A deal is a deal, judge says
Former CFO of North Atlantic Refining Ltd. wins case against company for dismissal without cause
When a former senior executive of North Atlantic Refining Ltd. was suddenly dismissed in January 2013, soon after new owners took over the Come By Chance Refinery, a negotiated compensation package for him worth hundreds of thousands of dollars went off the rails at the last moment.
It was as if a no-deal button was pressed despite the package looking good to lawyers for each side. And they could never get back on the same page again.
The result was a lawsuit launched against North Atlantic Refining Ltd. by Glenn Mifflin, who had been executive vice-president and chief financial officer (CFO) with the company when he was let go on Jan. 23, 2013. Mifflin had been a longtime employee who often was the front man commenting in the media on issues involving the refinery.
The subsequent trial from the lawsuit took place in Newfoundland Supreme Court over nine days in 2015 and one day in 2016, ending with a ruling this week in favour of Mifflin.
But the reason the case ended up in court in the first place even puzzled the judge — Justice Alphonsus E. Faour — who stated such in his decision.
“I was unable to understand why this case actually went to trial,” Faour wrote. “The defendant clearly acknowledged its obligations to Mr. Mifflin. It acknowledged the requirement to pay a reasonable notice period, and even proposed a number which was similar to that of (Mifflin). The defendant acknowledged Mr. Mifflin’s interest in being ‘bridged’ to age 60 for pension purposes. The defendant acknowledged his interest in health benefits. There was even acknowledgement about his entitlement to payout of the value of earned but unused vacation benefits, although in the end there was no real agreement about the amount of these benefits.
“During the negotiations undertaken during 2013, the parties came close to finalizing an agreement. At the last minute, just hours after the deadline for acceptance of the final offer, the defendant refused to complete the agreement. Considering that in an action for wrongful dismissal, the agreement almost reached was more favourable to the defendant than the likely calculation of damages under the common law, there appeared to be no logical reason why the defendant essentially forced (Mifflin) to litigate the issue. I asked counsel why his client took this position, and the only answer was that these were the instructions he was given.”
Lawyer Paul Dicks represented North Atlantic Refining Ltd. in the trial, while lawyer Peter O’flaherty appeared for Mifflin.
Faour noted that after about 10 months of negotiating a settlement in 2013 in a mutually respectable manner, each side ended up with a different view of the outcome of those negotiations. The negotiations at the time were led by lawyer Harold Smith for the company and lawyer Ian Kelly for Mifflin.
At trial, Mifflin argued an agreement had been reached and asked the court to enforce that agreement or assign damages for breach of contract. If not successful on those issues, he claimed for wrongful dismissal.
North Atlantic Refining disagreed that an agreement had been reached and claimed Mifflin had not fully accepted the latest offer by the deadline set.
“From the testimony of the lawyers (Smith and Kelly), it appears that the disagreement over the amount of the vacation pay was the catalyst for the company walking away from the agreement,” Faour wrote.
“Notwithstanding that Mr. Mifflin had reluctantly accepted the company’s position on the amount by the morning of Dec. 18, 2013, the company refused to complete the agreement. Based on their testimony, I was satisfied that both lawyers were confounded by this outcome. Both were of the view that it was in everyone’s interest to proceed with what had been negotiated, but it seemed that the company, for some unknown reason, reneged on what had been already agreed, and refused to complete even though Mr. Mifflin had accepted all of its proposals, albeit a few hours after the deadline.”
Faour found that an agreement had been reached between the two parties and ordered that the settlement as negotiated be implemented. He said there was agreement on all of the essential terms that were reasonably anticipated to be part of the final settlement by the parties.
In his conclusion regarding what Mifflin is entitled to, Faour stated: “Assuming it is possible to implement his pension and retirement benefits, specific performance of the agreement negotiated in December 2013 is ordered as follows: Payment for 24 months’ notice period from Feb. 1, 2013 at an annual salary of $215,000 for a total of $430,000, less statutory deductions; at his option, the right to use this sum to enhance his pension entitlement as if he had continued in his employment until after his 60th birthday, thereby entitling him to an unreduced pension from the date of retirement; entitlement to access retirement benefits which were available from the date of retirement; his retirement is effective Feb. 1, 2014; at his option, to select from the available options for taking his pension as if he had retired on the effective date of retirement; $6,000 contribution to legal fees for the period of settlement negotiations during 2013; payment of earned and unused vacation pay.
“In the event that it is not possible to implement his pension and retirement benefits as negotiated, he is entitled to compensation for the reduction in his pension and retirement benefits as follows: a lump sum payment of $606,200, being the present value of the difference between his pension entitlement, had the agreement been implemented as negotiated, and the reduced pension to which he is now entitled; a lump sum payment of $80,309, being the present value of the difference in health insurance premiums plus the projected cost of medical expenses; payment of an amount of $175,335.13, being the calculation of earned but unused vacation pay.” glen.whiffen@thetelegram.com