COURT OF APPEAL FOR ONTARIO

CITATION: Antunes v. Limen Structures Ltd., 2016 ONCA 509

DATE: 20160624

DOCKET: C60563

MacPherson, Sharpe and Miller JJ.A.

BETWEEN

John Antunes

Plaintiff (Respondent)

and

Limen Structures Ltd.

Defendant (Appellant)

Arnold Schwisberg, for the appellant

J. Van Wiechen, for the respondent

Heard: June 21, 2016

On appeal from the judgment of Justice Carole J. Brown of the Superior Court of Justice, dated June 2, 2015.

ENDORSEMENT

[1] The appellant Limen Structures Ltd. appeals the judgment of C. Brown J. of the Superior Court of Justice dated June 2, 2015. In the judgment, the trial judge awarded the respondent $105,228.54 in damages for wrongful dismissal and $500,000 in damages for the non-delivery of shares in the appellant pursuant to the employment contract. The appellant appeals the second component of this judgment.

[2] The appellant contends that the $500,000 in damages was both a palpable and overriding error of fact and an error of law. Central to both submissions is the assertion that, at trial, there was no evidence of the liquidity of the shares of the appellant that could possibly ground the $500,000 amount.

[3] We do not accept the appellant’s submissions. There are two major defects in them.

[4] First, the issue as to the liquidity of the shares is a new issue not raised in the evidence or argument at trial.

[5] Second, the appellant called no evidence at trial.

[6] The Employment Contract explicitly dealt with the shares issue:

3. Company Share: John Antunes shall be issued 5% of the Company shares at the start of the employment contract….

[7] The respondent testified that Antonio Lima, the appellant’s President and the signatory of the Employment Contract, told him that the appellant was worth $10,000,000. This would make the 5% share component of the Employment Contract worth $500,000.

[8] At trial, the appellant called no evidence on this or any other issue. The trial judge reasoned:

[70] No one was called from the defendant company to testify. Critically, Mr. Lima, with whom Mr. Antunes had negotiated his employment and the employment contract, and who would have direct knowledge of the negotiations and discussions, was not called. Further, while undertakings were requested at examinations for discovery as regards Mr. Lima’s knowledge concerning the negotiations and specific aspects thereof in issue in this action, no answers were given to those undertakings/advisements. Nor was there any documentary evidence as regards negotiations concerning the terms of his employment, or to refute the evidence of the plaintiff. Mr. Lima would have been a key material witness in this case, given his involvement in the negotiation of the employment agreement. The evidence indicates that he was the only person from the defendant corporation who negotiated the employment contract with the plaintiff or spoke to him prior to his hiring. The only reason given to the Court for his not being called was that he was president of the company. I do not accept this as a reason for his not being called as a witness. Only the transcript of the examination of Mr. Micciola, Controller-Finance & Operations, was in evidence.

[71] I draw an adverse inference against the defendant corporation regarding the failure to produce Mr. Lima as a witness. He was a material witness with direct and relevant knowledge of the negotiations regarding the employment agreement.

[72] In all of the circumstances, and based on the evidence before me, I accept the evidence of Mr. Antunes as regards the representations made to him. I further accept his evidence that he relied on these representations in accepting the offer of employment. While the defendant argues that such reliance is not reasonable, as the plaintiff did not request supporting documentation as to the financial circumstances of the company and knew or should have known that the company was not in such good financial circumstances, I do not find the plaintiff’s reliance to be unreasonable. Mr. Antunes testified that he knew or believed, given his familial relationship with Mr. Lima, that Mr. Lima was a successful businessman with a successful company. Further, and for the same reason, he trusted Mr. Lima’s representations.

[9] We agree with this reasoning.

[10] The appeal is dismissed. The respondent is entitled to his costs of the appeal and motion fixed at $11,000, inclusive of disbursements and HST.

“J.C. MacPherson J.A.”

“Robert J. Sharpe J.A.”

“B.W. Miller J.A.”