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Intervention by the Court of Appeal to Clarify Damages related to Wrongful Dismissal and Discrimination

The Ontario Court of Appeal’s Decision in Strudwick v. Applied Consumer & Clinical Evaluations Inc. , 2016 ONCA 520

Background

The appellant Ms. Vicky Strudwick (hereinafter “Ms. Strudwick”) was employed by the respondent, Applied Consumer & Clinical Evaluations Inc. (hereinafter “Applied Consumer”) for fifteen (15) years before she became deaf in 2010 from an uncertain cause. A campaign of abuse against Ms. Strudwick began almost immediately in an attempt to induce Ms. Strudwick to resign. The campaign of abuse included, but was not limited to, publically belittling, harassing and isolating Ms. Strudwick because of her disability.  Applied Consumer also refused to accommodate Ms. Strudwick’s disability and “took specific steps to increase the difficulties she faced as a result of her not being able to hear.” (para 2). Ms. Strudwick did not resign, however, she was later fired for an alleged stunt at a company event in May 2011.
Ms. Strudwick brought an action against Applied Consumer for wrongful dismissal. Despite her action, Applied Consumer continued in its abusive conduct by delaying her outstanding pay and listing her dismissal as wilful misconduct as to interfere with any employment insurance benefits that would otherwise have been available. As a result, Ms. Strudwick was diagnosed with adjustment disorder with mixed anxiety and depression.
 
Ms. Strudwick’s versions were deemed facts as Applied Consumer did not defend and a default judgment was entered against it. The motion judge found that Applied Consumer’s conduct had amounted to unfair treatment, noting that its refusal to accommodate was horrendous. Ms. Strundwick was awarded:
  • close to $50,000 for pay in lieu of notice;
  • $20,000 for violations of the Ontario Human Rights Code;
  • close to $19,000 in damages for intentional infliction of mental distress; and
  • $15,000 for punitive damages.
Applied Consumer did not make a single payment of the award.

Issues

Ms. Strudwick appealed the assessment of damages. There were two (2) central issues for the Court to consider:
  1. whether Ms. Strucwick was able to seek more damages than was originally    claimed; and
  2. whether the trial judge erred in his assessment of damages awarded.

The Ontario Court of Appeal’s Decision

Issue 1 – Damages Beyond the Pleadings

Relying on Burkhardt v Beder, [1963] SCR 86 and Whiten v Pilot Insurance, 2002 SCC18, the Court found that a judgement cannot exceed what has been pleaded, unless the claim has been amended. Ms. Strudwick initially claimed damages in the amount of $240,000, but on appeal sought over one million dollars in damages. The claim was not amended to reflect the increase in damages sought for fear that Applied Consumer would try to defend the claim.

Issue 2 – Assessment of Damages

Regardless of the above decision the Court still engaged in an assessment of the damages and whether the motion judge erred in his assessments.

First, with respect to damages for wrongful dismissal, the Court found that the motion judge did not err in his assessment of awarding 24 months. By affirming the motion judge’s assessment the Court reaffirmed the principle that exceeding 24 months for reasonable notice period will only be awarded in the most exceptional cases. The Court also rejected Ms. Strudwick’s argument that she should be compensated until retirement to the age of 65.

Second, with respect to damages for Human Rights Code violations, the Court held that the motion judge erred in two ways. The motion judge erred in not considering the profound impact of discrimination on the vulnerable. The motion judge also erred in not considering Applied Consumer’s conduct beyond its failure to accommodate. Therefore the Court increased the human rights damages to $40, 000.

Third, with respect to damages for intentional infliction of mental suffering, the Court found that the motion judge erred when he failed to consider the cost of therapy for Ms. Strudwick’s deafness. The Court noted that once the tort has been established, “the ordinary principles of assessment for damages relating to personal injuries applies” (para 82).

Fourth, with respect to aggravated damages, the Court held that the motion judge erred in electing to not award damages for Applied Consumer’s unfair and bad faith conduct due to the fact that if awarded it would overlap with damages awarded above. The Court noted the issue of overlap, however, the Court found that Applied Consumer’s conduct during the employment and after her dismissal was so egregious as to justify aggravated damages.

Fifth, with respect to punitive damages, the Court agreed that punitive damages were warranted, but did not agree with the motion judge’s assessment of the amount awarded. The Court noted that an increase in damages was necessary to deter conduct, such that Applied Consumer participated in. While the Court considered the size of Applied Consumer and the impact of such an award on its financial viability, the court did not agree with the motion judge’s consideration of the lack of profit from its concealment of its abuse.

Although totally the amount of damages above came to $247,850.79, the award was reduced to $240,000 to reflect the damages pleaded.

Our Thoughts

The above decision highlights the Court’s willingness to assess the liability, but not necessarily award damages beyond what is modestly assessed. However, the above is a clear example of why ignoring a legal action can be costly. Employers should also take note that their responsibility does not end at accommodating an employee’s disability; there is a responsibility to treat their employees fairly.

The above article is for general information purposes only and does not constitute legal advice. If you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere.