BURSEY v. ACADIA MOTORS LTD. - Stewart McKelvey

Page 19
3 of 4 DOCUMENTS
Case Name:
BURSEY v. ACADIA MOTORS LTD.
[1979] N.B.J. No. 308
28 N.B.R.(2d) 361
63 A.P.R. 361*
CASES JUDICIALLY NOTICED:
New Brunswick Court of Queen's Bench
Trial Division
Judicial District of Moncton
Meldrum, J.
November 26, 1979
(13 pages) (80 paras.)
Empey v. Coastal Towing Co. Ltd., [1977] 1 W.W.R. 673, folld. [para. 51].
[*page362]
Smith v. Dawson Memorial Hospital (1978), 29 N.S.R.(2d) 277; 45 A.P.R. 277, ref'd to. [para. 54].
Bardal v. The Globe & Mail Ltd. (1969), 24 D.L.R.(2d) 140, ref'd to. [para. 66].
AUTHORS AND WORKS JUDICIALLY NOTICED:
Harris, David, Wrongful Dismissal [para. 50].
Halsbury's Laws of England (3d), Vol. 25, page 488 [para. 53].
Smith, Treatise on the Law of Master and Servant (8d), (1931), page 80 [para. 55].
COUNSEL:
HORACE B. TRITES, Q.C., for the plaintiff
SAM GIRVAN, for the defendant

Page 20
This case was heard by MELDRUM, J., of the Trial Division of the New Brunswick Court of
Queen's Bench. The judgment of MELDRUM, J., was delivered at Moncton, N.B., on November
26, 1979.
1 MELDRUM, J.:-- This is an action for damages for wrongful dismissal.
2 The plaintiff is a car salesman. He had been employed by the defendant, an automobile dealer,
for eight and a half years as salesman and sales manager.
3 During all material times plaintiff was a shareholder and director of the defendant. Until mid
1978 Albert W. Girvan was president and general manager, a director and majority shareholder of
the defendant. After mid 1978 Winnifred Girvan, wife of Albert W. Girvan, was president, general
manager, director and shareholder in his place.
4 Throughout his employment, the plaintiff was paid a weekly salary, which by the time of his
dismissal had reached $ 350.00 per week. In seven of the eight full years he had worked he had received
a year-end bonus.
5 The arrangement for bonus seems very flexible but I find that the receipt of a bonus at
year-end was a term of the plaintiff's employment. The amount of the bonus would depend on the
company's performance and was in the discretion of the general manager. I think it was a part of his
contract of employment although in having the amount determined the best he could insist on would
be that the general manager must act fairly and reasonably and not deny the bonus capriciously or
without valid business reason. [*page363]
6 On January 29, 1979, the plaintiff was dismissed. The notice of dismissal was filed as exhibit
No. 3:
"ACADIA MOTORS LTD.
TO: GARY J. BURSEY,
279 Shediac Road,
Moncton, New Brunswick
NOTICE OF TERMINATION OF EMPLOYMENT
On behalf of the Board of Directors of Acadia Motors Ltd., I hereby advise you that your employment
with this Company is now terminated.
You are reminded that all assets of the Company in your possession or under your control are to be
turned over to the Company immediately, accounts receivable of the Company are to be collected
immediately and all motor vehicles of the Company are to be returned within Thirty (30) days.
Dated at Moncton, New Brunswick, this 29th day of January, A.D., 1979.
(Sgd.)
Sam Girvan
SECRETARY - ACADIA MOTORS LTD."
7 According to the plaintiff he was then asked to stay on for two weeks to help clean up some
outstanding items. He was paid at his regular weekly rate for the extra days worked.
8 No written reason was given for the dismissal. None of the matters now alleged as reasons for
the dismissal were discussed with the plaintiff, personally or at any directors' meeting. None of the

Page 21
matters now alleged as reasons for dismissal have ever been given as reasons for dissatisfaction
with the plaintiff's work. He was never asked to change any of the problems which now are put
forward as justifying dismissal.
9 After hearing the witnesses and their evidence and assessing it and more particularly after
watching them, seeing and hearing their manner of giving evidence and trying to assess the personalities
and their interaction I am satisfied that the actual reason for the dismissal was not any of the
[*page364] reasons now given. At the most they represent a series of small, festering annoyances
which in fact built upon the basic problem which was the real reason for the firing, i.e., Mrs. Girvan's
basic personality conflict with the plaintiff.
10 I shall deal individually with the defenses put forward at a later point in the reasons for
judgment.
11 Albert Girvan resigned as a director in mid 1978 and transferred his shares to his wife, Winnifred
Girvan. She had worked in the company since its beginning in charge of records. She, the
plaintiff and Sam Girvan, after mid 1978 became the three directors.
12 The plaintiff claims that things went smoothly until the last year of his employment. He
worked well with Albert Girvan. None of the defendant's evidence contradicts this. In fact, watching
the witnesses on the stand, hearing their manner of giving evidence and watching their interpretation
of the events, I can only conclude that the real reason for the deterioration of inter-personal and
business relationship was a personality conflict between the plaintiff and Winnifred Girvan who in
mid 1978 became in effect the principal owner and manager of the company.
13 In the defense it is alleged, inter alia, paragraph 5, that the plaintiff was hired on condition
that he would devote all his time, attention and energy to the affairs of the company and pursue no
other profession, occupation or vocation; paragraph 6, that he had offered his resignation, and; paragraph
7:
"The reasons for summary termination of the plaintiff's employment included:
a) The Plaintiff had established business interests which were both actually and potentially
in conflict with his duties as an employee of the Defendant Company and which justified
summary dismissal.
b) The Plaintiff was guilty of serious misconduct such as justified summary dismissal.
c) The Plaintiff habitually neglected his duties to the Defendant Company, particularly
during 1977 and 1978, which neglect justified summary dismissal. [*page365]
d) The Plaintiff intentionally and deliberately refused to carry out lawful and reasonable
orders, given on behalf of the Defendant Company, which refusal justified summary
dismissal."
14 By further particulars the defendant set out:
"we now provide the following particulars in connection with paragraph 7 of our Amended Statement
of Defence:
1) Gary J. Bursey deliberately refused to pay the required duty on an airconditioning unit
imported by him from the United States on the Company's behalf despite repeated in-

Page 22
structions to do so from early January 1979 until long after his termination of employment
with the Company;
2) He deliberately refused to calculate the "washout" segment of sales commission due to
sales staff after repeated instructions to do so during 1978 and 1979;
3) He deliberately refused to pay his account owing Acadia Motors Ltd., after repeated
requests and instructions to do so in 1978 and 1979;
4) He deliberately refused to devote the time, effort and attention required to properly
perform his duties for the Company during 1978 and 1979 after being instructed to do
so."
15 Of all the defenses, only 7(a), conflict of interest, merits serious consideration. It was toward
that defense that most of the evidence was directed. I shall deal first with the others.
16 Paragraph 5 refers to an agreement between the plaintiff, Albert Girvan and Winnifred Girvan.
The defendant was not a party to it. It related to a purchase and sale agreement for shares of the
defendant, to life insurance policies purchased to cover purchase and sale of a deceased shareholder's
interest and to provide disability insurance.
17 Assuming, the doubtful proposition, that the terms of that agreement govern the conditions
of the employment between plaintiff and defendant, the evidence does not satisfy [*page366] me
that the plaintiff was in breach of the term to devote his full time to the defendant's services.
18 The evidence is the usual in cases where no regular hours of work are established. The
plaintiff says he gave his full time, worked more than normal hours and always made up time he
was away.
19 Defendant says he was an excellent employee until 1978. It alleges that he went on fishing
trips to the Miramichi and hunting trips to Prince Edward Island.
20 He had a maple sugar camp in which he tapped a considerable number of trees and which
affected his time for 2 to 3 weeks each spring. He considered it a hobby. Albert Girvan and Winnifred
Girvan had visited the sugar camp. No one had objected to the time he spent.
21 The only evidence of discussion between Albert Girvan and/or Winnifred Girvan and the
plaintiff regarding time to be spent on the job related to the discussion in early spring 1978 when
Arthur Girvan was preparing to establish a Chevrolet-Oldsmobile dealership at Shediac and it was
presumed that the plaintiff would become general manager as well as sales manager. He would
therefore have to spend more time on the job. I am not convinced that the discussions were more
than that.
22 I do not think that in 1978 from May to December and in January, 1979 the plaintiff's work
attendance or practices were worse than previously, when he had been an "excellent" employee.
23 Paragraph 6. Plaintiff did not offer his resignation. It was discussed at the directors' meeting
January 15, 1979. By that time negotiations for the purchase by him of the shares of Albert Girvan
or Winnifred Girvan had fallen through. There was no real offer of resignation nor was one understood.
24 Paragraph 7. Paragraph 7(a) of the defense deals with conflict of interest. I shall go into it
more fully later.

