Supreme Court of Canada
H.L. Weiss Forwarding Ltd. v. Omnus, [1976] 1 S.C.R. 776
Date: 1975-06-26
H.L. Weiss Forwarding Limited (Plaintiff) Appellant;
and
Peter Omnus, Hermann Ludwig Allgemeine Land-Und Seetransportgesellschaft, Jurgen Eisen and Hermann Ludwig (Canada) Limited (Defendants) Respondents.
1975: May 9; 1975: June 26.
Present: Laskin C.J. and Judson, Spence, Beetz and de Grandpré JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Damages—Quantum—Punitive damages—Tort—Company knowingly inducing breach of contract—Conspiracy to take over business by drawing away key employees and solicitation of major customers.
The plaintiff established at trial the liability of Omnus, its chief managing officer, and of Eisen, his assistant, for breach of contract of employment in failing to give proper notice, and also the liability of the defendant company in tort for knowingly inducing these officers to break their contracts. All three defendants were found liable for conspiracy, in having combined together to obtain the plaintiff’s business and its goodwill without paying for it by a plan which had been inaugurated prior to January 1, 1970, and which resulted in Omnus abruptly leaving the plaintiff’s employ on January 9, 1970, and Eisen shortly thereafter, to take charge of a new company promoted by the defendant company. The trial judge assessed $6,000 against Omnus and the equivalent of one month’s salary against Eisen for breach of contract and then assessed $20,000 against all defendants for the conspiracy. The plaintiff’s appeal of the award of damages was dismissed without written reasons by the Court of Appeal. On further appeal, plaintiff sought an increase in the award of $20,000 or alternatively an award of punitive damages.
Held (Judson and de Grandpré JJ. dissenting): The appeal should be allowed.
Per Laskin C.J. and Spence and Beetz JJ.: The trial judge in his reasons intimated that assessment of a punitive award would be difficult and did not face up to the consequences of his findings. The circumstances of the case, the tortious drawing away of the plaintiff’s key
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employees, the coupling of this with a scheme to take over the plaintiff’s business and to end the plaintiff as a going concern, and the fact that plaintiff had a modest business in terms relative to the defendant company, justified, in the interests of justice, an award of punitive damages in the additional amount of $10,000.
Per Judson and de Grandpré JJ. dissenting: The assessment of damages made by the trial judge and affirmed by the Court of Appeal should stand. On the facts of the case an award of punitive damages was inappropriate.
APPEAL from the Court of Appeal for Ontario dismissing an appeal, without written reasons, of the award of damages from a judgment of Moorhouse J. at trial awarding damages for breach of contract and in tort. Appeal allowed, Judson and de Grandpré JJ. dissenting.
W.G. Dingwall, Q.C., and W.A. McLauchlin, for the appellant.
J. Edgar Sexton, and P. Atkinson, for the respondents.
The judgment of Laskin C.J. and Spence and Beetz JJ. was delivered by
THE CHIEF JUSTICE—The only issue in this appeal is the quantum of damages properly assessable to the plaintiff appellant against the defendants respondents. The plaintiff succeeded at trial in establishing the liability of the defendant Omnus, its chief managing officer, and of the defendant Eisen, his assistant, for breach of their contracts of employment. Omnus was in breach for failing to give six months’ notice and Eisen for failing to give one month’s notice. In addition, and this was the main cause of complaint, the plaintiff established the liability of the defendant company in tort for knowingly inducing Omnus and Eisen to break their contracts of employment with the plaintiff in order to capture their services for itself, and the liability of all three defendants for conspiracy.
In this latter aspect, the trial judge made this important finding:
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The German company, Omnus and Eisen combined together to obtain the plaintiff’s business and its goodwill without paying for it and succeeded in doing so. The plan was inaugurated before January 1, 1970.
Omnus abruptly left the plaintiff’s employ on January 9, 1970, and Eisen shortly afterwards, in order to take charge of a new company promoted by the corporate defendant. The new company was in business shortly after Omnus left the plaintiff’s employ, and he lost no time in soliciting and taking away the business of the plaintiff’s five major customers, business which the plaintiff had been able to keep for some eight years.
The trial judge assessed $6,000 against Omnus and the equivalent of one month’s salary against Eisen for breach of contract and then assessed the sum of $20,000 against all defendants for the conspiracy, although it is clear that it was the corporate defendant which was behind or able to carry out the scheme of driving the plaintiff out of business. Only the sufficiency of the award of $20,000 is before this Court. The plaintiff had appealed the award of damages to the Ontario Court of Appeal and that Court dismissed the appeal without written reasons. The defendants did not appeal, either directly or by cross‑appeal, the findings of liability against them or the award of damages.
In this Court the plaintiff asked for a substantial increase in the award of damages of $20,000 and, in addition or alternatively, an award of punitive damages.
I would not interfere with the award of $20,000 as damages for the tort but I am of the opinion that this is a very proper case for punitive damages. The trial judge, in my view, did not face up to the consequences of his findings. Indeed, there was an intimation in his reasons that assessment of a punitive award would be difficult. This was not only a case of the illegal drawing away of the plaintiff’s principal employee, who was in complete charge of its business, and drawing away his assistant, in order to capture their talents for a competing operation, but it was a case of coupling this tortious conduct with a wider scheme of taking
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over the plaintiff’s business through solicitation of its major customers in order to put an end to the plaintiff as a going concern. In this the defendants succeeded.
The business was a modest one in terms of profitability and most certainly in comparison with the giant enterprise which was the corporate defendant. Yet it had been carried on continuously for some eight years, during which the plaintiff had business dealings with the corporate defendant and retained its other major customers. I think substantial justice will be done here by awarding the plaintiff an additional $10,000 as punitive damages.
I would, accordingly, allow the appeal with costs to the plaintiff throughout.
The judgment of Judson and de Grandpré JJ. was delivered by
JUDSON J. (dissenting)—My opinion is that this Court should accept the assessment of damages made by the trial judge and affirmed by a unanimous Court of Appeal, and should not increase the award by the addition of any sum for punitive damages.
The amount of the award was carefully considered by the trial judge and although his rejection of punitive damages was made in somewhat hesitant terms, it was none the less made. He was well aware that the two employees were free to compete in what is a highly competitive business, if they had given proper notice of termination of their employment—in one case six months and the other, one month. He did make an award of six months’ salary against one, and one month’s salary against the other. It is difficult to characterize this award.
On the facts of this case and in view of the unanimity in both Ontario Courts, this seems to me to be an inappropriate occasion for an award of punititive damages. The difficulties and the con-
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troversy on the subject are fully dealt with in MacGregor on Damages, 13th ed., pp. 302-325.
I would dismiss the appeal with costs.
Appeal allowed with costs, JUDSON and DE GRANDPRÉ JJ. dissenting.
Solicitors for the appellant: Woolley, Hames, Dale & Dingwall, Toronto.
Solicitors for the respondents: Holden, Murdoch, Walton, Finlay & Robinson, Toronto.
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