COURT OF APPEAL FOR ONTARIO

DATE: 20050726

DOCKET: C42008

RE: ALLAN MURRAY (Plaintiff (Respondent)) – and – XEROX CORPORATION INC. (Defendant (Appellant))

BEFORE: GILLESE, LaFORME and ROULEAU JJ.A.

COUNSEL: John A. Campion for the appellant

W.A. Kelly Q.C. for the respondent

HEARD: July 20, 2005

On appeal from the judgment of Justice A. Hoy of the Superior Court of Justice dated May 31, 2004.

E N D O R S E M E N T

[1] This is an appeal from a judgment in which the trial judge held that pursuant to an Incentive Agreement, the respondent was entitled to incentive stock units upon early retirement. The trial judge identified the issue as being, “whether [the respondent] commenced early retirement with the approval of a [specific CEO], within the meaning of the Agreement” (para. 3). The trial judge found on the facts that the agreement was a form of contract of adhesion (paras. 63 and 64) and interpreted the disputed clause in the manner more favourable to the respondent.

[2] The core of the appellant’s appeal is that the trial judge erred in law by applying what amounts to the legal principle of contra proferentum without first having tried to resolve the ambiguity in the section by considering factors such as: relevant background, the purpose of the document, the entirety of the document, and what the parties reasonably would have understood the words of the document to mean. We disagree.

[3] It is noteworthy that the arguments on this core issue were essentially the same as those advanced by the appellant at trial as appears from the trial judge’s reasons. The trial judge summarized the facts including the relevant background, the commercial purpose, and the context. She then identified the applicable law and, applying the law to the facts correctly, held that the contract was one of adhesion: See Davies v. Zurich Life Insurance Co. of Canada (1981), 39 N.R. 457 (S.C.C.).

[4] Having identified the type of contract before her, the trial judge then went on to make findings of fact from the evidence presented at trial. It is clear to us that the conclusion reached by the trial judge on the meaning of the impugned words was informed by an appreciation of the factual circumstances within which the agreement arose and the commercial purpose of the agreement. In our view, the trial judge adopted an interpretation of the impugned words that accomplished the purpose and was consistent with the applicable legal doctrine.

[5] Given our decision on this core issue, we find it unnecessary to address the remainder of the appellant’s submissions. Accordingly, we find no basis for interfering with the trial judge’s decision, and the appeal is dismissed.

[6] The respondent did not pursue his cross-appeal on the trial judge’s findings on the issue of damages. We think this was a correct concession. The cross-appeal is dismissed.

[7] Finally, the respondent is entitled to costs of the appeal in the all-inclusive agreed upon amount of $3,500.

“E.E. Gillese J.A.”

“H.S. LaForme J.A.”

“Paul Rouleau J.A.”