COURT FILE NO.: CV-14-517481 DATE: 20200528 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Jack Ganz Consulting Ltd. Plaintiff – and – Recipe Unlimited Corporation Defendant

Counsel: Patricia Virc, for the Plaintiff Kenneth Prehogan and Hayley Peglar, for the Defendant

HEARD: November 28, 2019

REASONS FOR DECISION

NISHIKAWA J.

Overview and Procedural History

[1] The Plaintiff, Jack Ganz Consulting Ltd. (“JGC”), was retained by the Defendant, Recipe Unlimited Corporation, formerly known as Cara Operations Ltd. (“Cara”), [1] to provide services pursuant to a Consulting Agreement dated March 10, 2006 (the “Consulting Agreement”). In October 2014, the relationship between JGC and Cara came to an end.

[2] In December 2014, JGC commenced a claim for breach of contract, seeking $2 million in damages, $275,000 in special damages, and $25 million for lost stock options. In 2018, JGC amended its Statement of Claim to include a claim for common law reasonable notice on the basis that JGC was a dependent contractor.

[3] The Consulting Agreement had an initial term of three years, with a provision for renewal for further terms of three years, unless terminated in accordance with the agreement (the “Renewal Clause”). The issue in this action is whether JGC waived the Renewal Clause, terminating the Consulting Agreement at the end of the first three-year term, or whether the Renewal Clause was not waived, and Cara’s termination in October 2014 was a breach of the agreement.

[4] Cara brings this motion for summary judgment to dismiss JGC’s claims for breach of contract and for common law reasonable notice on the basis that there is no genuine issue that JGC waived the Renewal Clause or that JGC was not a dependent contractor.

[5] JGC’s position is that summary judgment is not appropriate because a trial is required to resolve material facts in dispute.

[6] The action has a long procedural history which will be detailed only briefly here. The examination for discovery of Mr. Ganz took place in November 2016. The examination for discovery of Cara’s representative was scheduled but did not proceed. Both parties brought motions for further and better affidavits of documents. Those motions were decided by Master Muir in May 2017, who ordered both parties to produce further documents.

[7] Both parties brought motions for summary judgment. In his endorsement dated November 7, 2017, Cavanaugh J. authorized the motions to proceed because both turned on the interpretation of a written contract. The motions were scheduled to be heard in June 2018. JGC did not proceed with its summary judgment motion. Four days before the hearing, JGC brought a motion to amend its claim to add the claim for common law reasonable notice. The summary judgment hearing was adjourned to allow the motion for leave to amend to proceed.

[8] In her endorsement dated August 14, 2018, Master Jolley granted JGC’s motion for leave to amend, finding that the proposed amendment was not a new cause of action but an alternative form of relief based on facts already pleaded: [Jack Ganz Consulting Ltd. v. Cara Operations Ltd., 2018 ONSC 4880], 295 A.C.W.S. (3d) 514, at para. 7. Master Jolley also found that sufficient particulars were pleaded in support of the new relief sought. Leave to amend was granted without prejudice to Cara’s ability to plead a limitations defence.

[9] In November 2018, contrary to its original position at the June 2018 hearing that its amended claim would not delay the summary judgment motion, JGC brought a motion for further documentary production. Master Josefo denied most of JGC’s documentary requests: [Jack Ganz Consulting Ltd. v. Cara Operations Ltd., 2018 ONSC 7517], 300 A.C.W.S. (3d) 54. [2]

[10] The evidentiary record on this motion is voluminous and consists of the following:

• Affidavits of Jack Ganz sworn on January 31, 2018, May 30, 2019 and June 24, 2019;
• Affidavits of Dave Lantz, sworn on December 15, 2017, April 3, 2018, May 10, 2019 and June 7, 2019;
• Excerpts from the transcript of the examination for discovery of Jack Ganz held on November 16, 2016; [3]
• Transcripts of cross-examinations of Jack Ganz held on May 17, 2018, June 26, 2019;
• Transcripts of cross-examinations of David Lantz held on May 17, 2018 and June 24, 2019;
• Transcript of the Rule 39.03 examination of Stephen Smith held on May 15, 2018; and
• Transcript of Rule 39.03 examinations of Kenneth Grondin held on May 14, 2018 and June 24, 2019.

[11] For the reasons that follow, I grant Cara’s motion for summary judgment dismissing JGC’s claims.

Factual Background

The Parties

[12] The plaintiff JGC is a corporation organized under the laws of Ontario with a head office located in Toronto, Ontario. Jack Ganz is an officer and director of JGC. Mr. Ganz is also the owner of 40 Ridgetop Road, Scarborough, Ontario, where Cara’s main facility is located.

[13] The defendant, Recipe Unlimited Corporation, is a corporation organized under the laws of Ontario with a head office located in Vaughan, Ontario. The defendant changed its name from Cara Operations Limited to Recipe Unlimited Corporation in May 2018. Cara operates directly and through franchisee restaurants across Canada.

The Consulting Agreement

[14] Pursuant to the Consulting Agreement, Cara retained JGC as a consultant in connection with a project to develop and assist Cara in the implementation of an information systems and business operations integration strategy. The parties do not dispute that JGC, and in particular, Mr. Ganz, was key to building a scalable information technology (IT) infrastructure at Cara.

[15] Section 4.01 of the Consulting Agreement states that “the parties acknowledge and agree that JGC is not an employee of the Corporation but is at all times an independent contractor” and that JGC would not be entitled to receive any benefits.

[16] The Consulting Agreement required that JGC render services for 200 hours per month and thereafter on an “as needed” basis as reasonably requested by Cara and reasonably convenient for JGC. The annual consulting fee for JGC’s services was $420,000 per year, payable monthly in advance. Additional hours over 180 hours per month were to be billed at a fee of $250 per hour.

[17] Under section 3.06 of the Consulting Agreement, Cara agreed that, in the event that Cara became a public corporation with its shares listed on any public stock exchange and an employee equity incentive plan, it would offer JGC the opportunity to participate in the plan on the same terms and conditions as offered to its other senior management-level employees. It is evident that this provision is at the crux of JGC’s claim against Cara, as JGC alleges that Cara terminated it shortly before going public, depriving Mr. Ganz of the opportunity to participate in its employee incentive plan and receive valuable Cara stock options. The stock options were the focus of a large portion of Mr. Ganz’s affidavit evidence and JGC’s two motions for production.

[18] The last sentence of section 2.01 of the Consulting Agreement contains the Renewal Clause at issue in this motion. Section 2.01 states as follows:

2.01 Term. The term of this Consulting Agreement shall commence on the date hereof and shall continue for a period of three consecutive (3) years thereafter. This Agreement shall automatically be renewed for additional three consecutive (3) year terms unless terminated prior to the expiration date in accordance with this Agreement. [4] (Emphasis added.)

[19] Under section 5.03, either party could terminate the Consulting Agreement after the first three-year term, by written notice 180 days prior to the expiration of the term:

5.03 Termination upon Expiration. Either party shall have the right to terminate this Agreement upon the expiration of three (3) years from commencement by written notice to the other to be given at least one hundred and eighty (180) days prior to the expiration of this Agreement. Notwithstanding the foregoing, in the event that the Corporation terminates this Agreement, the Consultant shall have the right to extending [sic] this Agreement, with fees detailed in section 2.01, for a further twelve (12) months following the date of termination.

[20] Also relevant to the issues in this motion is section 6.06 of the Consulting Agreement, which states:

6.06 Amendments and Waivers. No amendment to this Consulting Agreement shall be valid or binding unless set forth in writing and duly executed by the parties. No waiver of any breach of any term or provision of this Consulting Agreement shall be effective or binding unless in writing and signed by the parties, nor shall any such waiver be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior to subsequent time.

[21] In addition to Mr. Ganz’s services under the Consulting Agreement, a group of IT professionals known as the NetOps Group were providing IT services to Cara, through JGC, at approximately the same time. The Consulting Agreement did not include the services provided by the NetOps Group. There was no contract between Cara and the NetOps Group, whose services were provided on demand on a month-to-month basis.

The Alleged Waiver of the Renewal Clause

[22] Cara relies upon a meeting and an email exchange between Cara’s Chief Financial Officer at the time, Stephen Smith, and Mr. Ganz to argue that JGC waived the Renewal Clause. The meeting took place on August 29, 2008. After the meeting, on the same day, Mr. Ganz sent an e-mail message to Mr. Smith which stated as follows:

It was a pleasure meeting with you today. I look forward to working with you and know the future is exciting. Let this email serve to remove the auto renewal from my contract. I look forward to our discussions, in early 2009, after the new HQ moves and the Data Centre builds quiet down. (Emphasis in original.)

[23] On September 2, 2008, Mr. Smith responded to Mr. Ganz’s e-mail message by e-mail, as follows:

Thanks for your email. I too look forward to discussing with you the terms of our new arrangement that will take effect after your current agreement with Cara comes to an end in March, 2009. As you suggested, after the move is complete and things are working smoothly with the Data Center, we can figure out a mutually agreeable plan for our ongoing working relationship.

