COURT FILE NO.: 07-CV-335331PD3

DATE: 20130408

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Eugene Duynstee

Plaintiff

-and –

Sobeys Inc.

Defendant

Ellen Bessner, for the Plaintiff

Tom Moutsatsos/Craig Lawrence,

for the Defendant

HEARD: October 22-26, 2012 and February

4-6, 2013

Allen J.

R E A S O N S F O R J U D G M E N T

A. BACKGROUND

1. Mr. Duystee’s Employment Background

[1] The plaintiff Mr. Duynstee commenced a wrongful dismissal action against the defendant Sobeys Inc. in August 2007. He was terminated without cause on January 16, 2003 at 48 years of age. He originally claimed entitlement to a 20.5 month notice period but on closing, counsel indicated he was seeking an 18 month notice period. He seeks total damages of $788,000 which includes salary, bonus entitlements and various benefits.

[2] Mr. Duynstee has been a chartered accountant since 1980. Before working for Sobeys he had been employed with other retail companies in the capacities of controller, accountant, CFO and Vice-President. He worked for Holt Renfrew, a retail clothing business, for three years from 1993 to 1996 as a Sr. VP and CFO. From 1986 to 1996 he was employed by Loblaws retail food chain in the positions of Sr. VP Finance, CFO and controller. From 1978 to 1983, Mr. Duynstee worked at KPMG as an accountant and supervisor.

[3] Mr. Duynstee began working for Sobeys on December 6, 1999. Set out as follows are the dates and positions Mr. Duynstee held with Sobeys:

• from December 6, 1999 to June 20, 2001 under a consulting contract with Sobeys through his consulting firm KPM Enterprises Inc.
• from June 21, 2001 to March 6, 2002 as President Operations, Sobeys Ontario;
• from March 6, 2002 to January 16, 2003 as Sr. VP, Strategic Initiatives;

2. Termination

[4] In his President position, Mr. Duynstee received an annual base salary of $300,000 which remained unchanged when he became Sr. VP. Mr. Duynstee also received income under various management incentive programs: the Leadership Committee award, (“the LC award”); the Annual Management Incentive Plan award, (“the AMIP award” and “the SMART bonus”); and the Long Term Incentive Plan award (the “LTIP award”). In addition, Mr. Duynstee enjoyed a medical/dental plan, a pension plan, life and disability insurance, payment of his professional fees and an automobile allowance.

[5] Mr. Dynustee received notice on January 16, 2003 and served two weeks working notice. Termination therefore was effective January 31, 2003. He was offered a 6.5 months’ notice period.

[6] Mr. Duynstee received the following remuneration at termination:

• salary continuation and participation in bonus plans during the 6.5 months’ notice period;
• entitlement to any vacation owed at termination;
• an LC award of $100,000;
• an AMIP award of $134,020 (not including the SMART bonus);
• no SMART bonus;
• an LTIP award of $54,000;
• no pension payment since pension maximum of $15,500 had been reached in early 2003;
• employer’s contribution to the medical/dental plan made on a 50/50 basis;
• employer’s contribution to life insurance plan premium made on a 50/50 basis;
• an automobile allowance of $4,526.60 (for remaining 5 months of notice period) (annual value = $10,863.84); and
• $7,500 for expenses for job search increased to $15,000 on request by Mr. Duynstee.

3. Description of Bonus and Incentive Plans

(a) The Fiscal Year

[7] Important to determining various entitlements is an understanding that the fiscal year for Sobeys runs from the first Saturday in May to the first Saturday in the following May. So the days of the month for the start and end dates for a fiscal year would differ each year. The designation for each fiscal year is the year end. For instance, the 2003 fiscal year runs from May 2002 to May 2003. Mr. Duynstee was terminated in the 2003 fiscal year on January 16, 2003 which after serving working notice took effect on January 31, 2003.

(b) The Annual Management Incentive Plan

[8] The AMIP provided incentives to executives and other senior management to earn annual bonuses for achieving corporate profit targets and objectives. The award was based on sales and profits at 80 to 100% of base salary. Management retained the discretion to approve the percentage of salary each year. The award is paid out at different levels each year based on a percentage range. For instance, in fiscal year 2002 when Mr. Duynstee was President Operations, Sobeys Ontario, the Level 7 award was calculated at 44.84% of salary and in the fiscal year 2003 when Mr. Duynstee became Sr. VP, Strategic Initiatives, the Level 5 award was calculated at 21.23% of salary.

[9] Sometime in 2002 another component was added to the AMIP award called the SMART objectives. The letters of the acronym stand for Specific Measurable Agreed upon Realistic and Timebound objectives. This bonus is calculated on 5% of base salary based on achieved sales and profit targets and is payable when three out of five of the SMART objectives are met.

(c) The Long Term Incentive Plan

[10] LTIP has two components, an award element and an interest-free loan element calculated on the executive’s base salary. At the relevant time, the amount of the loan was calculated at twice the executive’s salary. The LTIP also provided executives an opportunity to earn annual cash awards based on the company’s progress. The award was paid at different levels, each level based on percentage ranges of the executive’s salary. For instance, in the fiscal year 2002 when Mr. Duynstee was in the President position, the Level 5 award was calculated at 40% of salary and in the fiscal year 2003 when Mr. Duynstee became Sr. VP, the Level 3 award was calculated at 20% of salary.

[11] An Executive Stock Purchase Plan (“ESPP”) allowed executives to purchase common shares in the company which were held in trust to secure the loan. The executive could repay the loan through awards earned under the LTIP award.

(d) The Leadership Committee Award

[12] The Leadership Committee (“LC”) was comprised of seven or eight top Sobeys executives. A Leadership Committee award (“LC award”) was an additional award of $200,000 available to executives in the LC if the company achieved a share value of $2.15 per share. Once Mr. Duynstee became President Operations, Sobeys Ontario in June 2001, he became a member of the LC. There is no written plan or other written text setting out the terms of the LC award. This award was only offered in the fiscal year 2002.

[13] There is a dispute as to whether the company had discretion to grant the LC award or not and as to the amount that would be granted. Mr. Duynstee’s view is that it was to be a one-time all or none award and that all members of the LC would receive the $200,000 if the $2.15 target was met. Sobeys’ position, on the other hand, is that the company had discretion over whether members received the award and over the amount to be paid out to members. Mr. Duynstee received a $100,000 LC award on termination.

