Author Archives: Irvin Schein

About Irvin Schein

I am a litigator, mediator, and arbitrator and a loving father of 2 and grandfather of 3.

Injuries During Sporting Events: When Does a Participant Give Up His Right To Sue?

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Last month my recreational hockey career was (temporarily) interrupted by a season-ending injury suffered during a game. While it would never occur to me to blame anyone for the injury, it is interesting to consider when a participant in a sporting event might actually have the right to sue someone who causes him or her an injury.

The issue was addressed by the Ontario Court of Appeal in the recent case of Kempf v. Nguyen.

This was a case arising out of an incident that took place in 2008 during a charity bicycle ride to benefit the Heart & Stroke Foundation.  In that ride, which was is an annual event, over 12,000 cyclists took to the Don Valley Parkway in Toronto.  The ride was open to cyclists of all abilities.  Participants could choose a 25, 50 or 75 kilometre route.  The road was closed to cars for the event.

Like most charity rides, this was not a competitive event.  There were no prizes.  Having said that, many cyclists at these events tend to ride as fast as they can.  The entire roadway was open to the cyclists but experienced cyclists at these events often ride in packs to take advantage of the ability to draft.  Inside the packs, riders roughly organize into lines with one cyclist following immediately behind another.  The front wheel of a cyclist is often within a foot or less of the back wheel of the cyclist ahead.

The parties in this action, Mr. Kempf and Mr. Nguyen, were both experienced cyclists and members of cycling clubs, riding several times a week.  Both were familiar with the generally understood rules pertaining to cycling safely in a group.

To participate in the ride, Kempf and Nguyen signed a waiver that made it clear that each cyclist was releasing the Heart & Stroke Foundation of Canada and its sponsors from any liability arising out of the cyclist’s participation in the event.

Shortly after the ride started, Nguyen was at the back of the first group of cyclists intending to ride 75 kilometres.  A second group was slightly behind. Kempf was at the front of the second group.

Wanting to join the first group, Kempf approached Nguyen’s left side.  At a point at which Kempf’s front wheel overlapped Nguyen’s back wheel, Nguyen swerved to the left, clipping Kempf’s front wheel with his back wheel.  Kempf fell to the ground.  A number of other cyclists rode over him.  Some of them fell as well. Kempf was seriously injured.

It appears that Kempf tried but was unable to avoid the contact with Nguyen.  Both cyclists were travelling between 20 and 25 kilometres per hour and the contact happened in a split second.

Nguyen did not stop after the impact of the two bicycles.  Kempf was later able to identify Nguyen as the rider who collided with him by looking through pictures of the ride posted online.

Kempf sued Nguyen for damages for negligence.  Nguyen’s evidence at trial was that immediately before the impact, the rider two places ahead of him suddenly slowed down.  This caused the rider directly ahead of him to take the evasive measure of decelerating and swerving to the right.  Nguyen was not forewarned of this and had no time to consider his options.  To avoid impact with the riders ahead, he swerved to his left.  He had no time to shout out a warning.  He was not aware that there was someone moving up behind him on his left.  In cross-examination, he admitted that his sudden movement to the left was not one that he would ordinarily make in a group ride.

Immediately after swerving to the left, he heard a crash behind him.  He did not look back as he was concentrating on the rider in front of him.  He carried on with the ride apparently unaware of his involvement in what had just happened.

The trial went on for five days. The trial judge found that Nguyen’s actions had caused Kempf’s injuries.

Nguyen appealed to the Court of Appeal on a number of grounds, including the fact that at the outset of the trial, the trial judge had dismissed the jury and proceeded with the trial on a “judge alone” basis for certain technical reasons.

At the appeal, in a two-to-one decision, the majority set aside the judgment on the basis that the jury notice should not have been struck, and ordered a new trial.  However, the interesting point in my view has to do with the court’s views as to Kempf’s right to recover on any basis.

Kempf had signed a waiver at the outset.  However, the waiver was very clearly intended to benefit the ride organizer.  No document was signed in which Kempf waived his rights against other cyclists acting negligently.

However, Nguyen argued at trial that Kempf should not have been able to recover anything on the basis of a doctrine of law identified by the Latin phrase volenti non fit injuria – literally, “to one who is willing, no harm is done”.  Kempf had agreed to participate in this event knowing full well that people sometimes fall off bicycles and hurt themselves.  As a result, when that happened to Kempf, he had no one to blame but himself.