[24] Also on September 2, 2008, Mr. Smith sent an email to Carolyn Kolers, in-house counsel at Cara, summarizing his meeting with Mr. Ganz. The email stated, in relevant part:

Jack and I met 11:00 Friday Sept [sic] 29 th in Toast to discuss his current agreement status and the future of his services at Cara.

We discussed the March 2009 expiration and the 6 month notice period to avoid automatic renewal which was the reason for the conversation now rather than closer to the expiration.

I indicated that I don’t know at this point what the requirement for his time would be in the future but that as I see it today, my expectation is for maybe 20-40% of his time, and that we will come to a mutually agreeable position on a new agreement closer to the expiration date.

I said there was an immediate need for a waiver of the automatic renewal clause as a result of changing needs of Cara in the future, or for an equivalent notice letter from me to Jack indicating that the current agreement will not be renewed under the current terms and will be allowed to expire. Jack agreed to send an email confirming our discussion and that he would waive the automatic renewal clause. See email Sept [sic] 29 th from Jack.

[25] Mr. Smith, who left Cara in December 2013, was examined by both parties under r. 39.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. On examination, Mr. Smith confirmed that his email to Ms. Kolers accurately summarized his discussion with Mr. Ganz. Mr. Smith was aware that the Consulting Agreement had to be terminated six months in advance of the end of the term or it would automatically renew. Mr. Smith testified that if Mr. Ganz had not sent the August 29 email message, he would have sent a letter giving notice of termination of the Consulting Agreement. Mr. Smith stated that he did not have to give notice because of the August 29 email from Mr. Ganz.

[26] JGC denies that the meeting and email exchange between Mr. Ganz and Mr. Smith constitute a waiver of the Renewal Clause. In its Amended Reply, JGC pleads that the August 29 email was a “partial draft communication with a suggestion for wording, as revisions were under discussion with regard to a complete new agreement.”

The Parties Discuss a New Contract

[27] After the meeting with Mr. Ganz on August 29, 2008, Mr. Smith was then mandated by Cara’s Chief Executive Officer, Don Robinson, to begin the process of negotiating an alternate arrangement for continuing to work with JGC. On January 15, 2009, Mr. Smith and Mr. Ganz met to discuss the terms of a new arrangement.

[28] On January 26, 2009, Mr. Smith sent Mr. Ganz the following email summarizing the meeting and asking Mr. Ganz to “review the following which I propose to send to Ian for drafting[.]” Ian referred to Cara’s general counsel at the time, Ian Wilkie.

Jack and I had a very positive meeting Jan 15 th . The following is my attempt at summarizing those discussions and the agreements we came to.

Current agreement between Jack and Cara expires as scheduled March, 2009.

Cara pays Jack the monthly entitlement for January and February, 2009 as per the existing agreement.

Cara pays Jack his annual entitlement ($430,000) [sic] by regular monthly payments starting in March, 2009 in fulfilment of the one-year notice period.

Cara enters a new agreement with Jack in which Jack provides agreed upon NetOps services (consistent with what is provided by Jack for such services today) for a fixed fee of $950,000 per annum commencing February 1 st , 2009. The agreement is for one year with automatic renewal for additional years provided that agreed upon service levels are being met, etc… upon renewal each year, the annual fee of $950,000 increases by a percentage equal to that being applied within Cara’s salaried group. Within that agreement Jack also earns a fee of $100,000 per annum for each of 2 years.

Jack, please let me know if there is anything you think I have missed.

[29] At his examination, Mr. Smith confirmed that he discussed all of these points with Mr. Ganz at the January 15 meeting and that the reason for summarizing the items in the email was to make sure that Mr. Ganz could “read it and concur that that was the agreement we came to.”

[30] Approximately one hour later, Mr. Smith forwarded the email message to Ian Wilkie, in-house counsel at Cara and stated “Jack had no additional comments to add.” Mr. Smith confirmed at his examination that this was correct. On cross-examination, Mr. Ganz had no recollection of having responded to Mr. Smith’s email message and no responding email has been produced. [5] The terms outlined in the January 26 email were not incorporated into an agreement.

[31] At some point in 2009, [6] a meeting took place among Mr. Ganz, Mr. Smith and Mr. Robinson. Mr. Smith deposed that Mr. Robinson wanted to “find a way of ensuring that Mr. Ganz remained as part of Cara in an IT position running the network operations” but that it was left open as to what the arrangement might be. Mr. Smith stated that at the time, Mr. Ganz was “totally amenable to finding a way for him to remain involved in the business.”

[32] Cara and JGC continued to discuss the terms of their ongoing relationship. At some point in 2012, Mr. Smith turned the discussions over to Sean Regan, a Senior Vice-President and principal shareholder of Cara. Because Mr. Regan was in charge of IT, Mr. Ganz worked closely with him. David Lantz, who joined Cara in 2009 and succeeded Ian Wilkie as Cara’s general counsel in February or March 2012, also became involved in the negotiations.

[33] In May 2010, Cara’s lawyers provided JGC with a draft “Managed Services Agreement” that would include the NetOps Group’s services. The draft agreement dated August 4, 2010 included recitals that referenced the Consulting Agreement and further stated that the parties wished to enter into a new business arrangement in place of the Consulting Agreement. The draft recitals also included the following paragraph:

NOW THEREFORE in consideration of the respective covenants and agreements of the parties contained herein, the sum of one dollar paid by each party hereto to each of the other parties hereto and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged by each of the parties hereto), the parties hereto and to the Original Agreement hereby mutually agree that the Original Agreement terminated fully effective midnight March 5, 2010, save and except for the Continuing Obligations upon Termination set out in section 5.04 of the Original Agreement, and further it is agreed as follows[.]

[34] The draft agreement had a term of January 1, 2010 to December 31, 2013, subject to earlier termination as provided in the agreement.

[35] JGC’s counsel struck all references to the Consulting Agreement (referred to in the drafts as the Original Agreement) from the draft.

[36] No written agreement was concluded in 2010.

[37] In March 2012, Cara and JGC exchanged further drafts of the Managed Services Agreement. The draft dated March 19, 2012 contained largely the same recitals as the draft exchanged in 2010. Again, Mr. Ganz struck all references to the Consulting Agreement. No written agreement was concluded in 2012.

[38] JGC submits that if the Consulting Agreement had been terminated in March 2009 or 2010, there would be no need to mention its termination in the recitals. In my view, the above recital does not necessarily lead to this interpretation, because the recitals state that the Consulting Agreement terminated in March 2010 and not that it would be terminating with the entering into of the new agreement. Moreover, the termination of the Consulting Agreement is not the consideration for the agreement, rather, the respective covenants and the payment of one dollar are.

[39] In addition, JGC argues that Mr. Ganz’s striking of the references to the Consulting Agreement demonstrates that the agreement remained in force and was not to be replaced by the Managed Services Agreement. JGC also relies upon an email sent by Mr. Ganz to his counsel on July 21, 2010 that the Consulting Agreement should not be referenced and the draft agreement “should not try to cancel or replace any other contract.”

[40] During the course of these negotiations, on April 23, 2012, Mr. Regan sent an email to Mr. Lantz and Mr. Ganz with “notes” for a meeting to take place the following day. The notes contain draft or proposed terms of an agreement for January 1, 2012 to December 31, 2014. In that message, Mr. Regan stated:

1.3b Although Jack does not have a contract (he actually does but he does not enforce it as he is too much of a gentleman), Cara should give him 6 months notice as Senior Technical Advisor before reverting to 2 days on this.

[41] The record contains no evidence that would shed further light on what Mr. Regan was referring to or what transpired at the meeting. No agreement was concluded at that time.

[42] On October 31, 2012, Mr. Regan sent an email to Mr. Ganz which stated as follows:

As we’ve agreed, on May 1, 2013, your compensation for managing the net ops team will change from $35k/month to $10,416.66/month. As part of the management of your team, you will only need to be onsite for at least 1 day per week (instead of the current 5 days/week).

[43] The email further stated that Mr. Lantz would “make this change to the draft contract and send off to you and your lawyers.” There is no response from Mr. Ganz in the record and no written contract was entered into. The arrangement proposed in Mr. Regan’s October 31 email is repeated in an email dated November 18, 2013 from Natasha Nelson, Cara’s Chief Information Officer, to Mr. Lantz and Mr. Grondin. In that email, Ms. Nelson states that Mr. Regan advised her that he had negotiated an agreement with Mr. Ganz that beginning in April 2013, Mr. Ganz would reduce his time to one day per week for a fee of $125,000 per year.

[44] No written agreement reducing JGC’s services or fee was executed at that time.

[45] JGC’s position is that throughout this time, the Consulting Agreement continued in effect, since it was never terminated or amended in accordance with its terms. From March 2006 to October 2014, JGC invoiced Cara monthly for the fee set out in the Consulting Agreement. The invoices stated “As per the Agreement Dated March 10, 2006[.]” Cara paid $35,000 every month, as it would have under the Consulting Agreement.

[46] Cara’s position is that after the expiry of the 12-month notice period in the Consulting Agreement, there was an “understanding” that JGC would provide consulting services to Cara on an ad hoc, month to month basis with a regular review of the rates to be paid.

