement their income by returning to work as registered nurse. She was required to write examinations before obtaining employment. Although he has received regular increases since March 1987 along with two bonuses of $1,500.00 each, Mr. Legorburu's salary still remains below his departing salary from DNV. In explaining his difficulty in obtaining employment at level equivalent to his salary at DNV, he referred to the almost complete lack of opportunity relating to offshore oil and gas, that shipbuilding was substantially reduced and the highly specialized nature of his work as surveyor with DNV. Mr. Sigurthorsson now the President of DNV Industry USA Inc., described that the Halifax Office was set‑up to provide survey functions for ships and oil rigs. He confirmed the progress of Mr. Legorburu's previous employment with DNV. It was his belief that in 1985, Mr. Legorburu wanted to change to local status because he wanted to make Canada his permanent home, allowing him to settle down with his family. Describing the policies of DNV, Mr. Sigurthorsson stated that expatriate employees are asked to move from time to time from one location to another. Local status employees may be invited to move, but they cannot be forced to move by DNV. Normally an expatriate position is for three years at any one location, and is usually not extended beyond that time. The document entitled "Expatriate Employment Policies" prepared by DNV, contains section entitled "Termination of assignment/Transfer expenses". It refers to adverse business developments, war or war‑like conflicts or other catastrophic events leading to cancelling an expatriate contract by the Assignment Division who will provide three months notice, if possible, and offer every assistance towards reassigning or repatriation with transfer costs being assumed by the assignment division. According to Mr. Sigurthorsson, this does not apply to persons on local status. He described that early in 1985, the Canadian market was quite good, but weaknesses gradually reduced the offshore work initially affecting the Halifax and Calgary locations. By the end of 1985, the weaknesses were becoming much stronger. Halifax was losing money due to the recession in the offshore and shipping activities. When this down turn occurred, DNV had very few openings resulting in limited ability to move people to other assignments. He was unable to recollect making any comments or promises to Mr. Legorburu about obtaining employment for him at the meeting in Calgary. He claims that given the context of the times, he found such comment very, very unlikely. He also claimed to have no recollection of such conversation in 1986 saying it would be even more unlikely then because DNV was in fairly deep difficulty with excessive staff capacity. news communication which was sent to all employees in the 28th week of 1986 indicated the necessity of undertaking staff reduction. Mr. Sigurthorsson stated that in any lay‑off, DNV's policy was to make every effort to find positions for people, however, nothing was found for Mr. Legorburu although claiming he had his personnel officer call colleagues and that he probably personally tried as well. He acknowledged he has no specific recollection of seeking another position for Mr. Legorburu. He described the several proposed agency agreements as attempts on the part of DNV to make the situation bit easier for Mr. Legorburu. Mr. Sigurthorsson stated Mr. Legorburu's interpretation of paragraph of the February 1985 agreement relating to three months notice was entirely incorrect. He denied that person returned to expatriate status this way. memo from Mr. Hagen to Mr. Sigurthorsson, dated October 14th, 1986, refers to the October 8th meeting between Mr. Legorburu and Mr. Hagen. In part, that memo refers to Paul Bishop, Manager of the Newfoundland Office, and the possibility of his obtaining other positions, but that DNV was not considering doing the same for Mr. Legorburu. In the memo, Mr. Hagen stated: "On this account, stressed the importance of retaining good junior staff with growth potentials. also made the following admission (direct quote): 'Perhaps you and I, Jon, have reached an age where it is much more difficult to use us, and therefore perhaps DnV is somewhat reluctant to find alternative employment for us'. (I don't think this is surprising although it is disillusioning). Jon Legorburu stated that he would be very disappointed if that was the case, and it was certainly not according to 'the DnV used to work with where senior people were always well looked after'." At trial, Mr. Sigurthorsson testified that he did not necessarily agree with that philosophy nor with Mr. Hagen's position that it was not his responsibility to assist Mr. Legorburu in obtaining other employment with DNV. Mr. Sigurthorsson said it was the responsibility of Canada to assist the plaintiff. Over 500 people from DNV were laid off and Mr. Sigurthorsson said efforts were made to place each one of them. Of this number, only 40 lay offs were in Canada with the majority occurring in Norway. He acknowledged that Mr. Hagen's memo to him was totally inconsistent with their policy, but he has no recollection of responding to it. He said such statement of retaining juniors because of growth potential is an over‑simplification and number of factors are used to determine who is