1993 S.H. No. 93‑5605 IN THE SUPREME COURT OF NOVA SCOTIA BETWEEN: HARRY GRANT and ALLSTATE INSURANCE COMPANY, body corporate, ALLSTATE INSURANCE COMPANY OF CANADA, body corporate, ALLSTATE LIFE INSURANCE COMPANY, body corporate, ALLSTATE LIFE INSURANCE COMPANY OF CANADA, body corporate, Defendant HEARD: at Halifax, Nova Scotia, before the Honourable Justice A. David MacAdam, on December 10, 11, 12, 13 and 14, 1995. DECISION: Orally December 14, 1996 RELEASE OF DECISION: February 16, 1996 COUNSEL; R. Ritchie Wheeler, Esq., for the plaintiff D. Geoffrey Machum, Esq., for the defendant J.: On November 5, 1991, the plaintiff, Mr. Grant, together with three other sales agents employed by the defendant, herein "Allstate", were notified their employment was being terminated. At the time, the plaintiff was also advised he would receive salary continuation and benefits (excluding disability) "until January 5, 1993, or until you secure alternative employment, whichever first occurs". In addition, Allstate agreed to provide him with the relocation counselling services of Peat Marwick Stevens Kellogg. BACKGROUND Mr. Grant joined Allstate in November, 1965, and continued in their employ, as a sales agent, for approximately 26 years. The Allstate agent's compensation agreement, in force at the time of his termination, provided for monthly compensation based on the "net written premium on new policies recorded in your account during the previous month" calculated in accordance with certain percentages for the different lines of insurance as therein stipulated together with renewal compensation calculated by reference to the "net premium on renewal policies recorded in your account during the two production quarters preceding the particular compensation quarter" multiplied by the applicable percentages and with the resulting dollar amount totalled and divided by six. Although the formula for calculating the plaintiff's compensation was changed in January, 1967, the basic format of the compensation remained the same, namely, after achieving certain minimums prior to which he was entitled to receive guaranteed monthly compensation from Allstate, Mr. Grant was to be paid on the basis of new policies written during the previous month together with renewal compensation calculated using the average renewals for the prior two quarters. Mr. Grant's success as sales agent, measured by the level of his compensation as compared to that of the other sales agents, placed him at or near the top of Allstate's sales agents employed within the Province of Nova Scotia. Nevertheless, and although Allstate has not, at any time, sought to justify the termination on the basis of cause, there were concerns expressed about Mr. Grant's lack of productivity in obtaining new policies and, in particular, in writing new life insurance policies. In the mid‑1980's, Allstate initiated program it entitled "The Neighbourhood Office Program" and invited its agents to convert to this program. At the same time, agents were offered new compensation contract that effectively increased the level of compensation on new policies written and at the same time reduced the level on renewals. By letter dated December 8, 1989, Lawrence E. Clodge, Senior Vice‑President, advised that effective July 1, 1990 no further conversions to the Neighbourhood Office Program status or the new compensation contract would be available to agents on staff prior to the introduction of these programs. At the same time he advised, in his letter to Mr. Grant, that it was the intention of Allstate to "direct all evolving technology regarding point of sale assistance to retail and Neighbourhood Office environments only". The plaintiff declined to accept the program on the basis the Neighbourhood Office Program required the agent to fund their own expenses and would not, in his opinion and in his circumstances, be of benefit to him. Because the bulk of his compensation, at this time, was for policy renewals, he believed the effect of the emphasis on new business represented by the increase in the rate of commission for new business, and the reduction in the rate for renewals, would have adversely affected his level of income. Similarly, in respect to the Neighbourhood Office Program, the transfer of responsibility for office expenses to the agent would, in the view of Mr. Grant, result in an overall reduction in his level of compensation. Mr. Grant testified he was assured by Dennis Madden, the Atlantic Canada Sales Manager of Allstate, that although his office might be on the 15th floor of an office tower there would always be "a place for him to work". Mr. Madden, on the other hand, although acknowledging there were number of discussions between himself and Mr. Grant about the new compensation contract and the Neighbourhood Office Program testified he has no recollection of ever saying to Mr. Grant he would be able to keep his job even if he didn't agree to go along with the Neighbourhood Office Program. By 1991, Allstate, having concluded that its business plans did not include the retention of direct offices, decided to close all direct offices, excepting only those in the Province of Quebec. On November 5, 1991, while Mr. Grant and his three fellow agents were being terminated, Allstate also closed all of the other direct offices in Canada, except only in the Province of Quebec. The decision to terminate the plaintiff was therefore the result of business plan involving the reorganization and restructuring of its sales agent system by the implementation of the Neighbourhood Office Program throughout Canada. At the meeting on November 5, 1991, the defendants' representatives restated the intention of Allstate to allocate and utilize its resources in supporting the new program and continued, in respect to the "direct office" where the plaintiff and the other three terminated sales agents worked: After considerable thought and analysis, it has been concluded that this office no longer complements our on‑going strategic direction and therefore, we must inform you that effective immediately we will no longer be serving customers out of this location. As such, your current position is no longer available." Although he was one of limited number of "senior" sales agents employed by Allstate, as of the time of his termination, Mr. Grant acknowledged, on cross‑examination, he had no managerial or supervisory functions and was not responsible for hiring or firing nor for the preparation of budgets. Mr. Madden also testified that direct office agents have no management or supervisory responsibility. He said by 1991 the only Maritime direct sales office of the defendant was the one located in Halifax where Mr. Grant and his three colleagues were the resident sales agents. He also confirmed the new compensation plan increased the commissions for new business and, at the same time, reduced commissions for renewals. The plan, he acknowledged, was intended to emphasize the