The Parties’ Relationship Ends

[47] In October 2013, Cara merged with Fairfax Financial Holdings Inc. (“Fairfax”) and new management was put into place at Cara. William Gregson became the Chief Executive Officer and Mr. Grondin became the Chief Financial Officer. Both received a grant of Cara options as an employment inducement when they joined Cara.

[48] On January 23, 2014, Mr. Grondin sent Mr. Ganz an email message stating that, beginning in January 2014, JGC would be paid $125,000 per year for one day a week of services. Mr. Grondin stated that he understood that this had been agreed to between Mr. Ganz and Mr. Regan in April 2013, as reflected in the email messages referred to above.

[49] Mr. Ganz responded by email on the same day, stating that the Consulting Agreement “is in effect through March 2015 with an option through March 2016[.]” Mr. Ganz further stated that the Consulting Agreement “is in full force and has never been cancelled or altered in any way.” In his message, Mr. Ganz indicated that he was open to discussions but expected the terms of the Consulting Agreement to be honoured until a new agreement was reached.

[50] Mr. Grondin responded to Mr. Ganz’s email on January 26, 2014, stating that Mr. Ganz had waived the auto renewal provision in August 2008 and agreed to allow the Consulting Agreement to expire as of March 2009. Mr. Grondin further stated that JGC received fees for an additional year and that “all of Cara’s obligations under the 2006 agreement have been satisfied.” Mr. Grondin reiterated that Mr. Ganz would be paid $2,500 per day.

[51] The evidentiary record does not show any further discussion of JGC’s fee. JGC continued to invoice Cara $35,000 monthly and Cara continued to pay the amount. On August 4, 2014, Mr. Grondin met with Mr. Ganz to discuss a transition plan for transitioning from JGC to Cara’s in-house team. Mr. Grondin summarized the meeting in an email message sent on the same day to Bill Gregson. In respect of the Consulting Agreement, Mr. Grondin stated as follows:

I met with Jack today regarding Jeremy starting tomorrow and the need to have a transition plan for him and his team – with the transition completed in 2014.

[R]egarding Jack’s personal contract, I mentioned that we are looking for this to wrap up in 2014 – he spoke up saying he has a contract – I reminded him that we have a different view on his contract (as we have previously declared). We agreed to focus on his team and responsible coverage and transition of their services – we set aside his personal terms which was the right thing for now[.]

[52] Mr. Grondin and Mr. Ganz met again in relation to the transition on August 25, 2014. The following day, Mr. Grondin sent an email to Mr. Ganz summarizing the terms of the transition from JGC’s consultants to Cara, to be completed by October 31, 2014. JGC submits that the email sent by Mr. Grondin terminated the services of the NetOps Group only and does not constitute notice of termination of the Consulting Agreement.

[53] On September 3, 2014, Mr. Grondin sent Mr. Ganz a further email stating Cara’s position regarding the termination of the Consulting Agreement. The email referred to meetings between Mr. Grondin and Mr. Ganz over the course of the year to discuss an orderly transition to be completed later in 2014. The email further states: “When we met on August 4, I informed you and further confirm with this email that Cara will no longer require JGCL’s services beyond October 31, 2014.”

[54] In his affidavit sworn January 31, 2018, Mr. Ganz deposed that he cooperated with the transition from JGC to an internal Cara IT team and that it went smoothly. However, he states that at the end of October 2014, Mr. Grondin abruptly and without notice advised him to return his access badge and to refrain from attending the Cara facility.

[55] Cara disputes that the termination was abrupt and relies on the email messages dated August 26 and September 3, 2014 as notice that the relationship between Cara and JGC would end by October 31, 2014.

[56] JGC commenced this action shortly after, on December 4, 2014.

[57] On April 10, 2015, Cara went public with a share price of $23 per share. Based on Cara’s Prospectus dated April 1, 2015, Cara’s board ratified the grant of options to Cara’s “leadership team” on December 4, 2014.

Issues

[58] Cara brings this motion for summary judgment on the basis that JGC waived the Renewal Clause, causing the Consulting Agreement to end on March 9, 2009, following which JGC exercised the right to extend the agreement for a further 12 months, bringing the termination date to March 9, 2010. Cara further submits that JGC’s claim for common law reasonable notice raises no genuine issue requiring a trial.

[59] JGC takes the position that JGC was never given notice of termination as required under section 5.03 of the Consulting Agreement and that the agreement therefore was in effect when JGC was terminated in October 2014. JGC submits that it is entitled to the benefit of the agreement until the end of its third three-year term on March 9, 2015, which would include the ability to participate in the employee incentive plan under which Cara’s senior management was granted valuable stock options. Alternatively, in the event that JGC is found to have waived the Renewal Clause, it submits that the rest of the Consulting Agreement remained in force, which would entitle JGC to the same relief. In the further alternative, JGC submits that Mr. Ganz was a dependent contractor and is entitled to common law reasonable notice of 18 months.

[60] In determining this motion for summary judgment, I must determine whether JGC’s claims for breach of contract and common law reasonable notice raise genuine issues requiring a trial. In doing so, I must consider the following issues:

(a) Whether JGC waived the Renewal Clause; (b) Whether, in the event that the Renewal Clause was waived, the Consulting Agreement remained in force; (c) Whether, in the event that the Consulting Agreement remained in force, JGC is estopped from relying on it; (d) Whether JGC was a dependent contractor; and (e) Whether JGC’s claim for common law reasonable notice is statute-barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.

Analysis

Principles Applicable to Summary Judgment

[61] Rule 20.04(2)(a) of the Rules of Civil Procedure states that a court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.

[62] The Supreme Court of Canada has held that “summary judgment must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims:” [Hryniak v. Mauldin, 2014 SCC 7], [2014] 1 S.C.R. 87, at para. 5 [Hryniak]. An issue should be resolved on a motion for summary judgment if: (i) the motion affords a process that allows the judge to make the necessary findings of fact and (ii) apply the law to those facts, and (iii) is a proportionate, more expeditious and less expensive process to achieve a just result than going to trial: [Hryniak], at para. 49.

[63] On a motion for summary judgment, the judge must first determine whether there is a genuine issue requiring a trial based only on the evidence before him or her, without using fact-finding powers. If there appears to be a genuine issue requiring a trial, the judge should then determine if the need for a trial can be avoided by using the following powers under rr. 20.04(2.1): (i) weighing the evidence; (ii) evaluating the credibility of a deponent; and (iii) drawing any reasonable inference from the evidence: [Hryniak], at para. 66.

[64] The court is entitled to assume that the record on a summary judgment motion contains all the evidence that the parties would present if the matter proceeded to trial: [Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200], O.J. No. 851, at paras. 26-27, aff’d [2014 ONCA 878], O.J. No. 5815, leave to appeal to SCC refused, [2015] S.C.C.A. No. 97 (9 July 2015). See also: [Crescent Hotels and Resorts Canada Company v. 2465855 Ontario Inc., 2018 ONSC 5508], at para. 23, 297 A.C.W.S. (3d) 312; aff’d [2019 ONCA 268], 304 A.C.W.S. (3d) 730. It is a “well-established rule that both parties on a summary judgment motion have an obligation to put their best foot forward:” [Mazza v. Ornge Corporate Services Inc., 2016 ONCA 753], 62 B.L.R. (5th) 211, at para. 9.

Does JGC’s Breach of Contract Claim Raise a Genuine Issue Requiring a Trial?

Did JGC Waive the Renewal Clause?

[65] Cara submits that by Mr. Ganz’s email dated August 28, 2008, JGC waived the Renewal Clause of the Consulting Agreement. JGC submits that it could not have waived the Renewal Clause because no amendment was executed by the parties in writing, contrary to section 6.06 of the Consulting Agreement. JGC further argues that no consideration was provided in exchange for the alleged waiver.

[66] In [Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 SCC 100], [1994] 2 S.C.R. 490, at para. 19 (S.C.C.) [Saskatchewan River], the Supreme Court stated that “[w]aiver occurs where one party to a contract or to proceedings takes steps which amount to foregoing reliance on some known right or defect in the performance of the other party.”

[67] The Court set out the essentials of waiver as follows: (i) full knowledge of the deficiency which might be relied upon; and (ii) the unequivocal intention to relinquish the right to rely on it. The intention “may be expressed in a formal legal document, it may be expressed in some informal fashion or it may be inferred from conduct. In whatever fashion the intention to relinquish the right is communicated, however, the conscious intention to do so is what must be ascertained:” [Saskatchewan River], at para. 19, quoting Federal Business Development Bank v. Steinbock Development Corp. (1983), 42 A.R. 231 (C.A.).

[68] The Court further stated that a stringent test is justified since “no consideration moves from the party in whose favour a waiver operates. An overly broad interpretation of waiver would undermine the requirement of contractual consideration:” [Saskatchewan River], at para. 20.

The August 28 – September 2, 2008 Email Messages

[69] In my view, there is no genuine issue that the essential elements of waiver have been demonstrated in this case. Mr. Ganz had full knowledge of the Renewal Clause of the Consulting Agreement. Mr. Ganz deposed that he was very familiar with the terms of the Consulting Agreement. There is no ambiguity in Mr. Ganz’s email dated August 28, 2008, which stated “[l]et this email serve to remove the auto renewal from my contract” (emphasis in original). In this email Mr. Ganz expressed an unequivocal intent to relinquish JGC’s right to rely on the Renewal Clause. On cross-examination, Mr. Ganz confirmed that the “auto renewal” to which he was referring was section 2.01 of the Consulting Agreement, the Renewal Clause.

