The Ontario Superior Court of Justice has issued a significant default judgment against Interspec Systems Ltd. and its associated entities, awarding eight former employees substantial damages for wrongful dismissal and age discrimination. The decision, delivered by Justice S.E. Fraser in Barrie, comes after a long legal process where the defendants failed to present a formal defense despite multiple opportunities to do so. The court found that the workers, many of whom had served the company for decades, were unilaterally terminated when the business relocated its operations without notice or proper compensation.
The legal action was initiated by Jeffrey Dunlop, Michel Gosselin, Mischa Intihar, Michael Wright, Michael Baker, John Kamstra, Henry Kamstra, and Sean Donley. These individuals were long term staff members at Interspec manufacturing facility in Rosemount, Ontario. The conflict began on September 5, 2023, when the defendants closed the Rosemount plant and moved the entire operation to Scarborough, a location roughly 106 kilometers to the south. This relocation effectively ended the employment of the plaintiffs, whose average age was 54 and whose tenure ranged from two years to over three decades of full time service.
The lawsuit named several defendants, including Interspec Systems Ltd., Foundry Asset Management Inc., and 1890141 Ontario Inc., which operated as VDF Vertical Business Accounts. Also named was Gregor Vahramian, the president and owner of the corporate entities, and a successor corporation referred to as John Doe Corporation. The plaintiffs argued that the move constituted a fundamental and unreasonable change to their employment terms, resulting in a constructive and wrongful dismissal. Furthermore, they alleged that the decision to terminate their employment was specifically targeted at their age and tenure, violating the Ontario Human Rights Code.
Throughout the proceedings, the defendants exhibited a consistent pattern of non participation. Although they were served with the motion for default judgment and were noted in default as early as July 2019, they failed to file the necessary materials to contest the claims. On a scheduled hearing date in May 2025, Mr. Vahramian indicated he would bring a motion to set aside the default status, but this never occurred despite subsequent case conferences. Consequently, Justice Fraser concluded that the defendants had ample notice of the proceedings and had chosen not to defend the action.
Under the rules governing default judgments, the facts pleaded by the plaintiffs in their statement of claim were deemed to be admitted by the defendants. These admitted facts established that the defendants together employed the plaintiffs through an interrelated corporate structure and that the closure of the Rosemount facility was a unilateral move that ignored statutory requirements under the Employment Standards Act. The court heard that the employees were terminated without any pay in lieu of notice, without minimum statutory payments, and while the company was in arrears for wages and unpaid vacation time.
In analyzing the claims, Justice Fraser found that the plaintiffs successfully proved wrongful dismissal on a balance of probabilities. The evidence showed a clear breach of employment contracts through termination without cause or notice. More significantly, the court accepted the argument that the defendants had discriminated against the workforce based on age. The ruling noted that the defendants targeted an older, senior workforce, which is a prohibited ground of discrimination under provincial law. This finding opened the door for human rights damages in addition to standard wrongful dismissal compensation.
The financial awards detailed in the judgment cover several categories of loss. First, the court addressed retroactive wages and unpaid vacation pay. Individual plaintiffs were awarded various amounts for wages held in arrears, ranging from two weeks to ten weeks of pay. For instance, Michael Baker was awarded over $12,000 for ten weeks of unpaid wages, while Michel Gosselin received over $11,000 for nine weeks. Similar awards were made for accrued vacation pay, with Michael Wright receiving more than $8,000 and John Kamstra receiving over $9,000 in that category.
The judgment also accounted for statutory pay in lieu of notice and the loss of benefits. Most plaintiffs were granted eight weeks of pay in lieu of notice, as well as a flat sum of $2,500 each for the loss of health and dental benefits that were cut off during the termination process. These statutory amounts represent the minimum protections afforded to workers in Ontario, which the court found the defendants had completely ignored at the time of the facility’s closure.
Beyond statutory minimums, the court applied common law principles to determine “reasonable notice” based on the age and length of service of each employee. Using a benchmark of four weeks of pay per year of service, the court calculated substantial additional damages. Henry Kamstra, one of the longest serving employees, was awarded $142,083.33 in common law pay in lieu of notice. Michel Gosselin received $55,833.33, and Michael Wright was awarded $41,420.50. These figures were adjusted to account for mitigation, which refers to the income the plaintiffs earned or could have earned in other positions after their dismissal.
The court’s decision to award damages for human rights violations added another layer to the financial judgment. Justice Fraser noted that terminating an older workforce and cutting off their health benefits has a significant impact on a vulnerable group. While the court noted that there was not enough specific evidence to differentiate the exact emotional impact on each individual, a medium range award was deemed appropriate to recognize the discriminatory nature of the defendants’ conduct. Each of the eight plaintiffs was awarded $25,000 in human rights damages.
Furthermore, the court awarded an additional $25,000 to each plaintiff in moral and aggravated damages. These damages are intended to compensate for the mental distress caused by the manner in which a dismissal is handled. Justice Fraser described the defendants’ behavior as reprehensible, highlighting their refusal to pay accrued wages, their failure to provide statutory minimums, and the unilateral termination of collateral benefits. This combined for a total of $50,000 per person in specialized damages above and beyond their lost wages and notice pay.
A critical aspect of the ruling was the determination of who was responsible for paying these amounts. The court applied the common employer doctrine, which prevents companies from using complex corporate structures to avoid employment liabilities. Because Foundry Asset Management acted as the paymaster while the work benefited Interspec and VDF, Justice Fraser ruled that all the corporate entities were interrelated and acted as common employers.
Personal liability was also extended to the president, Gregor Vahramian. The court found that the plaintiffs had pleaded sufficient facts to show that Mr. Vahramian personally engaged in the discriminatory conduct against the senior workforce. Additionally, the court applied the oppression remedy under the Business Corporations Act. This remedy is available when a director’s actions unfairly disregard the interests of creditors, including employees owed wages. The court found that Mr. Vahramian had closed operations and transferred assets to another corporation, leaving the employees without their earned compensation.
The final disposition of the case mandates that all defendants are jointly and severally liable for the total judgment. This means the plaintiffs can seek the full amount of the damages from any one of the defendants or a combination of them. In addition to the hundreds of thousands of dollars in total damages for the eight workers, the defendants were ordered to pay $14,161.04 to cover the plaintiffs’ legal costs. The court concluded that these costs were fair and reasonable given the number of parties involved and the complexity of the litigation.
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