A recent case, Consbec Inc. v. Walker, 2016 BCCA 114 (CanLII), deals, among others, with the unusual situation where an employee (at trial) was held liable for failure to give reasonable notice (2014 BCSC 2070 (CanLII)).
Walker was employed by Consbec for 5 years. In 2002, he left without giving notice to start his own competing business. Much litigation followed. Consbec made numerous claims, including breach of fiduciary duty or common-law duties of good faith. Walker counterclaimed. At trial most of the claims and counterclaims were dismissed. However, the trial judge found that Walker had failed to give reasonable notice and awarded damages. She also found that Walker had conveyed a property to his wife fraudulently.
Consbec appealed; Walker cross-appealed. Much of Consbec’s appeal challenged the findings of fact was and dismissed. In his cross-appeal, Walker submited that the judge erred in finding he had engaged in a fraudulent conveyance, and the manner in which she determined damages for his failure to give reasonable notice.
The trial judge had awarded Consbec $56,116.11 in damages against Walker for “wrongful quitting” (Ainscough v. McGavin Toastmaster Ltd. (1974), 45 D.L.R. (3d) 687 at 699 (B.C.C.A.), aff’d 1975 CanLII 9 (SCC), [1976] 1 S.C.R. 718). The trial judge found that there was “no point in trying to determine the proper notice that [Walker] should have given.” The award was based on the costs and expenses in connection with the temporary assignment of one employee and another employee’s relocation. Walker challenged the quantum of damages awarded arguing that Consbec failed to prove it suffered any damages arising from his failure to give notice and that the judge’s methodology for assessing damages was flawed.
The Court of Appeal agreed with Walker:
“71. … To award Consbec damages, the judge was required to first determine the notice Peter should have given Consbec and then determine what damages, if any, Consbec had proven it suffered due to Peter’s failure to give that notice.
…..
- Based on the trial judge’s finding that Peter was essentially an “estimator” who exercised very little independent authority, I consider a notice period of one month reasonable. Peter was a “manager” in name only; beyond knowing how to use a computerized spreadsheet his position did not require any specialized skills and training.
- What must be determined next is what damages, if any, flow from Peter’s failure to give Consbec one month’s notice … the measure of damages is not the cost to Consbec as a result of Peter leaving the company, but the cost to Consbec as a result of Peter’s failure to give notice.
The Court of Appeal considered the amounts awarded in light of these principles and set aside the award of damages.
The claim for fraudulent conveyance was based on transfers of properties between Walker and his wife. The trial judge found that Walker had sought to deceive the court about the transfer. However, the Court of Appeal concluded she had misapprehended the evidence of Walker’s accountant with respect to a letter he had written about the reasons for the transfers, which was central to her conclusion that the conveyance was fraudulent, amounted to a “palpable and overriding error.” The fraudulent conveyance claim had become academic by virtue of a transfer back to Walker of the properties in question.