creation of new business and therefore was consistent with the overall objectives of the Neighbourhood Office Program, although not part of the Neighbourhood Office Program. He testified existing agents were not required to accept the new compensation program even if agreeing to participate in the Neighbourhood Office Program. The compensation plan was only compulsory in respect to agents hired after its implementation by the company. Mr. Madden testified, to his understanding, the failure of Mr. Grant to accept the new compensation program had no part in his termination. He said Mr. Grant and the other three sales agents were terminated because the company was going in different direction that didn't include the continuation of direct offices. On re‑examination, Mr. Grant restated his belief that if he had accepted the Neighbourhood Office Program he would also have been required to accept the new compensation contract. Mr. Grant testified, following his termination, he experienced difficult emotional time realizing, at age 50, he had lost his job and his only source of income, and feeling he could have avoided the termination if he had decided to accept the Neighbourhood Office Program. He attended the counselling services funded by Allstate and talked to various persons in the insurance industry about his availability for employment. One of the persons with whom he spoke was Bill Sleigh, the President and owner of Sleigh Insurance Services. Mr. Sleigh testified Mr. Grant approached him about the prospects for employment. However, when informed Mr. Grant's employment contract with Allstate incorporated two year "non‑competition clause", he decided not to offer him employment. The clause in question reads: "For period of two years immediately following the termination of your employment under this agreement, you agree that you will not solicit or sell insurance of any kind A. with respect to any person, company or organization to whom you previously sold an Allstate policy, or B. within one mile from any Allstate location from which you solicited or sold insurance during the year immediately preceding such termination." Mr. Sleigh, on cross‑examination, acknowledged his office was within radius of one mile of the closed office. However, he said this was not the reason that had caused him to decline to offer position to Mr. Grant. Mr. Sleigh responded to counsel that his concern related to the prohibition against Mr. Grant selling insurance of any kind to any person, company or organization to whom he had previously sold an Allstate policy. The plaintiff decided his best option was to open his own office, in partnership with one of the other Allstate sales agents who was terminated in November, 1991. Allstate, in addition to writing and congratulating him on the opening of his business, took the occasion to remind him of the two year prohibition against soliciting insurance of any kind with respect to any person, company or organization to whom he had previously sold an Allstate policy. ISSUES 1. At the time of his termination, was the plaintiff owed any arrears of salary? 2. Has the plaintiff, in the circumstances, failed to mitigate his damages? 3. What, in the circumstances, is the period of reasonable notice to which the plaintiff was entitled? ARGUMENT 1. At the time of his termination, was the plaintiff owed any arrears of salary? The plaintiff submits at the time of his termination, in November 1991, Allstate was, in effect, one month in arrears in paying him compensation. The plaintiff suggests that since compensation is calculated, in part, on the basis of the prior month's productivity, he would not have received commissions for the sales generated by him during the month of October, 1991. His argument is founded on the premise that his salary was by way of commissions and, excluding the 14 months' salary continuation, he was not paid for commissions earned during the month of October, excepting to the extent he received compensation for the five days worked at the beginning of November, 1991. The submission of the plaintiff is without merit and involves misunderstanding as to the true nature of the terms of compensation as between himself and Allstate. Although calculated, in respect to new policies, on the prior month's productivity and with respect to renewals, on an averaging of the two prior quarters, the compensation paid each month is for the month worked rather than for the preceding month or some other period. Part IIA of the compensation agreement outlines the basis of calculating compensation "for each month of your employment", including the using of the prior month's sales, and in the case of renewals, the average over the previous two quarters. This interpretation of the terms for compensation is strengthened by the provisions dealing with payment on termination. Clause XII of Part IV provides, in part, as follows: "Any compensation payable under this agreement or any supplement thereto shall be payable only with respect to employment during the continuance of this agreement. When this agreement is terminated, your compensation for the month in which such termination occurs shall be determined as described below.” The clause then provides that where termination occurs at the end of month, the compensation for the final month is to be arrived at by applying the appropriate percentages to the net written premium on new policies recorded in the terminated employee's account during the month preceding such final month of employment, together with the monthly renewal compensation calculated by applying the appropriate percentage to the net written premiums on renewal policies recorded in the terminated employee's account, during the two production quarters preceding the compensation quarter in which the said final month falls, and then totalling the resulting dollar amount and dividing the total by six. The basis of calculation is therefore the same as for the monthly payments of compensation during the term of employment, namely the calculation of income based on the new policies sold during the prior month and the calculation, in respect to renewals, based on the average of the two preceding quarters. The clause then continues: "If, however, such termination occurs on date other than the last day of month, your compensation for the days during that month up to such termination date shall be calculated as though for the full month as above described but pro‑rated in accordance with the number of such elapsed days in that month." Clearly, both on an interpretation of the provisions dealing with the compensation itself, as well as the provisions dealing with compensation on termination of employment, there was, once he received pro‑rated amount to November 5, 1991, no month for which, to that time, he had not been compensated during his period of employment with the defendant. In fact, this is borne out, by his admission during his evidence, that there was