[70] In addition, in his responding email dated September 2, 2008, Mr. Smith specifically stated that “I look forward to discussing with you the terms of our new arrangement that will take effect after your current agreement comes to an end in March, 2009.” Mr. Ganz admitted that he received this email and sent no further response. The fact that Mr. Ganz did not tell Mr. Smith that he was mistaken supports a finding that both parties were in agreement.

[71] Moreover, also on September 2, 2008, Mr. Smith sent an email to Cara’s in-house counsel, Ms. Kolers, summarizing his discussion with Mr. Ganz. In the email, Mr. Smith specifically stated that he and Mr. Ganz “discussed the March 2009 expiration and the 6 month notice period to avoid automatic renewal which was the reason for the conversation now rather than closer to the expiration.” Mr. Smith told Mr. Ganz that either the Renewal Clause would have to be waived or he would have to give Mr. Ganz notice that the Consulting Agreement would not be renewed and would be allowed to expire.

[72] On cross-examination, Mr. Ganz denied that Mr. Smith spoke to him about negotiating a new relationship and that Cara intended to terminate the Consulting Agreement. This is inconsistent with the substance of Mr. Ganz’s email.

[73] Moreover, the timing of the August 28, 2008 meeting, 12 days before Cara would have to give notice of termination, supports a finding that the purpose of the meeting was to discuss the Renewal Clause and whether a notice of termination would be required. At that time, according to Mr. Smith, who was Cara’s CFO, Cara’s financial condition was precarious in that it was highly leveraged and running out of cash, a situation exacerbated by the 2008 financial crisis. He needed to reduce costs and had identified the Consulting Agreement as a concern. While others at Cara wanted to ensure that JGC stayed on, Mr. Smith had to find ways to reduce costs. Given the timing, it makes sense that Mr. Smith was seeking confirmation from Mr. Ganz that JGC would waive the Renewal Clause.

Subsequent Email Messages

[74] Notwithstanding his current position that the Consulting Agreement remained in force, Mr. Ganz subsequently confirmed or acquiesced with statements by Cara representatives that the Consulting Agreement was to terminate. In the January 26, 2009 email from Mr. Smith to Mr. Wilkie, and copied to Mr. Ganz, Mr. Smith again stated that the “[c]urrent agreement between Jack and Cara expires as scheduled March, 2009.” Mr. Ganz did not respond to Mr. Smith’s request that he let Mr. Smith know if there was anything he missed.

[75] In addition, in an email dated May 10, 2010, from Mr. Ganz to his lawyer, Tilda Roll, Mr. Ganz stated that his “current term will end Marc [sic] 2011.” At his examination for discovery, Mr. Ganz stated that he had “no idea” whether the statement was correct. Subsequently, on cross-examination, Mr. Ganz claimed that the 2011 was an error and that he verbally corrected the date to 2012 with Ms. Roll.

[76] Similarly, in response to an email dated November 2, 2010 from Sean Regan, which stated that his contract was “set to expire March 31 st , 2011, although he will be extended to December 31 st , 2011” Mr. Ganz stated “[w]e agree on all points.” If Mr. Ganz believed that the Consulting Agreement was in force, he would not have done so. Mr. Ganz made no attempt to correct the March 31, 2011 date.

[77] It is unclear from the evidence why Mr. Ganz and Mr. Regan referred to a March 31, 2011 termination date when the Consulting Agreement would not have, under any circumstances, terminated on March 31, 2011. Once the Renewal Clause was waived, the Consulting Agreement came to an end on March 9, 2009, and could be extended by JGC for one year to March 9, 2010. If there was no waiver of the Renewal Clause and the agreement was renewed, it would have terminated on March 9, 2012. Nonetheless, Mr. Ganz’s agreement to the March 2011 in his email to Mr. Regan suggests that he knew that the Consulting Agreement was no longer in force. He did not correct Mr. Regan or state that the Consulting Agreement remained in effect for another year. The March 2011 date is also consistent with Mr. Ganz’s email to Ms. Roll, despite Mr. Ganz’s evidence in cross-examination that he verbally corrected the date to March 2012.

The Exchange of Draft Agreements

[78] Mr. Ganz relies upon the draft agreements exchanged between JGC and Cara in 2010 and 2012, and the evidence that his counsel crossed out references to the Consulting Agreement, as support for his position that the new agreement was not intended to replace the Consulting Agreement and that the Consulting Agreement remained in effect. The parties agree that Cara included the references to the Consulting Agreement in the recitals and that Mr. Ganz’s counsel who crossed them out. It is not possible, or desirable, to read much into the recitals or the striking out of certain language from them in a draft agreement that was never concluded. [7]

[79] The bulk of the evidence does not support JGC’s position that the Consulting Agreement remained in force and that the draft agreements related only to the NetOps Group’s services. It is clear from the email exchange between Mr. Ganz and Mr. Smith at the end of August and beginning of September 2008 that the parties intended to discuss the terms of a new arrangement between Cara and JGC, including Mr. Ganz. Those emails did not reference the NetOps Group. Mr. Smith’s email to Ms. Kolers stated that he and Mr. Ganz met to discuss “his current agreement status and the future of his services at Cara.” At his examination, Mr. Smith testified that the intent was to conclude an agreement that would encompass both the services of both Mr. Ganz and the NetOps Group. This is consistent with Mr. Lantz evidence that he was tasked with concluding a new agreement that would include both Mr. Ganz’s and the NetOps Group’s services. Other than Mr. Ganz’s evidence, there is no support for JGC’s position that the new agreement under discussion was meant to apply to the NetOps Group alone. The contemporaneous email messages simply would not make sense if the parties intended only to negotiate an agreement for the NetOps Group’s services.

[80] Despite Mr. Ganz’s email to Ms. Roll stating that the new draft agreement was not to cancel or replace the Consulting Agreement, neither he nor Ms. Roll ever told Cara that the Consulting Agreement remained in effect.

[81] Contrary to JGC’s position, the fact that JGC and Cara were exchanging draft agreements, which included terms relating to Mr. Ganz’s services, supports a view that the Consulting Agreement had come to an end. Mr. Ganz confirmed that following the August 29, 2008 meeting, he understood that “Cara wished to design a new working relationship with [him].” On cross-examination, Mr. Ganz admitted that Mr. Smith wanted a new and “all-encompassing agreement” or “one agreement governing everything.”

[82] In addition, Mr. Regan’s email messages in April and October 2012 reflect further discussions between the parties of the terms of a new agreement, including a reduction of JGC’s fees to $125,000 per year. First, this amount is more consistent with the amount paid for Mr. Ganz’s services than for those of the NetOps Group. Second, while no written agreement was executed, the fact that Mr. Ganz did not respond to those messages by asserting that the Consulting Agreement remained in effect is consistent with the agreement having been terminated. It was only after Mr. Grondin repeated the arrangement in his email dated January 23, 2014 that Mr. Ganz asserted that the parties were still bound to the Consulting Agreement.

[83] JGC also submits that if the Renewal Clause was waived, the waiver was conditional upon a subsequent agreement being concluded. While the email messages refer to future discussions of a new agreement, there is no language in Mr. Ganz’s email to reflect that the removal of the Renewal Clause was conditional. The further email messages from Mr. Smith in September 2008 and January 2009 state that the Consulting Agreement would be terminated in March 2009, without reference to any condition. The language of the contemporaneous email exchanges do not support a finding that the waiver of the Renewal Clause was conditional on the execution of a new agreement. The fact that the parties contemplated entering into a new agreement does not make their agreement on the waiver conditional: see [Directors Film Company Ltd. v. Vinefera Wine Services Inc., 1998 ONSC 14658], [1998] 38 O.R. (3d) 212 (Gen. Div.), at para. 16 (regarding the exercise of an option to renew a lease).

[84] Moreover, JGC’s argument that the waiver is invalid for lack of consideration fails, since in [Saskatchewan River], at para. 20, the Supreme Court stated that the test is stringent because there is no consideration.

[85] In further support of its position that the Consulting Agreement was not terminated, JGC relies upon the monthly invoices that it submitted to Cara for payment, which consistently stated “As per Agreement dated March-10-2006.” Cara’s Chief Financial Officer (from December 2013), Mr. Grondin, testified that this was viewed as “boilerplate” language carried over from an invoice template that JGC was using. Other than the addressee and a change from GST to HST, the content of the invoices remained the same for the entire period. In my view, the fact that the invoices referenced the Consulting Agreement does not lead to a conclusion that the agreement remained in force. They could equally have been referring to the source of the amount, which was the original Consulting Agreement, even if that agreement was no longer in force.

Did the Waiver Have to Meet the Requirements of Section 6.06?