This type of argument is not new. People have tried to sue each other over injuries suffered, for example, during fights on the ice at hockey games. There is always an argument about whether or not a participant voluntarily assumes the risk of an injury arising out of that type of violent event, given that hockey typically involves physical contact.

The Court of Appeal made it clear that in sports such as hockey or basketball, for example, players have to assume some risk of injury from bodily contact even if it is intentional or in breach of the rules. This type of thing is part of the ordinary risk of the game. Nevertheless, such conduct in these contact sports will be unacceptable where it is malicious, out of the ordinary or beyond the bounds of fair play.

Having said that, sports participants are not exempted from the application of ordinary negligence law. If a defendant conducts himself in a negligent manner, he will have to answer for the damages that he causes. When Kempf decided to participate in the ride, he assumed the usual risks associated with it including the actions of reasonable cyclists who could be expected to follow the known rules governing group rides. However, in the view of the court, by its nature “cycling is not a contact sport or one that involves physical encounters with opponents such as football or rugby”. Since Nguyen’s actions went beyond what Kempf agreed to reasonably expect given the nature of the activity, he was liable for damages.

In my view, it would seem that the extent to which a participant accepts the risk of injury will actually depend on two things. The first is the nature of the activity.  Clearly, the more violent the activity, the less likely an injured party will be able to sue.  Secondly, it seems fair to say that any negligence on the part of a participant causing injury to another will be actionable. However, the question of whether or not a participant’s conduct was negligent will be related to the nature of the sport. In other words, the more inherently violent the sport, the less likely that violent conduct on the part of a participant causing injury will be considered to be negligent.

“Hard and Pointed” Conduct Does Not Pay

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The recent decision of the Ontario Court of Appeal in High Tower Homes Corporation v. Stevens is a useful illustration of the extent to which the court will go to deprive a party of relief where that party has acted in a way which some might consider unfair, even if the conduct was not unlawful.

In this case, a vendor owned two adjacent properties. One contained the principal residence of the vendor and his wife. They decided to sell the properties together, having decided that doing so would maximize their value.  For tax planning purposes, they wanted to allocate as much of the total purchase price for the properties as possible to one containing their personal residence.

The purchaser, a builder, submitted offers to buy both properties. The first offers contained conditions that made the sale of each property conditional on the sale of the other. After a series of revised offers went back and forth, the purchaser revised the offer for the parcel that did not contain the principal residence to provide that the sale of that property was not conditional on the sale of the property containing the principal residence. That change was not black-lined or otherwise drawn to the vendor’s attention. No such change was made to the corresponding clause in the offer involving the principal residence. The vendor did not notice the change.

As the vendor had preferred, the bulk of the amount offered for the properties together was attributed to the property containing the principal residence.

The agreement for the property that did not contain the principal residence had a clause making the purchaser’s obligation to close that purchase conditional on a variety of items.  The clause indicated that if the conditions were not waived by a particular time “by notice in writing to the seller”, the agreement would become null and void.

The two agreements were signed. On the deadline date for the waiver of conditions with respect to the property that did not contain the principal residence, the purchaser attempted to waive those conditions by delivering a notice to that effect to the vendor’s lawyer by fax.

By doing so, it appears that the purchaser tried to put into effect a plan that it must have concocted right at the outset. That plan involved purchasing the property that did not contain the principal residence at a bargain price while allowing the agreement for the other parcel, in respect of which the price was somewhat inflated, to go by the wayside.

As the Court of Appeal indicated, “the vendor was stunned when he learned of his mistake, and the purchaser’s attempt to take advantage to buy only Blue Water at a bargain price.”

The vendor refused to proceed. The purchaser sued for specific performance and in the alternative, damages of $5 million. The purchaser brought a motion for partial summary judgment.

The motion judge declared the agreement unenforceable on the very technical ground that notice of the waiver of conditions should have been delivered personally to the vendor and not by fax to his lawyer.

The purchaser appealed to the Court of Appeal, arguing in essence that the delivery of the notice by fax to the vendor’s lawyer was good enough based on a variety of legal doctrines.

The only doctrine that would appear to have had a glimmer of hope of success for the purchaser involved the equitable doctrines of waiver and promissory estoppel. The purchaser argued that by his conduct throughout, directly and through his lawyer, the vendor had demonstrated that he was not going to insist on strict compliance with the requirement that the purchaser’s notice in writing of its waiver of the conditions be delivered personally to the vendor. The purchaser argued that having been led to believe that strict compliance would not be required, he had somehow acted to its financial detriment in proceeding with the transaction, at least up to the date that the vendor pulled the plug on it.  As a result, it would be unfair for the vendor to be able to terminate the deal.

