Nancy Shapiro

This is a remand from the Supreme Court of Canada to the Ontario Court of Appeal concerning the award of incentive plan-related damages in a wrongful dismissal action.

The Supreme Court remanded the case for disposition in accordance with Matthews v. Ocean Nutrition Canada Ltd. The majority of the Court of Appeal affirmed its original decision, finding that the employee, Mr. Manastersky, was not entitled to additional damages beyond his vested interest in the Mezzanine Carried Interest Plan (CIP) because the plan's terms did not entitle him to annual payments or future investment periods.

The court held that RBC Dominion Securities Inc. had paid Mr. Manastersky all to which he was entitled at common law.

Feldman J.A. dissented, arguing that the trial judge's original decision, which awarded additional damages, correctly applied the legal principles affirmed in Matthews, emphasizing the requirement for "absolutely clear and unambiguous" language to limit an employee's common law right to compensation.

This is a costs endorsement following an appeal from a trial judgment.

The appellants (RBC Dominion Securities Inc. and Royal Bank of Canada) achieved mixed success on appeal: the court unanimously dismissed their appeal regarding the foreign exchange methodology award, but a majority allowed their appeal regarding the carried interest plan damages award, reducing the principal judgment from $1,144,181.50 to $190,789.

The parties disagreed on the treatment of the trial costs award of $100,000 in light of the appeal disposition.

The appellants sought reduction to $40,000, while the respondent sought to maintain the award or reduce it to no less than $75,000.

The court reduced the award to $80,000, considering that the respondent succeeded on four main issues at trial, with no appeal taken on two issues, and only divided success on the two issues that were appealed.

Appeal of wrongful dismissal damages award.

Employer terminated employee without cause and conceded entitlement to 18 months' notice.

Trial judge awarded damages for lost opportunity to earn carried interest plan entitlements during notice period and for foreign exchange methodology differences.

Appellate court allowed appeal in part, setting aside damages for lost carried interest opportunities but upholding foreign exchange award.

Key issue: whether employee entitled to damages for incentive compensation under plan that employer had contractual right to terminate, where plan was integral to employee's compensation package.

The defendant, a US citizen residing in Texas, brought a motion to stay the plaintiff's breach of employment contract action on the basis of forum non conveniens.

The plaintiff, a consulting firm with its head office in Toronto, hired the defendant to provide services globally.

The employment agreement specified Ontario law as the governing law.

The court applied the test from Club Resorts Ltd. v. Van Breda and the factors from Young v. Tyco, finding that the defendant failed to demonstrate that Texas was a clearly more appropriate jurisdiction.

The motion to stay was dismissed.

The plaintiffs brought an urgent motion for interim and interlocutory injunctive relief to restrain the defendants from completing a share sale pursuant to a unanimous shareholders agreement in the context of a shareholder dispute.

The plaintiffs alleged improper termination of a director and employment relationship and sought to preserve the status quo pending trial.

Applying the test for interlocutory injunctions from RJR‑MacDonald v. Canada (AG), the court accepted that a serious issue to be tried existed but held that the plaintiffs failed to demonstrate irreparable harm.

The court found that the remedies sought, including share valuation and damages, could be adequately compensated monetarily at trial.

As a result, the motion for injunctive relief was dismissed and costs were awarded to the defendants.