B. THE ISSUES

[14] The main issue is:

1. What amount of remuneration in terms of base salary, incentive bonuses and benefits is Mr. Duynstee entitled to on termination?

An answer to that question depends on the determination of the following sub-issues:

(a) For what period did Mr. Duynstee work for Sobeys in the capacity of an employee?

(b) What would be a reasonable notice period?

(c) Based on the notice period determination:

(i) What is Mr. Duynstee’s base salary entitlement?

(ii) What is Mr. Duynstee’s AMIP award entitlement?

(iii) *Sobeys does not dispute Mr. Duynstee’s is entitled to a SMART in the amount of $15,000.

(iv) What are Mr. Duynstee’s LTIP award entitlements?

(v) What is Mr. Duynstee’s LC award entitlement?

(vi) What are Mr. Duynstee’s group medical and life insurance benefits entitlements?

(vii) What is Mr. Duynstee’s pension plan entitlement?

(viii) Is Mr. Duynstee entitled to any amount for an automobile?

(ix) Is Mr. Duynstee entitled to an amount for professional fees?

(d) Is Sobeys entitled to a set off against an overpayment of $63,690 Sobeys claims in relation to the AMIP award for the fiscal year 2003?

(e) *Sobeys does not dispute Mr. Duynstee’s claim that he made reasonable efforts to mitigate his loss.

2. How should litigation costs be assessed?

C. ANALYSIS

1. Factors to Consider in Determining Reasonable Notice

(a) Basic Principles

[15] An employee dismissed without notice is entitled to reasonable notice and in absence of reasonable notice, they are entitled to pay in lieu. That is, an employee is entitled to recover the value of all losses arising from not being given reasonable notice of termination of employment [Adjemian v. Brook Crompton North America [2008 CarswellOnt 3304 (Ont. S.C.J.)].

[16] The determination of an appropriate notice period is a fact-driven exercise. There is no definitive formula that applies to all cases. An early case of the Ontario High Court offers some guidance on factors that can be considered:

There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of services of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant. [emphasis added]

[Bardal v. Globe & Mail Ltd. (1960), 1960 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.J.)]

[17] The Supreme Court of Canada held the factors laid down in Bardal were not intended to be exhaustive. The identification of other factors by subsequent courts in deciding the appropriate notice period has depended on the circumstances of each case [Wallace v. United Grain Growers Ltd. (1997), 1997 332 (SCC), 152 D.L.R. (4th) 1 (S.C.C.), at para. 83].

(b) Length of Mr. Duynstee’s Employment

[18] An important factor in fixing the period of reasonable notice is the length of service.

Typically, courts have awarded longer notice periods for longer term employees.

(I.) Duration of Mr. Duynstee’s Status as an Employee

[19] As noted earlier, Mr. Duynstee worked for Sobeys in three different capacities over about three years. From December 6, 1999 to June 20, 2001, he was retained by Sobeys under a consulting agreement through his consulting firm, KPM Enterprises Inc. From June 21, 2001 to March 6, 2002 he was hired as President Operations, Sobeys Ontario and from March 6, 2002 to January 16, 2003, as Sr. VP, Strategic Initiatives.

[20] Mr. Duynstee takes the position that the court should find he was an employee of Sobeys for the entire three year, 1 month and 25 day period and that his notice period should be determined in accordance with that period. That is, in Mr. Duynstee’s view he was an employee during the 18-month period of the consulting agreement.

[21] Sobeys’ position is that Mr. Duynstee was not an employee but rather an independent contractor for the 18 month period of the consulting agreement. In Sobeys’ view he was an employee only from June 21, 2001 to January 16, 2003 when he held the President and Sr. VP positions, a period of 19 months and 10 days.

[22] The importance of a determination on the length of Mr. Duynstee’s period as an employee is obvious since his rights and entitlements on termination are dependent on that finding, operating together with other factors.

(II.) General Principles

[23] Courts have long recognized the complexities in defining the relationships between employers and the persons who work for them ― that workers do not always simply fall into either the category of “employee” or “independent contractor”. The nature of a relationship is very much dependent of the facts of each case.

[24] For instance, the Court of Appeal in Carter v. Bell & Son (Canada) Ltd., 1936 75 (ON CA), [1936] O.R. 290 (Ont. C.A.) recognized the existence of an “intermediate” kind of relationship that falls between that of employee and independent contractor. Courts in those cases have implied an agreement to terminate the agreement upon reasonable notice. The “dependent contractor”, as this intermediate category of relationship has come to be known, is still recognized by our courts: [See for example: Conde v. Abrams Towing Services Ltd., [2001] O.J. No. 6067 (S.C.J.), appeal dismissed [2003] O.J. No. 504 (Ont. C.A.); Moseley-Williams v. Hansler Industries Ltd., 2008 57457 (ON SC); and Ross v. 413554 Ontario Ltd., [2008] O.J. No. 3381 (Ont. S.C.J.); Slepenkova v. Ivanov, [2007] O.J. No. 4708 (Ont. S.C.J.)].

[25] Montreal Locomotive raised the following question:

In this way in some cases it is possible to decide the issue by raising as the crucial question whose business is it? In other words by asking whether the party is carrying on the business, in the sense of carrying it on for himself or on his own behalf and not merely for a superior.

[Montreal v. Montreal Locomotive Works Limited, 1946 353 (UK JCPC), [1947] 1 D.L.R. 161 (P.C.)]

[26] Relationships between employers and those who work for them therefore fall along a spectrum with those more clearly defined as employer/employee on one end, and on the other end, those more easily defined as independent contractors. Courts − considering whether a position falling between the two ends of the spectrum is more in the nature of a position on one end of the spectrum or the other − have developed tests to guide their determinations.

