2005 BCSC 1393 Wightman Estate v. 2774046 Canada Inc. et al

Before: The Honourable Mr. Justice Halfyard

Reasons for Judgment

Counsel for Plaintiffs	B. Curtis
Counsel for Defendants 2774046 Canada Inc., NLK Enterprises Inc., and NLK Group GP Inc.	M. Korbin
Counsel for Defendant Jaakko Poyry NLK Inc.	C. Gibson J. Wiegele, Articled Student
Date and Place of Trial/Hearing:	May 11, 12 and 13, and August 29, 30 and 31, 2005
	Vancouver, B.C.

THE CLAIMS

[1] This action is brought by Christina Wightman, the personal representative of her husband Sam Wightman who died on March 30, 2004. She sues on behalf of the estate in her capacity as executrix, and also as an individual plaintiff. The central claim is against the defendant 2774046 Canada Inc. ("the employer") for damages for the wrongful dismissal of Mr. Wightman from his employment. His estate also claims damages for breach of an alleged oral contract which required the employer to pay Mr. Wightman the difference between his regular salary and the disability benefits that he received, for the time period from June 18, 2002, to March 30, 2004.

[2] The claim against the defendant Jaakko Poyry NLK Inc. is for damages for inducing the employer to breach its contract of employment with Mr. Wightman.

[3] The trial was conducted by way of summary trial pursuant to Rule 18A, with the agreement of all parties. Early in the trial, it was conceded by the plaintiffs that they had no cause of action against the defendants NLK Enterprises Inc. and NLK Group GP Inc. Later in the trial, the plaintiffs withdrew their claims for punitive damages and aggravated damages.

THE DEFENCES

[4] The employer made the following admissions through counsel, during the trial:

(a) It had an oral contract of employment with Mr. Wightman which was for an indefinite term.

(b) It dismissed Mr. Wightman from his employment, on December 11, 2003.

(d) It dismissed Mr. Wightman without any advance notice.

(e) A reasonable period of notice, if it was required, would have been 24 months.

[5] The employer's defence to liability is that, before it dismissed Mr. Wightman from his employment, the contract of employment had been frustrated by the serious, lengthy and ongoing illness of Mr. Wightman. The employer denies the existence of any oral contract whereby it promised to top up Mr. Wightman's disability benefits so that he would be receiving a monthly amount equal to his regular salary.

[6] The defence of the defendant Jaakko Poyry NLK Inc. ("the defendant Jaakko") is that, in the event that the contract of employment was not frustrated, it did not induce the employer to breach its contract of employment with Mr. Wightman.

[7] In the event that liability is established, there are a number of contested issues relating to damages.

THE BACKGROUND FACTS

[8] The facts necessary as a context for consideration of the issues are either agreed, or not in contest. I find them to be, in summary, as follows.

[9] Sam Wightman was born on July 26, 1942, and was 61 years of age at the time of his death on March 30, 2004. He worked in the pulp and paper industry for many years, as a project manager and mechanical designer, and spent a total of about 28 years working in that industry.

[10] Mr. Wightman worked for the employer (which changed its name, and perhaps ownership, several times over the years) since in or about 1975. His salary as of July 2001 was $9,270 per month, and in some years (not 2001 or 2002), he received an additional bonus of about $6,000. The employer paid 100% of the insurance premiums required to provide coverage for Mr. Wightman under the following plans:

(a) The B.C. Medical Services Plan;

(b) An extended health and dental care plan with Great West Life;

(c) A disability plan with Great West Life which would pay benefits on a short-term or long-term basis while Mr. Wightman was disabled from working, and would pay survivor benefits in the event of his death; and

(d) A life insurance plan with Great West Life, in an amount equivalent to two years salary.

[11] Mr. Wightman suffered a number of health problems during the time that he worked for the employer. In 1984, due to kidney failure, Mr. Wightman had one of his kidneys removed, and underwent a kidney transplant operation. In 1996 and 1997, Mr. Wightman experienced health problems which forced him to take time off work and he applied for and received short-term disability benefits for an undisclosed period of time (which I infer was for less than six months).

[12] In July 2001, the employer reduced the working week of all employees from five days to four days, and reduced the salaries of all employees to reflect the shorter work week. Mr. Wightman drew on his banked vacation time and unused sick time, so as to top up his salary to what he had been earning during the five day work week, namely, $9,270 per month.

[13] On February 18, 2002, Mr. Wightman had to stop working, by reason of disability caused by the failure of his transplanted kidney. His salary was paid to February 25, 2002. He received no further salary after that date, but received short-term disability benefits from February 26, 2002 until June 17, 2002, in the amount of $1,250 per week. Thereafter, he received long-term disability benefits from June 18, 2002 until March 30, 2004, in the amount of two-thirds of his regular salary, which was $6,180.31 per month. Mr. Wightman also received Canada Pension Plan disability benefits effective July 1, 2002, until March 30, 2004, in the amount of $956.05 per month. However, this amount was deducted from his long-term disability benefits, so that his total monthly benefits were $6,180.31.

[14] Notwithstanding his health problems, Mr. Wightman had been a hard-working, competent and valued employee, who loved his work. He was one of about a dozen senior project managers employed by the employer.

[15] After his health condition prevented Mr. Wightman from working in February 2002, he continued to visit the employer's office from time to time. He had developed close relationships with several other employees, including Wayne Lee and Thomas Kobayashi (who were also principals of the employer).

[16] At some time in the period from February to May, 2002, Mr. Wightman made a request that the employer top up his disability benefits so that he would be receiving 100% of his former salary. The response of the employer to Mr. Wightman's request, is in dispute.

[17] In or about May 2002, the employer further reduced the work week from four days to three days per week for all of its employees. The salaries of employees who were working, were reduced to 60% of what they had been receiving before the first work reduction in July 2001.

[18] In the fall of 2003, the employer negotiated a contract with the defendant Jaakko, whereby it was agreed that the defendant Jaakko would purchase some of the assets of the employer. It was a term of the contract that the employer would terminate the employment of those of its employees who were not going to be hired by the defendant Jaakko. That group of employees numbered more than 30, and included Mr. Wightman. At that time, the employer had about 100 employees and contractors who worked out of its offices in Vancouver and Montreal.

[19] On or about December 11, 2003, Mr. Wightman learned that he was being terminated by the employer. On or shortly after December 11, 2003, Mr. Wightman received the following letter of termination:

"Dear Sam:

As you may have heard, we have been working on a change of ownership to ensure the continuation of the NLK business. Our goal was to preserve jobs for as many of our employees as possible. The negotiations took longer than we anticipated, and unfortunately, the outcome reached was not as favourable as we had hoped it would be.

In the present economic environment the purchaser was not in a position to take on all of our existing employees. We therefore regret to advise you that your employment with NLK has terminated today. Tomorrow, we'll be sending you the sum of $13,700.00 (net of withholdings) as severance.

We hope your health is improving, and wish you every success in the future.

Sincerely,

'J. Mason'
Jim Mason,
President"

[20] On or about December 15, 2003, Mr. Wightman received a letter from the employer, which read as follows:

"Dear Sam:

Since our ownership has changed, we are no longer able to continue your benefits plan. Effective 31 January 2004, we will cancel your medical (MSP) plan and your extended health benefits with Great West Life.

We hope your health is improving, and wish you every success in the future.

Sincerely,

'J. Mason'
Jim Mason,
President"

[21] The severance pay (after tax) was sent to Mr. Wightman, soon after the letter of dismissal. Mr. Wightman's entitlement to continue receiving long-term disability benefits was not affected by the dismissal.

[22] On March 30, 2004, Mr. Wightman died in hospital, while receiving treatment relating to the implantation of a pacemaker in his heart. He died from a cardiac arrest which occurred shortly after surgery.

[23] In fact, the employer did not stop paying Mr. Wightman's MSP premiums, and his extended health benefits plan with Great West Life was not cancelled.

[24] After Mr. Wightman's death, his wife received life insurance benefits of $223,054.99, and $37,081.86 in survivor benefits (the latter from Mr. Wightman's long-term disability benefit plan).