suitable for particular job. Apparently, the former manager of the Newfoundland office was re‑employed in DNV's New York location. The agreement between the parties signed February 13th, 1985 contains clause providing that the laws of the Province of Alberta, Canada govern the agreement. Both parties submitted expert reports setting out their understanding of Alberta law. The plaintiff's expert, Christopher L. Rigg, is an Associate Professor of Law at the University of Calgary and barrister and solicitor entitled to practise law pursuant to the laws of Alberta. After obtaining his law degree, Professor Rigg spent five years in private practice. His field was employment law, in particular labour relations, with some work relating to wrongful dismissal. Commencing in 1980, he studied for two years at Osgoode Hall in the area of employment and labour relations law. He then was employed at the University of Calgary where he currently teaches courses in labour law. He considers himself an expert on the subjects of employment law and labour relations law. His evidence was by way of written opinion and discovery evidence. The expert for the defence is Thomas W. Wakeling of the law firm of Milner and Steer in Alberta. He has taught labour related courses and since 1981 has practised 50% of his time in the area of employment law. He served first as Alternate Chairman and since 1989 as Chairman of the Alberta Public Service Employee Relations Board. Mr. Wakeling filed written opinion and testified at the trial. In his written opinion, Professor Rigg set forth an outline of the facts as he understood them. These facts are essentially the same as those previously set forth in this decision. The only fact not stated in this decision upon which Professor Rigg relied was the final one which states: "P. The defendant did not have cause to dismiss the plaintiff." Based upon the traditional meaning of "cause" which relates only to actions of the Employee, agree with that opinion. In his discovery testimony, Professor Rigg refers to one additional fact, namely, that clause of the agreement was not specifically drawn to the plaintiff's attention. After analyzing the law, he concluded that an Alberta Court would not limit Mr. Legorburu to months notice of termination of employment. It was his opinion that the court would imply term of reasonable notice of termination. Professor Rigg relies upon primary cases decided in Alberta; Chadburn v. Sinclair Canada Oil Company (1966), W.W.R. 477 (Alta. S.C.); Allison v. Amoco Production Company 1975 CanLII 247 (AB QB), [1975] W.W.R. 501 (Alta. S.C.) and Bagby v. Gustayson International Drilling Co. (1980), 1980 ABCA 227 (CanLII), 24 A.R. 181 (C.A.). He describes Allison as being the most important case. In summary, the Alberta courts have found that: "...clear words are required to abrogate the implied term of reasonable notice of termination of employment." (page 14‑15 discovery evidence Christopher L. Rigg, May 28, 1990) In the Allison case, the plaintiff, an American citizen, commenced working for the defendant company in July 1949. In 1952, the plaintiff was assigned to Canada as an expatriate employee. From January 1, 1969, he was on loan to Canadian subsidiary of the defendant. Since 1964, the defendant paid expatriates special allowance to balance their salaries with those paid to employees in the United States. This allowance, amounting to around one fourth of the basic salary, was paid to the plaintiff. In May, 1974 the plaintiff chose to become Canadian citizen. He was then told by his employer that the expatriate allowance was intended to only cover United States citizens and if he refused transfer to the United States, then he would be transferred to the Canadian payroll. He was not offered position in the United States. He was transferred to Amoco, Canada and his expatriate allowance was cut‑off. The plaintiff considered that his employment by the defendant was being terminated without cause and left his employment. He had been employed for approximately twenty‑four years by the defendant and received expatriate compensation for about 10 years. Between 1949 and June 13th, 1974 when the plaintiff ceased to work for the defendant, he received various promotions and appointments to various places. Throughout, his services were always highly regarded by his employer. Although there had been discussion about phasing out the expatriate compensation policy several months before the plaintiff ceased employment, this information was never communicated to the plaintiff nor did it become company policy until the following year. MacDonald, J. held that the proposals by the defendant requiring the plaintiff to terminate his employment with the defendant and be employed by another company even though subsidiary, and the reduction in his income by immediate elimination of the expatriate compensation amounted to repudiation of the terms of the contract of his employment. The court held that there was wrongful dismissal. The court then turned to consider what notice was required. When the plaintiff was first employed by the defendant, he had no written contract. The defendant's position is based on contract between the parties executed approximately nineteen years earlier when the plaintiff became senior geophysicist which states: "If Company desires to terminate employment of