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Manitoba court awards wrongfully dismissed employee solicitor-client costs and punitive damages

Jurisdiction: - Manitoba
Sector: - First Nations

The decision in Lounsbury v. Dakota Tipi First Nation, 2011 MBQB 96 is unique in that the court awarded the plaintiff former employee both solicitor client costs and punitive damages because of the defendant employer's conduct.

The court had previously awarded the former employee $143,000 in notice period damages.

Solicitor-Client Costs

As the court stated, solicitor-client costs are or special costs "are intended to more closely represent a party's actual legal costs" (para 41). In the case, the court awarded solicitor-client costs on two basis:

  1. there was meaningful effort by the plaintiff to settle the matter even before discoveries; and
  2. most significantly, this is not a case where an employer simply acted in bad faith in which a court might be more inclined to order costs on a substantial indemnity basis.  Rather, this is a case where the entire defence was premised on lies - lies that were perpetuated in the statement of defence and counterclaim through to the amended statement of defence and counterclaim through to discoveries and through to the trial whereupon the proceedings regarding liability came to an end but only when the lies were unveiled during the cross-examination of Chief Pashe.  There was no valid defence nor was there any basis whatsoever for a counterclaim

Punitive Damages

The court also awarded the former employee $10,000 in punitive damages because of the following conduct by the employer:

  1. withholding the plaintiff's expense cheque without justification;
  2. unceremoniously throwing the plaintiff off the reserve on the basis of a trumped-up petition;
  3. terminating the plaintiff without notice or warning or offer of pay in lieu of notice;
  4. notifying members of the community of the plaintiff's termination before notifying the plaintiff;
  5. not having the common decency to speak directly to the plaintiff;
  6. lying about the reason for dismissal, i.e., ordering Melanie Pashe to distribute the
    Fact Sheet and accusing the plaintiff of non‑compliance with a direction by issuing the Fact Sheet;
  7. lying about the fact that the plaintiff deliberately failed to comply with a direction in order to terminate employment with the defendant and pursue an employment opportunity with Health Canada as the basis of a counterclaim;
  8. misleading the community with respect to why the plaintiff had left the employ of the defendant and the reserve, creating a perception of being dismissed for cause;
  9. posting disturbing comments on Facebook at 3:26 p.m., on June 8, 2010, immediately after the defendant's case collapsed due to Chief Pashe's admitted lying on the stand;
  10. refusing to remove the Facebook posting;
  11. making threats to the plaintiff by Councilor Pashe;
  12. emotionally traumatizing a vulnerable plaintiff by raising a defence based on total
  13. filing a counterclaim to secure damages from the plaintiff, i.e., attempting to get something for nothing;
  14. making serious allegations amounting to fraud or moral turpitude in a manner in which the plaintiff could not respond;
  15. damaging the plaintiff's reputation in a small community where she had worked for a number of years and was a well-known member of the public;
  16. pursuing the litigation which dragged on for three years as a result of a contrived
    defence; and
  17. overall putting into effect a scheme that was planned and deliberate.


For more on the intersection between solicitor-client (or special) costs and punitive damages, see my January 25, 2010 post concerning the BC Court of Appeal's decision in Marchen v. Dams Ford Lincoln Sales Ltd., 2010 BCCA 29: "BC Court of Appeal overturns award of $100,000 in punitive damages to apprentice employee".