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DISCIPLINE AND TERMINATION OF EMPLOYMENT - Conflict of interest

Wednesday, May 12, 2021 @ 6:09 AM  


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Appeal by the defendant GWR Resources from the award of $72,500 in contractual damages to the respondent Eisler for wrongful dismissal and the dismissal of its counterclaim. Eisler founded the appellant mining exploration company in 1987. The appellant dismissed then 79-year-old Eisler, its president, in 2011 without notice or pay in lieu. The appellant alleged several categories of misconduct against Eisler, including fraudulent invoicing for equipment rentals and management fees and related party transactions between Eisler and his corporations and the appellant for equipment rentals that were fraudulent or in breach of his fiduciary duties. Eisler was not warned about the allegations or given an opportunity to defend himself. Eisler passed away a few months before trial. The litigation was continued by his executor. The respondent Eisler Holdings was the company through which Eisler provided services to the appellant. The trial judge found the appellant failed to establish just cause for Eisler’s termination. She dismissed the appellant’s counterclaim in its entirety.

HELD: Appeal dismissed. There was no palpable error in the trial judge’s conclusion that no fraudulent invoicing occurred. The trial judge did not err in finding the related party transactions were procedurally and substantively fair and reasonable to the appellant. There was no error in principle in finding the transactions were disclosed to the appellant in multiple ways or in finding the information sharing between Eisler and the directors of the appellant was plentiful, meaningful and transparent. The trial judge did not limit herself to factors relevant to procedural fairness in determining substantive fairness.

Eisler Estate v. GWR Resources Inc., [2021] B.C.J. No. 510, British Columbia Court of Appeal, P. Abrioux, J.C. Grauer and P.G. Voith JJ.A., March 16, 2021. Digest No. TLD-May102021006