an Employee Company shall give Employee thirty days' notice thereof;..." (page 507) The court determined that reasonable notice is implied by law and held that the particular contract was to preserve confidentiality as condition of the employment and was not intended to deal with general terms of employment. As reasonable notice of termination was required initially when there was no written contract, MacDonald, J. could not accept that by being promoted into more senior position, the notice of termination would be reduced down to thirty days. At p.508 MacDonald J. states: "If such was to be the intention of the parties, that intention must be expressly and clearly stated. The words used do not clearly state that the contract would terminate on 30 days' notice but only that if the company desires to terminate it it shall give 30 days' notice. These words do not consider sufficient to abrogate the doctrine of law that reasonable notice must be given. would consider that the 30‑day notice provision if applied would be harsh term." After considering all the evidence, he concluded that the plaintiff was entitled to reasonable notice and since such notice had not been given, he was entitled to damages for breach of contract. MacDonald, J. determined that if the defendant desired to terminate the agreement, it had to give 30 days notice of its intention. The facts in Chadburn are that the plaintiff was employed for several years by one company which was taken over by the defendant company where he continued his employment for another nine years. He was given two days written notice of termination without cause. The reason for his termination was an internal reorganization which made the plaintiff redundant. When the plaintiff joined the defendant company, he signed an alleged employment contract which contained the following clause: "Either party may terminate this contract at any time, with or without cause. In event of termination employer shall not be liable to employee for wages or salary, except as may have been earned at the date of such termination...." (page 479) On termination he was given cheque amounting to one weeks' salary for each year he was employed with the defendant. The court found the agreement was payroll formality and at p. 480, Riley J. states: “It will be noted that there is no provision that either party can terminate without notice nor indeed specifying the notice required." The court held that to terminate without reasonable notice requires the use of very clear words and added at p.486: “What is reasonable is in part founded on social and economic conditions of the time for the reason that these conditions would govern the opportunity of the employee in obtaining similar employment." Bagby is 1980 decision of the Alberta Court of Appeal. The plaintiff was employed by predecessor company of one of the defendant companies. He eventually became President and General Manager. He went on to work for the purchaser of the predecessor company (another defendant) and after several years that company decided to look for buyer. In order to retain employees during this time memorandum was sent with terms of their employment. There was also an agreement with the plaintiff as to what would happen to him if the company was sold within twelve months and what would happen after twelve months if no sale resulted. The plans to sell were dropped and Mr. Bagby continued to serve as President and General Manager. Several years later, the company again decided to sell. Although Mr. 8agby was offered position with the new company, he refused it saying he had number of things to settle up with his current employer. As the company was sold, Mr. Bagby was terminated without notice. Although the company offered him monies that had been set out in the memorandum referred to, he was offered nothing in lieu of notice. Throughout twenty‑four years his performance was described as exemplary. The reason for his eventual termination was the sale of the company's assets and the end of this business. The court held that the agreement did not purport to deal with Mr. Bagby's termination of service when the sale occurred after twelve months. Laycraft J.A. (as he then was) states at p.191: “The rule is well established in contracts for service of indefinite duration that the implied term of reasonable notice of termination will not be negatived except by clear words." The court found the memorandum did not contain the necessary clear words. Professor Rigg also discussed the case of Olson v. Sprung Instant Greenhouses Ltd., 1985 CanLII 1257 (AB QB), 41 Alta. L.R. (2d) 325 (Q.B. 1985). There the plaintiff worked for group of related companies. He signed an employment agreement with only one of them which provided for employment on an indefinite basis with right to terminate on two weeks prior notice in writing. Relying on Bagby and Allison, the court found that these provisions did not clearly negative the implied term of reasonable notice and held at p. 330: “It is significant, believe, that the agreement does not say that the employment may be terminated on two weeks' notice. It says that the agreement may be terminated by two weeks' prior notice in writing." The court held the agreement which he had signed was not all‑inclusive and it did not set out the terms of employment with all of the groups. Professor