Bennett v. Cunningham

In this matter Ken successfully represented a law firm client alleging an employer had been dismissed for just cause all the way to the Ontario Court of Appeal.

The parties involved in this matter were both lawyers. Ms. Cunningham had a law firm in Mississauga, Ontario and in the summer of 2002 was looking for a junior associate to help with litigation matters. Ms. Bennett was interviewed and was hired for the position on July 8, 2002.

When she was hired, Ms. Bennett elected to be compensated by being paid 50% of all fees billed and collected with an annual recoverable advance against commission of $38,000. Early into the relationship, it became apparent that there was a large gap between the fees Ms. Bennett has billed and the fees that had been collected by the firm.

There were further issues which eventually led to Ms. Bennett giving Ms. Cunningham a letter on December 21, 2002 in which she made accusations that Ms. Cunningham was dishonest and negligent. The letter also contained comments suggesting that Ms. Cunningham was disorganized and incompetent. This letter was given to Ms. Cunningham just prior to her leaving for Christmas vacation.

Ms. Cunningham returned from vacation on January 6, 2003 and advised Ms. Bennett that she was terminated and that her last day of work was to be January 10, 2003.

A big part of the dispute at trial involved whether or not Ms. Bennett was an employee or a contractor.

The different between whether someone is considered an employee or a contractor impacts the kinds of compensation he or she may be entitled to receive if the employment relationship breaks down.

The Honourable Justice G. Valin found that Ms. Bennett was an employee and that she had been lawfully dismissed for just cause by Ms. Cunningham. Her claim for damages was dismissed:

“30     In this case, the incident that gave rise to the summary dismissal was Ms. Bennett’s four-page letter to Ms. Cunningham dated December 21, 2002. Ms. Bennett hand-delivered the letter to Ms. Cunningham on Saturday morning, December 21, 2002, as Ms. Cunningham was about to leave the country for a family vacation. She also mailed the letter to Ms. Cunningham by registered mail.

…

37     I find that Ms. Bennett did not offer any reasonable explanation for writing the letter, nor did she seek to apologize. Ms. Cunningham did not return from her vacation until January 6, 2003. The intervening period afforded Ms. Bennett ample opportunity to cool off and to offer an apology. Although that would have been difficult, if not impossible, to do in person, Ms. Bennett could have prepared and placed a written apology on Ms. Cunningham’s desk for her attention when she returned from vacation.

…

40     In addition to delivering the letter by hand, Ms. Bennett also mailed it to Ms. Cunningham by registered mail. This fact casts a dark cloud over the sincerity of the closing words of the letter that, in the submission of Ms. Bennett’s counsel, operated to soften the overall tone of the letter.

41     The relationship between lawyers practicing in the same law office is fundamentally based on confidence, respect and trust. After she had an opportunity to read the letter in its entirety and to consider its implications, Ms. Cunningham concluded that she could no longer have a working relationship with Ms. Bennett.

42     Her conclusion in that regard was justified. The letter was highly critical of the operations in the law office and of Ms. Cunningham’s integrity. The comments and accusations in the letter undermined the confidence she had in Ms. Bennett and destroyed the employment relationship.

…

53     Ms. Bennett’s claim for damages for breach of contract arising from Ms. Cunningham’s failure to give reasonable notice is dismissed.”

Ms. Bennett appealed Justice G. Valin’s decision to the Divisional Court on the issue of whether there was just cause for her dismissal. The Divisional Court determined that a contextual analysis had to be applied and that the letter of December 21, 2002 did not warrant dismissal for cause:

“9    I agree with the appellant Ms. Bennett’s submission that there was an absence of the required contextual analysis concerning the cause for dismissal in this case and that such an analysis would have led to the finding that her letter of December 21, 2002 did not warrant dismissal for cause. I would allow the appeal for the reasons explained below.”

This matter is a good example of how long litigation may take. This dispute lasted almost a decade until all rights of appeal were exhausted. Ms. Bennett was dismissed at the beginning of 2003 and it took until October of 2010 for this matter to be heard by the Divisional Court.

Although Ms. Cunningham won at trial, Ms. Bennett won at the Divisional Court which led to Ms. Cunningham successfully seeking leave to appeal to the Ontario Court of Appeal.

The appeal was heard  on May 8, 2012 and the Court of Appeal’s decision reversed the Divisional Court’s decision and restored the trial judgment in favour of Ms. Cunningham:

“15     The Supreme Court of Canada instructs us in McKinley, at para. 34, that the contextual approach involves examining “both the circumstances surrounding the conduct as well as its nature or degree”. In my view, a fair reading of paragraphs 32 through 43 of the trial judge’s reasons for judgment clearly demonstrates that he did precisely that, even if he did not use the words “contextual approach”.
…

18     In effect the Divisional Court simply substituted its view of the facts for that of the trial judge. This is not the role of an appellate court. The trial judge found that the December 21, 2002 letter did constitute just cause for dismissal and he was entitled to do so on the evidence before him.

Conclusion

19     In the result, I would allow the appeal, set aside the order of the Divisional Court, and restore the trial judgment in all respects.”

This matter involved several significant, time-consuming, and expensive steps.

Ultimately, Ken was successful in representing his client and won the case at the Ontario Court of Appeal.

This decision demonstrates that there is a gray area in the determination of what constitutes just cause. In one case the same behavior may amount to just cause but in another case it may not.

Full citations:
Bennett v. Cunningham, 2006 CarswellOnt 6909, [2006] O.J. No. 4446, [2006] O.T.C. 1033
Bennett v. Cunningham, 2007 CarswellOnt 416, [2007] O.J. No. 296, 166 A.C.W.S. (3d) 224
Bennett v. Cunningham, 2011 CarswellOnt 212, 2011 ONSC 28, [2011] O.J. No. 185
Bennett v. Cunningham, 2012 CarswellOnt 10166, 2012 ONCA 540, [2012] O.J. No. 3839