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Claimant Awarded Aggravated and Punitive Damages arising from Employers Misconduct


The claimant was employed as a store manager at the 28th & Main liquor store in Vancouver operated by the Liquor Distribution Branch (the “LDB”) and had worked for LDB for over 30 years. Another employee made a written complaint about the claimant and the LDB terminated the claimant’s employment without notice. The claimant won her lawsuit that she was dismissed without cause, and was entitled to damages for the defendant’s breach of contract for failure to provide reasonable notice of dismissal and  in addition was awarded aggravated and punitive damages arising from the manner of her dismissal(Vernon v. British Columbia (Liquor Distribution Branch),2012 BCSC 133).Aggravated damages are generally compensatory in nature.  In this case the claimant was a long serving faithful employee. The manner of her termination was devastating and caused her serious harm. The court awarded $35,000 in aggravated damages.  
 Unlike aggravated damages punitive damages are directed towards punishment. The leading authority remains Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595 at para. 36(“Whiten”). As the judge stated,

[382]     The three objects of punitive damages are retribution, deterrence and denunciation. The Supreme Court of Canada has directed trial courts to approach punitive damages with caution and restraint and to resort to them only in exceptional circumstances: Whiten at para. 69.

[383]     An award of punitive damages is rational only when compensatory damages do not adequately achieve the objectives of retribution, deterrence and denunciation:  Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, [2002] 1 S.C.R. 678 at para. 87.

[384]     In Whiten, at para. 94, the Court set out the factors that should be taken into account when considering an award for punitive damages:

 (1) Punitive damages are very much the exception rather than the rule, (2) imposed only if there has been high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour. (3) Where they are awarded, punitive damages should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of the misconduct, the relative vulnerability of the plaintiff and any advantage or profit gained by the defendant, (4) having regard to any other fines or penalties suffered by the defendant for the misconduct in question. (5) Punitive damages are generally given only where the misconduct would otherwise be unpunished or where other penalties are or are likely to be inadequate to achieve the objectives of retribution, deterrence and denunciation. (6) Their purpose is not to compensate the plaintiff, but (7) to give a defendant his or her just desert (retribution), to deter the defendant and others from similar misconduct in the future (deterrence), and to mark the community’s collective condemnation (denunciation) of what has happened. (8) Punitive damages are awarded only where compensatory damages, which to some extent are punitive, are insufficient to accomplish these objectives, and (9) they are given in an amount that is no greater than necessary to rationally accomplish their purpose. (10) While normally the state would be the recipient of any fine or penalty for misconduct, the plaintiff will keep punitive damages as a “windfall” in addition to compensatory damages. (11) Judges and juries in our system have usually found that moderate awards of punitive damages, which inevitably carry a stigma in the broader community, are generally sufficient.

[385]     As noted in Honda, in the context of damages for conduct in the course of dismissal, care must be taken when aggravated damages have been awarded to avoid the pitfall of double compensation or double punishment for the same actions. Punitive damages are restricted to advertent wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own.

[386]     In this case, I have made an award of aggravated damages arising out of the insensitive manner in which Ms. Vernon was terminated. To award punitive damages for the same conduct would lead to double punishment for the same acts.

[387]     There is, however, one exception. At the termination meeting of April 19, Ms. Ferrara told Ms. Vernon that if she agreed to resign, the LDB would provide her with a reference letter. While an employer is under no obligation to give a reference letter (Shinn v. TBC Teletheatre B.C., 2001 BCCA 83, 85 B.C.L.R. (3d) 75), to offer Ms. Vernon a reference letter, conditional on her resignation, was reprehensible and departed to a marked degree from ordinary standards of decent behaviour. If Ms. Vernon’s conduct was sufficiently serious that the LDB had the right to summarily dismiss her without notice, it would have been improper for the LDB to give her a reference letter. To offer a reference letter as a carrot to resign, is, in my opinion, conduct which is properly the subject matter of retribution, deterrence and denunciation.

[388]     Whiten directs that when punitive damages are awarded, they should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of the misconduct, the relative vulnerability of the plaintiff and any advantage of profit gained by the defendant. At the time the proposal was made, Ms. Vernon could not have been more vulnerable. She had just been told she was being terminated from her job of 30 years. She knew that without a reference she would have little chance of finding suitable new employment. The LDB knew that if she voluntarily resigned, it could avoid a possible lawsuit for wrongful termination in which it would have to justify its treatment of a 30-year employee. I award $50,000 in punitive damages.

Posted by personal injury lawyer Mr. Renn A. Holness

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