The Court of Appeal dismissed these arguments for a number of reasons. Most interestingly, however, the Court of Appeal pointed out that promissory estoppel is equitable relief. Therefore, a party seeking to invoke it must show that its past record in the transaction is clean. In this case, the Court of Appeal stated that it would decline to grant relief to the purchaser in view of the purchaser’s conduct at the outset. The motions court judge had concluded that while the purchaser’s conduct in changing the condition clause without notifying the vendor was not equivalent to fraud, the purchaser must have known that it was important to the vendor that the properties be sold together. The motion judge characterized the purchaser’s conduct as “hard and pointed”. Given that conduct, the purchaser was held not to be entitled to equitable relief.

The law now appears to be clear that there is a duty of good faith on parties to a transaction in terms of the manner in which they deal with each other after an agreement is made. There is no such duty on parties before they enter into a transaction.  Accordingly, this purchaser’s conduct during the negotiation process was not unlawful.  However, as it learned the hard way, conduct that might be characterized by a court as “hard and pointed” – to say the least – may well give rise to a negative result in court later on.

Some Thoughts and Observations by a Toronto Mediator

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In this post, rather than discussing a recent case, I thought it might be useful to provide observations on an aspect of the mediation process based on my training and recent experience conducting mediations in commercial disputes.  In particular, I would like to address the role of lawyers in managing their clients’ expressions of anger or high emotion.

Anger is almost an inevitable part of conflict.  A party believing his position to be right will likely believe the other side to be wrong and unreasonable in refusing to meet his demands.  As a result, parties in a mediation often blame each other and the resulting anger is one of the most commonly experienced emotions during a conflict.

One of the challenges for a mediator is to recognize the emotional states of the parties to the dispute, assess them in the context of the dispute and make an appropriate decision as to the circumstances under which each party is to be encouraged to express his or her emotions. At the very least, that analysis is critical to the decision as to whether to permit each party to vent or otherwise express emotion in the presence of the opposing party or merely in caucus.

One of the critical elements in the process has to do with the mediator’s own emotional self-awareness or emotional intelligence. Self-awareness will alert a mediator to feelings that might otherwise threaten his or her impartiality. Emotional self-regulation prevents these feelings from being expressed and acted upon in a manner that undermines the mediation.

A point that appears to receive little attention in the literature has to do with the importance of emotional intelligence of self-awareness among lawyers.

In a sense, the task of mastering one’s emotions is even more difficult for the lawyers than it is for mediators. Unlike the third party neutral mediator, each lawyer has been immersed in his client’s case, likely from the outset. The lawyer has been exposed primarily to his own client’s side the of the story, subject only to whatever documentary and oral discovery may have taken place by the time of the mediation. While any lawyer will recognize the importance of providing advice that is as objective as possible, the fact remains that many lawyers will, either deliberately or subconsciously, adopt their client’s cause as their own.  As a result, it may be more likely for the negotiations at mediation to give rise to emotional upset for the lawyer than for the mediator. This is particularly true if the lawyer for the opposing side is able to press the right triggers, for example by challenging the lawyer’s integrity, pride, ego, or skill level.  In that event, the need for lawyers to regulate their own emotions becomes even more important, but more difficult, than for the mediator.

Furthermore, unlike the mediator, a lawyer acting on behalf of an angry client in an emotionally charged dispute may find himself in a different predicament. Angry clients have a rather disturbing tendency to turn their anger upon their own lawyers, sometimes at the drop of a hat.  Whether that is a function of the often irrational behavior that characterizes angry outbursts and attitudes filled with blame and resentment is beyond the scope of this post.  However, most lawyers will have gone through this experience and may well have to confront it once again at or after mediation.  This will particularly be so if the mediation does not go well for the client, either because of hostility created by the opponent’s expressions of anger or for any other reason.

A lawyer confronted by his own angry client with attacks on his own integrity and threats to his own ego will have to manage his own emotions in order to respond appropriately and constructively.  This reality will represent a very real challenge.  A lawyer will approach the negotiation, presumably, with a view to obtaining the best result reasonably available to his client given the strengths and weaknesses of his case, the likely outcome and costs of trial, and the other usual considerations.  It may well be that this objective would be best served by permitting his client to express anger and high emotion, although presumably under controlled circumstances.  On the other hand, permitting a client free rein with his emotions may result in a backlash against the party’s own lawyer if the desired result is not achieved.  Furthermore, there are clients who seem to feel that their lawyer ought to share their anger, particularly if it is based in righteous indignation.  Lawyers who join in with their clients in expressing those sorts of sentiments may ingratiate themselves with their clients but, by doing so, will rarely contribute to the objective of settlement.