[25] This action was commenced on June 8, 2004.

THE DEFENCE OF FRUSTRATION

[26] The employer alleges that the employment contract was frustrated before the dismissal of Mr. Wightman, by reason of his severe and prolonged physical disabilities that caused him to be totally disabled from working from February 2002 onward. If the employer is right, the law would treat the employment contract as being at an end, without the fault of either party, before the employer dismissed Mr. Wightman, and accordingly there could be no breach of contract by the employer.

THE LAW

[27] An employee's permanent and total disability from performing his work by reason of injury or illness, will justify an employer's termination of the employment contract: Dartmouth Ferry Commission v. Marks (1903) 34 S.C.R. 366.

[28] Even where an employee's disability from illness may not be total and permanent, such condition will result in frustration of the employment contract, if the disability is of sufficient duration and seriousness to elevate it beyond the category of a temporary illness: Yeager v. R.J. Hastings Agencies Ltd. [1985] 1 W.W.R. 218 (Wood, J.). In Yeager, Mr. Justice Wood accepted the test for frustration which was set out by the National Industrial Relations Court in Marshall v. Harland and Wolff Ltd. [1972] 2 All E.R. 715, as follows (at p. 718 - 719):

"... was the employee's incapacity, looked at before the purported dismissal, of such a nature, or did it appear likely to continue for such a period, that further performance of his obligations in the future would either be impossible or would be a thing radically different from that undertaken by him and agreed to be accepted by the employer under the agreed terms of his employment? In considering the answer to this question, the tribunal should take account of:

(a) The terms of the contract, including the provisions as to sickness pay - The whole basis of weekly employment may be destroyed more quickly than that of monthly employment and that in turn more quickly than annual employment. When the contract provides for sick pay, it is plain that the contract cannot be frustrated so long as the employee returns to work, or appears likely to return to work, within the period during which such sick pay is payable. But the converse is not necessarily true, for the right to sick pay may expire before the incapacity has gone on, or appears likely to go on, for so long as to make a return to work impossible or radically different from the obligations undertaken under the contract of employment.

(b) How long the employment was likely to last in the absence of sickness - The relationship is less likely to survive if the employment was inherently temporary in its nature or for the duration of a particular job, than if it was expected to be long term or even lifelong.

(c) The nature of the employment - Where the employee is one of many in the same category, the relationship is more likely to survive the period of incapacity than if he occupies a key post which must be filled and filled on a permanent basis if his absence is prolonged.

(d) The nature of the illness or injury and how long it has already continued and the prospects of recovery - The greater the degree of incapacity and the longer the period over which it has persisted and is likely to persist, the more likely it is that the relationship has been destroyed.

(e) The period of past employment - A relationship which is of long standing is not so easily destroyed as one which has but a short history. This is good sense and, we think, no less good law, even if it involves some implied and scarcely detectable change in the contract of employment year by year as the duration of the relationship lengthens. The legal basis is that over a long period of service the parties must be assumed to have contemplated a longer period or periods of sickness than over a shorter period.

These factors are interrelated and cumulative, but are not necessarily exhaustive of those which have to be taken into account. The question is and remains: was the employee's incapacity, looked at before the purported dismissal, of such a nature, or did it appear likely to continue for such a period, that further performance of his obligations in the future would either be impossible or would be a thing radically different from that undertaken by him and accepted by the employer under the agreed terms of his employment? Any other factors which bear on this issue must also be considered."

[29] This legal definition of the defence of frustration in this kind of case appears to have been universally accepted under our law. Of course, the defendant bears the burden of proving all essential elements of the defence, on a balance of probabilities.

Objections to evidence

[30] Before reviewing the evidence relating to the defence of frustration, I must decide two objections to the admissibility of evidence. First, the plaintiffs object to the admissibility of medical evidence which the employer seeks to introduce, to show that Mr. Wightman's health continued to deteriorate after his dismissal on December 11, 2003, right up to the time of his death on March 30, 2004. Second, the employer objects to the admissibility of three affidavits filed by the plaintiffs, allegedly in reply to evidence filed by the employer in support of the defence of frustration.

THE PLAINTIFFS' OBJECTION

[31] In support of his objection on behalf of the plaintiffs, Mr. Curtis relied on the judgement of the Newfoundland Court of Appeal in White v. Woolworth Canada Inc. (1996) 22 C.C.E.L. 2d 110. In that case, the plaintiff, an employee of 22 years, had been absent from work due to a back injury sustained on the job, for about 10 months, and was still disabled, when the employer dismissed him. The employer advanced the defence of frustration which was rejected at trial. On appeal, the employer argued that the trial judge had erred in refusing to consider evidence which proved that the plaintiff's disability continued for more than two years after he was dismissed, and up to the time of trial. The employer contended that the evidence showing the plaintiff's lengthy post-dismissal disability was relevant and admissible on the issue of whether the contract of employment was frustrated before the time of termination.

[32] The Court of Appeal rejected the employer's argument, on the ground that it was inconsistent with the test set out in Marshall v. Harland and Wolff Ltd. In the course of his reasoning, Marshall, J.A. for the Court of Appeal expressly disagreed with the reasoning of Mr. Justice Coultas in MacLellan v. H.B. Contracting Ltd. (1990) 32 C.C.E.L. 103.

[33] In MacLellan v. H.B. Contracting Ltd., the plaintiff, a long-term employee, was dismissed on the ground that the employer was having economic difficulties. At the time of dismissal, the plaintiff was disabled from working by an ankle injury sustained on the job, and had been absent from work for several months. The plaintiff was receiving long-term disability benefits at the time of dismissal, and continued receiving them up to the time of trial, about four years later. The disability insurer had declared the plaintiff's disability to be permanent, about two years post-dismissal. At trial, the plaintiff testified that he believed he was permanently disabled and would never be able to return to work.

[34] At trial, the employer alleged that the contract had been frustrated by the plaintiff having been permanently disabled at the time of termination. The plaintiff objected to the employer raising the defence of frustration, and to the admission of post-dismissal events to bolster the employer's case on the issue of frustration, if the defence was available.

[35] Coultas, J. rejected the plaintiff's argument. In doing so, he drew an analogy with the rule of law which permits an employer to justify a dismissal by proving pre-dismissal conduct of the employee which was unknown to the employer at the time of dismissal, but was discovered before trial. Coultas, J. found that the plaintiff was permanently disabled at the time he was dismissed, although neither the plaintiff nor his employer then knew that his disability would be permanent (i.e., for the remainder of his working life). He held that the contract of employment was frustrated, and dismissed the action.

[36] The ruling made in MacLellan v. H.B. Contracting Ltd. was followed by Mr. Justice Edwards in Demuynck v. Agentis Information Services Inc. 2003 B.C.S.C. 96. In that case, the plaintiff (again, a long-term employee) had to stop working on July 14, 1997, due to an elbow injury, and began receiving short-term disability benefits. On January 26, 1998, the plaintiff became entitled to long-term disability benefits which had a two year limit. On April 8, 1999, while the plaintiff was still absent from work and receiving long-term disability benefits, the employer dismissed her without just cause and without notice. At the time of her dismissal, the plaintiff had been absent from work for about 20 months, and had been totally disabled for the last 14½ months before termination.

[37] The medical evidence available at the time of termination gave a prognosis of at least another seven months disability. At the trial, the evidence did not disclose whether the plaintiff was then working, or whether or not she was disabled from working.

[38] The employer pleaded the defence of frustration, although this had not been stated as a ground for the plaintiff's dismissal. Rather, a different reason for dismissal had been given. The employer argued that it should be allowed to raise the defence of frustration, and that the evidence of post-dismissal events should be admissible on that issue.

[39] Edwards, J. reviewed the cases of MacLellan, Yeager and Marshall, and held that it was open to the employer to raise the defence of frustration, and that the evidence of post-dismissal events was admissible to support that defence. He was referred to White v. F.W. Woolworth Co., but refused to follow the Newfoundland Court of Appeal, and said he felt bound to follow the MacLellan case on the point of the admissibility of post-dismissal events. Edwards, J. concluded that the employment contract had been frustrated, but found it unnecessary to rely on the evidence of "post-dismissal" events to support that conclusion.

