A Wrongful Dismissal Case with A Twist

The Supreme Court of Canada dismissed leave to appeal in Yvonne Montague, et al. v. Bank of Nova Scotia, et al. - and between - Bank of Nova Scotia v. Yvonne Montague, et al. (August 26, 2004)

Back in January 2004, the Court of Appeal decided the case of Montague v. Bank of Nova Scotia (January 7, 2004, Ont. C.A.). In brief, the Court dismissed Ms. Montague's appeal against the trial judges determination that she should received 16 months pay in lieu of notice of termination and dismissing her claim for aggravated and punitive damages. The Court also dismissed the Bank's appeal of the trial judges decision to increase the notice period after she had been informed that the Bank had made a formal offer to settle under Rule 49 of the Rules of Civil Procedure.

What is apparent is that Ms. Montague and the Bank have been participants in a long and difficult legal battle.

Ms. Montague was terminated from her employment the Bank on July 24, 1991. At that time she had been employed by the Bank as a data entry operator for approximately fifteen and one-half years. When she was terminated, she was earning an annual salary of $24,750.00, plus a shift bonus valued at $1,254.50 per year and employee benefits were valued at $2,600.45 per year.

At the time of Ms. Montague's termination, there was a dispute about certain medical information and her medical status (she had fallen at work and sustained some injuries). The termination letter was sent the day after Ms. Montague had attended at a specialist appointment (the Bank was aware that she was doing so). The Court made the following comment:

The letter did not acknowledge the fact of the two recent medical consultations. Nor did the Bank make any inquiries of Mrs. Montague about what she had learned or when the resulting medical reports might be expected. It simply fired her.

There were a number of issues in the appeal by Ms. Montague and the Cross-Appeal by the Bank.

The Appeal by Montague

The Period of Reasonable Notice

The Court of Appeal held that the trial judge had not erred in determining that the period of reasonable notice was 16 months. In doing so, the Court held, she was alive to the Bardal v. The Globe and Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.) (discussed here). Further, she also discussed and applied the principle set out in Wallace v. United Grain Growers Ltd. (1997), 152 D.L.R. (4th) 1 (S.C.C.)(discussed Here)

Aggravated and Punitive Damages

The Court dismissed this aspect of the appeal as follows:

[Ms. Montague] argues that the trial judge erred in dismissing her claim for aggravated and punitive damages. I do not agree. There was ample evidence to support the conclusion of the trial judge that there was no malice or vindictiveness by the Bank or its officials here. In addition, the evidence does not sustain the conclusion that the Bank?s conduct constitutes a separately actionable wrong. Hence punitive damages were properly denied. Moreover, the absence of any separately actionable wrong puts an end to any entitlement to aggravated damages.

The Cross Appeal by the Bank

The Wallace Factors

The Court was of the view that:

There was ample evidence for her to conclude that the respondent fired the appellant precipitously, knowing of the pending medical visits but making no effort to find out what information they had yielded or when the resulting reports might be available. Moreover, the respondent treated the appellant as having abandoned her position, knowing that she had done nothing to suggest that. It was reasonable for the trial judge to assess this conduct as being unreasonable and in bad faith. As a result, Wallace was properly applied.

Trial Judge Changing Her Judgment

This is, probably, the most interesting (and controvercial) aspect of the case. The Rules of Civil Procedure provide that an offer to settle is not to be disclosed to the Court "until all questions of liability and the relief to be granted, other than costs, have been determined".

It seems that the trial judge changed her judgment twice. Here's the history. The original judgment was 12 months. The offer was disclosed and she corrected herself and said that, really, the judgment was 13 months when you gactored in the Wallace-bump. When she was told that the offer was still greater than the judgment, she awarded costs agaiinst Ms. Montague from the date of the offer. A short time later, before the judgment was entered with the Court, the trial judge called the parties back to court and increased the notice period to 16 months [See paragraph 21 of the Court of Appeal's decision] which was greater than the Bank's offer. The trial judge then awarded costs against the Bank.

The Bank suggested that the judge was not permitted to alter her judgment. The Court of Appeal disagreed. They held that "There can be no doubt that until a judgment is formally entered in the court record, the judge has a very broad discretion to change it." The Bank also suggested that the trial judge had changed her judgment "to avoid the cost consequences of Rule 49 for Mrs. Montague". The Court of Appeal held that there was nothing in the record to suggest that and, in any event, since the 16 months that was ultimately awarded by the trial judge was reasonable and not reversible.

In saying this the Court did make the following comment:

While this is not such a case, I have no doubt that in some cases the very wide discretion a judge has to change his or her judgment before it is entered could be abused if it were exercised for an improper purpose. Any change to a judgment once given, no matter how soundly based, runs the risk of evoking suspicions of abuse on the part of those adversely affected. It is at the least disquieting, and to that extent can put a cloud over the administration of justice. A judge exercising this discretion bears a significant onus to explain the change. Giving clear reasons for decision is always a profoundly important part of judging. See R. v. Sheppard, [2002] 1 S.C.R. 869. It is never more important than in this circumstance.

The significance of this case rests not so much in the principles of wrongful dismissal, but, rather, in the extent to which judges will be accorded lattitude in altering their judgments to better serve the ends of justice. The case highlights, as the Court notes, the need for judges (or arbitrators or other administrative decision makers) to provide clear reasons for their decisions. This is especially so where the optics are not good.

Also, of note, is the fact that the timing of a termination and the circumstances surrounding it can significantly increase the notice period (in this case by 4 months) by reason of the Wallace factrs.