Court File and Parties

CITATION: Davenport v. Hudson's Bay Company, 2007 ONCA 399

DATE: 20070528

DOCKET: C46038

COURT OF APPEAL FOR ONTARIO

LASKIN, MOLDAVER and SHARPE JJ.A.

BETWEEN:

GARY DAVENPORT

Applicant (Respondent)

And

HUDSON’S BAY COMPANY

Respondent (Appellant)

Counsel: Christopher G. Riggs, Q.C. for the appellant Alan J. Lenczer, Q.C. for the respondent

Heard: May 24, 2007

On appeal from the judgment of Justice Edward Belobaba of the Superior Court of Justice dated September 11, 2006.

ENDORSEMENT

[1] We agree with the application judge that, in view of the change of control, the respondent is entitled to the full benefit of clause 8(2)(a) of the appellant’s Mid-Term Incentive Plan (“MTIP”) and that the respondent’s entitlement is not limited to an amount to be calculated pro rata to active employment pursuant to clause 8(2)(c).

[2] We do not accept the submission that by finding that clause 8(2)(a) “trumps” the other parts of clause 8(2), the application judge erred by failing to apply the principle that the terms of the MTIP should be read as a whole with every provision of the document being given full effect. As we read his thorough and well-crafted reasons, the application judge found that, given the change of control, clause 8(2)(a) was the governing provision and that clause 8(2)(c) simply had no application. We see no error in that interpretation.

[3] The clause 8(2)(c) pro-rata payout formula ensures that an involuntarily terminated employee gets a pro-rata benefit for share units that have not vested. Here, the respondent remained a participant and, by virtue of clause 8(2)(a), the change of control triggered an actual and immediate vesting of the share units. As the respondent’s share units did vest, he did not need the protection of clause 8(2)(c), nor does that clause cut back or qualify the actual vesting of the share units pursuant to clause 8(2)(a).

[4] As this is sufficient to dispose of the appeal, we need not consider the submission relating to the application of the contra proferentem principle to this case.

[5] Accordingly, the appeal is dismissed with costs in the amount agreed to by the parties, namely $7500 inclusive of disbursements and GST.

“J.I. Laskin J.A.”

“M. Moldaver J.A.”

“Robert J. Sharpe J.A.”