This is an appeal from a summary judgment concerning the interpretation of a Share Purchase Agreement (SPA) and related employment agreements.
The dispute arose after the appellants (purchasers of a business) furloughed one of the respondents (sellers/employees) due to the COVID-19 pandemic, which the respondents asserted was a constructive dismissal.
The SPA included an "Accelerated Provision" for a capital payment if an employee was terminated without cause, and an "Unprofitable Quarter Provision" allowing termination for cause without penalty.
The motion judge found constructive dismissal without cause, triggering the Accelerated Provision.
The Court of Appeal dismissed the appeal, upholding the motion judge's interpretation that the appellants had not exercised their option to terminate for cause under the Unprofitable Quarter Provision, and that their actions constituted a termination without cause, thereby triggering the payment.
The court emphasized deference to the motion judge's contractual interpretation and rejected arguments of commercial absurdity.