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Reasonable Notice Damages for Wrongful Dismissal Cannot be Determined via Summary Judgment

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The decision from of the Court of Queen’s Bench of Alberta in Coffey v. Nine Energy Canada Inc., 2018 ABQB 898 [Coffey], provides clarity amidst the conflicting jurisprudential landscape regarding whether the assessment of damages for a termination without cause is appropriate for summary judgment.

In Coffey, the Plaintiff had commenced a claim for wrongful dismissal and applied for summary judgment against his former employer, alleging entitlement to damages for a reasonable notice period and a percentage of revenue. The Defendant counterclaimed, alleging the Plaintiff made disparaging remarks and improperly used confidential information. The Master found that summary judgment was inappropriate for the assessment of damages for pay in lieu of reasonable notice for wrongful dismissal. Summary judgment was also not suitable for the Plaintiff’s claims for punitive or aggravated damages, or for the counterclaim. The Plaintiff appealed.

The Court dismissed the appeal, judging that the assessment of damages for pay in lieu of reasonable notice for wrongful dismissal is outside of a Master’s jurisdiction and beyond the scope of summary judgment. Because the assessment of reasonable notice requires weighing evidence, the appropriate summary procedure is via summary trial, not summary judgment.

The Court acknowledged that the question of the appropriate test for summary judgment in ascertaining whether a claim has “merit” was presently before the Court of Appeal for determination. However, the Court found that it was not necessary to decide that issue in order to find that it is not appropriate to determine reasonable notice damages by way of summary judgment. The Court noted that both the Court of Queen’s Bench Act, s.9, and the Constitution Act, 1867, s.96, preclude Masters from weighing evidence to determine damages. The summary judgment rule must be interpreted within the context of a Master’s jurisdiction and is not intended to determine the parties’ rights; rather, the rule requires an examination of the evidence to find whether there is an issue to be tried. Thus, when evidence must be weighed and contentious issues of fact determined, summary judgment is inappropriate. Instead, the correct procedure is summary trial, regardless of whether the summary judgment application is before a Master or a Justice.

The Court commented that the assessment of damages for reasonable notice is not a mechanical exercise. It involves the weighing of evidence to ascertain the reasonable notice period. The analysis must be conducted on a case-by-case basis as the factual scenarios, and in particular, the distinguishing facts, have a significant impact on the analysis. It is not a matter of simply locating where the pertinent factual scenario falls on a chart of prior decisions and accepting that as determining the matter. To the contrary, the jurisprudence merely establishes general parameters, narrowing down the likely findings within which parties can assess their potential exposure.

Determining the damages claimed for lost revenues involves contested facts and is intertwined with the entitlement of reasonable notice damages. As such, the Court gave deference to the Master’s decision that summary judgment was not appropriate in the circumstances. The Court also found that the Defendant’s counterclaim involved a material conflict in evidence, likely requiring viva voce evidence and a trial. The Plaintiff confirmed on questioning that he made statements about the Defendant to clients, supporting the counterclaim, and thereby providing a genuine issue of merit requiring a trial.

In conclusion, the Court supported the Master’s finding that an assessment of damages for pay in lieu of reasonable notice for wrongful dismissal is not appropriate for summary judgment. It requires a determination of contentious issues of fact, the weighing of evidence to decide the Plaintiff’s rights and entitlements, and is outside the scope of the summary judgment rule and Masters’ jurisdiction. Instead, the summary trial process before a Justice is the appropriate process to decide matters such as the one before the Court in Coffey.