Court of Appeal for Ontario

Date: 2017-06-30 Docket: C63056

Judges: LaForme, Hourigan and Paciocco JJ.A.

Between

Sanchin Bakshi Plaintiff (Appellant)

and

Global Credit & Collection Inc. Defendant (Respondent)

Counsel

For the Appellant: John E. Callaghan and Kenneth Alexander

For the Respondent: David Milosevic and Caroline Garrod

Heard: June 27, 2017

Appeal

On appeal from the order of Justice Edward P. Belobaba of the Superior Court, dated November 11, 2016, with reasons reported at 2016 ONSC 4610.

Reasons for Decision

Background

[1] The appellant, Sachin Bakshi, was one of several hundred debt collectors whom the respondent, Global Credit & Collection Inc., laid off when the respondent lost its contract with its most important client, Capital One. After the lay-offs, Capital One and the respondent entered into a settlement agreement (the "Settlement Agreement") in which Capital One agreed to pay $6.675 million to the respondent in exchange for a broad mutual release of claims. The appellant became representative plaintiff in a class action in which the class of debt collectors sued the respondent. He alleged that the respondent had breached part of each class member's employment contract (the "Commission Agreement") by failing to pay commissions on the payment made under the Settlement Agreement.

[2] After certification of the class proceeding, the respondent and the appellant each brought motions for summary judgment on the common issues. The motion judge awarded summary judgment in the respondent's favour and thereby dismissed the class action.

[3] The appellant appeals from the summary judgment order, alleging that the motion judge erred in: (1) interpreting the Commission Agreement as disentitling him from receiving any commissions while laid-off; (2) interpreting the payment under the Settlement Agreement as reflecting a settlement of the respondent's potential damages claim for extraordinary expenses and defamation; and (3) holding that a motion for summary judgment was an appropriate procedure for resolving the common issues in the class action.

[4] We are not persuaded that the motion judge made any reversible error.

Standard of Review

[5] Before turning to the errors alleged by the appellant, it is important to take note of the applicable standard of review. Neither the Commission Agreement nor the Settlement Agreement are standardized contracts. The interpretation of these agreements will have no impact beyond the interests of the parties before the court and we are not satisfied that there are any extricable questions of law. Accordingly, the standard of review is a palpable and overriding error: Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2015] 2 S.C.R. 23, at paras. 21-26.

Interpretation of the Commission Agreement

[6] With respect to the interpretation of the Commission Agreement, the appellant submits that the motion judge overlooked the fact that he remained an employee of the respondent during his temporary lay-off. He relies on s. 56(4) of the Employment Standards Act, 2000, S.O. 2000, c. 41, in support of his position that the "Notice of Temporary Lay-off" he received from the respondent did not terminate his employment because the respondent did not specify a recall date and promised to continue to provide employment benefits to him. Given that he remained employed during the temporary lay-off, the appellant submits that the motion judge erred when he reasoned that the employment contract did not entitle him to commissions during periods when he was not "working the account."

[7] We do not accept this argument. We agree with the submission of the respondent that the motion judge did not dismiss the claim under the Commission Agreement based on a finding that a collector had to be employed or actively working an account to be entitled to commissions. The dispositive finding was that a collector had to exceed a "breakeven" financial target set by the respondent to be entitled to commission, and a laid-off employee could not possibly be collecting monthly payments sufficient to exceed the monthly "breakeven" requirement. Exceeding one's "breakeven" multiple was a condition of commission entitlement under the Commission Agreement. It required at a minimum, collection of three times an employee's salary. The commissions were not "earned" because the employees could not comply with that condition as they were not engaged in collection. We see no palpable and overriding error in the motion judge's analysis on this point. Accordingly, there is no basis for appellant interference.

Interpretation of the Settlement Agreement

[8] The motion judge found that the Settlement Agreement was a settlement of "a potential damages claim for 'extraordinary expenses' and defamation that the respondent was actively considering," arising out of a lawsuit the respondent was threatening based on Capital One's conduct leading to the severance of their business relationship: see para. 33 of his reasons. The motion judge acknowledged that Capital One's recitation in the "consideration" provision stated that the $5.7 million was payment for "US and Canadian Card payments." He also referred to a statement by Capital One that in offering this payment it had used the present value of the amount that the respondent would have earned on its U.S. and Canadian accounts with Capital One had Capital One not terminated their relationship. However, he concluded that a reasonable interpretation of Capital One's statement was merely that Capital One had used that "formula" for its own internal book-keeping purposes in quantifying what it would be prepared to pay by way of settlement.

[9] The appellant submits that the motion judge erred in his interpretation of the Settlement Agreement by considering evidence tendered by the respondent regarding its subjective intent in entering into the contract and in not recognizing that there was no admissible evidence before him that suggested in any way that Capital One viewed the settlement as being for defamation or extraordinary expenses. It is the appellant's submission that properly interpreted the payment provided for in the Settlement Agreement was designed to reflect the loss of revenue on the return of post-dated cheques to Capital One and, accordingly, it was to be included in the calculation of commissions.

[10] In our view, it is unnecessary to consider these submissions. Even if the Settlement Agreement could be interpreted as including a payment for returned post-dated payments, given our conclusion on the first issue that the class members had not "earned" any commissions, they would not be entitled to receive any commissions on such a payment.

Appropriateness of Summary Judgment

[11] Finally, we are not persuaded that the motion judge erred in determining this case on the basis of a summary judgment motion. It was the appellant's counsel who wrote to the motion judge to state that the parties agreed that the motion judge had sufficient evidence before him to decide whether all or any part of the Settlement Agreement was for commissions on post-dated payments. The appellant never argued in the court below that summary judgment was inappropriate. Indeed, he brought his own motion for summary judgment of the common issues.

Disposition

[12] The appeal is dismissed. The respondent as the successful party is entitled to its costs of the appeal, which we fix at the agreed upon sum of $20,000, plus disbursements.

"H.S. LaForme J.A."

"C.W. Hourigan J.A."

"David M. Paciocco J.A."