HELD: Action allowed. C never clearly
communicated to plaintiff that his business
had been incorporated. The conversation
during which he indicated his intention to
incorporate was not enough to communicate that this was actually done. Plaintiff
proved on a balance of probabilities that its
relationship was with C, and not the numbered company. C was liable for the debt.
Kobes Nurseries Inc. v. Convery,
 O.J. No. 5056, Ont. S.C.J., Lau-
wers J., Nov. 24/10. Digest No. 3033-006
(Approx. 6 pp.)
– Appellate court upheld imposition of
a unanimous shareholders agreement
on the shareholders of respondent
Appeal from an order imposing a
unanimous shareholders agreement on
the shareholders of A Ltd. A Ltd. was a
company at the centre of a troubled rec-
reational real estate development.
Respondents acquired campsite licences
in the development. Initially, A Ltd. was
structured in a manner to permit the tak-
ing of profits through a share distribution
after all of the campsites were developed
and sold. The project ran into difficulty
after the development of roughly one-
third of the intended campsites. The
developer lacked the financial resources
for further development. Litigation com-
menced in 2005 for control of the com-
pany between the developers. Respond-
ents filed a cross-petition to validate
conversion of the preferred shares obtained
in A Ltd. in conjunction with their camp-
sites into voting common shares and for a
declaration of oppression. A receiver-man-
ager was appointed. In January 2009 a
chambers judge imposed the shareholders
agreement, which included a term pre-
cluding A Ltd. from borrowing funds
secured by an interest in the development
property due to the potential for further
prejudice to respondents.
& DISMISSAL LAW
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CONSTRUCTIVE DISMISSAL – Trial
judge did not err in finding that appellant
had been constructively dismissed and
awarding him damages based on 14
months reasonable notice.
Appeal by the employer from an award
of damages for wrongful dismissal.
Respondent had been employed for 16 years
by an automobile dealership. He was shop
foreman/manager, earning a base salary
plus a percentage of gross profits. The
dealership sold its assets to appellant. As a
term of the agreement, all employees were
terminated and re-hired by appellant under
similar terms and conditions. Appellant
advised respondent that it did not have a
shop foreman/manager position. Consequently, he was employed as a technician
and team leader, earning the technician’s
hourly rate plus an extra dollar per hour for
performing certain duties similar to those
he performed as a shop foreman. Respondent worked as a technician for approximately six weeks, then informed the
employer that he considered he had been
constructively dismissed and did not return
to work. The employee sought alternative
employment in supervisory positions but
turned down offers to work as a technician.
The trial judge found that the changes to the
employee’s position and remuneration were
fundamental changes to the employment
contract and amounted to a constructive
dismissal. He concluded that 14 months
would have been a reasonable notice period
and based his award of damages on the
employee’s pre-reduction rate of pay.
HELD: Appeal dismissed. As the job
offered by the employer was dramatically
different from the employee’s previous position and at a significantly lower rate of pay,
and the employee could not have functioned harmoniously with his supervisor,
the employee was entitled to treat the
demotion as constructive dismissal, leave
the employer’s employ, and sue for damages for breach of his employment contract. Furthermore, the employee was
entitled to search for a position equivalent
to the one from which he had been dismissed. In arriving at his assessment of the
reasonable period of notice, the judge did
not err in his approach and the award he
made was not unreasonable.
Sifton v. Wheaton Pontiac Buick GMC
(Nanaimo) Ltd.,  B.C.J. No. 2388,
B.C.C.A. per Smith J.A. (Kirkpatrick and
Smith JJ.A. concurring), Dec. 2/10.
Digest No. 3033-008 (Approx. 14 pp.)
only. She was not paid over a 12-month
period as were defendant’s employees.
Plaintiff was uncertain that her contract
would be renewed annually. Once the position became a full-time one, as it did in
2008, then a different segment of defendant’s hiring policy kicked in and the position had to be posted, with preference
given to First Nation’s people in declining
categories before any non-First Nation
members could be hired. That policy provided that non-native individuals could
only be hired on a term contract. Plaintiff,
although treated like staff and respected by
her peers and principal, could only be
employed as an independent contractor on
a fixed term in compliance with defendant’s
policy. The underlying reality of the employment was the parties knew they were
entering into successive, independent contractor, fixed term contracts.
Van Mensal v. Walpole Island First
Nation,  O.J. No. 5094, Ont.
S.C.J., Little J., Nov. 25/10. Digest No.
3033-009 (Approx. 5 pp.)
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WRONGFUL DISMISSAL – Plaintiff
was employed by defendant as an
independent contractor on fixed term
contracts. She was not an employee.
Action for damages for wrongful dismissal. Plaintiff provided computer training to students of defendant First Nation
for 11 years on a series of fixed term contracts, each for a single school year. She was
not offered a contract for 2008. Her job was
to become a permanent one and was put up
for tender. Plaintiff claimed she was effectively an employee and that she was entitled
to reasonable notice of termination or payment in lieu thereof.
HELD: Action dismissed. Plaintiff was
not an employee. Her contracts with
defendant were not ambiguous. The contracts were for the term of the school year
PATERNITY – Court ordered DNA
test to be performed to compare DNA of
respondent with that of deceased to
determine if she was the biological child
of the deceased.
Application under s. 10 of the Children’s
Law Reform Act (Ont.) for a DNA test to
compare the DNA of respondent and that of
the deceased to determine if respondent
was the biological child of the deceased.
Applicant was the sister of the deceased.
She argued that the deceased had no children and that respondent was not his biological child. Respondent was born to the
deceased’s ex-wife. They had separated on
April 30, 1981. Respondent was born Sept.
5, 1980. Under s. 8 of the Act, the deceased
was presumed to be respondent’s father, as
he was married to her mother at the time of
her birth. He was also listed as her father on
the statement of live birth, but the deceased
had not signed the form. Respondent
opposed the testing. She argued that applicant had not rebutted the presumption on
the balance of probabilities.
HELD: Application allowed. It was not
necessary to rebut the presumption. Section 10 was a stand-alone section. On a s.
10 application, the court ought to determine whether there was sufficient evidence
to bring paternity into question, and if so,
order testing. In this case there was sufficient evidence to bring paternity into question. There was some plausible evidence
supporting the proposition that the
deceased was not respondent’s father. For
example, the deceased never recognized
her as his natural daughter and he allegedly
confirmed to applicant that respondent
was not his daughter. There was also a note
from the deceased indicating he was
resentful of his ex-wife for cheating on him
without protection. No child support order
was ever made for respondent. Respondent
did not state in her affidavit that she
believed the deceased was her biological
father. There was no evidence from the
mother or explanation why the mother
could not give evidence. DNA testing was a
highly reliable method of determining parentage. It was minimally invasive and there
would be a minimal invasion of respondent’s privacy. It was in the interests of justice that testing be ordered and reliable
evidence be available where there was
plausible evidence to question paternity.