[40] Like Coultas, J. in the MacLellan case, Edwards, J. relied on the decision of our Court of Appeal in Carr v. Fama Holdings Ltd. (1989) 40 B.C.L.R. 2d 125, to reason by analogy. In his view, if an employer may rely on any pre-dismissal conduct of an employee which was not asserted as a ground for dismissal and was not then known to the employer, then an employer should be allowed to present evidence of events occurring after termination, relating to the employee's disability, in support of its plea of frustration.

[41] I note that in White v. F.W. Woolworth Co., Marshall, J.A. expressly approved the principle relied on by Edwards, J. as a foundation for the analogy he drew with respect to the defence of frustration. But it appears that the Newfoundland Court of Appeal was of the opinion that no valid analogy existed.

[42] For the plaintiffs, Mr. Curtis submits that I should decline to follow the decisions of this court in MacLellan v. H.B. Contracting Ltd. and Demuynck v. Agentis Information Services Inc., and that I should adopt the conclusion of the Newfoundland Court of Appeal in White v. F.W. Woolworth Co.

[43] This raises directly the question of stare decisis. The law on this point was stated by Mr. Justice Wilson (later Chief Justice) in Re Hansard Spruce Mills Ltd. [1954] 4 D.L.R. 590, in this way:

"I will only go against a judgment of another Judge of this Court if:

(a) Subsequent decisions have affected the validity of the impugned judgment;

(b) It is demonstrated that some binding authority in case law, or some relevant statute was not considered; [or]

(c) The judgement was unconsidered, a nisi prius judgment given in circumstances familiar to all trial judges, where the exigencies of the trial require an immediate decision without opportunity to fully consult authority.

If none of these situations exists, I think a trial Judge should follow the decisions of his brother Judges."

[44] I am not persuaded that any of the conditions defined by Wilson, J. exist in this case. Accordingly, I consider myself bound by the decisions of Coultas, J. in MacLellan and Edwards, J. in Demuynck. Had it not been for these decisions, I would have inquired further into the logic of the analogy in question.

[45] The plaintiff's objection is dismissed. The employer may introduce medical evidence in an attempt to prove that Mr. Wightman's health continued to deteriorate after his dismissal on December 11, 2003, in support of the defence of frustration.

[46] In one part of his argument, counsel for the plaintiffs submitted that the employer should not even be allowed to raise the defence of frustration, because it was not relied on as a ground for dismissal, and because the employer claimed to believe that Mr. Wightman was permanently disabled and would never be returning to work, when it dismissed him. Counsel seemed to later concede that the weight of authority was against him on this point, and to incorporate this argument into his argument against the admissibility of post-dismissal events. Since counsel did not pursue the estoppel-type argument as a separate reason for rejecting the frustration defence, I have not considered it further in that separate context.

THE EMPLOYER'S OBJECTION

[47] The employer objects to the admissibility of evidence in reply affidavits filed by the plaintiffs, insofar as such evidence purports to contradict or qualify the evidence presented by the employer in support of its defence of frustration. The substance of the objection is that the plaintiff Christina Wightman had already given evidence in her affidavit sworn December 21, 2004, on the issue of frustration and, having done so, the plaintiffs were obliged to present all of the evidence on that issue that they intended to rely on, before the employer filed the affidavit evidence in support of its case on frustration. Mr. Korbin, counsel for the employer, relied on Rule 18A(5), which states as follows:

"(5) A party who applies for judgment under subrule (1)

(a) must serve with the notice of motion and the other documents referred to in Rule 44(5), every statement of expert opinion, not already filed, on which the party will rely, and

(b) must not serve any further affidavits, statements of expert opinion or notices except

(i) to adduce evidence that would, at a trial, be admitted as rebuttal evidence.... or

(iii) with leave of the court."

[48] Rule 44(5) requires that an applicant must deliver a copy of the notice of motion to each party of record, together with "a copy of each affidavit in support of the application that has not already been filed and served ...."

[49] The three affidavits objected to, all sworn on January 19, 2005, are the affidavits of Christina Wightman, Dr. Robert Weaver and Christina Heinrick. All three affidavits expressly purport to be sworn in reply to the affidavits of James Mason, Wayne Lee and Thomas Kobayashi.

[50] Before I outline the evidence, I should note that neither party objected to the admissibility of the statements of Mr. Wightman on the ground that they were hearsay.

[51] The only evidence given by the plaintiff Christina Wightman in her first affidavit sworn December 21, 2004, relating to frustration, consists of the following:

"10. ... Even when Sam was off on long-term disability in 2002-2003, he made several visits to the NLK offices to maintain his work relationships and ensure that people knew he was still part of the team.

11. Sam had every intention of returning to work at NLK as soon as he could. Sam was looking forward to either a new home dialysis program scheduled for spring 2004 or a kidney transplant, either of which Sam felt would allow him to return to work at NLK full time. Partly because we had a mortgage on our home that we were still paying off, Sam wanted to return to work full time and was not considering retirement."

[52] In his affidavit sworn January 10, 2005, Wayne Lee gave evidence to the following effect:

(a) That after going on disability leave in February 2002, Mr. Wightman visited the employer's office about once every month or two months;

(b) That he observed a steady decline in Mr. Wightman's appearance and health, saw that his body had become bloated and that he was having difficulty in walking and in using his hands;

(c) That he and Mr. Wightman never discussed the work that the company was doing, but talked about things they had done together in the past;

(d) That on several occasions, Mr. Wightman told him: "... that he needed another kidney transplant as the first transplanted kidney was failing, but that the doctors had told him that his heart was not strong enough to withstand such an operation. He told me his heart was very weak.";

(e) That "... on at least six different occasions during his visits to the office, including late in 2003", Mr. Wightman told him "... that he would never be able to return to work."; and

(f) That as a result of his observations of Mr. Wightman, and what Mr. Wightman had told him, he formed the opinion that Mr. Wightman was permanently disabled from working and would never be able to return to work.

[53] In his affidavit sworn January 11, 2005, Thomas Kobayashi gave evidence which included testimony to the following effect relating to the issue of frustration:

(a) That he himself was not in the office very often during the time when Mr. Wightman was on disability leave, but that on at least three occasions during that time he spoke privately at the office with Mr. Wightman, and telephoned Mr. Wightman on numerous occasions to see how he was doing;

(b) That on one of these visits to the office not long after he took disability leave, he asked Mr. Wightman when he thought he would be returning to work, and Mr. Wightman told him "... that he was never going to be returning to work because of his health problems";

(c) That on another of his visits to the office in the spring or summer of 2003, Mr. Wightman told him that his transplanted kidney was failing and that he would have to continue with dialysis treatments until he could receive another kidney transplant, but his heart was very weak and his doctors told him that it was not strong enough to withstand the transplant operation;

(d) That he noticed that Mr. Wightman looked worse each time he saw him, and the last time he saw Mr. Wightman, later in 2003, "... he really looked in bad shape. His body was very bloated, his face and hands were puffed out, and his skin was discoloured and peeling in some areas. He had great difficulty walking and using his hands."; and

(e) That as a result of his observations of Mr. Wightman, and from what Mr. Wightman had told him, he believed that Mr. Wightman was permanently disabled from working and would never be able to return to work.

[54] James Mason swore an affidavit on January 10, 2005, in which he gave testimony to the following effect:

(a) That he occasionally spoke to Mr. Wightman when he came to visit the office during the time he was off on disability leave;

(b) That when he talked to Mr. Wightman on one of these visits, in the spring or summer of 2003, Mr. Wightman told him "... that it was unlikely that he would ever be able to return to work because of his health problems.";

(c) That Mr. Wightman told him that he needed a kidney transplant but could not have it because the doctors said his heart could not withstand a transplant operation;

(d) That he observed a steady worsening in Mr. Wightman's physical appearance, and saw that he had difficulty and awkwardness in walking.