(III.) Application of Principles Set Down in Belton

[27] The Ontario Court of Appeal in Belton v. Liberty Insurance Co. of Canada 2004, 6668 (Ont. C.A.), relying on Doyle v. London Life Insurance Co. 1985 301 (BCCA), leave to appeal to S.C.C. refused (1986), 64 N.R. 318, addresses the criteria courts may consider in determining the category of relationship that exists between employers and those performing duties for them. The court looked at:

(a) whether or not the agent was limited exclusively to the service of the principal;

(b) whether or not the agent is subject to the control of the principal, not only as to the product sold but also as to when, where and how it is sold;

(c) whether or not the agent has an investment or interest in what are characterized as the "tools" relating to his service;

(d) whether or not the agent has undertaken any risk in the business sense or, alternatively, has any expectation of profit associated with the delivery of his service as distinct from a fixed commission;

(e) whether or not the activity of the agent is part of the business organization of the principal for which he works. In other words, whose business is it?

[28] Those factors are weighed and considered together. There is no set number of factors that must be present. The tests are not inflexible. They are tests that inquire into the overall nature of the relationship between the persons doing the work or performing the services and the person or organization for which the worker’s services are performed. The court’s inquiry therefore does not end with how the relationship is described in a written document or with what the parties’ original intention might have been.

[29] A full appreciation of the nature of Mr. Duynstee’s relationship with Sobeys lies in, among other things, the business and organizational context in which Mr. Duynstee performed his duties and the nature of his interaction with Sobeys during the course of the contract.

1. Was Mr. Duynstee limited exclusively to the service of Sobeys?

[30] Before Mr. Duynstee began his relationship with Sobeys he owned KPM Enterprises, a sole proprietorship through which he contracted out his consulting services. He testified that when he approached Sobeys in November 1999 for a position, he was seeking full time employment. A contract of employment was drafted dated November 18, 1999 setting out Mr. Duynstee’s responsibilities. Mr. Duynstee however did not sign that agreement.

[31] Mr. Duynstee testified that the original idea was for him to be a contract employee. However, a discussion ensued between Mr. Duynstee and Mr. Bruce West, a President at Sobeys, and it was mutually agreed that the agreement be re-cast as a consulting agreement between Sobeys and KPM Enterprises (“the Consulting Agreement”). The Consulting Agreement, dated December 5, 1999, was signed by both Mr. Duynstee and Mr. West. The term of the contract was from December 6, 1999 to December 31, 2000. The term was later extended to June 20, 2001. Mr. Duynstee’s title was “Executive Consultant”. The nature of the agreement is described in the following paragraph:

Consulting Agreement

This agreement constitutes an agreement for consulting services and is not employment. Sobeys is contracting for the services of KPM Enterprises as an independent consultant and it is agreed that this agreement not be deemed one of employment.

[32] As distinct from the original plan for Mr. Duynstee, the express intent of both parties by the December 6, 1999 agreement was that Mr. Duynstee through KPM Enterprises would perform services as an independent consultant.

[33] Mr. Duynstee drafted an exclusivity agreement that was agreed to and signed by both parties on December 6, 1999 as an addendum to the Consulting Agreement. It provides as follows:

While consulting for Sobeys Ontario, KPM Enterprises agree [sic] to provide services exclusively for Sobeys Ontario. KPM Enterprises agrees to devote its full time and attention to such consulting services to Sobeys Ontario. Sobeys Ontario and KPM Enterprises agree to meet prior to the expiration of this contract to discuss a senior management role for the assigned consultant (Eugene Duynstee) with terms that are mutually acceptable to the parties.

[34] The exclusivity clause contemplates KPM Enterprises providing consultancy services solely to Sobeys for a pre-arranged fixed term, what turned out to be 1½ years. There is no evidence to show during the currency of the Consulting Agreement that Mr. Duynstee through his company performed services for any other person or company.

[35] This I find tends to place Mr. Duynstee on the more dependent end of the spectrum at least for the limited term of the Consulting Agreement.

2. Was Mr. Duynstee subject to Sobeys’ control?

[36] Sobeys retained Mr. Duynstee to provide services in relation to coordinating and implementing a review of Sobeys’ systems and operations and for the purpose of making recommendations with the objective of finding costs savings for the company.

[37] Important to note is that Mr. Duynstee did not take on a position that already existed withinSobeys. Sobeys had a particular need on a time-limited basis for services such as those offered by Mr. Duynstee. Mr. Duynstee was retained specifically to fulfill that need through the projects he was to carry out.

[38] Mr. Duynstee testified he attended work at Sobeys’ head office daily, five days per week, about 37½ to 40 hours per week, and occasionally worked a half day on weekends from home. Mr. Duynstee required access to confidential company information and systems which necessitated he devote most of his time working from the Sobeys premises. There is no evidence Sobeys set his hours of work. Sobeys provided him with an office space and telephone. He did not recall whether he used his own computer or one from Sobeys when he worked from the premises.

[39] Mr. Duynstee’s contact person in the company was Mr. West. The nature of their relationship was not such that Mr. West gave him day-to-day instructions. Mr. Duynstee did not attend monthly management review meetings as he did when he later took on the President and Sr. VP functions. Sobeys gave him a company objective and he implemented a plan to achieve it. He did so in a relatively independent manner. He set intermediate deadlines for completion within the designated deadline of the Consulting Agreement. It was never contemplated that this be an ongoing project.

[40] Mr. Duynstee met with Mr. West usually once per month to discuss the status of his work. While Mr. West provided Mr. Duynstee with staff to assist him with photocopying and other administrative tasks, Mr. Duynstee had no one reporting to him as became the case when he took on his executive functions. He testified that at times he attended company social events such as barbeques held outside in the parking area.

[41] The Consulting Agreement describes Mr. Duynstee’s pay as a consulting fee. He was paid a monthly consulting fee of $16,667. Mr. Duynstee was also entitled to bonuses at Sobeys’ discretion to be calculated at 10% of any annual net savings Sobeys gained from projects he initiated. Sobeys did not pay his professional fees as it did when he took on his senior executive roles.

[42] On Mr. Duynstee’s income tax returns for the years 1999 to 2001, he reported his earnings as business income earned as a self-employed consultant and he reported business expenses separately as deductions from income. This, Mr. Duynstee acknowledged as a benefit of reporting as an independent consultant as opposed to as an employee. In his senior executive positions, he reported income as an employee and as such was not entitled to deduct business expenses.

[43] Sobeys presented an analogy I found useful in assessing Mr. Duynstee’s relationship to Sobeys.