no month of his employment with Allstate for which he was not paid. 2. Has the plaintiff, in the circumstances, failed to mitigate his damages? Allstate submits the plaintiff has failed to mitigate his damages arising out of the termination on November 5, 1991. In this respect they note the admission of Mr. Grant that if he had pursued obtaining employment, rather than commencing his own business, he would likely have obtained work with compensation at between $1,800 to $3,000 month. The defendant submits it is, in the circumstances, entitled to credit but claims this credit only to the extent that any awarded reasonable period of notice exceeds the already paid 14 months provided by the defendant to the plaintiff. Clearly, there is responsibility on the plaintiff to mitigate any damages arising as result of the termination, without notice, by the defendant. In Holland v. Midland Walwyn Capital Inc. (1993), 1993 CanLII 4537 (NS SC), 124 N.S.R. (2d) 204, Justice Davison, in dealing with the responsibility of the dismissed employee to seek alternative employment, stated, at p. 213‑214: "A wrongfully dismissed employee is required by law to make reasonable efforts to secure other employment. The doctrine of mitigation in wrongful dismissal cases was set out by Chief Justice Laskin in Michaels et al. v. Red Deer College (1975), 1975 CanLII 15 (SCC), N.R. 99; 57 D.L.R.(3d) 386 (S.C.C.), as follows: 'The primary rule in breach of contract cases, that wronged plaintiff is entitled to be put in as good position as he would have been in if there had been proper performance by the defendant is subject to the qualification that the defendant cannot be called upon to pay for avoidable losses which would result in an increase in the quantum of damages payable to the plaintiff.' The burden is on the defendant to show an employee could have avoided portion of the loss. An employee may reject alternate employment if it is reasonable to do so. Generally, an employee is entitled to await position analogous to his or her former employment. The dismissed employee, Mr. Holland, like Mr. Grant, began his own firm. Justice Davison found he made little effort to secure alternative employment and on the issue of mitigation concluded, at p. 214: "Midland has satisfied me that Holland's efforts to mitigate were scant. cannot accept the submission on behalf of Holland that 20 months is reasonable notice period. find that proper notice period on the evidence to be 14 months, notwithstanding Holland's long service with Midland. have no doubt that after 14 months following his departure from Midland, Holland would have secured position with comparable income if he had not elected to start new business." In the present circumstances, it is clear, although contacting number of persons involved in the insurance industry, Mr. Grant did not pursue the possibility of alternative employment with enthusiasm or commitment. On his evidence, he prepared neither resume nor sought recommendation from his former employer in order to assist him in such pursuit. Although he spoke to number of persons in the insurance industry, it is clear that early on he reached the decision to establish his own business, in partnership with another of his terminated colleagues. The question then becomes, whether or not his course of conduct was, in the circumstances, reasonable. In this respect, the evidence of Mr. Sleigh to the effect that the existence of the "non‑competition" clause was material factor in determining whether to offer Mr. Grant position is also relevant in considering the reasonable alternatives available to Mr. Grant following his termination. Clearly, his ability to generate income in job where compensation is measured by formula tied to productivity would be severely hampered by prohibition against selling to any person he had been successful in selling on behalf of his former employer. At age 50 he would presumably, for the first two years at least, be limited to contacting persons for whom he had no prior business dealings or associations, unless he had previously been unsuccessful in selling them insurance on behalf of the defendant. Clearly, where the employer seeks to enforce the "non‑competition" clause, of which here this is not in dispute, it must recognize this may constitute factor in determining whether or not the terminated employee has made reasonable efforts to seek and obtain alternative employment. The evidence of Mr. Sleigh confirms the existence of this clause as an impediment to Mr. Grant's successfully obtaining new employment. On the other hand, and although the non‑competition clause would equally apply to the business which he established, the restrictions against contacting former clients would be offset against the anticipation of long‑term benefits in establishing his own business. In all the circumstances, his course of conduct was not unreasonable, and as such, did not constitute a failure by the plaintiff to mitigate his damages. 3. What, in the circumstances, is the period of reasonable notice to which the plaintiff was entitled? The factors cited by Chief Justice McRuer in Bardal v. The Globe Mail Ltd. (1960), 1960 CanLII 294 (ON SC), 24 D.L.R. (2d) 140 are often cited in deciding the period of reasonable notice to which dismissed employee is entitled, in the absence of just cause. At p.145, Chief Justice McRuer says: There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be 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 the servant." In Squires v. Ayerst, McKenna Harrison Inc. (1991), 1991 CanLII 4349 (NS SC), 104 N.S.R. (2d) 124 (N.S.S.C.), at p. 136, Gruchy, J. listed number of factors he considered in determining the appropriate length of notice to which dismissed employee was entitled. Gruchy, J. considered: 1. the availability of similar employment in this regard; 2. the plaintiff's relatively high corporate status for person of his age; 3. the plaintiff's age, which is factor reducing the period of notice herein; 4. the plaintiff's length of service with the defendant; 5. the plaintiff's loyalty to the defendant; 6. the marital and family status of the plaintiff; 7. the apparent contribution of the plaintiff to the defendant in terms of building business and in the performance of his job; 8. the degree of security of position which the plaintiff ought reasonably to have anticipated; 9. the plaintiff's relocation from his original home to his present residence in Nova Scotia; 10. there was no evidence to indicate that the nature of the defendant's business was such as would lead the plaintiff to anticipate mobility of employment. 