[55] After receiving the employer's evidence which I have outlined, the plaintiffs delivered the reply evidence that is objected to. In her affidavit sworn January 19, 2005, Christina Wightman gave evidence on this point to the following effect:

(a) That she did not believe Mr. Wightman made the statements to Mr. Lee, Mr. Kobayashi and Mr. Mason that they claim he made to them;

(b) That Mr. Wightman always told her that he intended to return to work as soon as his health improved;

(c) That Mr. Wightman intended to pursue a plan of treatment that involved three steps, namely, surgery on his neck (angioplasty and stenting to clear blockages), cardiovascular surgery to clear blocked arteries and either a kidney re-transplant or dialysis treatments at night time (so that he could go back to work in the daytime);

(d) That potential donors existed for a new kidney for Mr. Wightman;

(e) That Mr. Wightman had the surgery done on his neck in early January 2004, and it was successful; and

(f) That Mr. Wightman's statements and conduct right up to the time of his death contradicted the implications in Mr. Lee's affidavit that Mr. Wightman believed that he was dying and would never return to work.

[56] In her affidavit sworn January 19, 2005, Christina Heinrick, Mr. Wightman's daughter, gave evidence to the following effect:

(a) That she did not believe her father had told Mr. Lee, Mr. Kobayashi or Mr. Mason the things they claim he told them;

(b) That during the time when her father was off on long-term disability leave, he told her many times that he was looking forward to getting back to work, right up until his employment was terminated in December 2003;

(c) That even after his employment was terminated, her father intended to pursue a course of treatment designed to allow him to return to work, and maintained his intention to return to work; and

(d) That her father did not believe he was going to die within the foreseeable future.

[57] Dr. Robert G. Weaver swore an affidavit on January 19, 2005. He was Mr. Wightman's family physician for many years before he died, and his affidavit includes evidence to the following effect:

(a) That although Mr. Wightman was a very ill man for a very long time, his chronic illness had not seriously interfered with his career, until 2002;

(b) That when he described Mr. Wightman as having a "permanent disability" in his statement to Great West Life on February 20, 2002, he meant that Mr. Wightman "had kidney disease that was not curable", but not that Mr. Wightman was permanently disabled from working;

(c) That during the time Mr. Wightman was on long-term disability leave, he engaged in a course of treatment with the intention that he would be able to return to work;

(d) That Mr. Wightman's specialists determined that he required a three-stage plan of treatment, namely, an angioplasty and stenting procedure, cardiovascular surgery to deal with coronary artery disease, and either a kidney re-transplant or a program of nocturnal dialysis;

(e) That Mr. Wightman would have to go through all three stages of this treatment plan, before he could recover sufficiently to return to work;

(f) That Mr. Wightman had successfully completed the first stage of treatment, by way of angioplasty and stenting procedure on January 6, 2004;

(g) That Mr. Wightman was scheduled to have cardiovascular surgery in April 2004, to be performed by Dr. Peter Skarsgard, which would have been the second stage of the three-stage treatment program;

(h) That he was surprised to learn that Mr. Wightman had died on March 30, 2004, because he had seen Mr. Wightman on March 23, 2004 "and there was nothing alarming about his condition at that time";

(i) "20. I do not believe it can be said from the facts of Mr. Wightman's medical condition that, had he lived, he would have been unable to return to work at any point in the two years following December 11, 2003."

(j) "22. ... I do not believe it probable that Mr. Wightman, had he lived, would have continued to qualify for long-term disability payments for the two years following December 11, 2003."

[58] Counsel for the employer argued that the plaintiffs are attempting to split their case by means of these three additional affidavits, and that the evidence merely adds to or confirms the evidence given by Christina Wightman in her first affidavit. Counsel asserts additional grounds for the objection to Dr. Weaver's affidavit, insofar as he purports to express expert medical opinions.

[59] I have set out only the reply evidence of the plaintiffs which relates to the issue of frustration. I have not summarized the reply evidence relating to the alleged effect of the manner of termination on Mr. Wightman, or the alleged top-up agreement. On those issues, the burden of proof is on the plaintiffs, and the attempt to adduce further evidence on those issues by way of rebuttal evidence amounts to splitting the case. That evidence is not permitted by way of rebuttal, and is inadmissible. See R. v. Krause [1986] 2 S.C.R. 466 per McIntyre, J. at 473-474.

[60] The employer relied on McPhee v. British Columbia (Ministry of Transportation and Highways) 2005 B.C.C.A. 139 (at para. 51) for the following proposition of law:

"[51] As the appellant called no evidence concerning his speed, he would not be splitting his case by calling evidence in rebuttal on the question of speed. A plaintiff is not obliged to call as part of his case, evidence on an issue the burden of which is on the defendant. But if he calls any evidence on such an issue, he must exhaust his evidence on the point."

[61] The employer says that the plaintiffs, having presented evidence on the issue of frustration in paras. 10 and 11 of Mrs. Wightman's first affidavit, are now precluded from introducing any further evidence on that issue, whether from a lay person or from an expert. Counsel for the plaintiffs argues that, although the evidence in paras. 10 and 11 of Mrs. Wightman's first affidavit may be relevant to the issue of frustration, it is also relevant to issues on which the plaintiffs bear the burden of proof, namely:

(a) That Mr. Wightman had not repudiated the contract of employment (i.e., he had no intention of quitting his job or retiring);

(b) Mr. Wightman's health deteriorated after December 11, 2003, as a result of the employer's manner of dismissing him (and therefore the state of Mr. Wightman's physical and emotional health before and after the date of dismissal was relevant); and

[62] This argument is self-defeating, and concedes improper case-splitting. In the alternative, the plaintiffs say that the court should exercise its discretion under Rule 18A(5)(b)(iii), and grant leave to the plaintiffs to introduce further evidence on the issue of frustration, by way of reply. I was referred to the decision of Madam Justice Gray in Dr. David F. Charbonneau Inc. v. Dr. Peter Braun Inc. 2002 B.C.S.C. 738, at paras. 16‑18, as an example of the exercise of the discretion.

[63] I am not persuaded that the plaintiffs are attempting to split their case on the issue of frustration. In any event, in the interests of justice, I would admit the reply evidence insofar as it is relevant and admissible on the issue of frustration. It has not been suggested that the plaintiffs ought reasonably to have anticipated the evidence of the employer's witnesses as to what Mr. Wightman had told them. In addition, I have ruled that the employer may introduce evidence of post-dismissal events designed to show the decline of Mr. Wightman's health. In fairness, I think the plaintiffs should be permitted to lead evidence on that issue.

[64] As to the opinions of Mrs. Wightman and Ms. Heinrick expressing their disbelief that Mr. Wightman would have made the statements attributed to him by Mr. Lee, Mr. Kobayashi and Mr. Mason, those opinions are not admissible. One witness cannot state his or her opinion as to the veracity of another witness. See Markadonis v. The King [1935] S.C.R. 657; R. v. Marquard (1994) 85 C.C.C. 3d 193 (S.C.C.) at 228; R. v. P.(H.P.) (1997) 112 C.C.C. 3d 140 (Man. C.A.) at 148.

[65] However, I take the thrust of the evidence of these two witnesses to be that Mr. Wightman had never made similar statements to them, and in fact had made different statements of his intentions, namely, to recover his health and to return to work. That evidence is admissible. Of course, the evidence of all of the lay witnesses relating to their observations of the health and illness of Mr. Wightman, and his emotional state, is admissible opinion evidence. See R. v. Graat (1983) 2 C.C.C. 3d 365 (S.C.C.) per Dickson, J. at 378. But the opinions of Mr. Lee and Mr. Kobayashi that Mr. Wightman was permanently disabled, and the opinions of Mrs. Wightman and Ms. Heinrick that he was not, are not admissible.

[66] The evidence of Dr. Weaver is problematic. Counsel for the employer has raised many further grounds of objection to the admission of his affidavit. I would paraphrase these grounds of objection as follows:

(a) None of Dr. Weaver's evidence can qualify as proper rebuttal evidence;

(b) To the extent that the plaintiffs rely on Dr. Weaver's evidence as a statement of expert opinion, his affidavit was required to be delivered with the plaintiffs' notice of motion for summary trial, but was not.