[44] While Mr. Duynstee was not performing the duties of an auditor, I find he functioned in a comparable way. Commonly, independent auditors working for chartered accountant firms contract out their services to businesses to perform audits on a time-limited basis. Because of their need for access to a company’s confidential financial information, an auditor’s function frequently requires work to be carried out on site from a company office, not unexpectedly equipped with a telephone. Company staff may be assigned to assist the auditor with such administrative tasks as photocopying. The auditor communicates with the company through meetings with the company finance department personnel from time to time to answer any audit concerns and to review the status of the audit. The auditor does not become a part of the organizational structure of the company but continues to perform their services as an agent or employee of his accountant firm.

[45] I find Mr. Duynstee’s role, while not identical to that of an auditor, it is sufficiently similar as to place Mr. Duynstee more on the independent end of the spectrum. It is fair to conclude from his arrangement with Sobeys that Mr. Duynstee was not under the control of Sobeys. He did not take on an existing position in the company but brought his consulting services through KPM Enterprises into the company for a special assignment set up by Sobeys; his duties involved a time-limited project which he initiated and implemented himself; he was not part of Sobeys’ organizational or reporting structure; and he was treated as a self-employed consultant for tax purposes.

[46] The intention was express from the start that Mr. Duynstee not be hired as an employee and I find that intention was carried out in practice. Standing in contrast to his consulting role is the change in his relationship to Sobeys once Mr. Duynstee was employed in his executive functions. I find what was contemplated by the consulting agreement on one side, and the changes in his relationship to Sobeys with his executive positions on the other side, establishes a bright line that distinguishes his period as an independent contractor. Adding to this conception is the fact that when he transitioned from his consulting role to his first executive role, he took on distinctly different tasks.

3. Did Mr. Duynstee have an investment in the “tools” of his service?

[47] Little evidence was led about the tools Mr. Duynstee used to provide services to Sobeys. There was a telephone in the office Mr. Duynstee used when working from headquarters. Mr. Duynstee used a computer. Sobeys gave no evidence they provided Mr. Duynstee a computer and Mr. Duynstee could not recall whether he used his own computer at work. Mr. Duynstee gave no evidence he used a Sobeys computer when he worked from home or used his home phone for business purposes. Unlike his arrangement when he took on the executive positions, there is no evidence Mr. Duynstee received a car allowance when he acted as a consultant. He submitted invoices to Sobeys for his expenses.

[48] There is no evidence of any investment by Mr. Duynstee in the tools of his service. This I find places Mr. Duynstee’s consulting role more on the independent side of the spectrum.

4. Did Mr. Duynstee assume any business risk or expect any profits?

[49] No evidence was led as to any business risk Mr. Dunystee assumed in the performance of the consulting services. Mr. Duynstee was paid a fixed monthly fee of $16,667. He was entitled to receive a bonus at Sobeys’ discretion if he achieved a certain savings target. In fact, in 2001, Mr. Duynstee was able to negotiate with his manager a $350,000 bonus. There was no profit sharing plan in place.

[50] The implication from the set of facts on this test is that Mr. Duynstee fell more on the independent contractor side of the spectrum.

5. Was Mr. Duynstee’s activity part of Sobeys’ business organization?

[51] I find it is clear from the facts that Mr. Duynstee’s activities during the currency of the Consulting Agreement were not part of Sobeys’ business organization. Again, he was retained on a time-limited basis to perform a specified task. He did not occupy an already existing position in the organization. He was not part of the organization’s chain of command. He had no one reporting to him and he was not subject to monthly management reviews. Mr. Duynstee continued during the Consulting Agreement to receive his pay and to charge his expenses through KPM Enterprises. In other words, his company continued to be the vehicle through which he operated and conducted his activities. He reported his income as a self-employed person and deducted his expenses from income for tax purposes. He was not subjected to the regular payroll deductions of a regular employee.

[52] Again, this test puts Mr. Duynstee on the independent contractor end of the spectrum.

6. Conclusion on the Length of Service as an Employee

[53] For all the reasons discussed above, balancing out the results of the tests, I find that Mr. Duynstee performed consulting services for Sobeys in the capacity of an independent contractor during the life of the Consulting Agreement from December 6, 1999 to June 20, 2001. Thus, only Mr. Duynstee’s period as President Operations, Sobeys Ontario and Sr. VP Strategic Initiatives from June 21, 2001 to January 16, 2003, a period of 19 months and 10 days, will be considered in determining the proper notice period.

(c) Mr. Duynstee’s Age

[54] An employee’s age at termination is recognized as a critical factor since the prospects of obtaining employment normally decreases with persons of a more advanced age. Mr. Duynstee was 48 years of age at termination. This is not a youthful age but neither is it on the elderly end of the age scale considered by the courts.

(d) Character of Employment

[55] In their assessment of the notice period, courts typically take into account factors such as the employee’s job status, the degree of specialization, and the nature and size of the industry. Courts have awarded longer periods of notice to presidents, vice-presidents and other senior executives. At the other end of the spectrum of job classifications are non-skilled and labouring positions. The employment context and other surrounding factors are central to a determination.

[56] The Ontario Court of Appeal considered the issue of the notice period for more senior executive employees. The court in those cases maintained the traditional view that longer notice periods are reserved for employees with more senior positions [Cronk v. Canadian General Insurance Co. (1995), 1995 814 (ON CA), 128 D.L.R. (4^th) 147 (Ont. C.A.); [Minott v. O’Shanter Development Company Ltd., 1999 3686 (Ont. C.A.)].

[57] In a more recent case, Love v. Acuity, the Ontario Court of Appeal considered the appropriate notice period for a high level executive in an accounting firm who had a relatively short 2.5 year period of employment with the firm. He reported directly to the CEO and had no staff that he managed. He earned an average income of approximately $633,548 per year and held a 2% equity stake in the company. Those features of the plaintiff’s position were important to the Court’s decision [Love v. Acuity Investment Management Inc., 2011 ONCA 130 (Ont. C.A.)].

[58] In Love v. Acuity, the court held that a short length of service is given less weight when dealing with very high-ranking employees. The Court emphasized the importance of assessing the availability of similar employment along with the other factors, In awarding a nine-month notice period, the Court of Appeal held:

In my view, the character of the appellant’s employment, viewed fully, and the challenge of finding similar employment both require a significantly longer period of notice. Giving appropriate weight to these factors, and keeping in mind the appellant’s age and short service I would set aside the 5 months awarded at trial and substitute a period of 9 months.

