A 69-year-old professional engineer who was fired without notice via a courier-delivered letter and accused of possibly being involved in the death of the company’s founder has been awarded 24 months’ notice and $100,000 in aggravated and punitive damages.
The court also tacked on more than $190,000 in legal costs.
The employer in this case, Controlex Corporation, did not participate in the trial — leading to a default judgment by the Ontario Superior Court of Justice. This absence followed a series of legal proceedings, including the withdrawal of the defendant’s counsel and unresponsiveness to court orders.
Case background and findings
The plaintiff, MK, was abruptly dismissed from his position as vice-president at Controlex Corporation in September 2020. The dismissal, delivered via a couriered letter without any stated cause, followed 18.5 years of service, during which MK significantly contributed to the company’s growth.
The court noted that during his tenure as vice-president the land holding assets under Controlex’s control increased from “those of small land holding company to a current value in the range of $700 million.”
When he was terminated, MK was given his base salary for eight weeks and benefit continuation for that period. At the time of dismissal, MK was earning a salary of $228,000 per year plus benefits and a car allowance of $300 per month.
MK oversaw the development and leasing of the Ottawa Train Yards, a major shipping centre in Ottawa and a principal asset of Controlex.
Justice Charles T. Hackland found this termination to be without cause, citing the absence of a written employment contract and MK’s non-waiver of common law notice entitlement.
Mistreatment and defamation
The ruling noted the disrespectful and offensive treatment by the company’s president toward him.
In the months leading to his dismissal, the president made defamatory statements about MK to clients and employees, falsely implicated him in her husband’s death, and unjustly accused him of dishonesty.
Her husband, who founded the company, died suddenly and accidentally on July 17, 2020. After this death, his wife — who had not previously been directly involved in the business in any substantial way — took over the business.
She phoned MK to let him know she would be running the business and would be the only one with signing authority. She also began directing his reports without his knowledge or involvement.
“During the eight week period following (the founder’s) death, it was reported to (MK) by clients of the defendant that he knew and worked with that (she) was visiting them and making bizarre and defamatory statements about (MK), including that he was ‘a nobody’ and was ‘no good’ and not to speak to him and to deal only with her,” the court said. “She suggested it was possible her husband had been murdered and (MK) may have been involved, that he had been taking kickbacks, and that she had fired him.”
That termination took place eight weeks after her husband’s death. This behavior led the court to find the case warranted aggravated and punitive damages.
Damages awarded
The reasonable notice period was set at 24 months, including 24 months of lost base salary; 22 months of lost benefits (estimated at 10% of base salary); and 24 months of lost car allowance. From that, the court deducted the $35,938.32 he had already been paid for a total of $471,461.68.
MK also sought aggravated damages for the manner of his dismissal. It noted that the president personally visited customers after her husband’s death “telling them not to deal with the plaintiff, criticizing his character and his honesty and telling some that the plaintiff had been terminated.”
She offered his to a subordinate before he had been let go, ostracized him from management duties and made repeated defamatory allegations that he was dishonest and “on the take.” Rather than providing reasonable advance notice or severance, she “set out to destroy his reputation.”
It also noted that during the legal proceedings, she upgraded her attack on MK by advancing “groundless” allegations of a breach of fiduciary duty and then retained and ended her relationshipw tih four different law firms. She ultimately abandoned the defence of this proceeding. The court set aggravated damages at $50,000.
It then turned its attention to punitive damages. The court found that, after taking over management of the company following her husband’s death, she embarked on a “malicious” campagin to undermine MK. She accused him of criminality and dishonesty, without a shred of justification. She then pursued a baseless counterclaim.
“She then caused the defendant to default on the order of this court to appoint new counsel and caused the defendant to abandon the defence of this proceeding and simply chose not to attend the trial with no communication to the court or to plaintiff’s counsel of any kind,” it said. It set punitive damages at $50,000.
Additionally, the court ordered costs in favor of the plaintiff, totaling $192,112.19. This judgment reflects the court’s view of the employer’s conduct as a marked departure from ordinary standards of decent behavior and emphasizes the importance of fair and respectful treatment in employment termination.
For more information, see Koshman v. Controlex Corporation, 2023 ONSC 7045 (CanLII)