[86] JGC places significant reliance on section 6.06 of the Consulting Agreement, which required amendments to be made in writing and duly executed by the parties. However, the courts have repeatedly held that parties can, by their conduct, demonstrate that they do not intend to be bound by such clauses. In these situations, courts have enforced the terms of the parties’ subsequent verbal agreement: [Shelanu Inc. v. Print Three Franchising Corp., 2003 ONCA 52151] (2003), 64 O.R. (3d) 533 (C.A.), at paras. 2, 50-60; [Colautti Construction Ltd. v. Ottawa (City), 1984 ONCA 1969] (1984), 46 O.R. (2d) 236 (C.A.), at pp. 242-243.

[87] In my view, the parties, by their conduct, demonstrated that they did not intend to be strictly bound to the amendment provision. JGC sent an email unequivocally removing the Renewal Clause, as requested by Mr. Smith, who then accepted the change. The email waiving the Renewal Clause was in writing and both parties clearly intended to be bound. In [L’Ouvrier Inc. v. Leung, 2016 ONSC 6993], at para. 55, notice by text message was found to be effective, as the parties acted in a manner consistent with effective notice having been delivered. In this case as well, the parties’ conduct after the waiver of the Renewal Clause, including their negotiations of a new agreement and Mr. Ganz’s acquiescence with email messages referring to the Consulting Agreement as terminated, was consistent with an intent to be bound by the waiver.

[88] The evidentiary record belies Mr. Ganz’s submission that he insisted on strict compliance with the formal requirements of the Consulting Agreement. The parties’ relationship continued despite an absence of clarity as to the terms governing their relationship.

[89] Indeed, it would be unduly formalistic to find that, after such a clear indication that the parties did not intend to be bound to the Renewal Clause, a party could rely upon a purely formal contractual requirement to relieve itself from its promise. As stated by the Supreme Court in [Saskatchewan River], at para. 18, “the principle underlying both doctrines [waiver and promissory estoppel] is that a party should not be allowed to go back on a choice when it would be unfair to the other party to do so.”

[90] Accordingly, I find that there is no genuine issue that JGC waived the Renewal Clause.

What is the Effect of the Waiver of the Renewal Clause?

[91] The effect of JGC’s waiver of the Renewal Clause was to remove, as Mr. Ganz stated, that provision from the Consulting Agreement. Section 2.01 of the Consulting Agreement would thus be read without the last sentence, which stated: “This Agreement shall be automatically be renewed for additional three consecutive (3) year terms unless terminated prior to the expiration date in accordance with this Agreement.” The first sentence of section 2.01, containing the term of three years, would remain intact.

[92] As a result, once the Renewal Clause was waived, the Consulting Agreement came to an end at the end of the initial three-year term, on March 9, 2009. Notice of termination in accordance with section 5.03 was not required. The notice required by section 5.03 is premised on the continued existence of the Renewal Clause.

[93] In the event that I have erred in this interpretation of the interaction between the Renewal Clause and the termination provision, I find that the email dated September 2, 2008 from Mr. Smith to Mr. Ganz, which stated that the Consulting Agreement would come to an end in March 2009, was effective notice of termination in compliance with section 5.03.

[94] Pursuant to the second part of section 5.03, JGC then had a right to extend the Consulting Agreement for a period of 12 months.

Did the Consulting Agreement Remain in Force After the Waiver of the Renewal Clause?

[95] JGC relies upon the severability clause in section 6.04 of the Consulting Agreement to argue that if the Renewal Clause was removed from the agreement, the Consulting Agreement nonetheless survives. The severability clause provides that if any provision of the Consulting Agreement is invalid or unenforceable, the remainder of that provision and all other provisions of the agreement continue in full force and effect.

[96] A finding that JGC waived the Renewal Clause is not a finding that the provision is invalid or unenforceable. As a result, the severability clause is not engaged.

[97] Moreover, the effect of JGC’s waiver of the Renewal Clause was that the Consulting Agreement came to an end at the end of the term. It would be nonsensical to interpret the waiver of the Renewal Clause as keeping the Consulting Agreement alive. Since the Consulting Agreement had an initial term of three years, unless that provision was invalid or unenforceable, which is not the case, the severability clause does not result in the remaining provisions continuing in perpetuity.

What Terms Governed the Parties’ Relationship After the Consulting Agreement Terminated?

[98] Cara submits that after the Consulting Agreement came to an end in March 2009, JGC exercised its right to extend the agreement for twelve months in accordance with section 5.03. JGC denies invoking the contractual right to extend, and there is no documentary evidence to support that JGC ever specifically invoked this right. It appears that Cara proceeded on the understanding that the Consulting Agreement had been extended for a further twelve months, as evidenced by the January 26, 2009 email from Mr. Smith to Mr. Ganz referring to the “fulfillment of the one-year notice period.” As noted above, JGC did not disagree with this email.

[99] After the Consulting Agreement came to an end and the extension period was over, in March 2010, there was no written agreement between Cara and JGC, raising the question as to what governed the parties’ relationship after that time. Cara’s position is that the parties had an ad hoc, month to month arrangement for an additional four years. JGC’s position is that if the Consulting Agreement is found to have been terminated, JGC was a dependent contractor. JGC further argues that Cara has failed to demonstrate that there is no genuine issue requiring a trial on the issue of whether there was a month to month arrangement.

[100] In certain respects, both Cara and JGC conducted themselves as if the terms of the Consulting Agreement continued to apply. JGC continued to provide services to Cara and Cara continued to pay JGC the fees provided for in the Consulting Agreement. According to Mr. Grondin, there was an “understanding” that Mr. Ganz would continue to provide services to Cara and that Cara would continue to pay him. Mr. Smith, who preceded Mr. Grondin as CFO stated that “we continued to pay the $420,000 because we had nothing else to go on.” Despite discussions about JGC reducing its fee, this was never formalized and Cara continued to pay JGC the full amount.

[101] When asked on examination whether he and Mr. Ganz “understood that post March ’09 nothing would change in relationship to his arrangements” Mr. Smith did not agree, and responded that it was left to him and Mr. Ganz to work out. Due to the importance of the project and Mr. Ganz’s role in it, Cara’s senior executives, Mr. Robinson and Mr. Regan, were keen to ensure that Mr. Ganz remained with Cara. The parties made numerous attempts to put the arrangement in writing but were not successful. The contemporaneous documents show that the parties were aware that they were in a “grey area,” as Mr. Smith described it. Mr. Smith also described the relationship between Cara and JGC as in a “constant state of movement” and a “moving target.” The email messages referring to a March 2011 termination date reflect the lack of clarity.

[102] Based on the evidence on this motion, the arrangement appears to have been ad hoc. The only terms that are evidenced by the parties’ conduct is that JGC would continue to provide services and Cara would continue to pay the amount under the Consulting Agreement, until the parties agreed otherwise. Those were the essential terms. The parties’ conduct does not evince a mutual intent to be bound beyond those terms, for example, on the length of the engagement or when and how the arrangement could be terminated. There is no evidence of any agreement that further terms from the Consulting Agreement would apply, specifically, JGC’s ability to participate in the employee incentive plan.

[103] There is little evidence to support Cara’s position that the parties agreed to a month to month arrangement. Mr. Ganz referred to the NetOps Group’s arrangement as month to month. However, there was never any contract for the NetOps services. There was no mention of “month to month” in relation to JGC in the documentary evidence until an email from Mr. Grondin dated September 3, 2014. By that time, Cara was transitioning JGC out. In his examination, Mr. Smith acknowledged that if the parties had a month to month arrangement, JGC could have left with a month’s notice.

[104] Contrary to JGC’s position, however, Cara is not required to demonstrate no genuine issue requiring a trial as to whether there was a month to month arrangement in order to succeed on its motion. It is sufficient that Cara demonstrate that, due to the waiver of the Renewal Clause, the Consulting Agreement expired in March 2010 and that no other written agreement was struck to take its place.

[105] It seems unusual that sophisticated parties to a valuable business relationship for important services would continue without the clarity that would be provided by putting the terms applicable to their relationship in writing. However, this was not unusual to the parties. The NetOps Group also provided services to Cara, at a cost of more than $950,000 per year, without a written contract. In Mr. Lantz’s Reply Affidavit, sworn on April 3, 2018, he deposed that at one point, Mr. Ganz told him that he preferred to have no contract because he did not trust them, motioning to Mr. Smith and Mr. Robinson. Mr. Ganz did not deny or address this in his further affidavits. Neither Mr. Lantz nor Mr. Ganz were cross-examined on this point. Based on their history and relationship, the parties were prepared to proceed without putting the terms of their ongoing relationship in writing.

[106] As noted above, JGC’s breach of contract claim relies upon the continued existence of the Consulting Agreement. JGC has not alleged that the Consulting Agreement was reinstated, that JGC retracted its waiver of the Renewal Clause, or that the Consulting Agreement was replaced by an oral agreement. The evidence of Mr. Smith and Mr. Lantz confirms that at no time was the Consulting Agreement reinstated. JGC has not adduced evidence of a subsequent retraction of its waiver or an oral agreement.

[107] As a result, the lack of certainty regarding the precise terms that governed the parties’ relationship does not preclude me from finding that Cara has demonstrated that JGC’s breach of contract claim raises no genuine issue requiring a trial. Since I have found that JGC waived the Renewal Clause, causing the Consulting Agreement to come to an end, and since JGC has not alleged a breach of any other contract between the parties, there is no legal basis for JGC’s breach of contract claim against Cara.