[Love v. Acuity Investment Management Inc., supra, para. 24]

[59] For 19 months and 10 days of Mr. Duynstee’s time with Sobeys, he was employed in senior executive positions. This must be factored into the assessment of reasonable notice.

(e) Availability of Employment

[60] The availability of employment having regard to the employee’s experience, training and qualifications, is an important factor in assessing the notice period. Love v. Acuity emphasized that the availability of similar employment is a factor that requires careful consideration along with the other factors. Mr. Love’s substantial annual compensation and equity share in the company were important aspects of his position making it more difficult to find a job to replace this remuneration. Again this pointed to a longer notice period. The Court of Appeal concluded:

In my view, the character of the appellant’s employment, viewed fully, and the challenge of finding similar employment both require a significantly longer period of notice. Giving appropriate weight to these factors, and keeping in mind the appellant’s age and short service I would set aside the five months awarded at trial and substitute a period of nine months.

[Love v. Acuity, supra, para. 24]

[60] While availability of employment influences the length of the notice period, it clearly would not be reasonable for it to be prolonged or extended indefinitely by virtue of the fact that it took a long time to find a position or by the fact that no positions are available.

[61] Courts have discussed the question whether executive level positions should automatically attract longer notice periods, as compared to more modest jobs, on the presumption that senior positions are more difficult to obtain. While the Court of Appeal in DiTomaso v. Crown Metal Packaging LLP, 2011 ONCA 469 (Ont. C.A.) concluded the notice period for lower positions should not be artificially capped, the court maintained the notion that executive employees should enjoy longer notice periods [See Cronk v. Canadian General, supra; Minott v. O’Shanter, supra; and DiTomaso v. Crown Metal, supra.].

[62] The availability of executive positions comparable to Mr. Duynstee’s President and Sr. VP positions with Sobeys is therefore a relevant consideration.

2. Determination on Reasonable Notice Period

(a) General

[63] Mr. Duynstee was 48 years of age when he was terminated. I have found that Mr. Duynstee worked with Sobeys in the capacity of an employee for just short of 20 months. Those factors and the executive nature of his position before termination and the restricted availability of such positions are factors to be considered.

[64] On closing argument Mr. Duynstee argued for 18 months’ notice. Sobeys argued a reasonable notice period is from six to ten months.

[65] The determination of an appropriate notice period is very much fact driven and contextual. The exercise involves applying the Bardal factors and other considerations to the particular facts of the case. While some cases have similar fact situations, no two cases are completely identical. Although previous cases provide useful guidance, the court in any particular case must take account of the particularities of the case before it and balance its findings on the Bardal and other factors to arrive at a notice period that is reasonably tailored to the circumstances.

(b) Mr. Duynstee’s Position

[66] Mr. Duynstee argues there is support in case law for an employee, employed two years or less, receiving 18 months’ notice period. He relies on the following cases.

[67] Schamborzki v. North Shore involved a woman age 46 who was employed as a senior executive at a hospital and was terminated after two years. The job market for her type of position was limited and it took her 30 months to find other employment. Her contract provided for a 14-month notice period which the court increased to 18 months due to a unique situation that required an employee in a prospective job to have a favourable relationship with the Ministry of Health. The circumstances of her termination adversely impacted the potential of such a good relationship [Schamborzki v. North Shore Health Region, [2000] B.C.J. No. 2148 (B.C.S.C.)].

[68] In Rummery v. Matthew the defendant entered into a new lumber retail business with the plaintiff. The plaintiff became the general manager of the store. The defendant unilaterally terminated the employment contract without notice after three months. The plaintiff was awarded an 18-month notice period. In awarding the 18 months, the court considered that the plaintiff had left a secure remunerative position with another lumber company and had to wait out a non-competition period before he could resume work in the field. An amount was also awarded for the oppressive conduct of the defendant [Rummery v. Matthews, 2001 MBCA 32, [2001] M.J. No. 78 (Man. C.A.)].

[69] In McFadden v. Brockville the plaintiff was terminated at age 46 without notice after 3 years’ employment as a VP finance and CFO of the defendant company. The court awarded a 15-month notice period. The court took into account the character of the plaintiff’s employment, his age, and the scarcity of the type of position he held. The fact the plaintiff was induced from his previous secure job was considered [McFadden v. Brockville Carriers Inc., [1998] N.B.J. No. 250 (N.B.Q.B.)].

[70] In Makhija the plaintiff, age 43, took on employment as head chemist with the defendant research facility and was terminated after 13½ months. The plaintiff was induced by the defendant to leave a secure federal government job with representations that employment with the defendant would be permanent. He was awarded 15 months’ notice [Makhija v. Lakefield Research, [1983] O.J. No. 1290 Ont. H.C.J.); aff’d by Ont. S.C.O. (C.A.), [1986] O.J. No. 5950]

[71] Mr. Duynstee argues there is also authority for granting 12 months’ severance pay to persons in situations similar to his.

[72] Kussman is a constructive dismissal case involving a plaintiff, age 47, who was employed with the defendant as VP Portfolio Development. He left his position after 15 months. His remuneration consisted of a base salary and entitlement to a sales bonus if he achieved a specified revenue target. He did not achieve the sales target, his salary was reduced and the revenue target was lowered. In awarding the 12-month notice period the court found the defendant fundamentally breached the employment contract [Kussman v. AT&T, [2000] B.C.J. No. 310 (B.C.S.C.)].

[73] In Toole, the plaintiff, age 61 at termination, was employed for over 4 years with the defendant as President. The plaintiff received a base salary plus a bonus. He was dismissed without notice. The court awarded 12-months’ severance pay [Toole v. Acres Inc., 2007 11326 (ON SC), 2007] O.J. No. 1337(Ont. S.C.J.)].

[74] Cathcarth involves an employee terminated at age 54 from the defendant where he had been employed for 1 year as the President. The court awarded a 12-month notice period [Cathcarth v. Longines Wittnauer Watch Co., [1980] O.J. No. 654 (Ont. H.C.J.)].