Rigg's opinion is that Mr. Legorburu was employed "without specific tenure" when he signed the expatriate agreement in March of 1984. In accordance with that agreement, the plaintiff chose to transfer to local status which resulted in the February 1985 agreement. Professor Rigg believes the latter agreement dealt with various terms affecting the transfer to local status. He concludes by saying that paragraph #7 would be interpreted in Alberta as notice of termination of "this agreement", that is, the plaintiff's agreement about local status as compared to expatriate status, thus paragraph #7 did not relate to the termination of the plaintiff's employment with the defendant. Mr. Wakeling refers to Levitt, The Law of Dismissal in Canada (1985). At p.250 paragraph 1004.1 states: “The existence of an express contractual term dealing with dismissal from employment will govern to the exclusion of any implied term...However, such term must be clearly and unequivocally expressed since it will be interpreted, if ambiguous, against the interest of the party who drafted it." He distinguished the three cases relied upon by Professor Rigg. He referred to the 1979 case of Pierce v. Krahn, 1979 CanLII 1091 (AB QB), 10 Alta. L.R. (2d) 49. The plaintiff, Ms. Pierce, was manager of the defendant company. There were certain written and oral agreements concerning her employment. There was authority for the directors of the company to forthwith terminate her employment if it was in the best interests of the company. Shortly after the business opened, because of dissatisfaction with her performance, the plaintiff's services as manager were terminated. The argument was that this was in breach of an implied term of employment requiring reasonable notice. The court held at p.55: "When there is in existence an express contractual term governing dismissal from employment, that term governs to the exlusion (sic) of any implied term." Mr. Wakeling also refers to the case of Krupka v. Board of Governors of Grande Prairie Regional College (unreported decision Alta. Q.B. September 12, 1984). In that case, there was an employment agreement with very specific terms concerning dismissal and severance allowance which in the view of the court negated the reasonable notice requirement because of the plain meaning of the words. With deference, find the clear words relating to employment in Krupka and Pierce, distinguish those cases from the case at bar. Mr. Wakeling says Krupka is not inconsistent with Bagby or Chadburn. He submits that in Bagby, the court found the agreement did not purport to deal with terminating his services where sale occurred after twelve months, therefore, there was no provision for termination and the court imposed reasonable notice. In Chadburn, Mr. Wakeling says the court determined that the contract was just payroll formality and therefore did not contain the terms of employment including termination provision, which was in contrast with the case of Pierce. agree with those analysis of Bagby and Chadburn but disagree with his conclusions. Mr. Wakeling says there is no basis to distinguish between termination of the agreement and termination of employment for Mr. Legorburu in his employment contract. In his opinion, paragraph is clear and unequivocal and therefore binding upon the parties. respectfully disagree based on the findings which are detailed below. Mr. Wakeling distinguished the Olson case from the present case. agree with that conclusion. find that Mr. Legorburu and Mr. Hagen held extensive discussions concerning the changes to be made in both benefits and employment of Mr. Legorburu, which eventually led to the signing of the February, 1985 agreement. During these discussions, find there was no mention of how employment termination would take place. The 1985 agreement was preceded by the March '84 agreement where there was also change from previous working conditions. Again, the 1984 agreement was preceded by discussion and there was no evidence led of the terms for terminating the employment of an expatriate. further find that Mr. Legorburu believed that DNV had commitment to continue to employ him based upon his seniority and years of experience. find Mr. Sigurthorsson gave him to understand that other employment would be found for him. Where the evidence of the witnesses differs, accept the evidence of Mr. Legorburu. On balance of probabilities find that these statements were made to the plaintiff. Perhaps they were not intended to be binding and were intended to placate him but find they were made and accepted as factual by the plaintiff. I find that based on the plaintiff's knowledge of the defendant's practises at the time that he signed the agreement in 1985, that his interpretation that clause #7 did not relate to termination of his employment, but rather to termination of the written agreement, was correct. find this was reasonable belief on the part of the plaintiff. In spite of his failure to make that position plain at discovery, accept the understanding that Mr. Legorburu had of this particular clause in the agreement as expressed at trial. In my opinion, the February '85 agreement was continuation of the March '84 agreement which was continuation of his previous employment, and therefore it simply amended his benefits as result of the change to local status. To have clause amount