There is an additional reason why the need for lawyers to help regulate their clients’ conduct is even more significant than that of the mediator.  The mediator’s involvement in the matter will conclude at the end of the mediation whether the case has settled or not.  If the case has not settled, the action will proceed, the lawyer will continue to be involved, and the lawyer will next face the task of assisting the client to regulate his emotions when the matter reaches the courtroom.  In the courtroom, of course, the consequences of failure are far greater than they are at mediation, the atmosphere is likely to be even more emotionally charged, the need to regulate emotion is even higher, and the difficulty of doing so is even greater.

These observations are not just directed to lawyers.  A party involved in a mediation with a genuine interest in settlement will have to be able to “read” not only the opposing side but also his own lawyer, to be satisfied that the advice and guidance being provided is truly objective and dispassionate.

Warranties in Sale Agreements

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The recent case of French Family Funeral Home Limited v. Player et al. provides a useful review of the rights and obligations of parties to a real estate transaction where one party misrepresents the state of the property but the innocent party knows about it before closing, and goes ahead and closes anyway.

In this case, the property in question was located in Kirkland Lake, Ontario. The parties entered into an agreement of purchase and sale that included a warranty on the part of the vendor that there were no environmental issues concerning the property.

After a number of hiccups, the deal finally closed. As part of the deal, a portion of the purchase price was covered by way of promissory note from certain individuals involved in the company that took title to the property. The note was never paid and the vendor sued the individuals who had signed the note.

Part of the defence set up by the defendants concerned the fact that notwithstanding the representation contained in the sale agreement, the property did have environmental issues and as a result, the warranty given by the vendor had been breached. The defendants claimed that they were relieved from any obligation to pay the note and furthermore, that the entire transaction should be set aside.

The plaintiff moved for summary judgment.

The motions court judge granted the motion. The judge made a careful review of the evidence including a report prepared prior to closing, revealing that the property had previously been a mine site and that there existed a possibility of some non-native material buried on it including potentially hazardous chemicals.

The defendants had relied on this report in support of their argument that the vendor had made false representations upon which the defendants were entitled to rely, to avoid their contractual obligations.

However, the judge also found that the defendants were aware of this information for over a year before closing and possibly even before entering into the sale agreement itself.  They had the report in hand before closing together with similar information from the municipality. They did obtain additional information on the point after closing, but the judge found that this added little or nothing to what they already knew. Accordingly, the judge found that there had been no misrepresentation. In the view of the judge, the warranty contained in the sale agreement was not intended to cover matters of which the defendants were aware prior to closing.

This case highlights the importance of giving careful thought to deficiencies in a property of which one becomes aware prior to closing.  Making a choice to complete a transaction knowing of these deficiencies may well deprive the purchaser of any remedies after closing that might otherwise have been available.

The Duties of Contractors Involved in Design and Construction

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The recent decision of the Ontario Court of Appeal in O’Dowda v. Halpenny et al. is a useful reminder of the duties of contractors, subcontractors, architects and engineers who take part in the design and construction of buildings.

In this case, the plaintiffs purchased a house in 2003 from the defendants. They discovered structural problems soon afterwards. They obtained an expert report in late 2003. One of the problems disclosed by the report had to do with the load bearing ability of the roof.

They sued the vendors and commissioned a further report, which was prepared in early 2005, identifying further problems and raising safety concerns about the roof.

In March 2006, at his examination for discovery, one of the vendors testified that the house had been designed by G.S. Morton & Associates Ltd. The Morton firm also prepared the working drawings. Later that year, the purchasers added the Morton firm as an additional defendant alleging that it had been negligent in designing the house, causing it to be a danger to safety.

The Morton firm moved for summary judgment dismissing the action on the basis that it had been added as a defendant more than two years after the cause of action arose. The judge granted the motion, concluding that the purchasers knew or should have known that the negligent design of the house had created a condition of danger to safety after they reviewed the first report, even though the words “danger” and “safety” were not used in it. The judge also ruled that the purchasers should have known that it was the Morton firm that had designed the home because soon after taking possession, they had received the plans to the home stamped with the Morton firm’s name on it. As a result, the judge ruled that the purchasers knew of the problem, and who had caused it through faulty design work, more than two years earlier.