Page 23
25 Defendant alleges "serious misconduct" on the part of the plaintiff. That relates to the refusal
to pay the duty on an air conditioning unit, "imported by him".
26 Possibly it was intended to relate to certain expense [*page367] account items. They will be
dealt with under the conflict of interest matter.
27 In December, 1978 the plaintiff went to Florida on vacation in a mobile home from the defendant's
mobile home sales branch. After consultation with the manager of the branch he installed
an air conditioning unit. When he returned to Moncton he had not paid the import duty.
28 Mrs. Girvan insisted that he pay it. From her attitude on the stand I presume she insisted
with some heat.
29 Plaintiff said defendant should pay it.
30 In early March plaintiff paid the duty and defendant re-imbursed him. I would have thought
the easy way would have been for defendant to pay direct in one transaction rather than make two
of it. Mrs. Girvan thought otherwise. She had had some sort of audit and had paid $ 90.00 on an
imported sign in the fall of 1978. She seems to have been unduly tense about further visits by Revenue
Canada auditors.
31 In 7(c) it is said that he neglected his duties in 1977 and 1978. In the particulars (4) the failure
is alleged in 1978 and 1979. As already stated the evidence does not support this allegation.
32 The lawful and reasonable orders seem to relate to the import duty, (see above) the washout
payments and an account due.
33 In selling new cars, the final payment due to salesmen is dependent on the final disposition
(the washout) of the trade-ins. That sometimes takes some months.
34 The computation of these "washouts" seem largely related to the period around the time of
the firing. Plaintiff may have been slow at that time. I can not find that he was unreasonably so.
35 No evidence was led as to debt due by plaintiff to defendant.
36 In 1977 the plaintiff entered into a partnership with Donald Pond in B & P Auto Salvage.
His investment was $ 700.00. He takes no active part in the management of B & P and has received
no income from it. B & P has grown. It is [*page368] in the auto salvage business, buying wrecked
or junked cars, reselling the parts. It has resold some of the cars it purchased for junk. I have no information
as to the amount of repairs it needed to put on any one, what type of guarantee it gave the
purchaser, etc.
37 Defendant is a new and used car dealer. Some of its trade-ins are sold for junk. Some were
sold to B & P, some to other dealers.
38 Naturally defendant sells Toyota parts. B & P sells parts from any of its junked Toyotas.
39 Acadia Motors and B & P Auto Salvage are not in competition. To that extent many of the
cases involving conflict of interest are not exactly on point.
40 They do however do business with each other. Plaintiff as sales manager sold junk cars to
Donald Pond at B & P. The conflict of interest principle applies to deals where the parties should be
doing business at arm's length as well as to competitors.