(d) Dr. Weaver is not qualified to give the opinions that he expresses in his affidavit.

(e) Dr. Weaver's affidavit does not comply with Rule 40A(5).

(f) Dr. Weaver's evidence is not "responsive" to any expert opinion evidence introduced by the employer.

(g) Dr. Weaver has lost his objective impartiality as a professional witness, and has acted as an advocate for the plaintiffs.

(h) Some of the opinions expressed by Dr. Weaver are based on hearsay and double hearsay statements of medical specialists who have examined and treated Mr. Wightman, but the statements he relied on are not identified or summarized.

[67] In December 2004, counsel for the plaintiffs and counsel for the employer agreed that a great many medical documents would be admissible at trial for the proof of the truth of the facts and opinions expressed therein. Counsel for the employer sought this agreement, and it must therefore have been apparent to counsel for the plaintiffs that the employer would be introducing these medical documents at the trial. For this reason, I would not give effect to the employer's objection that Dr. Weaver's evidence was not given "in rebuttal" of other expert opinion evidence. However, Dr. Weaver does not attempt to contradict the findings or opinions of any specialist. His evidence seems to be directed at negativing the inference of "permanent disability" that might be drawn from those findings and opinions.

[68] Nor would I exclude Dr. Weaver's evidence on the grounds that he is not qualified, or that he was acting as an advocate for the plaintiffs. However, parts of Dr. Weaver's affidavit are objectionable.

[69] The opinion expressed by Dr. Weaver in para. 18, to the effect that Mr. Wightman's dismissal "appeared to have a negative effect on his health", is inadmissible. It is not proper rebuttal evidence. Moreover, the only foundation given for that opinion is what Mr. Wightman told Dr. Weaver on February 5, 2004.

[70] As mentioned, Dr. Weaver expressed this opinion in para. 20 of his affidavit:

"I do not believe it can be said from the facts of Mr. Wightman's medical condition that, had he lived, he would have been unable to return to work at any point in the two years following December 11, 2003."

[71] I interpret Dr. Weaver's opinion to mean the following: "I am not satisfied that Mr. Wightman would not have been able to return to work by December 11, 2005 if he had survived." If Dr. Weaver had identified and summarized the factual material upon which his opinion was based, and if he had expressed the opinion that Mr. Wightman would have been able to return to work before December 11, 2005, the opinion would have been admissible and might have been helpful to the court. While the second aspect of the deficiency relates to weight, I think it is relevant to admissibility because one of the requirements for expert opinion evidence is that it must assist the trier of fact. This opinion is incapable of assisting the court, and will not be admitted.

[72] In para. 22 (in conjunction with para. 21), Dr. Weaver expressed this opinion:

"Given Mr. Wightman's medical status and exhibit G, I do not believe it probable that Mr. Wightman, had he lived, would have continued to qualify for long-term disability payments for the two years following December 11, 2003."

[73] I take that opinion to mean this: "I am not satisfied on the balance of probability that Mr. Wightman, had he lived, would not have been able to perform any kind of gainful employment before December 11, 2005." This opinion suffers from the same defects as the opinion expressed in para. 20. For the same reasons, it will not be admitted.

[74] I have decided that, in the interests of justice, Dr. Weaver's evidence will be admitted to the extent that it tends to establish the following facts:

(a) That Mr. Wightman wanted to recover his health, and return to work, if he could;

(b) That he had never diagnosed Mr. Wightman as being terminally ill, or as being permanently disabled, in the sense that he would never be able to work again;

(c) That Mr. Wightman needed, and would have to undergo, carotid angioplasty and stenting, and cardiovascular surgery, before he would be a candidate for a kidney re-transplant; and

(d) That Mr. Wightman's illness became more acute in the two years from February 2002 to February 2004, but such a development was to be expected pending his receipt of treatment that was necessary to his recovery.

[75] While on the subject of Dr. Weaver's affidavit (although it concerns a matter of weight), it seems clear from other evidence that Dr. Weaver is mistaken in para. 19 when he states that Mr. Wightman was scheduled to undergo cardiovascular surgery in April 2004 by Dr. Peter Skarsgard. Mr. Wightman was likely scheduled to see Dr. Skarsgard (on March 30, 2004), in order to confirm that he was willing to undergo heart surgery, with all its risks. I will admit the affidavit of Dr. Skarsgard as surrebuttal evidence, but not the other two later affidavits filed by the employer.

THE EVIDENCE

[76] I will summarize the evidence which is relevant to the nature, extent and duration of Mr. Wightman's disability.

[77] In 1984, as a result of the failure of one of his kidneys, Mr. Wightman underwent surgery to have one of his kidneys removed, and a donated kidney transplanted. In 1997, Mr. Wightman was diagnosed with severe triple vessel coronary artery disease. At that time, he also was experiencing episodes of angina, and had arthritis in his hips. He was considered not to be a good candidate for heart surgery at that time.

[78] A biopsy test in March 2000 showed that Mr. Wightman's body was rejecting his transplanted kidney. Mr. Wightman's kidney function continued to deteriorate, and on February 18, 2002, he had to stop working as he was no longer able to work. He was then 59 years of age.

[79] On February 27, 2002, Dr. Bernstein, a heart specialist, assessed Mr. Wightman with a view to determining whether he could qualify for a repeat kidney transplant. Dr. Bernstein recommended that Mr. Wightman should continue trying to function as he was, until dialysis became necessary, and then he should be assessed again for his ability to undergo coronary bypass surgery. It was apparent that Mr. Wightman required the heart surgery before consideration could be given to the surgery for kidney re-transplantation.

[80] Dr. John Wade, rheumatologist, saw Mr. Wightman in June 2002 for his problem with gout. Dr. Wade also noted that there had been a "marked progression in recent months" of his hip problem, and that Mr. Wightman could only walk about 100 feet. He noted that Mr. Wightman had mild osteoarthritis of the small joints in his hands. Dr. Wade stated that surgery for Mr. Wightman's hip problem and for kidney re-transplantation depended on Mr. Wightman first having successful heart surgery or angioplasty. He therefore referred Mr. Wightman to Dr. Gin for a risk assessment.

[81] On July 19, 2002, Mr. Wightman signed an application for Canada Pension Plan disability benefits, at the request of Great West Life. In his application, Mr. Wightman described the conditions which prevented him from working as being kidney failure, arthritic hips and angina.

[82] Dr. Gin, a heart specialist, examined Mr. Wightman on August 6, 2002. In his opinion, Mr. Wightman had "a very high risk for cardiac mortality should he undergo renal re-transplantation, if nothing is done about his heart surgically." Dr. Gin wanted to conduct an angiogram procedure, but believed that would be detrimental to Mr. Wightman's kidney function. Dr. Gin therefore recommended that "... a repeat angiogram will be postponed until he is on dialysis." His opinion is re-stated near the end of his report in this way: "In summary, his significant coronary artery disease excludes him from renal re-transplantation unless he undergoes some form of coronary revascularization."

[83] Dr. Gin saw Mr. Wightman again on September 30, 2002, at which time Mr. Wightman was complaining of increased frequency of angina over the previous three weeks. He had been having such episodes four to five times per week, but they had increased to four or five times per day. The episodes were approximately five minutes long. Dr. Gin noted that Mr. Wightman was "a well looking elderly male in no acute distress." He recorded that Mr. Wightman was able to walk about half a block. He repeated his earlier opinion that Mr. Wightman should not have an angiogram, until he was on haemodialysis.

[84] Dr. Weaver referred Mr. Wightman to Dr. Wade for another acute problem with gout, and he saw Dr. Wade on October 9, 2002. Dr. Wade recommended a change in medication to control the level of uric acid in Mr. Wightman's body. He again noted the severe arthritis in Mr. Wightman's hips, which could not be surgically treated unless Mr. Wightman first had coronary bypass surgery.

[85] Dr. Gin saw Mr. Wightman again on October 31, 2002. He noted that his angina was improving, but that Mr. Wightman was experiencing symptoms of "postural hypotension". Dr. Gin stated that Mr. Wightman would likely need dialysis "in the next few months", and repeated his earlier recommendation that Mr. Wightman should then be re-assessed for heart surgery. He again said that heart surgery was a necessary pre-condition for a repeat kidney transplant and hip surgery.