[75] In Dwyer the plaintiff was employed as VP Sales and Marketing for over 3½ years and was terminated at age 52. He earned an annual base salary of $150,000. In deciding the plaintiff’s entitlement on termination, the court took into account his age, his executive position and the limited availability of jobs in his field. The court awarded 12 months’ notice [Dwyer v. Avantis Inc. 2009 CarswellOnt, 2610 (Ont. S.C.J.)].

[76] In Dimmer the plaintiff was employed nearly 4 years with the defendant as Sr. VP sourcing and processing multi-million loan transactions. The plaintiff’s compensation was comprised of a base annual salary and annual bonuses that fluctuated in the years 2007 to 2009. The plaintiff was discharged without notice at age 52 from an executive position in a difficult market. The court awarded a 12-month notice period [Dimmer v. MMV Financial Inc., [2012] O.J. No. 6066 Ont. S.C.J.)].

[77] I find no justification in the case law to award Mr. Duynstee a notice period as high as 18 or 12 months. There were important features in all the cases cited by Mr. Duynstee that distinguish them from his circumstances.

[78] In Rummery an inducement factor figured into the court’s decision. The defendant induced the plaintiff to leave previous secure employment. Courts have awarded longer notice periods under these circumstances [Wallace v. United Grain Growers Ltd. (1997), 1997 332 (SCC), 152 D.L.R. (4^th) 1, at para. 83, (S.C.C)]. The court also considered the oppressive conduct of the employer. There was also a non-competition clause that restricted the plaintiff’s job search.

[79] The age and character of employment was similar to Mr. Duynstee in McFadden. However, the plaintiff in McFadden had a lengthier period of employment at 3 years. As well, there was an inducement factor the court took into account in awarding 15 months’ notice. In Makhija the plaintiff was of similar age to Mr. Duynstee, was terminated after a somewhat shorter period of employment and was awarded a 15-month notice period. However, the court found the plaintiff was induced to leave a permanent position as chemist with the federal government with promises of a permanent job with the defendant. Similarly in Cathcarth, a 12-month notice period was awarded under circumstances where the defendant had induced the plaintiff to leave his long standing job with a previous employer.

[80] In Kussman the plaintiff was of similar age with a similar type of position as Mr. Duynstee’s and was terminated after a somewhat shorter period of employment. However, in awarding a 12-month notice period, the court found the defendant had fundamentally breached the employment contract. In Schamborzki the court took into account that the circumstances of the termination of a senior hospital executive affected her future employment opportunities in its negative impact on a necessary ongoing relationship with the Ministry of Health.

[81] In Toole the court awarded a 12-month notice period. The plaintiff in that case was considerably older that Mr. Duynstee at age 61, was employed for a longer period of four years and was terminated from a position as President, a higher position than Mr. Duynstee at the time of his termination. In Dimmer and Dwyer the plaintiffs were both awarded 12-month notice periods. They were dismissed from positions at similar levels to Mr. Duynstee’s but they both had been employed for lengthier periods, 3½ years in the former case and 4 years in the latter. Both plaintiffs were somewhat older than Mr. Duynstee when terminated, both being age 52. There was also evidence in Dimmer of the effect on the plaintiff’s job prospects of a difficult market.

[82] The features I have highlighted in the cited cases affected the courts’ view of a reasonable notice period in those circumstances, sometimes allowing rather lengthy notice periods for relatively short term employment. I see no special factors in Mr. Duynstee’s case that would warrant a notice period as long as 12 months.

(c) Sobeys’ Position

[83] Sobeys argues the 6.5 months’ notice period it offered Mr. Duynstee on termination was reasonable. I will review the cases Sobeys has submitted to support its position.

[84] In Love v. Acuity, supra, the Ontario Court of Appeal granted a 9-month notice period. The plaintiff was age 50 and worked for the defendant for 2 years, 7 months as a Sr. VP. He was permitted to be a 2% equity owner in the company and when terminated had earned average total compensation of $633,548 per year. In allowing 9 months the court held the fact of a short period of employment should not take on inordinate importance when applying the Bardal factors. The character of employment and availability of similar employment must be given weight.

[85] In Love v. Acuity the plaintiff’s age was 50 years so Mr. Duynstee was somewhat younger at termination. The plaintiff worked for his employer for a lengthier period than Mr. Duynstee’s 19 months and 10 days. Moreover, the plaintiff’s compensation was significantly higher than the $410,000 Mr. Duynstee earned before termination. Also important are the differences between the plaintiff’s and Mr. Duynstee’s reporting arrangements. While both the plaintiff and Mr. Duynstee were Sr. VPs at termination, in that capacity Mr. Duynstee did not report directly to the CEO as did the plaintiff. Mr. Duynstee had a direct report to the CEO when he was in his previous position as President. A further point of distinction is that Mr. Duynstee had a very small equity holding in Sobeys as compared to the plaintiff’s 2% equity.

[86] Sobeys cites other cases that involve grants of notice periods from 6 to 9 months for senior executives with longer periods of service than Mr. Duynstee. [Lloyd v. Oracle Corp., [2004] O.J. No. 1806 (Ont. S.C.J.); and Kieran v. Ingram Micro Inc. (2004), 2004 4852 (ON CA), 33 CCEL (3d) 157 (Ont. C.A.)]. As well, the Ontario Court of Appeal allowed a notice period of 13 months for an employee who was terminated at age 36 years from an 11-year position as Sr. VP. He earned salaries and bonuses totalling $1.6 million and managed 100 employees [Schumacher v. Toronto-Dominion Bank, 1997 12329 (ON SC), [1997] O.J. No. 2004; aff’d 1999 3727 (ON CA), [1999] O.J. No 1772 (Ont. C.A.)]. Schumacher is also clearly distinguishable from Mr. Duynstee’s situation.

[87] In arriving at my determination, I have taken into account the restricted availability of positions at senior executive levels as observed by the Ontario Court of Appeal in Cronk, supra. It was Mr. Duynstee’s experience during his job search that positions similar to his were rather scarce and he ultimately accepted a position at a lower level than his position at Sobeys.

[88] Looking at Love v. Acuity with its significantly enhanced facts on the Bardal criteria, as compared to Mr. Duynstee’s situation, I find there is justification for awarding Mr. Duynstee less than a 9-month notice period. Given Mr. Duynstee’s moderately senior age of 48, his 19-month period of employment, the senior executive character of his employment and the restricted availability of his type of position, I find the 6.5- month notice period offered by Sobeys to be reasonable in the circumstances.