The purchasers appealed to the Court of Appeal.

The Court of Appeal very usefully reviewed the law in this area. It referred to a 1995 Supreme Court of Canada case making it clear that contractors involved in the design and construction of buildings will owe a duty in tort to subsequent purchasers of the building if it can be shown that it was foreseeable that a failure to take reasonable care in constructing the building would create defects that pose a substantial danger to the health and safety of the occupants. If the negligence is established and the defects become clear before any damage occurs, such contractors are liable for the reasonable cost of repair.

In this case, there was no question that the Morton firm was potentially liable to the purchasers in tort, even though there was no direct contractual connection between the purchasers and the Morton firm. The question before the court in this case was whether or not the judge had made a mistake determining that the purchasers missed the two-year limitation period in adding the Morton firm as a defendant.

The Court of Appeal determined that the judge had indeed made a mistake. The court pointed to an affidavit that had been sworn on the summary judgment motion, which was never challenged, indicating that the purchasers were not aware that the house might be dangerous by design until they received the second report in 2005. The court found that it had been an error of law for the motion judge to ignore that uncontested sworn evidence without giving any reasons for doing so. The court considered that the motion judge had the discretion to reject that evidence but felt that the judge could only do so if he explained why he was doing so. One could reasonably suggest that the sworn evidence was rejected because the judge interpreted the first report as suggesting that the house had a design defect. However, there was no explicit statement made by the motion judge rejecting the sworn affidavit evidence for that reason. As a result, presumably the Court of Appeal could not be certain that the judge had taken the affidavit into account.

Accordingly, the summary judgment order was set aside and the matter was ordered to proceed to trial to deal with the limitation issue.

This case is a useful reminder to both contractors involved in design and construction, and purchasers of newly constructed properties, of their respective obligations and rights. It is also a useful warning to purchasers becoming aware of potential design problems of the need to obtain expert advice and act on that advice as quickly as possible.

Municipal Liability For Road Maintenance

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The recent decision of the Court of Appeal in Fordham v. The Municipality of Dutton-Dunwich provides some useful guidance on the duty of a municipality to maintain its roads, and particularly signage, for the safety of its citizens.  The case is also interesting for its discussion on the differences, if any, in urban and rural settings.

In January 2007, a 16-year-old drove his car from one friend’s house to another.  He took a route through the Municipality of Dutton-Dunwich on rural roads that were unfamiliar to him.  He came to an intersection with a stop sign.  As he saw no approaching cars, he ignored the stop sign and drove through the intersection at about 80 km per hour.  Unfortunately for him, the road curved to his right just after the intersection.  In trying to navigate the curve, he lost control of his car and crashed into a concrete bridge abutting the road.  He suffered brain damage.

He sued the Municipality claiming that it breached its duty to keep the road in good repair by failing to post a checkerboard sign warning of the change in the road’s alignment.

At trial, the young man was successful.  The trial judge indicated that it was clearly a local practice in the rural area for drivers to go through stop signs if they considered it safe.  As a result, the change in the road’s alignment was a hidden hazard and the Municipality should have provided more than a stop sign to give ordinary rural motorists reasonable notice of the hazard ahead.  However, the judge also found the young man contributorily negligent because he had failed to stop at the stop sign.  As a result, the trial judge apportioned liability for the damages equally between the young man and the Municipality.

The Municipality then appealed.

The Court of Appeal found in favour of the Municipality.  As far as it was concerned, a municipality has no duty to keep roads safe for those who drive negligently.  Running a stop sign at 80 km per hour is negligent driving.  The turn in the road would have represented no hazard to a driver stopping at the stop sign or even one slowing down to perhaps 50 km per hour at the intersection.

In the court’s view, the finding of the trial judge that in rural areas, drivers go through stop signs at or near the speed limit is legally irrelevant.  There is only one standard of reasonable driving and not a separate standard for rural as opposed to city drivers.  That standard requires drivers to obey traffic signs.  As a result, the Municipality had no duty to install an additional sign on the road.

As an interesting side note, the court went on to explore the cause of action that an individual might have for damages against a municipality failing to keep a road in a reasonable state of repair.  As the court pointed out, merely proving that a road was not kept in good repair is not sufficient to justify a damage award.  In fact, there is a four-step test involved under the legislation:

Firstly, the plaintiff has to prove that the Municipality failed to keep the road in a reasonable state of repair.

Secondly, the plaintiff has to prove that the non-repair caused the accident.

