CITATION: MacNeil v. Dana Canada Corporation, 2009 ONCA 343

DATE: 20090429

DOCKET: C49253

COURT OF APPEAL FOR ONTARIO

Juriansz, MacFarland and Watt JJ.A.

BETWEEN:

Joe MacNeil

Plaintiff (Respondent)

and

Dana Canada Corporation

Defendant (Appellant)

Michael A. Hines and Frank Cesario for the defendant(appellant)

Bradley J. Troup for the plaintiff (respondent)

Heard and released orally: April 17, 2009

On appeal from the judgment of Justice J.E. Sheppard of the Superior Court of Justice, dated July 16, 2008.

ENDORSEMENT

[1] The appellant, Dana Canada Corporation, appeals from the trial judgment awarding damages to the respondent in the amount of $241,643.83 for breach of contract. The trial judge concluded that the respondent accepted the appellant’s offer of an early retirement severance package, which the appellant then refused to make available to him.

[2] The trial judge found that the appellant’s offer of early retirement was embodied in two documents: Structural Solutions Severance Plan for Management and Severance Plan for Management Structural Solutions Division, which he attached to his judgment. He found that these documents made “a simple and straightforward and unconditional” offer to the respondent that was open to him to accept to result in a binding contract.

[3] In our view, the trial judge erred in construing these documents. The first document stated that “employees who are eligible for retirement should seek guidance and information about alternatives from the Human Resource’s Department”. This alone indicated that this was no simple, straightforward and unconditional offer. Rather, it showed that employees eligible for retirement should explore their alternatives with the Human Resources Department. As the respondent was eligible for retirement and had indicated he planned to retire, there was no unconditional offer to him. Whether he had given irrevocable notice of his retirement is beside the point.

[4] While it is unnecessary to say more, we consider it plain and obvious that an objective reasonable person, in the position of the respondent and knowing what the respondent knew, could not have understood these documents to make an unconditional offer of early retirement for him to accept unilaterally. He knew that the documents were created to enable him to explain to his subordinates the company’s program to achieve a 10% reduction of the Canadian workforce. In-chief, he said that manpower reduction was the purpose of the whole program. He knew he would be replaced because the appellant had started the process to replace him and he, in fact, had participated in that process.

[5] The trial judge, while stating the correct test of objective contract formation at one point, in his reasons, focussed on the plaintiff’s subjective understanding. The trial judge said “it was not unreasonable for the plaintiff to believe that upon Mr. Servos receiving the plaintiff’s acceptance there would be a binding agreement”. If the trial judge had maintained as his focus what an objective reasonable person would believe, he would have concluded that there was no binding agreement.

[6] The appeal is allowed and the action is dismissed. Costs are fixed in the amount of $12,500 inclusive of GST and disbursements.

“R.G. Juriansz J.A.”

“J. MacFarland J.A.”

“David Watt J.A.”