[108] As Cara has met its burden of demonstrating no genuine issue requiring a trial, the burden shifts to JGC to demonstrate that its claim has a real chance of success: [Hamilton Kilty Hockey Club Inc. v. Ontario (Attorney General), 2003 ONCA 24429] (2003), 64 O.R. (3d) 328 (Ont. C.A.) at para. 20; [5A Investment Inc. v. Jane Street Inc., 2017 ONSC 7474], at paras. 32-33. For the foregoing reasons, JGC has failed to meet its burden.

Is JGC Estopped from Relying on the Consulting Agreement?

[109] Since I have found that JGC waived the Renewal Clause and the Consulting Agreement came to an end, it is not necessary to determine whether JGC is estopped from relying on the agreement. I will address this argument only briefly.

[110] The doctrine of estoppel by representation requires a positive representation made by the party whom it is sought to bind, with the intention that it shall be acted on by the party with whom he or she is dealing, and the person to whom the representation is made acts upon that representation to his or her detriment: [Ryan v. Moore, 2005 SCC 38], [2005] 2 S.C.R. 53, at para. 5. Adapted to the context of contract law, the doctrine may apply when one party to a contract makes a positive representation regarding a change to the entitlements under the contract, with the intention that the representation be acted upon by the person to whom the representation is made, and the party to whom the representation has been made acts upon it to his or her detriment: [John Borrows Ltd. v. Subsurface Surveys Ltd. and Whitcomb, 1968 SCC 81], [1968] S.C.R. 607 (S.C.C.), at p. 615 [John Borrows]. Courts have held that it would be inequitable to allow the person making the representation to then act in a contrary or inconsistent manner by insisting on the strict enforcement of the original terms of the contract: [John Borrows]; [Fort Frances (Town) v. Boise Cascade Canada Ltd., 1983 SCC 47], [1983] 1 S.C.R. 171 (S.C.C.), at paras. 47-48.

[111] In this case, Mr. Ganz specifically represented to Cara that the Renewal Clause was to be removed from the Consulting Agreement, thus indicating that JGC did not intend to rely on the provision. In reliance on this statement, Cara refrained from sending JGC written notice of termination, which it would have been entitled to do any time before September 9, 2008. It would be unfair to permit JGC, after making the representation it did about waiving the Renewal Clause, to then insist on strict compliance with the Renewal Clause.

[112] In the event that the Renewal Clause was not expressly waived by JGC, the principle of promissory estoppel would preclude JGC from enforcing it.

Does JGC’s Claim for Common Law Reasonable Notice Raise a Genuine Issue Requiring a Trial?

Was JGC a Dependent Contractor?

[113] As noted above, in 2018, JGC was granted leave to amend its Claim to include a claim for common law reasonable notice. JGC alleges not that Mr. Ganz was an employee of Cara, but that he was a dependent contractor. [8]

[114] In [McKee v. Reid’s Heritage Homes Ltd., 2009 ONCA 916], O.J. No. 5489, at para. 39 [McKee], the Court of Appeal for Ontario identified the factors to be applied to determine whether a contractor is a dependent or independent contractor:

(a) Whether or not the agent was limited exclusively to the service of the principal; (b) Whether or not the agent is subject to the control of the principal, not only as to the product sold, but also as to when, where and how it is sold; (c) Whether or not the agent has an investment or interest in what are characterized as the "tools" relating to his service; (d) Whether or not the agent has undertaken any risk in the business sense or, alternatively, has any expectation of profit associated with the delivery of his service as distinct from a fixed commission; and (e) Whether or not the activity of the agent is part of the business organization of the principal for which he works. In other words, whose business is it?

[115] As the term “dependent contractor” suggests, the work relationship is characterized by “a certain minimum economic dependency, which may be demonstrated by complete or near-complete exclusivity:” [McKee], at para 30. The determination of exclusivity requires consideration of the full history of the relationship in question: [Thurston v. Ontario (Children’s Lawyer), 2019 ONCA 640], 437 D.L.R. (4th) 111, at para. 25 [Thurston].

[116] JGC’s position is that Mr. Ganz’s relationship with Cara was one of exclusivity. JGC submits that while JGC was the party to the Consulting Agreement, the agreement was for the services of only Mr. Ganz. The Consulting Agreement required that JGC provide 200 hours of service per month, or more than 40 hours per week. JGC submits that, as a result, Mr. Ganz would not have been able to work for anyone else.

[117] JGC also relies upon the following evidence to demonstrate that Mr. Ganz was a dependent contractor:

• Mr. Ganz provided services to Cara on a full-time basis, working from 8 a.m. to 6 p.m. daily, and frequently past 10 p.m.;
• He reported to Cara’s management;
• He had sole control and supervision over Cara’s information and technology systems;
• He had designated office space at Cara’s premises which was his “home base” and JGC did not have its own office, other than Mr. Ganz’s home office;
• He had a phone number and email address at Cara;
• He had Cara business cards describing him as a “Senior B.I. Consultant”;
• He attended Cara’s retreats for executive level managers;
• He had an access pass to Cara’s premises with the highest level of clearance;
• He travelled on Cara business with Cara paying his expenses; and
• He attended a Conference Board of Canada event in place of Cara’s Vice-President.

[118] Cara disputes that JGC or Mr. Ganz was a dependent contractor on the basis that Cara did not require JGC to provide services exclusively to Cara, whether under the Consulting Agreement or subsequent arrangement, and JGC was at liberty to provide services to other customers. Cara further submits that JGC had considerable freedom in providing the services, including engaging its own employees and contractors, which Cara did not control. Cara argues that Mr. Ganz was not JGC’s sole employee and JGC has failed to put forward any evidence that its other employees worked exclusively for Cara.

[119] Cara submits that JGC has no claim to common law notice as a dependent contractor because, in its Amended Reply, JGC has pleaded that:

[t]he plaintiff does not claim that it or Jack Ganz was financially dependent on Cara. As a matter of law, financial dependence need not be present in order to classify a relationship as one that requires notice to terminate.

[120] Cara further relies on Mr. Ganz’s other business interests and sources of income, and JGC and Mr. Ganz’s failure or refusals to disclose financial information relating to that income, to argue that JGC’s dependant contractor claim raises no genuine issue requiring a trial. Specifically, Cara points to the following evidence:

• Mr. Ganz is the president and sole director of 40 Ridgetop Road Limited, the company that owns Cara’s leased facility, for which Cara pays over $900,000 per year in base rent. Mr. Ganz is thus effectively Cara’s landlord;
• Mr. Ganz is the sole shareholder and officer of Four Valley/Edgeley Holdings Limited, which, from 2006 to 2010, owned Cara’s leased head office facility. Cara leased the premises for approximately $2.125 million per year. Four Valley purchased the property for $7.59 million in 2006 and sold it for $35 million in 2010;
• The Land Titles Registry shows that Mr. Ganz owns four other properties; and
• Publicly filed corporate documents show Mr. Ganz has an interest in three other corporations, GanzCorp Ventures Inc., Ganz Realty Inc., and Ganz Realty Limited.

[121] JGC refused to answer questions or to produce financial statements, tax returns or notices of assessment for either JGC or Mr. Ganz.

[122] In this case, I find that JGC’s claim for common law notice raises no genuine issue for trial because JGC was not a dependent contractor.

[123] First, JGC admitted in its Amended Reply that neither JGC nor Mr. Ganz are financially dependent on Cara. In my view, and contrary to JGC’s pleading, economic dependence is a key factor in demonstrating a relationship for which reasonable notice is required. In [Thurston], at para. 24, the Court of Appeal reiterated that the entitlement to common law reasonable notice was extended in [McKee] to include dependent contractors because “like employees – and unlike independent contractors – dependent contractors are to a large extent economically dependent, albeit on a contracting party rather than an employer.” To extend the requirement of common law notice to relationships in which there is no economic dependence would be to ignore the “dependent” part of “dependent contractor.”

[124] JGC’s position suggests that exclusivity alone is sufficient. While the Court of Appeal has stated that exclusivity is a “hallmark” of the dependent contractor category and found it to be “determinative” in [McKee], at para. 34, it is clear from the Court’s analysis that exclusivity was critical in that case because it evinced economic dependency. However, as is the case here, exclusivity does not necessarily result in economic dependency.

[125] On this motion, JGC has argued that JGC is synonymous with Mr. Ganz. Examining the entire relationship between Cara and JGC and Cara and Mr. Ganz, it is clear that Mr. Ganz was not only a contractor to Cara but, through his other businesses, was also the landlord to Cara’s key facilities, collecting approximately $3 million in rent per year at certain periods of time. The relationship between Cara and Mr. Ganz is not typical of a dependent contractor relationship, where the dependent contractor is vulnerable to the party who retained their services. The vulnerability inherent in the rationale for protecting dependent contractors is entirely absent here.

[126] JGC argues that a person’s assets should not disentitle them from reasonable notice. In this case, however, Mr. Ganz does not merely have assets, but generates significant income from those assets, including from Cara. JGC has not cited any authority for its submission that only employment income, and not income generated from assets, is relevant to the assessment of dependency.