[86] Mr. Wightman was hospitalized from December 3 to 6, 2002, for treatment for kidney failure, which included blood transfusions.

[87] Mr. Wightman was again hospitalized from February 11 to 15, 2003, for kidney failure. Haemodialysis was commenced at that time, and was thereafter required on a continuing basis of two or three times per week, as an out-patient. The hospital discharge summary stated that Mr. Wightman "had been feeling progressively unwell for the four weeks prior to admission", and that he had "spent much of his time in bed." He was given a blood transfusion of four units of blood. A coronary angiogram test was done, and it was stated that Mr. Wightman would be re-assessed by Dr. Gin as to whether he would be a candidate for heart surgery.

[88] Dr. Wade saw Mr. Wightman again on February 28, 2003. He noted the multiple problems that Mr. Wightman was having and particularly his acute problems of gout in the right big toe, and hip pain.

[89] In her report to Great West Life dated March 3, 2003, Dr. Shapiro recorded that Mr. Wightman's current problems included kidney failure for which he was receiving haemodialysis three times per week. She stated the opinion that Mr. Wightman "... will need coronary bypass surgery and hopefully a kidney transplant before he could think about working."

[90] Dr. Gin saw Mr. Wightman on April 3, 2003. At that time, he described him as being "alert and in no acute distress." Dr. Gin expressed the opinion that Mr. Wightman was at high risk of death or severe complications if he underwent heart surgery, at least 10% to 15% chance. He also found that Mr. Wightman had asymptomatic carotid disease which he said should be investigated for possible surgical intervention. Dr. Gin stated that Mr. Wightman knew he could not have hip surgery or repeat kidney transplant surgery, unless he first had heart surgery, and noted that Mr. Wightman was concerned about the high risk of heart surgery. They were to discuss it further, at a later date.

[91] On July 2, 2003, Dr. Gin saw Mr. Wightman. In his opinion, the carotid disease had progressed, which increased the risk of stroke, particularly as a consequence of surgery. He said Mr. Wightman was undecided as to what he should do. Dr. Gin referred Mr. Wightman to Dr. Teal, a specialist in stroke and cerebrovascular disease.

[92] Dr. Teal saw Mr. Wightman on August 1, 2003, to assess his carotid artery disease. In his opinion, carotid surgery was high risk, but Mr. Wightman could undergo a left carotid angioplasty and stenting. He referred Mr. Wightman to Dr. Redekop.

[93] Mr. Wightman checked into the hospital on October 14, 2003, to receive treatment for an ulcerous condition of his right big toe. He was treated and released.

[94] Mr. Wightman was referred to Dr. Davis, a general surgeon specializing in head and neck surgery, for an opinion as to whether he should have surgery to remove his parathyroid gland. Dr. Davis was of the opinion (on November 21, 2003) that Mr. Wightman would benefit from such surgery, but concluded that he could not tolerate general anaesthetic because of his heart disease.

[95] On January 6, 2004, Dr. Redekop carried out a left carotid angioplasty and stenting on Mr. Wightman, and an excellent result was obtained.

[96] Mr. Wightman saw Dr. Gin on February 20, 2004. His angina had again worsened, although he was "alert and in no acute distress." Dr. Gin noted that Mr. Wightman had decided that he wanted kidney re-transplantation surgery, and was willing to take the risk of heart surgery as a necessary pre-condition. Dr. Gin referred Mr. Wightman to Dr. Skarsgard, for his surgical opinion.

[97] Mr. Wightman was seen by Dr. Duncan, a kidney specialist, on or before March 8, 2004. Mr. Wightman had been having problems with his dialysis treatments, his angina had been worsening again, and he had experienced several episodes of partial loss of consciousness and loss of bladder control during the previous few months. In addition, he had been spitting blood and had been having difficulty passing urine. Among other things, Dr. Duncan recommended that Mr. Wightman's haemodialysis treatments should be increased from three to four times per week.

[98] On March 29, 2004, Mr. Wightman was taken to the emergency room of the Royal Columbia Hospital, for problems with his heart. He was examined and assessed, and it was decided that a pacemaker should be implanted in his heart. This operation was carried out on March 30, 2004, by Dr. Vrabec and Dr. Boisvenu. There were problems with Mr. Wightman's heartbeat towards the end of the surgery, but he was revived and the surgery was completed. However, very soon after being moved to the intensive care unit, Mr. Wightman's heart stopped again, and he could not be revived. Before the surgery was performed, Mrs. Wightman had told Dr. Blackwell that her husband did not want to be kept on life-support, if he developed any irreversible problems.

ARGUMENTS

[99] Mr. Korbin relied heavily on the medical evidence, and the agreement concerning the findings and opinions contained in the documents filed. He argued that the facts proved by the documentary evidence satisfied the legal test set out in the Marshall case. Counsel noted that there were no issues of credibility concerning this objective evidence. Many authorities were referred to.

[100] Mr. Curtis submitted that the factors in Marshall did not weigh in favour of a "permanent" disability. The points he argued in support of this submission included the following:

(a) Mr. Wightman was a long-term employee with job prospects of working for the employer until he retired, when he went on disability leave. It was not necessary to hire someone to replace him while he was absent. Mr. Wightman was still receiving long-term disability benefits and the length of his absence must therefore have been within the contemplation of the parties. Accordingly, factors (a), (b), (c) and (e) weigh in favour of Mr. Wightman.

(b) There is no expert medical opinion given which expressly states that Mr. Wightman was permanently disabled from working.

(c) The evidence as a whole supports the inference that Mr. Wightman was striving to recover his health so that he could return to work, and not because he had to do so, in order to continue living.

(d) There is at least one previously-decided case in which the employee was absent from work for longer than 22 months, where it was held that the contract of employment had not been frustrated, for example: Yeager v. R.J. Hastings Agencies Ltd. (24 months).

(e) The employer's evidence to the effect that Mr. Wightman had given up on ever returning to work, before he was terminated, is not credible because:

(i) On his examination for discovery on January 14, 2005, Wayne Lee retreated from his affidavit evidence, and testified that Mr. Wightman had only said, in effect: "I don't think I can come back [to work]."

(ii) Mr. Mason (in the termination letter) and Mr. Lee (on discovery) both said, in effect, that they were trying to preserve Mr. Wightman's job during the negotiations with Jaakko, which is conduct inconsistent with the professed belief that Mr. Wightman was permanently disabled and would never be able to return to work.

(iii) The employer paid severance pay to Mr. Wightman, which is inconsistent with the allegation of frustration.

(iv) Mr. Kobayashi acknowledged in his affidavit that he had read Mr. Lee's affidavit before swearing his own, which was equivalent to sitting in court and hearing Mr. Lee testify before himself giving testimony, and which diminishes the weight that should be given to Mr. Kobayashi's evidence.

FINDINGS OF FACT

[101] On the question of Mr. Wightman's subjective belief, I think Mr. Curtis' first two arguments on credibility have some merit. Mr. Lee did qualify his affidavit evidence to some extent, on discovery. And the attempt to preserve Mr. Wightman's job so that he would become an employee of Jaakko, is inconsistent with the assertion that the employer believed that Mr. Wightman would never return to work. This causes me some doubt as to whether Mr. Lee and Mr. Kobayashi did form the opinions they express in their affidavits, to the degree of certainty they claim, before December 2003. But I find my suspicions are not sufficient to support an inference adverse to the credibility of their evidence as to the statements made to them by Mr. Wightman.

[102] I accept that Mr. Wightman did make the statements to Mr. Lee, Mr. Kobayashi and Mr. Mason that they attributed to him. Those statements were made between February 18, 2002 and October or November of 2003. However, I also accept that Mr. Wightman made contrary statements to his wife and daughter, during the same time period, and also between December 11, 2003 and the time of his death on March 30, 2004. On the whole of the evidence, I am not prepared to draw the inference that Mr. Wightman subjectively believed that he was permanently disabled from working and would never be able to return to work. Mr. Lee and Mr. Kobayashi might have held the opinion that Mr. Wightman would never be able to return to work. But the test has an essential objective component, which depends largely on whether the medical evidence supports the inference sought by the employer.

