Colenbrander v. Savaria Corporation, 2018 ONCA 1057

Case Summary

The appellant appealed orders from the Superior Court of Justice regarding a stock option agreement dispute. The motion judge found that even if the appellant had terminated the respondent's consultant status, the appellant breached its obligation under Quebec law to execute the contract in good faith by failing to ensure the respondent retained a qualifying status under the stock option agreement that would have entitled him to exercise irrevocable stock options or to consider alternative arrangements. The Court of Appeal upheld the motion judge's decision, finding no error in applying Quebec law and granting the appropriate remedy under Quebec law. The appeal was dismissed with costs fixed at $25,000.00 all inclusive.

Court of Appeal for Ontario

Date: 2018-12-19 Docket: C61805 Judges: Juriansz, Brown and Roberts JJ.A.

Between

Anthony Colenbrander, Karen Colenbrander and Colenbrander Enterprises Canada Inc. Plaintiffs/Defendants by counterclaim (Respondents)

and

Savaria Corporation Defendant/Plaintiff by counterclaim (Appellant)

Counsel

Ryan A. Morris, for the appellant

H. Richard Bennett, for the respondents

Heard

December 4, 2018

On Appeal

On appeal from the orders of Justice Janet Wilson of the Superior Court of Justice, dated February 2, 2016 and June 29, 2018.

Appeal Book Endorsement

[1] Even if the appellant had terminated the respondent's status as a consultant, the motion judge found it breached its obligation under Québec law to execute the contract in good faith by failing to ensure the respondent had some qualifying status under the stock option agreement that would have entitled him to exercise the irrevocable stock options or consider other alternatives that would preserve his qualifying status. This conclusion was supported by the expert opinion of the Honourable Mr. Dalphond. The motion judge was entitled to prefer his opinion and provided adequate reasons for doing so.

[2] The appellant argued the remedy was governed by Ontario law. The Option Agreement states it is governed by Québec law. On our reading all the experts were of the opinion Québec law applied. The remedy granted was for the breach of the good faith obligation in Québec law.

[3] Based on the pleadings and the evidence before her, we are not persuaded the motion judge erred by applying Québec law and granting the remedy appropriate in Québec law.

[4] The appeal is dismissed.

[5] Costs are fixed in the amount of $25,000.00 all inclusive.