Page 24
41 Defendant called Donald Pond as a witness. He testified that all purchases from the defendant
by B & P were in the ordinary course of business, prices were negotiated. In its purchases B &
P dealt with Albert Girvan, with the service manager, with the stockroom and with the plaintiff.
42 Defendant produced evidence of sale to B & P of 2 cars in 1977, 6 in the first half of 1978, 2
in the second half and 3 in January, 1979.
43 One of these sales was impugned by defendant. It was the sale in January, 1978 of a 1967
Ford 2 ton stake body truck for $ 400.00. The vehicle had been taken in trade in 1974. Between
September, 1974 and July, 1977 defendant had put $ 1103.69 repairs on it. The invoices produced,
from records 2 to 5 years old, included repairs slips from $ 1.29 to $ 321.72. Truckers in New
Brunswick will advise the defendant that the quickest way to go broke is to keep putting repairs on
an eleven year old vehicle. Instead of convincing me that the sale was bad for Acadia I am satisfied
that it made good business sense to dispose of the truck. No evidence was given of its condition or
of the usual price of such an old vehicle. $ 400.00 does not strike me as necessarily too low.
[*page369]
44 Much time was spent in the analysis of plaintiff's expense accounts for two trips, one to Toronto,
one to Halifax. Originally it appeared that the purpose was to show improper accounts as
such, being turned in. The accounts seem reasonable and in order.
45 Each trip was made with the knowledge and approval of the defendant. Each was on defendant's
business. In each case, Donald Pond went along for B & P Auto Salvage and made purchases
for his company. In Toronto plaintiff bought a car for the defendant. In Halifax he bought a typewriter.
In each case B & P made more purchases and for ease of banking, B & P paid for the plaintiff's
purchases and later recovered the price from the defendant.
46 The story of the trips was told by the plaintiff, confirmed by other evidence, and finally repeated
by defendant's witness, Pond.
47 In spite of overwhelming evidence to the contrary, and no evidence in support of her position,
Mrs. Girvan insisted that the company had bought the car and typewriter from B & P and that
it should have paid the plaintiff's expense account.
48 Her insistence on putting her own interpretation on facts, an interpretation not supported by
the evidence presented by the defendant itself, left me most unimpressed by Mrs. Girvan.
49 There is no evidence that defendant was in any way harmed by the potential conflict of interest.
Nevertheless, in conflict of interest situations, the rule of Caesar's wife applies. It must not
only be pure, it must be seen to be pure.
50 David Harris, Wrongful Dismissal under the heading "Competing with Employer's Interest"
sets out the status of this ground for dismissal in New Brunswick:
"Actual conflict between the employer's interest and that of an employee in a competing business
need not be shown - the servant may be dismissed where only the potential for such conflict is
proven. In Tozer v. Hutchison (1869 12 N.B.R. 54, the Plaintiff made a capital contribution to a
competing enterprise, and was not active in its daily business. The trial [*page370] Judge's direction
to the jury that real conflict must be shown was reversed in appeal, the court holding:
'A person who enters into the service of another undertakes to bestow the same care, attention and
diligence as if the business were his own. This the Plaintiff could not do while he had an interest as

Page 25
partner in a business of the same description as that in which his employer was engaged. There
would necessarily be a conflict between his duty and his interest. It was inconsistent with his duty
as clerk to the Defendant and destructive of the confidence which must be reposed in a person employed
as the Plaintiff was, by enabling him to make use in his own business of the knowledge and
information which he obtained as the confidential clerk and agent of the Defendant.'" (p. 543)
51 Empey v. Coastal Towing Co., Ltd., [1977] 1 W.W.R. 673, extended this principle of the
duty owed by the employee to serve in good faith and fidelity to justify dismissal where the servant
had met with a competitor to discuss entering a business arrangement, designed to compete directly
with his employer. The court concluded such conduct was good grounds for dismissal, despite the
fact that no actual prejudice in fact was caused to the employer; rather only the intent to cause potential
harm was regarded as cause for summary discharge.
52 If the relationship between B & P and the plaintiff has not been condoned, then the dismissal
was justified even though no actual conflict or loss existed, no harm had come to defendant as a result
and though the potential conflict had not been the real reason for the dismissal.
53 Halsbury's (3d), Vol. 25, p. 488:
"940 Condonation: Justification for dismissal is a question of fact. A master who with full knowledge
of a servant's misconduct elects to continue him in his service cannot subsequently dismiss
him for the offense which he has condoned."
54 Smith v. Dawson Memorial Hospital (1978), 29 N.S.R. (2d) 277; 45 A.P.R. 277, at p. 286
(N.S.S.C.):
"Even if the problem be approached on the basis that sufficient evidence was produced at trial to
justify [*page371] dismissal for an act of misconduct it has long been established that an employer
who waives or condones his employee's misconduct by retaining the employee in his service forfeits
the right to rely in that act to justify dismissal."
55 Smith, Treatise on the Law of Master and Servant, 8th ed. (1931), p. 80, makes this statement:
"But if a master, on discovering that his servant has been guilty of misconduct which would justify
a dismissal, yet elects to continue him in his service, he cannot at any subsequent time dismiss him
on account of that which he has waived or condoned."
56 What a person knows is not always easy to determine.
57 B & P Auto Salvage was formed in July, 1977. The plaintiff had previously mentioned his
interest in the salvage business, in the abstract, to Albert Girvan. He had received no negative
comment.
58 Shortly after its commencement Donald Pond placed a number of business cards in Acadia's
office, on the desk of the service manager. The cards contained,
"B & P Auto Salvage
R. R. #1, Moncton, N. B.
Gary Bursey
Don PondTel. 372-9172"