[103] As of December 11, 2003, the date of his dismissal, Mr. Wightman was still totally disabled from working. He was 61 years of age. During his disability leave, Mr. Wightman's conditions relating to his kidney, hips, angina and gout had worsened. He had developed two further significant problems, in that his carotid artery disease had become symptomatic, and he was being adversely affected by his parathyroid gland.

[104] As of December 11, 2003, Mr. Wightman would not be able to work until such time as he could successfully undergo coronary bypass surgery and then, kidney re-transplantation surgery. By that date, Mr. Wightman had not yet decided whether he would take the risk of heart surgery, and of course no date for potential heart surgery had been scheduled.

WHAT MUST BE PROVED BY THE EMPLOYER

[105] The employer must prove on the balance of probabilities that Mr. Wightman's incapacity, looked at before the purported dismissal, was of such a nature, or it appeared likely to continue for such a period, that further performance of his obligations in the future would either be impossible or would be a thing radically different from that undertaken by him and agreed to be accepted by the employer under the agreed terms of his employment.

[106] In my opinion, in this case the most important factor of the five factors referred to in the Marshall case, is the following:

"(d) The nature of the illness or injury and how long it has already continued and the prospects of recovery

The greater the degree of incapacity and the longer the period over which it has persisted and is likely to persist, the more likely it is that the relationship has been destroyed."

CONCLUSIONS

[107] At the time of his dismissal, Mr. Wightman had been totally disabled from working for more than 21 months. His prospects for recovery from the conditions that disabled him from working, were uncertain at best. I infer, on the balance of probabilities, that his disability, at the time of his dismissal, was likely to continue for such a period that further performance of his obligations in the future would either be impossible or would be a thing radically different from that undertaken by him and agreed to be accepted by the employer under the agreed terms of his employment.

[108] In making this finding of fact, I find it unnecessary to rely on any facts relating to the continuing deterioration of Mr. Wightman's health, after the date of his dismissal.

[109] In my opinion, as of the summer or fall of 2003, there was no reasonable possibility that Mr. Wightman would be able to return to work by the end of 2004. In my opinion, the length of Mr. Wightman's incapacity, the increasing degree of his incapacity to work, and the likelihood that the incapacity would continue for a further lengthy period of time, support the conclusion that, before the time when he was dismissed, Mr. Wightman was permanently disabled, within the meaning attributed to that term in the relevant authorities.

[110] Accordingly, the defence of frustration has been proved, and the cause of action based on breach of the employment contract must be dismissed.

THE ALLEGED ORAL AGREEMENT

[111] The plaintiffs allege that, after Mr. Wightman went on disability leave, and when he realized that his disability would be longer than six months, he asked the employer to top-up his long-term disability benefits by paying him one-third of his monthly salary to supplement the two-thirds salary that he would be receiving in long-term disability benefits. It is alleged that the employer promised in advance to pay Mr. Wightman that monthly amount, when he began receiving long-term disability benefits, "in consideration of maintaining the long and productive working relationship with Mr. Wightman." The plaintiffs say that the employer failed to comply with this obligation, in that they did not pay him anything by way of top-up payments. In the alternative, the plaintiffs allege that Mr. Wightman relied upon the employer's promise to make the monthly top-up payments and acted in reliance to alter his position, thereby estopping the employer from denying its promise to pay.

THE EVIDENCE

[112] All of the admissible evidence presented by the plaintiffs in direct support of this cause of action is contained in paras. 16 and 17 of Mrs. Wightman's first affidavit, and is as follows:

"16. Sam told me and I verily believe that when Sam first realized he needed to take long-term disability leave, he spoke with Wayne Lee, a principal of NLK. Sam said that Wayne promised him NLK would "top-up" his disability benefits so that he would continue to earn the full salary he enjoyed with NLK. The issue arose because the long-term disability benefits payable to Sam were only 2/3 of Sam's salary from NLK. Sam understood from his discussion with Mr. Lee that NLK would be paying Sam the other 1/3 of his salary while he was on long-term disability. Sam relied on this promise and believed that NLK would pay him the money. NLK never paid to Sam any of this promised "top-up" money. By my calculation, this promised but unpaid "top-up" would amount to 1/3 of Sam's monthly salary of $9,270 over the 21 month period from June 18, 2002 to March 30, 2004. This amount is $64,890.

17. When NLK failed to pay the promised "top-up" money, I was forced to give up the daily care I was providing to my granddaughter and return to work to contribute to the household income."

[113] On her examination for discovery for discovery on January 13, 2005, Mrs. Wightman testified to the following effect:

(a) The only thing her husband told her about the alleged agreement was that "they were going to top-up his disability pay.", and that he was told this on his last day of work in February 2002.

(b) Her husband did not distinguish between short-term disability and long-term disability. She knew that her husband did not begin long-term disability benefits until June 2002.

(c) As far as she knew, her husband never again talked to Mr. Lee, or any other representative of the company, about the top-up, after February 2002.

(d) She herself never spoke to any representative of the company about the topping-up of her husband's disability benefits.

(e) She had to return to work in April 2002, because the company did not make the top-up payments that it had promised to her husband.

(f) In his income tax return for 2002, her husband reported her income as being zero, and in his 2003 income tax return he reported her income as being $7,635.85.

(g) When she returned to work, it was necessary for her to give up the care of her granddaughter.

[114] The employer did not object to the plaintiffs' introduction of Mr. Wightman's hearsay statements through Mrs. Wightman, nor was it argued that the hearsay statements could not be admitted for their truth.

[115] The employer denies that any agreement was ever made to top-up Mr. Wightman's long-term monthly disability payment. The evidence presented by the employer on this issue consists of the following:

(a) Affidavit of Joy Chong, the employer's payroll and benefits administrator, sworn January 10, 2005 (paras. 33-34);

(b) Affidavit of Wayne Lee sworn January 10, 2005 (paras. 32-34); and

[116] The facts asserted in the employer's evidence on this issue may be summarized as follows:

(a) In early May 2002, Mr. Wightman telephoned the employer's office, spoke to Joy Chong, and made a request that the employer top-up his disability benefits to 100% of his former full-time salary.

(b) Joy Chong informed Wayne Lee that Mr. Wightman had made that request.

(c) Mr. Lee discussed Mr. Wightman's request with Mr. Kobayashi, and they decided that Mr. Wightman's request should not be granted, because the monthly payments that Mr. Wightman would be receiving on his long-term disability coverage would be two-thirds of his former full-time salary, which was more than the 60% salary that the active employees of the employer would be receiving when the work week was cut to three days.

(d) Mr. Lee told Ms. Chong that the employer would not grant the request, and told her to communicate this decision to Mr. Wightman, together with the reasons for the decision not to grant his request.

(e) On or about May 8, 2002, Ms. Chong telephoned Mr. Wightman and told him that the employer would not top-up his long-term disability benefits, unless the employer went back to a five day work week.

(f) Mr. Wightman never made any further request for top-up payments, nor did he ever complain that the employer was not paying him such top-up payments.

(g) the employer never did return to a five-day work week, and was still operating on a three-day work week when Mr. Wightman was dismissed on December 11, 2003.

[117] On his examination for discovery, Mr. Lee denied that Mr. Wightman ever asked him directly for top-up payments, but acknowledged that he did make that request through Joy Chong. Mr. Lee thought this occurred shortly after Mr. Wightman went on disability leave in February 2002. He identified a note in Joy Chong's handwriting dated March 14, 2002, in which she calculated the difference between Mr. Wightman's full-time weekly earnings and the $1,250 per week that he would receive on short-term disability benefits. But Mr. Lee said that he had never seen that note, and seemed unsure as to why Ms. Chong had made it.