[127] Moreover, the evidence of exclusivity is equivocal. In [McKee], at para. 17, the trial judge had found a tacit agreement that the plaintiff work exclusively for the defendant. There was no such requirement that JGC or Mr. Ganz work exclusively for Cara in the Consulting Agreement, or in the arrangement that followed. While Mr. Lantz admitted on cross-examination that he believed that the Consulting Agreement was solely for the services of Mr. Ganz, nothing in the Consulting Agreement required that Mr. Ganz personally provide the 180 hours of service required under the agreement. Given the degree of freedom and discretion that Mr. Ganz had to fulfill the terms of the arrangement with Cara, he could have assigned or delegated work to other employees or contractors of JGC.

[128] The evidence that JGC relies upon shows that Mr. Ganz was treated as a valued member of Cara’s team. Mr. Ganz was essential to the project at Cara and spent a large proportion of his time providing services to Cara. Mr. Ganz reported to the highest levels of Cara and had a significant degree of discretion and freedom. While the project in which JGC and Mr. Ganz were engaged was clearly for Cara’s benefit, JGC was more like an equal than a subordinate in the relationship. Mr. Regan referred to Mr. Ganz as “a valued partner.” There is little evidence of the “indicia of control” over JGC that characterizes an employment or dependent contractor relationship, such as deciding what methods the contractor will employ, requiring reports, providing direction and guidance over the work, and the ability to set dress and conduct codes or discipline the contractor: [John A. Ford & Associates Inc. v. Keegan, 2014 ONSC 4989], O.J. No. 3995, at paras. 74-75.

[129] Mr. Ganz’s own evidence is that:

• He was solely responsible, together with an outsourced technical team, for the design and installation of a new multi-million dollar, state-of-the-art network and data operations centre for Cara;
• He was “responsible for millions of dollars in technology expenditures. Cara’s management policy directed that no technology expenditures could be incurred by Cara unless specifically approved by me;”
• He provided “advice and guidance to Cara respecting business decisions relating to technology, and management of business risk related to technology;”
• He “selected and oversaw the installation of” a Unified Physical Infrastructure system and equipment to support power, communications, computing, control, and security systems at Cara; and
• He “oversaw the complete technical design of the data centre, including its physical construction.”

[130] Moreover, it was Mr. Ganz who chose to continue to provide his services as a contractor. At his examination for discovery, Mr. Ganz deposed that he rejected a titled position as an executive at Cara multiple times because, as he put it, “I prefer to work as an independent at my own company and I’ll provide services on that basis.” Independence was something that Mr. Ganz valued over and above the security and benefit of an employer-employee relationship.

[131] For the foregoing reasons, Cara and JGC did not have the kind of permanent, exclusive and dependent relationship that would be necessary to find that JGC was a dependent contractor.

[132] In addition, JGC and Mr. Ganz have refused to answer questions and disclose any financial records regarding their business revenues. Without such disclosure, economic dependency cannot be established because there is simply no evidence of the proportion of JGC’s or Mr. Ganz’s revenue that was derived from Cara. In [Thurston], for example, at most 40 percent of the plaintiff’s billings were from her contract with the Office of the Children’s Lawyer. This was insufficient to establish the requisite economic dependence. In this case, neither JGC nor Mr. Ganz have put forward evidence of the proportion of their income that was from Cara. It is insufficient to allege that Mr. Ganz worked for Cara full-time. Even if Mr. Ganz worked for Cara full-time, Mr. Ganz had other sources of income. In respect of JGC, whose employees and contractors also billed Cara for their services, JGC may have had other contracts that were performed by employees or contractors other than Mr. Ganz. At the minimum, JGC has not alleged or provided evidence to support that it did not do so.

[133] If, contrary to its Amended Reply, JGC intended to demonstrate that JGC or Mr. Ganz were economically dependent on Cara, it was required to put its best foot forward and adduce evidence of its financial dependence. To the extent that JGC has made a strategic choice not to produce such documents at this stage, the court may hold a party to its choices: [ThyssenKrupp Elevator (Canada) Limited v. Amos, 2014 ONSC 3910], O.J. No. 3155, at para. 44.

[134] Based on the foregoing, there is no genuine issue requiring a trial on JGC’s claim to common law reasonable notice.

[135] While JGC submits that it was entitled to notice even if it was not a dependent contractor, it has cited no authority to support its position. [9]

[136] Because JGC was not a dependent contractor, I need not deal with the arguments regarding whether notice of termination was clear, whether fresh notice was required after an extension of employment, or whether JGC failed to mitigate its damages. On the duty to mitigate, I note that JGC takes the position that this goes to damages and has not put forward any evidence of its efforts to mitigate on this motion.

Is JGC’s Claim to Common Law Reasonable Notice Statute-Barred?

[137] Given my finding that the claim for common law reasonable notice raises no genuine issue requiring a trial, I need not determine whether JGC’s claim is statute-barred. If I had not dismissed JGC’s dependent contractor claim, I would have nonetheless found that the claim is statute-barred under s. 4 of the Limitations Act, 2002 because it was commenced more than two years after the cause of action arose.

[138] JGC alleges that Cara terminated it without notice on or about October 31, 2014 when Mr. Ganz was told to surrender his security access card and precluded from entering the Cara facility. The limitations period thus expired in October 2016. While this proceeding was commenced in December 2014, the claim for common law reasonable notice was not made until 2018. Unless the claim for common law reasonable notice is an alternative claim for relief or legal conclusion arising from the same facts pleaded, it would be statute-barred.

[139] Discoverability is not at issue here, since JGC’s position is that the claim is based on the same facts alleged in the original Statement of Claim. The relevant facts were thus known to JGC in 2014 when it commenced the action and it knew that a proceeding would be an appropriate means to seek a remedy.

[140] In [Davis v. East Side Mario’s Barrie, 2018 ONCA 410], O.J. No. 2283, at paras. 31-32, the Court of Appeal reiterated that a cause of action is “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person” and quoted from P. Perell and J. Morden, The Law of Civil Procedure in Ontario, 3d ed, (Toronto: LexisNexis Canada, 2017), at p. 186 as follows:

A new cause of action is not asserted if the amendment pleads an alternative claim for relief out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon [which] the original right of action is based.

[141] In my view, the claim for common law reasonable notice is not an alternative form of relief arising from the same facts, but a new cause of action. While JGC has characterized its claim for common law reasonable notice as an alternative form of relief, the relief is based on a cause of action for wrongful dismissal. JGC’s cause of action for wrongful dismissal differs from its claim for breach of contract, in that the entitlement to common law reasonable notice does not arise from a breach of the Consulting Agreement, but a common law presumption that in every employment contract, there is an implied term that an employer must provide an employee with reasonable notice before terminating them. [Machtinger v. HOJ Industries Ltd., 1992 SCC 102], [1992] 1 S.C.R. 986, at para. 19 (S.C.C.); [Bardal v. Globe & Mail Ltd., 1960 ONSC 294], [1960] O.J. No. 149 (Ont. H.C.), at para. 12.

[142] In other words, an employee’s claim for common law reasonable notice is based not only on the terms of a contract, but from the employment relationship between the parties, to which additional legal duties apply. The duty to give reasonable notice arises from the nature of the employer-employee relationship, or as alleged in this case, the dependent contractor-contracting party relationship. The relevant factual matrix includes more than the terms of the contract and the surrounding circumstances to include the factors referred to in the dependent contractor analysis. Moreover, in determining the appropriate notice period, the analysis is not limited to the terms of the contract. The court will examine factors such as the employee’s age and skills, role and responsibilities, length of employment and the availability of comparable or suitable employment.

[143] In its motion for leave to amend, JGC maintained that its claim for common law reasonable notice was an alternative form of relief that required only a “one-line amendment” to its Statement of Claim. Master Jolley granted leave to amend on the basis that JGC “relies on the same facts for its claim... but seeks to argue an alternative theory of damages based on those facts.” [2018 ONSC 4880], at para. 7.

[144] However, JGC subsequently pleaded additional facts to support its claim in its Amended Reply. For example, the original Statement of Claim pleaded only that JGC would be paid $250 per hour if JGC’s hours exceeded 180 hours per month. The Amended Reply pleads that Mr. Ganz was required to provide 180-200 hours of service and that he worked for Cara from 8 a.m. to 6 p.m. daily and frequently past 10 p.m. In the Amended Reply, JGC also pleads that the relationship between Cara and JGC “whether under contract or at common law, was governed by the other terms described in the Consulting Agreement, including the obligation to provide reasonable notice of termination and the obligation to offer [JGC] the opportunity to participate in an employee equity incentive plan on the same terms and conditions as other management level employees.” The Amended Reply does not simply provide particulars or additional facts of the cause of action previously pleaded but advances a different theory of liability. Until the motion for leave to amend, Cara had no notice that it was alleged to owe any common law duties to Mr. Ganz as a dependent contractor.

[145] On this motion, JGC filed an affidavit to support its dependent contractor claim with additional new facts that were not pleaded in the Amended Statement of Claim or Amended Reply. Those new facts give rise to a different factual matrix than the one supporting JGC’s breach of contract claim, and of which Cara has had notice since 2014. See [Sweda Farms Ltd. v. Ontario Egg Producers, 2011 ONSC 6146], at para. 25.