11. the manner in which the plaintiff was dismissed; 12. lack of forewarning; 13. the accusation by the defendant that the plaintiff had, in effect, acted fraudulently to obtain personal benefit, (although this is factor which may more appropriately affect costs); 14. actions of the defendant taken subsequent to the dismissal in an apparent attempt to justify it." With the exceptions of numbers 9, 10, 13, and 14, the plaintiff submits the remaining factors are also relevant in determining the appropriate period of notice in respect to the dismissal of the plaintiff by Allstate. In this respect, counsel suggests that "availability of similar employment not only includes employment of like nature or character but also includes employment of an equivalent or reasonably close pay scale." Counsel notes that at the time of dismissal the plaintiff's compensation was in excess of $90,000.00 annually, and for person of his age and education, with his experience limited to the field of insurance sales, and in view of the "non‑competition clause imposed by the defendant", no similar employment was available to the plaintiff. Although "availability of similar employment" is clearly factor to be considered in deciding the appropriate period of notice, the submission of plaintiffs counsel places, in our view, too narrow focus on what is meant by "availability of similar employment" in the context of dismissed employee. Although the characteristics noted by counsel are relevant, they do not preclude consideration of whether, having regard to the age, educational and experience background and interests of the dismissed employee, there may be similar employment, although at compensation level substantially less than that previously enjoyed by the dismissed employee. Comparable compensation level is factor but its absence doesn't preclude an examination of reasonable alternatives. Clearly, as suggested by counsel, the plaintiffs age is factor, particularly where the basis of compensation is dependent upon developing "book of repeating clients". Mr. Grant's years with the plaintiff had enabled him to develop such 'book of clients" who annually renewed their contracts of insurance with Allstate, thereby providing the plaintiff with continuing income, calculated, in part, on these renewals. Clearly, at age 50, the plaintiff's prospects for developing "book of repeating or renewal business" was not as great as it was in his 20's particularly when he is precluded for two years, from soliciting or selling insurance to persons he had earlier sold insurance on behalf of the defendant. His age, combined with the nature of the business, and the format of compensation, are clearly factors to be considered. Although, there was some evidence of concerns by the defendant, on the plaintiffs failure to achieve marketing goals in respect to new business, and in particular, life insurance, there was no suggestion he was other than an "honest and loyal employee", as submitted by his counsel. He was, as also suggested by his counsel, the "major bread winner" in his family. Counsel also referred to the circumstances of the dismissal, including the lack of any prior warning by the defendant indicating the plaintiffs job was in jeopardy. suggested "non‑factor" is the lack of managerial or supervisory responsibility of the plaintiff in his former position with Allstate. In his supplementary memorandum, counsel refers to the decision of Justice MacPherson in Cronk v. Canadian General Insurance Company (1994), 1994 CanLII 7293 (ON SC), 19 O.R. (3d) 515. 55 year old plaintiff was terminated as an assistant underwriter following 29 years service. In awarding the plaintiff 20 months salary, as damages in lieu of notice, Justice MacPherson dismissed, as factor, considerations of the nature and character of the employment as they related to managerial and non‑managerial functions. In so dismissing the managerial/clerical distinction, Justice MacPherson noted studies by the Council of Ontario Universities reviewing the relationship between education and employment. He then continued, at pp. 525‑526: Drawing on the statistical material compiled in their studies, the Council of Ontario Universities describes the employment situation in Canada and in Ontario in the early 1990s in these terms (The Financial Position of Universities in Ontario: 1994, v. 2): [I]n Canada ... [w]hile the number people who did not go any further than high school and who were employed decreased substantially during both 1991 and 1992, the number of university graduates who held jobs increased in both years ... [E]ven in recession wracked Ontario, the number of university graduates who were employed has increased each year while the number of employed men and women without post‑secondary training has been sharply reduced since 1990. My conclusion, based on the above data, is that it is wrong to contend, as the defendant has, that clerical workers like Ms. Cronk or other employees in low level positions should receive shorter notice period than managers or professionals because the former are likely to obtain new positions more quickly than the latter. Indeed, the data support the opposite conclusion. Statistically speaking, in Ontario in 1993 fired clerical employee was in terrible situation with respect to finding employment." However, on appeal, the Ontario Court of Appeal, at 1995 CanLII 814 (ON CA), [1995] O.J. No. 2751, rejected the dismissal by MacPherson, J. of "character and nature of employment" as factor in determining the appropriate period of notice. LacourciŠre, J.A. in reasons, generally concurred in by Mordin, A.C.J.O., stated at p. 33‑34: The principle that senior employees are entitled to lengthier periods of notice has also been applied in Ansari v. British Columbia Hydro and Power Authority (1986), 1986 CanLII 1023 (BC SC), B.C.L.R. (2d) 33 where McEachern C.J.S.C. stated at p. 43: At the end of the day the question really comes down to what is objectively reasonable in the variable circumstances of each case, but repeat that the most important factors are the responsibility of the employment function, age, length of service and the availability of equivalent alternative employment, but not necessarily in that order. In restating this general rule, am not overlooking the importance of the experience, training and qualifications of the employee but think these qualities are significant mainly in considering the importance of the employment function and in the context of alternative employment. The argument before MacPherson, J. proceeded on the express acceptance by both parties of the distinction between clerical and managerial employees, and on the concession that the respondent's function was clerical and did not involve specialized knowledge or managerial responsibilities. Despite these concessions, the motions court judge rejected principle which has been widely accepted and applied by trial judges and Canadian appellate courts and which has found favour with the Supreme Court of Canada in Machtinger v. Hoj Industries Ltd., 1992 CanLII 102 (SCC), [1992] S.C.R. 986. Iacobucci J. quoted the classic statement of McRuer C.J.H.C. in Bardal, noting that it is the most frequently cited enumeration of factors relevant to the assessment of reasonable notice (at p. 998). The