[89] The Ontario Court of Appeal has observed that arriving at a reasonable notice period is an art not a science and courts should not micro-manage the reasonable decisions of employers [Lowndes v. Summit Ford Sales Ltd. et al, 2006 14 (ON CA), [2006] O.J. No. 13 (Ont. C.A.) and Gismondi v. Toronto, 2003 52143 (ON CA), [2003] O.J. No 1490 (Ont. C.A.)]. One court made the following observation:

It appears to me that in judging the severance arrangements I should not arbitrarily fix what I consider to be a proper period of notice based on the facts of the case and the authorities, but rather should approach the matter first on the basis of whether or not the employer’s severance arrangements were fair. If the period of notice under the severance arrangements was reasonable, then I do not think that I should interfere or tinker with the result. If the period of notice was unreasonable, that is a different matter and the Court should interfere.

[Perry v. Gulf Minerals Ltd., [1985] O.J. No. 1041, at para. 19, (Ont. H.C.J.)]

[90] I find this to be a reasonable approach to employ in the case before me and accordingly I shall not tinker with the 6.5-month notice period offered by Sobeys.

3. Entitlement to Various Types of Remuneration and Benefits

(a) Base Salary

[91] The parties agree that on termination Mr. Duynstee received the proper amount of base salary for the 6.5-month notice period. The parties agree to $25,000 as the monthly salary and therefore that the $162,500 he received is correct.

(b) Leadership Committee Award

[92] Mr. Duynstee received an LC award of $100,000 seven months before termination. As noted above, the LC award was $200,000 available to executives in the LC if the company achieved a share value of $2.15 per share. Mr. Duynstee became a member of the LC when promoted to President Operations, Sobeys Ontario in June 2001 and he left the LC in March 2002 during the fiscal year 2002. There is no written plan or other written text setting out the terms of the LC award. As noted earlier, this bonus was only offered in the fiscal year 2002.

[93] Mr. Duynstee argues that Sobeys achieved the target share value and he was entitled to the full $200,000 because the award was a one-time bonus in the fixed amount of $200,000. Mr. Duynstee argues that Sobeys did not reserve for itself any discretion to pay a lesser amount. Mr. Duynstee asserts that when he met with Mr. McEwan and Ms. Nancy Lonergan-Larch, the Director Human Resources, in March 2002 there was no discussion of paying an LC award of less than the full $200,000. Important to note is that salary documentation for the fiscal year 2002 discloses that Mr. Duynstee was not the only LC member that received $100,000. Two other LC members received that amount and one member received no award.

[94] Mr. Duynstee attempted to explain why the others received $100,000 by saying Ms. Lonergan-Larch became a member of the LC long after he did and Mr. Robert Sobey did not play a significant role in the LC. He did not provide an explanation for Mr. Seaman receiving no bonus. However, Mr. Morrissey explained Mr. Seaman received no bonus because he left Sobeys before the end of 2002.

[95] I am not prepared to receive Mr. Duynstee’s evidence about the others who were paid $100,000 as a reasonable explanation why they received $100,000 and why he should have received $200,000. I found that Mr. Duynstee’s evidence on this point does not prove Sobeys did not have the discretion to pay him $100,000.

[96] Sobeys’ evidence through Mr. Morrissey, then Sr. VP Corporate Administration, and Mr. Hynes, then Executive VP CFO, was that whether the award was paid and the amount paid were to be determined at Sobeys’ discretion. Their evidence was that the LC award was not a one-time, all or none bonus of $200,000. Sobeys put forward a number of arguments to support the legitimacy of not paying Mr. Duynstee an additional $100,000 on termination.

[97] Their first position, with which I agree and find sufficient, is that Mr. Duynstee accepted the $100,000 LC award and cannot later retract his acceptance. Mr. Duynstee sent an e-mail to Mr. McEwan dated July 12, 2002 where he discussed his view of the amount of the LC award he received and indicated he thought he was entitled to $200,000. In the e-mail Mr. Duynstee indicated he would leave the conclusion on this matter to Mr. McEwan’s judgment. Mr. Duynstee remained at Sobeys for a further seven months after he received the award. He stated he could not recall whether he received a response to his e-mail from Mr. McEwan and conceded he did not raise this as an issue again until nearly five years later with the commencement of this litigation in 2007.

[98] Sobeys cites case law that establishes that an employee who had previously condoned an amount of compensation cannot later reject it. Chapman v. Bank of Nova Scotia dealt with similar circumstances and held:

When [the Plaintiff] originally received $692,460 for the 2002 year, he did complain to Brooks and said that he would accept whatever decision was made. The adjustment was made to $742, 460 for the year. [The Plaintiff] accepted it.

[The Plaintiff] cannot now come back and assert a claim to compensation which he had previously accepted. These changes could not have been so fundamental to his employment contract if he continued as he did. He condoned these changes. An employee, when faced with a change, may either elect to accept it or reject it and report to work. Condonation of the change constitutes acceptance.

[Chapman v. Bank of Nova Scotia, 2007 18732 (ON SC), [2007] O.J. No. 2044, paras. 110-112, (Ont. S.C.J.); see also Rasanen and Lisle-Metrix Ltd, [2004] O.J. No. 2095 (Ont. C.A.]

[99] I find Mr. Duynstee is not entitled to an additional LC award of $100,000. In arriving at that conclusion, I also took into account that Mr. Duynstee is a sophisticated person, a chartered accountant, who had previously worked at senior executive positions with other employers. He also had experience negotiating terms of his consultancy with Sobeys. If he were truly not willing to accept the $100,000 payment he possessed the skills and experience to have negotiated with Sobeys.

(c) The AMIP Award

I. Effective Date of Level 5 AMIP Award

[100] The parties agree that with Mr. Duynstee’s demotion from President Operations, Sobeys Ontario to Sr. VP Strategic Initiatives in March 2002, Mr. Duynstee’s AMIP award would be reduced from level 7 to level 5. Mr. Duynstee does not disagree that his bonus should have been decreased with the promotion. What the parties disagree on is the date from which the level 5 award should have been paid.