Thirdly, the Municipality then has three available defences to rely on:

  1. The Municipality could not reasonably have been expected to know about the state of repair of the road;
  2. The Municipality took reasonable steps to prevent the problem from arising; or
  3. At the time of the incident, minimum standards established elsewhere in the legislation applied and had been met.

Finally, even if it fails on any of the first three tests, the Municipality can show that the plaintiff’s driving caused or contributed to the plaintiff’s injuries.

In this case, the real question was as to whether or not the road had been kept in a reasonable state of repair given the absence of a checkerboard sign.  As the court pointed out, a municipality has a duty to prevent or remedy conditions on its roads that create an unreasonable risk of harm for ordinary drivers exercising reasonable care.  Ordinary reasonable drivers are not perfect.  They make mistakes.  However, they are not negligent.  The duty of reasonable repair does not extend to making roads safe for negligent drivers.  In terms of signage, they are required only if without them, an ordinary driver driving without negligence would be exposed to an unreasonable risk of harm.  Therefore, the mere presence of a hazard does not require that a sign be put up.  The hazard must be one that puts reasonable drivers at risk.  In this case, as the young man had not been reasonable in his operation of his vehicle, the road was considered safe without a checkerboard sign.

The story of this young man is sad, which is an observation also made by the Court of Appeal.  However, that fact alone will not result in liability.

Just Cause For Termination of Employment: Can the Pendulum Swing Any Further?

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The recent case of Fernandes v. Peel Educational & Tutorial Services Limited provides a useful insight into an issue which has had employers gnashing their teeth for years.

In this case, a teacher who had been employed by what is known as the Mississauga Private School for over ten years was terminated for cause on April 17, 2009.

The evidence indicated that until the spring of 2008 he had been a good and dedicated teacher. Differences began to appear between him and his superiors towards the end of the 2007/2008 year.

By the date of his termination, the school was of the view that the teacher was sloppy and inconsistent in his record keeping and calculations which impacted student marks, he was contravening school policy by attributing a mark of zero for any missed assignments, he had allowed distorted marks to appear on report cards, he had fabricated marks on a number of occasions by entering marks for assignments that he had not marked, and entering marks before the work had been done or submitted by the students, and he had failed to mark or return assignments. In the school’s view, this was tantamount to academic fraud. This conclusion led to a decision to terminate the teacher’s employment for cause.

The teacher sued for wrongful dismissal. The trial took place over ten days.

During the course of trial, the teacher admitted a number of these transgressions including his violation of school policy by giving full marks to students who had not completed their assignments. He admitted giving students a zero mark in breach of the school policy that no student can get a zero for anything other than plagiarism (interestingly the judge expressed the opinion that this policy seemed astonishing to him).  Astonishing or not, this was a rule of the school and the teacher was aware of it and decided not to follow it.

The court made a number of findings damaging to the teacher’s case. The court found that he gave incorrect marks, marks that he did give were late, he allowed students to submit overdue assignments, and even though he was the computer teacher, his own computer program did not provide accurate marks. The court found that when he met with his superiors immediately prior to his dismissal, he lied to them about how marks were calculated. He then was found to have lied to the court about how student presentations were marked. The court found that he had admitted to falsifying marks on the student records.

The court reviewed the law relating to dishonesty as a basis for termination. The court observed that as indicated by the Supreme Court of Canada, in dealing with the topic of dishonesty, a contextual approach is required rather than a hard line.  According to the Supreme Court of Canada, just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligations to the employer.

Accordingly, it is not true that dishonest conduct always amounts to cause for dismissal notwithstanding the surrounding circumstances. Underlying this approach is the principle of proportionality.  In other words, there has to be a balance struck between the severity of the misconduct and the sanction imposed.

In this case, the court found that notwithstanding all of the transgressions proven at trial, immediate termination was not the appropriate sanction for the teacher’s misconduct. The court found that the school could have provided a reprimand and a warning that if such conduct was repeated, it would lead to termination.  The fact that the teacher’s professional behavior had changed so abruptly after years of satisfactory service should have led the school to make more of an effort and inquiry to assist the teacher rather than to terminate his employment without notice.  At the end of the day, the court found that the punishment outweighed the seriousness of the infraction.

This is another useful reminder of how far the pendulum has swung in employment cases. Employers simply have to take every possible step to analyze and assess every aspect of an employee’s behavior before making a decision to terminate without notice.  Short of outright fraud on an employer resulting in personal financial gain to the employee, or repeated transgressions in the face of a series of warnings, cases in which just cause will be found appear to be entering the realm of an endangered species.