Alberta Court of Appeal, 2010

Facts:

The Appellant Syed Joe Ahmad (“Ahmad”) commenced employment as CEO of Athabasca Tribal Council Ltd. (“ATC”), a corporation composed of Five First Nations Bands, on April 1, 2003. In his role as CEO Ahmad also sat on an executive group formed through All Party Core Agreements between the five First Nations, energy companies, and three levels of government. During the course of Ahmad’s participation in executive group meetings, ATC Board of Directors meetings, and executive management meetings, various players became concerned became with his business views. ATC Director Jim Boucher (“Boucher”) met with Ahmad on September 5, 2003, to communicate some of the concerns of the energy companies, in response to which Ahmad e-mailed a summary of said meeting to a number of individuals including Boucher and Syncrude VP Phil Lachambre (“Lachambre”), an industry representative who also sat on the executive group. On September 16, 2003, the ATC Board of Directors met and told Ahmad he was terminated. ATC offered Ahmad five weeks’ severance pay if he would sign a release. Ahmad refused.

Ahmad brought an application for wrongful dismissal against ATC and sued Boucher and Lachambre for tortiously inducing his termination of employment. After Ahmad closed his arguments, Boucher and Lachambre both applied for, and were granted, nonsuit applications.

The trial judge also held that ATC had not breached the employment agreement. The trial judge held that the agreement was not a fixed-term contract as it clearly provided for early termination for any reason without cause provided the employee was given one month's notice for each year of service, and any entitlements under the Alberta Employment Standards Code. He further agreed with ATC’s argument that for five and one half months employment, Ahmad was entitled to two weeks’ notice (one-half of one month), together with one week’s salary under the Employment Standards Code, for a total of three weeks’ salary.

This decision appeals the granting of Boucher’s nonsuit application and the judgment against ATC in an amount equivalent to three weeks’ salary. A separate appeal of the granting of Lachambre’s nonsuit application was dismissed.

Issues:

The issues on appeal were whether the trial judge erred:

  1. by applying the wrong legal test for nonsuit applications;
  2. by holding there was no direct evidence that Boucher induced Ahmad’s termination, in that courts can infer a breach by a party when it is reasonably foreseeable a breach could result from that party’s conduct;
  3. by applying the wrong legal test in determining Boucher was not personally liable as a Director of ATC;
  4. in determining the employment terms were unambiguous and the appellant was only entitled to three weeks’ salary; and
  5. in determining ATC had complied with the terms of the agreement when no severance payment was made to Ahmad.

Decision:

The Court advised that “correctness” is the standard of review involving questions of law, and that findings of fact regarding the essential terms of a contract have a review standard of “palpable and overriding error”.

The Court dismissed the appeals against ATC and Boucher on the following grounds:

Nonsuit Applications

The Court agreed with the earlier decision of the Court in the appeal against Lachambre, when it determined there had been no error in the legal test for nonsuit applications.

Direct Evidence

The Court held that the trial judge recognized that a burden of proof can be met by drawing inferences, but that he could not draw any such inferences from those actions to support a conclusion that Boucher had induced the breach of contract (which breach was itself assumed for the application of the test). The Court cited its reasoning from the appeal against Lachambre, that criticism of someone is not itself sufficient to constitute the tort of inducing breach of contract. Other than the concerns voiced by Boucher, Ahmad was unable to point to any evidence supporting inducement. The Court was unable to find palpable and overriding error of the trial judge and therefore unable to interfere with his decision.

Director’s Liability

The trial judge held that personal claims against a director could only succeed if the director was acting outside his or her duties as director to further personal interests over the interests of the corporation, and that there was no evidence that Boucher conducted himself in this manner. The Court upheld this decision, stating that both ATC and Boucher, as a Director, had the right to manage and address performance issues of Ahmad as an employee. The Court held that the dealings between Ahmad and Boucher as employee and director, respectively cannot therefore be characterized as outside of their respective roles, and thus Ahmad had not demonstrated any error in the trial judge’s conclusion that Boucher could not be held personally liable for his conduct as Director.

Wrongful Termination

The Court further held that the trial judge had correctly found there was no breach of contract by ATC. The Court determined the contract was clear and unambiguous, and therefore the principle of contra preferentem was not applicable.

The Court held that the trial judge did, however, err in his awarding of anything more than the 1 week of notice Ahmad was entitled to under the Employment Standard Code, but as this had not been appealed the Court did not correct it.

ATC Compliance with Agreement

The Court held that ATC had offered Ahmad more than required under the agreement, provided he sign a release, and that there had been no breach of the agreement because the appellant refused to accept the pay in lieu offered.