following cases are indicative of the wide acceptance by appellate courts of the Bardal principle: Dafoe v. Microtel Ltd. (1987), A.C.W.S. (3d) 433 (B.C.C.A.), McHugh v. City Motors (Nfld.) Ltd. (1989), 1989 CanLII 265 (NL CA), 74 Nfld. P.E.I. R. 263 (Nfld. C.A.), Wiebe v. Central Transport Refrigeration (1994), 1994 CanLII 6406 (MB CA), C.C.E.L. (2d) (Man. C.A.), Pelech v. Hyundai Auto Canada Inc. (1991), 1991 CanLII 920 (BC CA), 63 B.C.L.R. (2d) 24 (C.A.). In Desnaulniers v. Wire Rope Industries Ltd., judgment of the British Columbia Supreme Court released April 21, 1995, Baker, J. referred to Justice MacPherson's decision under appeal and stated at p. 34: Whether Justice MacPherson is correct in his interpretation and application of the law in Ontario, the applicable law in British Columbia is expressed in Ansari [supra] and Pelech [supra]. In another judgment of the British Columbia Supreme Court, Hester v. International Land Corp. (released March 28, 1995), Errico J. refused to depart from the principle enunciated in the Ansari decision and rejected the conclusions reached by MacPherson J. in the judgment under appeal. The Cronk decision on the notice period was, however, followed by Ferrier J. in Kwasnycia v. Goldcorp. Inc., an unreported decision of the Ontario Court General Division, delivered January 10, 1995. In my opinion, the learned motion court judge's reasons do not justify departing from the widely accepted principle. He erred in doing so on the basis of his own sociological research without providing counsel an opportunity to challenge or respond to the results of the two studies relied upon. agree with the appellant that the factual conclusions which he drew from these studies are beyond the scope of proper judicial notice. As noted by this court in R. v. Potts (1982), 1982 CanLII 1751 (ON CA), 36 O.R. (2d) 195, at p. 201: [I]t has been held that, generally speaking, court may properly take judicial notice of any fact or matter which is so generally known and accepted that it cannot reasonably be questioned, or any fact or matter which can readily be determined or verified by resort to sources who accuracy cannot reasonably be questioned. The conclusion of the motions court judge based on the studies prepared by the Council of Ontario Universities are obviously not so generally known or accepted as to challenge the validity of an established principle which has found judicial acceptance for over three decades. It is not, as the respondent contended, an undisputed 'social reality' as was the background information concerning the circumstances encountered by spouses at the dissolution of marriage, in Moge v. Moge, 1992 CanLII 25 (SCC), [1992] S.C.R. 813 at 874. Before taking new matters into account based on statistics which have been considered in the judgment under appeal, the adversarial process requires that the court ensure that the parties are given an opportunity to deal with the new information by making further submissions, oral or written, and allowing, if requested, fresh material in response." Justice Morden, in separate reasons, noted at p.49: "... There can be no doubt that the case law in this country, before and after Bardal, and in England, has generally recognized seniority as being factor favouring longer notice periods." He then, at p.50 continues: "I agree with LacourciSre J.A. that MacPherson J. erred in collapsing the 'character of employment' factor into the re‑employability factor. It may be that it cannot be said dogmatically that senior employees take longer to find new employment than do junior ones. However, if the policy of the law which makes responsibility of employment factor favouring longer notices is one that requires reconsideration, do not think, having regard to the record in this case and the positions taken by the parties before MacPherson, J., that this is an appropriate case in which to embark on such reconsideration." Similarly, nothing has been here provided to justify departure from the long accepted consideration of the nature of the employment function as one of the factors to be considered in assessing the appropriate reasonable period of notice. Although the data referred to by MacPherson, J. suggests, and it really is indisputable, that the work force is increasingly composed of persons with university degrees, this does not mean that dismissed persons with senior managerial or supervisory responsibilities will be more likely to find alternative employment than persons without such responsibilities. The data referred to by Justice MacPherson simply confirms that the work force is now composed of greater percentage of university graduates than formerly. The likelihood of re‑employment remains factor of the availability of suitable positions in the marketplace. Until, however, there are as many managerial or supervisory positions as there are non‑managerial and non‑supervisory positions, the fact remains there will be more of an opportunity for an individual seeking non‑managerial or non‑supervisory position to obtain new or replacement employment. It may well be, and certainly is irrelevant to the issues to be decided in this case, that persons with university degrees will accept non‑managerial or non‑supervisory positions. Managerial and supervisory functions are part of the characteristics of employment and the extent to which they are or are not present, remain one of the factors to be considered in determining the appropriate period of notice pursuant to the enumeration of factors in Bardal. The plaintiff, in dismissing the managerial/clerical distinction, cites number of Nova Scotia decisions involving periods of notice of between 15 and 24 months. The defendant, in response, notes that in each case the dismissed employee occupied position of management or of supervisory responsibility and this was one of the factors considered by each court in assessing the appropriate or reasonable period of notice to which the dismissed or constructively dismissed employee was entitled. Counsel for the defendant also refers to the decision of Justice Holland in Kiffe v. Allstate Insurance Company of Canada (1986), O.J. 661 where, after finding the termination was for just cause, he provisionally assessed the period of notice for 52 year old salesperson who had worked for Allstate for period of almost 20 years, apparently performing functions essentially similar to that of the plaintiff, at 12 months. The plaintiff cites the decision of the Nova Scotia Supreme Court in Connor v. Canada Life Insurance Company (1991), 108 N.S.R. (2d) 361 where 53 year old plaintiff was dismissed from clerk‑related duties after 12 years of employment. The period of notice deemed appropriate was 10 months reduced by one month, on the principle of "near cause". Considering the nature of Mr. Grant's position, and although not involving managerial or supervisory functions, it is clear, as reflected by the level of his income, that he had been