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WRONGFUL DISMISSAL DAMAGES - Punitive damages

Wednesday, June 23, 2021 @ 4:43 PM  


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Appeal by the defendant law firm from trial judgment allowing the respondent’s wrongful dismissal claim against it. Cross-appeal by respondent from the dismissal of her claims for punitive damages and general damages for the loss of opportunity to become a lawyer. The respondent was hired as an articling student by the appellant. The firm specialized in driving law and offences. The respondent’s articles and employment were terminated after the appellant discovered a Blog that offered information of interest to persons facing a driving prohibition. Similar information was offered in the blogs maintained by the appellant. The appellant believed the Blog threatened the firm’s competitive position and that the respondent was behind it. The appellant then terminated the respondent’s employment and commenced an action against her for breach of contract, theft, trespass, and wrongful use of materials. The trial judge dismissed these claims. The trial judge found the allegations against the respondent did not constitute cause for dismissal or for the unilateral termination of the articling agreement. He awarded the respondent $18,034 in damages for breach of the employment contract and aggravated damages of $50,000. He did not deal with her claim for punitive damages. He found no evidence before him to value the potential increase in her earning capacity and declined to award damages based on the loss of the opportunity to become a lawyer, calling it speculative. The appellants argued the trial judge erred by not considering the special relationship between a principal and articled student mandated by the rules and requirements of the Law Society and thus wrongfully concluded that because the respondent’s conduct fell short of dishonesty, it did not breach the employment relationship or justify termination of her articles. The respondent argued the trial judge erred in not awarding damages for her delay in becoming a lawyer, despite his finding that the appellant’s allegations against her rendered her unemployable in the legal profession if the allegations remained outstanding. She further argued the trial judge erred by failing to award punitive damages.

HELD: Appeal dismissed. Cross-appeal allowed. The trial judge did not err in applying the common law principles to the facts before him. There was no legal foundation for the appellant’s proposition that the principal-articled student relationship was the determining factor when assessing whether just cause existed for the termination of the employment relationship. Trust was not a unique characteristic that applied only to the principal-articled student relationship. The requirement that a principal confirmed an articled student’s good character by signing a declaration at the end of the articling period did not distinguish the employment relationship from other employment relationships to the extent that unique employment law principles ought to be applied. Common law employment principles could readily be applied to the employment relationship between a principal and articled student. The trial judge’s failure to award damages for loss of opportunity was an error in principle. The fact that damages could not be assessed with certainty did not relieve the wrongdoer of the necessity of paying damages for a breach of contract. What the respondent lost because of her wrongful termination was the opportunity to become a lawyer at the end of the articling period. She established that she was entitled to an award for loss of opportunity. She was awarded $100,000 for loss of earning capacity. The appellant’s conduct described by the trial judge in the manner of termination and of serving the respondent with the claim could properly be described as high-handed, malicious, arbitrary or highly reprehensible misconduct that departed to a marked degree from ordinary standards of decent behaviour. The awards of general and aggravated damages were not sufficient to achieve the goals of denunciation, deterrence, and retribution but must be considered in determining the appropriate award. Considering those awards, the respondent was awarded $25,000 in punitive damages.

Acumen Law Corp. v. Ojanen, [2021] B.C.J. No. 995, British Columbia Court of Appeal, S.D. Frankel, R. Goepel and J. DeWitt-Van Oosten JJ.A., May 10, 2021. Digest No. TLD-June212021006