Page 26
59 Plaintiff had numbers of the cards on his desk or his window. They were seen by Albert
Girvan and Winnifred Girvan as well as by other members of the firm.
60 Mr. and Mrs. Girvan discussed Bursey's involvement with B & P with each other.
61 There seems to have been no secrecy about the involvement or about any of the deals between
the two companies. There is no evidence that the sales by the plaintiff to B & P were any
more hidden than the sale by Albert Girvan or the purchases by the service or parts managers.
62 I am satisfied that both Mr. and Mrs. Girvan knew of the situation while he was general
manager. Mrs. Girvan knew [*page372] of it when she became general manager. All the facts necessary
were known to them at the material times.
63 By permitting the relationship to continue without any query about any of the sales, or
comment to the plaintiff on the situation, was in fact condonation.
64 The plaintiff's claim is allowed.
65 I am indebted to counsel for their briefs. On the subject of length of notice the cases give
guidance as to principles but leave me to settle the detail.
66 McRuer, C.J.H.C., in Bardal v. The Globe & Mail Ltd. (1969), 24 D.L.R.(2d) 140, at page
145, has stated the governing principles thus:
"There can be no catalogue laid down as to what is reasonable notice in particular classes of cases.
The reasonableness of the notice must be decided with reference to each particular case, having regard
to the character of the employment, the length of service of the servant, the age of the servant
and the availability of similar employment, having regard to the experience, training and qualifications
of the servant."
67 Plaintiff was sales manager. He had been employed for more than 8 years. He is relatively
young. No evidence has been given as to the availability of similar employment.
68 Plaintiff has not secured employment since his dismissal. He has collected some disability
insurance, the premiums paid by the defendant, and is still collecting but now he pays the premium.
I had the impression that he had not been urgently seeking work.
69 In my opinion the reasonable notice under the circumstances should have been twelve
months.
70 (a) In lieu of notice the plaintiff will receive the sum of $ 18,200.00 being $ 350.00 per
week for 52 weeks. From that will be deducted the sum of $ 3000.00 received for disability insurance
while the defendant was responsible for the premium, for a net of $ 15,200.00.
71 Counsel agreed that the policy has now been transferred to the plaintiff and he is responsible
for the premiums. He has received $ 1533.00 since the transfer but since it is now [*page373] his
policy, for which he must pay, that can not be credited to the defendant.
72 (b) Plaintiff claimed a year-end bonus. Such bonus was payable from profit. 1978 was a bad
year for dealers in foreign cars. Defendant lost $ 45,000.00. No bonus would have been paid.
73 It apparently is still in a losing position. No bonus would have been paid for fiscal 1979.
Plaintiff will receive nothing under the bonus heading.

Page 27
74 (c) Plaintiff was to receive a car for himself and one for his wife. He now has a courtesy car
from B & P Auto Salvage. The condition was not described. The value of car rental is not in evidence.
75 I will allow a loss of $ 100.00 per month total under this item for $ 1200.00.
76 (d) and (e) plaintiff claims refund of travelling and entertainment expenses. Those would
seem to be applicable to business not personal and he would have had none under those headings.
77 (h) Plaintiff claimed loss of fringe benefits, i.e., life and disability insurance permiums
which the company would have paid.
78 The company has paid or been responsible for disability premiums for the first three quarters
of the year. At the moment premiums are waived during disability.
79 Life insurance premiums were $ 155.39 payable twice a year. Plaintiff will receive $ 310.78
for that item.
80 There will be judgment for the plaintiff for $ 16,710.78 and costs.
Judgment for the plaintiff.