successful in developing substantial clientele, and thereby promoting the interests of the defendant as well as of himself. To recognize the nature of his employment is not to dismiss the contribution by Mr. Grant, during his period of service with Allstate, nor to minimize the degree to which the defendant has benefitted by his efforts. In assessing the appropriate period of notice, taking into account the principles cited by Chief Justice McRuer in Bardal, as well as the factors listed by Justice Gruchy in Squires, there are two additional factors that are relevant in the particular circumstances of this case. Firstly, the court is aware, through the evidence and the positions of the parties, that Mr. Grant received salary continuation for period of 14 months following his termination in November of 1991. Secondly, and despite the volume of authorities as well as learned articles on the subject, the determination of reasonable notice is not "precise science" such as to necessarily result in one period being reasonable and another, approximate but different period, being therefore unreasonable. Absent information, as to what has already been provided by Allstate to the plaintiff, the court would then have chosen one of these as the period to which the plaintiff was entitled. In the circumstances of Mr. Grant, is the defendant entitled to ask whether the 14 months of salary continuation was unreasonable and, receiving negative response, to seek the dismissal of the plaintiffs claim; or, is the plaintiff entitled to ask whether some period in excess of 14 months notice was reasonable, in all the circumstances, and upon receipt of an affirmative response, to recover damages calculated on the difference between the amount already paid and the amount awarded. potential additional and significant effect of how the question is stated and answered is the matter of costs and the application of the general principle that "costs shall follow the event". In this regard, it is necessary to consider the concept of "ballpark justice" or "fairness" and its possible application in the present circumstance. In Employment Law Manual, by John R. Sprout, (Carswell, 1992), Volume at p. 6‑22.1, the author observes: "The concept first appeared in the following trilogy of cases in the Supreme Court of Ontario: Perry v. Gulf Minerals Can. Ltd. (1985), 30 A.C.W.S. (2d) 524 (Ont. H.C.); Rivers v. Gulf Can. Ltd. (1986), 13 C.C.E.L. 131 (Ont. H.C.); and McKee v. NCR Can. Ltd. (1986), 10 C.C.E.L. 128 (Ont. H.C.). The classic statement on ballpark justice was made by Mr. Justice R.E. Holland in Perry, as follows: It appears to me that in judging the severance arrangements should not arbitrarily fix what consider to be proper period of notice based on the facts of the case and the authorities, but rather should approach the matter first on the basis of whether or not the employer's severance arrangements were fair. If the period of notice under the severance arrangements was reasonable, then do not think that should interfere or tinker with the result. If the period notice was unreasonable, that is different matter and the Court should interfere. (at p.6 of the judgment). This doctrine was subsequently applied in McKee by Mr. Justice Reid of the Ontario Supreme Court. In that case, the employee had been offered 12 months' notice upon termination by the employer. In all the facts of the case, Reid J. found that he might have granted 12 to 15 months' notice. Applying the ballpark justice doctrine, however, Mr. Justice Reid found that the employer's offer of 12 months' notice was within the 'reasonable range' and awarded the employee 12 months' notice." Justice Rutherford of the Ontario General Division in McCrea v. Conference Board of Canada (1993), 45 C.C.E.L. 29 rejected the concept of "ballpark justice" or "reasonable range" on the basis it afforded "curial deference" to the position of the employer, an approach normally reserved only for judicial review of decisions taken "in judicial or quasi‑judicial setting where reasonable result is the duty of the authority making the assessment." He continues by observing there is no such mandate on an employer in providing notice, or compensation in lieu thereof, to dismissed employee. He then, at pp. 35 or 36, says: ". Moreover, do not see any basis for proceeding in fashion which has the result of placing the dismissed employee in position of having an onus to show that the notice given was beyond the bounds of what anyone considers reasonable. It is all very well to say that it is consonant with the requirement that reasonable notice be given, that the notice or payment in lieu thereof must therefore be assessed to determine if it was reasonable. But should that really lead to anything other than the traditional approach in which what is reasonable is determined in court as matter of fact, or mixed fact and law? ... We all know that reasonable people may differ on matters but that, in my view, should not deprive the plaintiff in wrongful dismissal action from seeking the uncompromised judgment of the court." The approach was similarly rejected by Justice Ferguson in Garvin v. Rockwell International of Canada Ltd. (1993), 50 C.C.E.L. 295 (Ont. Gen. Div.), where, at pp. 302‑304, he states: "In my view it is not appropriate to apply threshold or ballpark approach. In my view the trial court should not express its view by reference to range but should make specific determination as to what it thinks is the reasonable period of notice in the circumstances and then award judgment if the employee received any less." On the other hand, as noted in the Employment Law Manual, supra, the principle has received some favourable consideration in other jurisdictions, and in particular, by the New Brunswick Queen's Bench in Locke v. Avco Financial Services Can. Ltd. (1987) 85 N.B.R. (2d) 93, 217 A.P.R. 93 (Q.B.), where the court, at p. 99, stated: "There is logic to this approach. Settlements should be encouraged and as well employers should be encouraged under these circumstances to make reasonable proposals rather than treating the matter in totally adversary fashion." The Court, however, at pp. 99‑100, concluded that: "In the present circumstances the defendant's proposal was for nine months firm and the possibility of further six months on month to month basis. In addition there was disagreement between the parties with respect to pension contributions and bonus payments. As shall detail shortly it is my finding that the plaintiff was entitled to recognition of these compensations. In the appropriate case one might well be inclined to follow the rationale referred to. On the facts in the present case do not feel that the proposal put forward by the defendant was such as to modify my consideration of period of 18 months notice as being reasonable." On the other hand, this doctrine or principle was rejected by the Alberta Queen's Bench in Heinz v. Cana Construction Co. (1987), 1987 CanLII 3203 (AB QB), 55 Alta. L.R. (2d) 382, 82 A.R. 197 (Q.B.)