FINDINGS OF FACT

[118] The employer's evidence is somewhat unsatisfactory. There is conflict between Mr. Lee and Ms. Chong as to the date when Mr. Wightman made his request for the top-up payments. When Mr. Wightman went on disability leave in February 2002, the employer was working a four-day week, and it was not until May 2002, that it was reduced to a three-day week. Mr. Lee's reason for refusing Mr. Wightman's request breaks down if, as he claims, the request was made in late February. Of course, he may be mistaken.

[119] It does appear that the request for top-up payments was made by Mr. Wightman at a time when he was receiving $1,250 per week on short-term disability benefits, which extended to June 2002. Ms. Chong's second note, likely made on or shortly after May 8, 2002, describes amounts that would be paid to Mr. Wightman by Great West Life under both the short-term and long-term disability plans. But the important part of her notes is crowded in at the top of the page, and could have been written after the calculations were written.

[120] The evidence does not reveal whether Mr. Wightman had exhausted his accumulated vacation time and sick-day time (which was being used to make up the difference between his full regular salary and the reduced salary that had commenced in July 2001). It may have been all used up by the time Mr. Wightman went on disability leave in February 2002, but if not, it could have been continued after that time.

[121] Finally, Mr. Lee and Mr. Kobayashi testified that it was "the company" that decided Mr. Wightman's request would be denied, rather than saying that it was the two of them (or them together with someone else) who made the decision. That evidence did nothing to dispel the uncertainty of the date, and the lack of particulars of the conversations that led to the decision.

[122] But there are several problems with this aspect of the plaintiffs' claim. First, there appears to be no consideration given by Mr. Wightman in return for the alleged promise of the employer. It makes no sense to say that Mr. Wightman would agree to continue to work for the employer after he returned from disability leave, in return for the top-up payments. There is no suggestion that Mr. Wightman would have quit his job and sought employment elsewhere (assuming he recovered) if the employer refused to pay his top-up payments. Moreover, Mrs. Wightman does not assert that her husband told her that this, or anything else, was accepted by the employer as consideration for its promise to pay.

[123] Secondly, with respect to the alternative claim that Mr. Wightman relied on the employer's promise to his detriment, the only evidence directed to this issue appears to be Mrs. Wightman's evidence that she had to return to work in April 2002. Apart from the fact that it is likely she is mistaken about the year when she returned to work, I do not see how her actions can amount to an act by Mr. Wightman to his detriment.

[124] Thirdly, Mr. Wightman's failure to ever raise the matter of top-up payments again before he was dismissed, is conduct inconsistent with the existence of the alleged agreement.

[125] It is possible that Mr. Wightman told his wife that the employer had agreed to make monthly top-up payment to him. But it is also possible that he told his wife that top-up payments would not begin until the employer went back to a five-day work week, and she has forgotten this part of what he said.

[126] There is also a possibility that Mr. Wightman did not tell Mrs. Wightman about the qualification put on the employer's promise to make top-up payments. Mr. Lee gave evidence (in para. 56 of his affidavit) that he had loaned $60,000 to Mr. Wightman to enable him and his wife to purchase a lot on Hardy Island. Mrs. Wightman did not deny that Mr. Lee made that loan to her husband, but she said she knew nothing about it. I see no reason to reject Mr. Lee's evidence on this point, and I infer from it, that Mr. Wightman did not always tell his wife everything about his financial affairs.

[127] But in any event, Mr. Wightman's failure to pursue the matter of top-up payments before he was terminated, is conduct which is more consistent with the employer's version of the discussions about making top-up payments.

conclusions

[128] Apart from the problem of no consideration, I am far from being persuaded that the evidence of Mr. Lee, Mr. Kobayashi and Joy Chong should be rejected as being false on the balance of probabilities. When I consider their evidence in the context of the whole of the evidence, it is my opinion that their evidence has a probability of truth that is at least equal to the probability that the allegation of the plaintiffs is true.

[129] In my opinion, the plaintiffs have failed to prove on the balance of probabilities that the alleged oral agreement for top-up of Mr. Wightman's disability benefits was ever made. This cause of action is dismissed.

The claim against the defendant jaakko

[130] I have decided that the contract of employment between the employer and Mr. Wightman was frustrated, before he was dismissed. The employer did not breach the employment contract, and it must follow that the defendant Jaakko did not induce the employer to breach the employment contract. Accordingly, the action against the defendant Jaakko is also dismissed.

[131] I wish to add that, in my opinion the plaintiffs could not have succeeded against the defendant Jaakko, even if I had found that the employer had breached the employment contract. In my view, the Asset Purchase Agreement does not require the employer to breach its contract of employment with Mr. Wightman (or any employee of the employer), notwithstanding that the Agreement did require the employer to terminate the employment of all employees who were not going to be offered employment with the defendant Jaakko.

DAMAGES

[132] In case I have erred on the issue of liability, I will briefly state my conclusions on the issues relating to damages:

(a) The period which would constitute reasonable notice is 24 months (which appears to be common ground).

(b) While I think the employer could have handled Mr. Wightman's dismissal in a more sensitive way, I am not persuaded that the employer was guilty of "bad faith conduct" in the manner of dismissal, within the principles set out in Wallace v. United Grain Growers Ltd. (1997) 152 D.L.R. 4d 1 (S.C.C.). The principals of the employer believed that Mr. Wightman had given up on returning to work, and knew that his entitlement to long-term disability benefits would not be affected by his termination.

(c) The amount paid by the employer to Mr. Wightman at the time of dismissal, approximately $13,700, must be deducted from the damages.

(d) The long-term disability benefits received by Mr. Wightman from the date of his dismissal (December 11, 2003) until the date of his death (March 30, 2004) would have to be deducted from any damages awarded for wrongful dismissal: Sylvester v. B.C. [1997] 2 S.C.R. 315.

(e) The death of Mr. Wightman (which occurred during the period of reasonable notice) does not bar his personal representative from recovering damages for that part of the reasonable notice period that extended beyond the date of Mr. Wightman's death. On this issue, I adopt the reasoning of Madam Justice Lynn Smith in Rickards Estate v. Diebold Election Systems Inc. 2004 B.C.S.C. 1357, notwithstanding that her conclusion on this point was not essential to her judgment.

(f) The damages should be calculated by first multiplying 24 months times 60% of Mr. Wightman's full-time monthly salary of $9,270, because he would have been earning only 60% of his salary, had he been working at the time of the dismissal.

(g) I would not deduct the life insurance money or the survivor's benefits paid by Great West Life to Mrs. Wightman, on the death of her husband. In reaching this conclusion, I am mindful of the arguments made by counsel for the employer based on the rule against double recovery, and on the principle which defines the purpose of awarding damages in a case of wrongful dismissal.

THE ISSUE OF COSTS

[133] It seems to me that the defendant 2774046 Canada Inc. and the defendant Jaakko Poyry NLK Inc. are entitled to their costs of these proceedings, on scale 3. While a great many issues were involved, in my opinion the issues of fact and law are not so complex as to justify a higher scale of costs. Moreover, there has been no hint of any reason that might support an argument that special costs should be awarded. Mr. Korbin did argue that it was outrageous for plaintiffs' counsel to claim that the employer's manner of dismissal contributed to Mr. Wightman's death. While I agree that the medical evidence does not support this assertion, I reject the notion that this could be a reason for awarding special costs. Accordingly, I do not accede to Mr. Korbin's request for the opportunity to make further submissions on costs.

[134] I order that the plaintiffs shall pay the costs of the defendants 2774046 Canada Inc. and Jaakko Poyry NLK Inc., at scale 3. The reasonable costs of the defendants NLK Enterprises Inc. and NLK Group GP Inc. may only be claimed as part of the costs of the first defendant. It must have been apparent to the defendants, very early on, that no cause of action existed against these two defendants, and there could be no justification for any significant amount of work relating to defending them. Conversely, I think it is understandable why the plaintiffs joined those two defendants, having regard to the history of changes in name (and likely ownership) of Mr. Wightman's employers over the years.

"D.A. Halfyard, J."
The Honourable Mr. Justice D.A. Halfyard

Citation:	*Wightman Estate v 2774046 Canada Inc. et al*,
	2005 BCSC 1393