to the notice required to terminate his employment, the word "employment" or "dismissal" or other precise words should have been used to avoid any misunderstanding. Mr. Legorburu was entitled to believe that his employment with DNV would continue and that this clause would not permit DNV to terminate his employment with the defendant upon three months notice. I find that the terminology was unclear in that termination of employment was not specifically mentioned in the clause and had not been discussed with him previously in preparing the '85 or '84 or earlier contracts. Thus, this clause must be construed against the author of the clause, the defendant. In summary, there is no clear and unequivocal clause in the agreement which terminates Mr. Legorburu's employment with DNV. In my understanding of the law of Alberta this decision conforms to the case law and interpretation as presented by Professor Rigg. Having made this finding, it is unnecessary to examine argumnets on harshness and unconscionability. As result of this finding, Mr. Legorburu was entitled to reasonable notice. The question then arises was three months reasonable notice? Considering the lack of work in Mr. Legorburu's area of expertise and his efforts towards finding work, find that he did everything reasonably possible to mitigate his damages. He canvassed the local market. find his refusal to accept the agency proposal was also reasonable based on his opinion that he could well end up losing money. He was offered low salary by one company which he turned down. After three months, he obtained employment with Indal. although the salary was lower than he had been receiving from DNV, it was higher than the position he turned down in Halifax. The plaintiff submits that he should receive twenty‑four months pay less the three months for which he received notice and pay from DNV and also, less the pay which he received from Indal. He claims this is reasonable period of time given that he was the second most senior person in DNV in Canada, and second in seniority as surveyor only to Mr. Hagen. Also, he claims he had specialized expertise which did not readily find market for employment with an equivalent salary which is evident from the fact that even after two years he has not reached his departing salary level from DNV. Although the plaintiff provided the court with number of cases with varying years of service and awards, it would appear that each case must be looked at individually. "The measure of damages is the amount the plaintiff reasonably would have expected to receive from his former employer during the period of reasonable notice less any amounts earned during that time." (Sweet v. The Canadian Indemnity Co. (1981 43 N.S.R. (2d) 55 at p. 65) Thus, Mr. Legorburu is entitled to damages for breach of contract. In determining the length of notice one must look at reasonableness based upon the character of the employment; the length of the employment; the person's age; and the availability of similar employment having regard to the persons experience, qualifications and training. In this case the latter issue appears to have been the most difficult area for Mr. Legorburu as equivalent jobs at equivalent salary were unavailable. After taking into consideration all of the arguments made by the plaintiff, I find that Mr. Legorburu is entitled to eighteen months notice. From this amount must be deducted the three months pay which he received from the defendant and any income from his new employer over the balance of fifteen months. I also award the loss resulting from the difference in vacation for fifteen months, and loss of automobile allowance for fifteen months. On the issue of prejudgment interest, it appears that counsel are substantially in agreement on method of determining the interest for the period based on the figures presented by the plaintiff, and would ask that this calculation be made and agreed to. If counsel have any difficulty in reaching conclusion, they may contact the court. Finally there is the claim for the emotional trauma. The period of distress was fortunately short and apparently responded to treatment. I award $500.00. The plaintiff is entitled to his costs to be taxed. Constance R. Glube Halifax, Nova Scotia July 4, 1990 1986 S.H. No. 59705 IN THE SUPREME COURT OF NOVA SCOTIA TRIAL DIVISION BETWEEN: Jon Legorburu and Det Norske Veritas Defendant DECISION OF GLUBE, C.J.T.D.
In a contract of employment, which involved an agreement changing the plaintiff from 'expatriate' to 'local' status, a termination clause providing that the agreement could be terminated upon 3 months' notice was held to be inadequate language to abrogate the implied term of reasonable notice. The plaintiff had correctly interpreted the clause as relating to the termination of the agreement, not of his employment. The agreement provided that it was governed by the laws of the province of Alberta. The plaintiff had been employed by the defendant for 12 years and was awarded compensation in an amount equivalent to 18 months notice less the three months pay he already received and any income from his new employment over the balance of the 15 months. He was also awarded the loss resulting from the difference in vacation and loss of an auto allowance for the 15 months. For emotional trauma, which lasted only briefly, he received $500.