., where Justice Stratten also interpreted the principle as one of "curial deference" and found it inappropriate in determining the appropriate or reasonable period of notice to be afforded to dismissed employee. He concurred with the comments of O'Driscoll J. in Grant v. MacMillan Bloedel Indust. Ltd. (1982), 83 C.L.L.C. 12007 at 12012 (Ont. H.C.), that such "curial deference" is not applicable to the employer since they are not an impartial nor an independent third party judicial arbitrator. The British Columbia Supreme Court in Michalchuk v. B.C. Hydro Power Authority (1987), 1987 CanLII 4025 (ON CJ), A.C.W.S. (3d) 418 (B.C.S.C.), stated: "While respectfully prefer not to adopt the approach mentioned by Holland and Galligan, J.J. as an invariable rule, agree that the selection of notice period is not precise exercise and the Plaintiff has not satisfied me that 15 months is not reasonable compensation in lieu of notice in this case. (at p. of the judgment)." As noted by the authors of the Employment Law Manual, at p. 6‑25, although it is unclear whether the court in fact applied the ballpark justice doctrine, it awarded the period of notice offered by the employer on the basis the offer was reasonable. In the present circumstances, it would be both naive and arbitrary, on the part of the court, to suggest the selection of either a 14 or 15 months notice period, as a reasonable period of notice, was being made in the absence of knowledge of what has already been provided to the plaintiff by Allstate. The selection of reasonable period cannot be made in vacuum of the information communicated during the course of the trial. In weighing the reasonableness of the employer's conduct, we are, with deference to the authorities to the contrary, not affording to the employer "curial deference". The plaintiff, in paragraph of the Statement of Claim, alleges "... that he was wrongfully dismissed without any cause whatsoever, and also without sufficient notice or severance pay." Equating the phrase "sufficient notice" with the phrase "reasonable notice", the issue raised by the plaintiff is whether the notice provided by the defendant was "sufficient notice" or "reasonable notice" in the circumstances. For the reasons already noted, it cannot be said the salary continuation for 14 months was not "sufficient notice" or "reasonable notice". The statement by the British Columbia Supreme Court in Michalchuk, supra, that the selection of notice period is not precise exercise, is in accordance with the views already stated herein. In the circumstances, the suggestion outlined by the authors of the Employment Law Manual, supra, at p. 6‑25, provides realistic and reasonable approach, in weighing the respective positions of the parties, in coming to court: "It is respectfully submitted that if the ballpark justice principle is to be applied it should be limited to those cases in which the Judge is truly undecided where the period of notice should fall within certain, and relatively narrow, range. In such cases it would be consistent with the general principles of contract law to look at the conduct of the parties. If either of the contracting parties has made an offer within the range, then this element of conduct, although perhaps deserving of only slight weight, may be enough to tip the judicial scale in favour of finding that the offered notice corresponds with reasonable notice." In so limiting the doctrine, the authors concur in the comments of Justice O'Driscoll in Grant v. MacMillan Bloedel Indust. Ltd., supra, that to afford broader scope, would be to grant the position of the employer degree of "curial deference" to which only judicial or quasi‑judicial body is now entitled. We also agree it is only to judicial or quasi‑judicial bodies that "curial deference" should be afforded. However, the issue, in claim for inadequate or insufficient notice, is founded on an allegation that what was provided by the employer was neither "sufficient" nor "reasonable" in the circumstances. The question, logically, is whether what was afforded was in fact "sufficient" or "reasonable" having regard to all the circumstances, including the guiding principles set out in Bardal and the factors amplified on by Justice Gruchy in Squires. If, in fact, what the claimant received was "sufficient" or "reasonable", then it follows the dismissed employee was afforded the period of notice to which he was entitled under law. If the employee did not receive "sufficient" or "reasonable" notice, then he is entitled to an order providing for compensation on this failure. The decision does not grant the employer "curial deference" any more than it does the position of any party in legal proceeding where the "reasonableness" of their conduct is brought into question. The function of the court is to imply, in contract of indefinite employment, provision, incorporating period of notice, applicable in the circumstance of subsequent dismissal without just cause. This proceeding, by the plaintiff, is founded on the basis the period provided by the employer was not reasonable, in the context of this implied term of the employment contract. The employer provided 14 months salary continuation. The question is, whether, in the circumstances, it was "reasonable". In the absence of fixed notice periods, either by statute, by agreement or otherwise, the determination of this question rests on the court's assessment of what is "reasonable". In considering what is "reasonable", it is, we suggest folly, amounting to naivete, to suggest the court will not make such determination in the context of what has actually occurred and, therefore, by assessing whether what the employer has provided constitutes the provision of "reasonable notice". Where an employee has been dismissed, without any notice, the court hears the parties, and receives their submissions, and decides what is "reasonable notice" in the circumstances. Where period of notice has already been provided, the question is whether it was "reasonable", in which case, the employer has met the implied term of the contract, or whether it was unreasonable, and the employer has thereby violated the implied term of the contract of employment. Here, as already noted, a period of 14 months was "reasonable" though, as also noted, a period of 15 months would not have been "unreasonable". The plaintiff has therefore not established he has not received "reasonable notice" and therefore the claim for damages against the employer is dismissed. Costs The defendant seeks cost on the basis it has been successful, citing Orkin, The Law of Costs, (Second Edition 1994) at p. 2‑23: “The principal that successful party is entitled to his or her costs is of long standing and should not be departed from except for very good reasons." The plaintiff, although acknowledging there is presumption in favour of costs following the cause, suggests