Court File and Parties
Citation: Eady v. Treklogic Technologies Inc., 2009 ONCA 710 Date: 2009-10-09 Docket: C48871 Court of Appeal for Ontario
Before: Weiler, MacPherson and MacFarland JJ.A.
Between:
David Eady Plaintiff (Respondent and appellant by cross-appeal)
and
Treklogic Technologies Inc., Treklogic Inc. and Advanced Solutions Group, Inc. Defendants (Appellants and respondents by cross-appeal)
Counsel: Daniel Chitiz and Tamara Ramsey, for the appellants Patrick F. Schindler, for the respondent
Heard: September 23, 2009
On appeal from the judgment of Justice Thea P. Herman of the Superior Court of Justice dated April 30, 2008.
Endorsement
[1] The trial judge’s finding that the respondent’s consulting contract was repudiated without cause by the appellant is amply supported by the evidence.
[2] The trial judge found that while there were staff complaints about the respondent’s lack of communication and support, there were never any warnings nor opportunities for improvement given at any time before the meetings of June 29 and 30.
[3] On June 30, Mr. McKinnon was highly critical of Mr. Eady in front of staff. He was told his job responsibilities had changed and he was to focus only on ASG sales. In such circumstances the trial judge’s finding that his responsibilities at Brainhunter were taken away implicitly is the only reasonable conclusion on the evidence.
[4] The appellant submits that the trial judge erred in law in holding that it terminated the respondent’s consulting contract by way of anticipatory breach. Treklogic does not take issue with the trial judge’s formulation of the test for anticipatory breach: namely whether Mr. Eady was deprived of substantially the whole of the benefit of the contract. What Treklogic submits is that the trial judge failed to consider:
that the change in Mr. Eady’s responsibilities was a bona fide response to serious issues with Mr. Eady’s employment; and
these changes could not, in any case, be a breach of the agreement because Mr. Eady’s responsibilities at that time were not contemplated by the consulting agreement.
[5] The change in the consulting agreement involving a transfer from the Treklogic side to the Brainhunter side of the company was done on consent of both parties. It is not now open to Treklogic to say that the further transfer back to ASG in a lesser capacity was merely a return to what was contemplated by the consulting agreement. More importantly, Treklogic did more than realign Mr. Eady’s responsibilities when it told him to focus on ASG sales; pursuant to the consulting agreement he was to be the president of ASG. Mr. Eady protested on June 30 that Treklogic had breached their agreement and his lawyer wrote to Mr. McKim of Treklogic on July 2 saying that he had repudiated the agreement and requesting written confirmation that the express terms of the consulting agreement would be observed. Treklogic did not reply and say that there had been no repudiation. Instead McKimm, the president of Treklogic replied by voicemail and said Eady would not be getting the letters requested and that “there is no reason for me to give you back responsibilities …”
[6] The consulting agreement specifically contemplated termination for cause – these provisions were either inapplicable or not proved by the appellant. In any event the trial judge concluded that even if Mr. Eady’s conduct could be considered to give rise to cause, the failure to give any warning or reasonable opportunity to improve his performance was fatal to the appellant’s claim and we agree.
[7] In our view on the particular facts there was no duty to mitigate. The consulting agreement was, as the trial judge found, part of a package deal whereby the respondent sold his shares in the company he had developed to the appellant in return for which he received a consulting agreement, shares and warrants in the appellant company.
[8] The appeal is dismissed.
[9] By way of cross-appeal the respondent (appellant by cross-appeal) argues that because he was never given written notice of termination he was entitled to 24 months of payments, being for the balance of the term of his consulting contract in which he characterizes as a debt owed.
[10] Any debt, if there was one, flowed from the contract which had been repudiated. The language of the contract is clear and it specifically contemplates 12 months of payments each in the sum of $10,000 to be paid immediately or in 12 instalments in the event of termination without cause. Any other interpretation would render that clause meaningless.
[11] The cross-appeal is dismissed.
[12] Costs to the respondent, of the appeal less the costs of the cross-appeal, fixed in the sum of $17,000 inclusive of disbursements and G.S.T.
“K.M Weiler J.A.”
“J.C. MacPherson J.A.”
“J. MacFarland J.A.”