[146] That JGC’s claim for common law reasonable notice is a new cause of action is further supported by the fact that, after submitting an affidavit from counsel stating that the proposed amendment would not delay the summary judgment hearing, JGC nonetheless brought a motion for production of further documents, including documents relating to the employment agreements, compensation and severance packages of Cara’s past and present senior management. [10] Moreover, in its factum and at the hearing of Cara’s motion for summary judgment, JGC’s counsel argued that a trial is required to determine whether Cara breached the implied duty of good faith by terminating JGC shortly before its initial public offering to avoid including him in the employee incentive plan. None of JGC’s original or amended pleadings allege a breach of the duty of good faith. This serves to demonstrate not only that the dependent contractor claim now being advanced by JGC is very different from its original breach of contract claim but also that it may expand further.

[147] Finally, contrary to JGC’s submission, Cara’s argument that JGC’s claim for common law reasonable notice is statute-barred is not a collateral attack on the decision of Master Jolley on the motion for leave to amend. In her endorsement, Master Jolley clearly stated that leave to amend was granted but that the decision was “not to be taken as a final determination of the limitation period issue and the defendant may plead the limitation period as part of any amended statement of defence.” [2018 ONSC 4880], at para. 11.

[148] JGC’s claim for common law reasonable notice is a new cause of action that it could have but failed to plead when it commenced the action in 2014. As the limitation period expired in October 2016, the claim is statute-barred.

Is JGC’s Claim For Breach of Contract Statute-Barred?

[149] Cara submits that JGC’s claim for breach of the Consulting Agreement is also statute-barred because it was commenced after the limitation period expired. Cara’s position is that JGC knew or ought to have known that it had a cause of action against Cara when the Consulting Agreement came to an end in March 2010. According to this theory, JGC had to commence a proceeding by March 2012.

[150] JGC’s position is that the breach occurred in October 2014, and therefore, the limitation period had not expired when it commenced the action in December 2014. Moreover, JGC submits that Cara did not plead a limitations defence in its original Statement of Defence and only pleaded it in response to JGC’s amended Statement of Claim.

[151] As I have dismissed JGC’s claim on its merits, I need not determine whether it is statute-barred. I have doubts that the limitation period began to run when the Consulting Agreement expired in March 2010. Since Cara continued to pay JGC until October 2014, JGC had not suffered an injury. JGC suffered a loss only after the relationship was terminated in October 2014.

Is There a Genuine Issue Regarding the Projector?

[152] There is an additional issue to which little attention was devoted in the parties’ evidence and argument. In the Amended Statement of Claim, JGC alleges that it was not reimbursed for a projector system that it purchased and for “valuable inventory of technology service components” that Cara retained. In his affidavit, Mr. Ganz deposed that in conjunction with JGC’s termination in October 2014, Cara “seized the inventory and locked [him] out of the data centre.”

[153] JGC produced no documents supporting the claim for retained equipment in its affidavit of documents or in response to undertakings given at Mr. Ganz’s examination for discovery. Master Muir had ordered that JGC review and produce all relevant email messages because it was “obvious from the evidence that some messages are missing from the plaintiff’s productions.” On July 25, 2017, JGC’s counsel advised Cara’s counsel that no further emails or other documents were located.

[154] Nonetheless, at the examination of Mr. Grondin in May 2018, JGC’s counsel put to him an email chain between Mr. Ganz and Mr. Grondin with an invoice for the projector dated August 27, 2008 attached, showing a purchase price of approximately $35,800 USD. While Cara disputes the authenticity of the invoice and objects to its admissibility, there is no reason to believe that the email chain or invoice are not authentic, and Cara should also have had the email messages. As the email chain and invoice are the only documentary evidence on this issue and there is little prejudice to Cara, the documents are admissible for the purposes of this motion.

[155] The email exchange, which takes place in late October 2014, reflects Cara’s position that the projector system was a fixture and should remain on the premises at 40 Ridgetop Road, which Mr. Ganz’s company owns. Mr. Ganz, who stated that that the projector was his personal property, did not accept Cara’s offered to pay him a reduced amount due to the age of the projector.

[156] On this motion, JGC has adduced no evidence to challenge Cara’s assertion that the projector is affixed to the premises. Nor has JGC advanced any argument for the return of the equipment or any basis for damages. It is unclear what damage JGC suffered if the projector was Mr. Ganz’s personal property, and if it remains affixed to the premises. Other than the documents relating to the projector, there is no evidence of any inventory allegedly retained by Cara. If JGC intended to advance this claim, JGC was required to lead evidence to support its claim or risk having the claim dismissed. It was insufficient to make bald statements in an affidavit.

[157] As there is no genuine issue requiring a trial regarding JGC’s claim regarding the projector or inventory, JGC’s claim is dismissed.

Summary

[158] On this motion, rather than identify the genuine issues requiring a trial, JGC argues that summary judgment is not appropriate because it has not yet had discovery of Cara and because Cara’s primary witness on the motion was Mr. Lantz, who stated repeatedly that he did not manage the relationship with JGC. JGC argues that Cara ought to have submitted affidavits from Mr. Robinson or Mr. Regan, who worked more closely with JGC. JGC further submits that discovery will be “more illuminating” than the Rule 39.03 examinations conducted to date, where the scope of questioning was more limited.

[159] The gist of JGC’s arguments is that there may be better evidence at trial. As noted at the outset, however, the court is entitled to assume that the record on a motion for summary judgment contains all the evidence that the parties would present at trial. A party who alleges that necessary evidence is missing bears the burden of showing that it took reasonable steps to obtain the evidence for the summary judgment motion and that the missing evidence would be material to the disposition of the motion: [Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200], at para. 28.

[160] JGC has not identified the missing evidence or the steps it has taken to obtain it. In fact, JGC did not take steps available to it to ensure that the record was complete. JGC was at liberty to summons Mr. Regan or Mr. Robinson for Rule 39.03 examinations. JGC has not had discovery of Cara because it did not proceed with the scheduled examination for discovery of Mr. Grondin. JGC has offered no good reason for its failure to discover Cara more than four years into the proceeding. While JGC has made repeated attempts to obtain production of further documents relating to the employee incentive plan, those documents are not material to the issues on the motion, namely, whether the Renewal Clause was waived or whether JGC was a dependent contractor.

[161] In my view, the motion record comprises a sufficient evidentiary basis on which to determine the issues: [Aird & Berlis LLP v. Oravital Inc., 2018 ONCA 164], at paras. 7-8. I am satisfied that the summary judgment motion process allows me to make the necessary findings of fact and apply the law to those facts, and is a proportionate, more expeditious and less expensive process to achieve a just result than going to trial: [Hryniak], at para. 49.

Conclusion

[162] Accordingly, Cara’s motion for summary judgment dismissing JGC’s claims is granted.

[163] Counsel submitted cost outlines at the hearing but requested an opportunity to make submissions on costs. Given the restrictions on the court’s operations and the constraints on the court’s resources during the current pandemic, the parties are strongly encouraged to agree on costs. In the event that no agreement is reached, Cara’s counsel shall submit their costs submissions within 21 days of the release of these Reasons. JGC’s costs submissions are due within 14 days of that date. No costs submissions are to exceed four double-spaced pages. They may submitted by email to my judicial assistant, at Roxanne.johnson@ontario.ca. No reply submissions shall be made without leave. If no costs submissions are received within this time frame, the parties will be deemed to have resolved costs.

Nishikawa J.

Released: May 28, 2020

COURT FILE NO.: CV-14-517481 DATE: 20200528 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Jack Ganz Consulting Ltd. and Recipe Unlimited Corporation

REASONS FOR DECISION Nishikawa J. Released: May 28, 2020

Footnotes

[1] For consistency and ease of reference, the defendant will be referred to as Cara throughout these reasons.

[2] Cara had agreed to produce some of the documents requested without conceding their relevance.

[3] Counsel agreed that only those portions of the transcript included in the Joint Compendium were to be considered as evidence on this motion.

[4] The Consulting Agreement contains two section 2.01s, however, only the section 2.01 quoted above is at issue in this proceeding.

[5] Master Muir ordered JGC to review and produce all relevant email messages because it was “obvious” that email messages had not been produced. JGC’s counsel subsequently advised Cara that no further email were located.

[6] Neither Mr. Ganz nor Mr. Smith could provide a more specific date.

[7] Cara’s request for the file of JGC’s lawyer was refused.

[8] The fact that the plaintiff in this proceeding is JGC and not Mr. Ganz personally does not preclude it from making a claim as a dependant contractor: [Caradoc Power Line Ltd. v. Southwest Middlesex, [2003] O.T.C. 537], at paras. 19-20.

[9] The case that JGC relies upon, Leerdam v. Stirling Douglas Group Inc. (1999) 87 A.C.W.S. (3d) 77 (Ont. Sup. Ct.), deals with a dependent contractor and does not support its position. In that case, the plaintiff’s claim for common law reasonable notice was dismissed and the contractual notice provision was found to apply.

[10] In dismissing the bulk of JGC’s requests for production, Master Josefo noted that in stating that the summary judgment hearing would not be delayed, JGC’s counsel expressed the view that JGC “had all the production it needed to proceed to the summary judgment motion[.]”