there are exceptions, citing Orkin, The Law of Costs, (Second Edition, 1995) at pp. 2‑37 and 2‑38: "An action or motion may be disposed of without costs when the question involved is new one, nor previously decided by the courts on the theory that there is public benefit in having the court give decision; or where it involves the interpretation of new or ambiguous statute; or new or uncertain or unsettled point of practice; or where there were no previous authoritative rulings by courts: or decided cases on point; ... The Principle that costs are usually to follow the event is recognized in C.P.R. 63.03(1): Unless the court otherwise orders, the costs of proceeding, or of any issue of fact or law therein, shall follow the event." The Court of Appeal in Bent v. N.S. Farm Loan Board (1978), 30 N.S.R. (2d) 552 after acknowledging that C.P.R. 63.03 provides that costs of proceeding shall follow the event, unless the Court otherwise orders, added "... costs are always in the discretion of the Court." Justice Hart, on behalf of the Court, continued by restating the principle that "the discretion of the Court must, however, be exercised judicially." He then refers to the statement by Lord Goddard in Lewis v. Haverfordwest Rural District Council [1953] ALL E.R. 1599, at 1600: "... it is the settled practice of the court that in the absence of special circumstances successful litigant should receive his costs." As to the exercise of discretion by Court in denying costs to successful party on the basis the action or application involved new question, not previously decided by the Courts, defendants' counsel refers to the decision of Roscoe, J., as she then was, in Turner‑Lienaux v. The Attorney General of Nova Scotia (1992), 1992 CanLII 4534 (NS SC), 115 N.S.R. (2d) 200 where the unsuccessful plaintiff argued against the awarding of costs because, inter alia, the matter involved novel question of law of interest to all management levels employees in the civil service. Justice Roscoe, at p. 214 stated: "Although the present case was novel, am not satisfied that it was of significant public importance and interest. have no information before me as to how many Civil Service competitions are held for management employees annually, or for that matter, how many unsuccessful candidates in those competitions may have been effected by the outcome of this particular case." Counsel continues by suggesting the reasons of Justice Roscoe indicate "novelty alone is not necessarily sufficient to justify denial of costs but rather there must be some overriding public importance or interest for which there is no evidence in this case." However, examples of where successful parties have been awarded costs include, in addition to where the "matter is one of great civic interest and importance", (Chater v. Dartmouth (1975), 20 N.S.R. (2d) 34) (T.D.), cases where the pleadings did not disclose the eventual successful ground of defence (Laffin v. Hamel (1976), 23 N.S.R. (2d) 89) (T.D.) where the successful party had not specifically plead the defence and the other party was led to believe another question was the primary issue (Munroe v. Clarke (1977), 23 N.S.R. (2d) 652) (T.D.), and where there was laches by successful plaintiff in case involving real property (McCormack Estates v. Feelan Estate (1986), 59 Nfld. P.E.I. R. 215 (P.E.I. S.C.). The listing of exceptions to the usual rule of "costs following the event or cause" is far from exhaustive. After considering an issue concerning ownership of roadway access to three lakes, Justice Cavarzan of the Ontario General Division, in Beaumaris Fishing Club v. Corp. of the Township of Gravenhurst (1991), 1991 CanLII 7345 (ON SC), O.R. (3d) 774, in denying costs to the successful party, at p. 785 said: The real issue raised in these proceedings was, if not entirely novel, one in which the courts appear not to have ruled authoritatively. In the circumstances, and notwithstanding that the applicant has been successful in part, it is my view that this is not an appropriate case for an award of costs." Also, in Hounsome Estates v. John Deere Ltd. (1991), 1991 CanLII 7069 (ON SC), O.R. (3d) 89, Justice Rosenburg, at p. 97‑98, in denying costs to the successful applicant trustee, said: "... Under the circumstances and in view of the uniqueness of the situation, there being no previously decided cases on the precise point (as acknowledged by both counsel),there will be no order as to costs." Plaintiff's counsel suggests the concept of "ball park" justice is such an exception, being notion for which there has been no previously decided authoritative rulings by the Court. However, and as already reviewed, we have declined to apply the principle or notion of "ball park justice", but rather to adopt the approach suggested by the authors of Sproat, Employment Law, supra. In doing so, we recognize that absent knowledge of the salary continuation the plaintiff has already received, and in view of the imprecise nature of the determination of reasonable notice, the award of reasonable notice could have as likely been for fifteen months as for fourteen months. Having been advised, since release of oral reasons, that the defendant, prior to the conclusion of trial, had offered to consent to the discontinuance of these proceedings, by the plaintiff, without costs and in view of lowest suggested period of notice, by the plaintiff during final argument, of eighteen to twenty months, we award the defendant one half of its costs, together with all of its disbursements, calculated on Scale Three. For purposes of calculating costs the amount in issue is the difference between the fourteen months already paid to the plaintiff and the proposal by his counsel, for the court to award at the equivalent of at least eighteen months salary, together with the one month's arrears of salary argued by the plaintiff. The amount in issue is therefore the equivalent of five months salary. J. Halifax, Nova Scotia February 16, 1996
The plaintiff was terminated as a sales agent after being employed by the defendant for 26 years. As part of the termination package he received 14 months salary continuation. The plaintiff claimed that he had not received 'reasonable notice' and sought damages. He also claimed that he was owed arrears of salary at the time of his dismissal. The defendant argued that the plaintiff had failed to mitigate his damages. Dismissing the action, that the appropriate period of notice was in the range of 14 to 15 months. Since the calculation of a 'reasonable period of notice' is not an exact exercise, either period could have been justified. Thus, it could not be said that the 14 month period given by the defendant was unreasonable. Furthermore, the plaintiff was not owed any arrears. Finally, in view of a non-competition clause in the contract of employment, it was not unreasonable for the plaintiff not to have pursued employment with other insurance companies any more than he had.