[101] Mr. Duynstee states he did not receive notice of the decrease in the AMIP award until he received a memo from Mr. Hynes dated July 3, 2002. Based on this, it is Mr. Duynstee’s position that he is entitled to a prorated level 7 bonus for May and June 2003, the level 5 bonus not to take effect until July 2002.

[102] Mr. Hynes testified on the contrary that soon after the meeting of March 6, 2002 where Mr. McEwan advised Mr. Duynstee of his demotion, Mr. Hynes advised Mr. Duynstee that his compensation package would stay the same for fiscal year 2002 (until May 2002), but that his package would be assessed at the regular annual June Key Management Compensation review and at that time brought into line with his reduced position.

[103] Mr. Morrissey testified that to keep matters simple it was Sobeys’ practice to commence changes in bonus levels at the start of a fiscal year, whether the change was an increase or decrease. If a proration was appropriate that arrangement would be communicated to the employee in writing. No such written communications was sent to Mr. Duynstee and no conversations were held with Mr. Duynstee about a proration.

[104] I agree with Sobeys that the plain language of the July 3 memo belies Mr. Duynstee’s position and confirms Sobeys’ view. The memo states:

Eugene, I understand that at the point of your change in position from President of Ontario Region to Senior Vice President Strategic Initiatives we agree to leave your compensation program intact until the June 2002 Key Management compensation review took place. I have now had an opportunity to review your total rewards and confirm your eligibility for the following programs at the levels outlined for fiscal 2003.

AMIP level 5 (0 – 25 – 50) [emphasis added]

[105] I agree that given that the 2002 fiscal year ended at May 2002 and the 2003 fiscal year commenced May 2002 then it is apparent from the memo that an award at level 7 was payable until May 2002 and the decrease to level 5 was to take effect at May 2002.

[106] There is no basis to allow Mr. Duynstee a prorated AMIP award at level 7 for May and June 2002.

II. Overpayment of AMIP Award

[107] For the fiscal year 2003, Mr. Duynstee was paid $134,520, which was calculated at level 7. It is clear from the evidence that with Mr. Duynstee’s demotion he was entitled to a level 5 award starting in May 2002 for the fiscal year 2003. The testimony of Mr. Duynstee, the Sobeys witnesses, and the relevant documentary evidence support this conclusion. A level 5 AMIP award would amount to $63,690. Sobeys’ evidence is that the level 7 award was paid in error and that they did not realize this until the commencement of this litigation. The parties agree, and I am satisfied with Mr. Morrissey’s evidence at trial, that the $134,520 amount was calculated at level 7.

[108] The difference between the level 5 and level 7 awards is $70,830. I accept that this amount was overpaid.

[109] Sobeys did not counterclaim for the overpayment but claims an equitable set off of this amount from any amount of damages this court might award. I accept this is an appropriate case for a set off claim. As established by the Supreme Court of Canada in Holt v. Telford, five requirements must be met:

a) The party relying on a set off claim must show some equitable ground for being protected against the adversary’s demands.

b) The equitable ground must go to the very root of the plaintiff’s claim.

c) A cross-claim must be so clearly connected with the demand of the plaintiff that it would be manifestly unjust to allow the plaintiff to enforce payment without taking into consideration the cross-claim.

d) The plaintiff and the cross-claim need not arise out of the same contract.

e) Unliquidated claims are on the same footing as liquidated claims.

[Holt v. Teleford, 1987 18 (SCC), [1987] S.C.J. No. 53 (S.C.C); see also Algoma Steel Inc. v. Union Gas Ltd., 2003 30833 (ON CA), [2003] O.J. No. 71, para. 26, (Ont. C.A.)]

[110] It is clear from the facts that Mr. Duynstee was overpaid on the AMIP award. The overpayment is directly connected to Mr. Duynstee’s claim for damages for wrongful dismissal and arises from the employment relationship. It is therefore just and equitable for the court to allow a set off against any damage entitlement applicable to the reasonable notice period and that any final damage award should be calculated on that basis.

III. AMIP Award for 2004

[111] Mr. Duynstee was terminated in January 2003 in the 2003 fiscal year. I decided a reasonable notice period is 6.5 months. So the issue here is whether Mr. Duynstee is entitled to any portion of a level 5 AMIP award for the 2004 fiscal year.

[112] I agree with Sobeys’ position that Mr. Duynstee is not entitled to a level 5 award for fiscal 2004. I accept Mr. Morrissey’s evidence that no employee received a level 5 AMIP award in the fiscal year 2004. Courts have determined that the actual amount paid to continuing employees should be the preferred method to determine whether a terminated employee is entitled to a particular amount [See Allan v. Westinghouse Canada Inc., [1993] M.J. No. 208, para. 7, (Ont. C.A.) and Harapiak v. Farm King Alliance Inc., [1993] M.J., No. 208, p. 1, (Ont. C.A.) ].

[113] I conclude that Mr. Duynstee is not entitled to a level 5 AMIP award for fiscal year 2004.

(d) SMART Objectives

[114] Mr. Duynstee was terminated on January 16, 2003 and the fiscal year 2004 commenced in May 2003. Sobeys did not award Mr. Duynstee a SMART objectives payout for the fiscal year 2003. However Sobeys concedes Mr. Duynstee achieved his SMART objectives for the fiscal year 2003 and is entitled to the maximum annual payout of $15,000, calculated at 5% of his base salary. Mr. Duynstee claims he is also entitled a SMART payout for the fiscal year 2004 during the period of reasonable notice, which I determined is 6.5 months.

[115] As noted earlier, to be entitled to this payout an employee has to achieve three out of five SMART objectives. Mr. Duynstee was not working at Sobeys during fiscal year 2004. Mr. Morrissey testified, and this was conceded by Mr. Duynstee, that the nature of the SMART objectives was such that to achieve them an employee would have to be actively employed at Sobeys. Mr. Morrissey testified that SMART objectives are typically built around annual plans and some of the objectives require an employee to work a full year.

[116] I accept as reasonable that an employee would have to be an active employee to achieve objectives that are tied to their employment tasks. I therefore will not allow damages for a SMART objectives bonus for 2004.

[117] Therefore, Mr. Duynstee is entitled only to the annual payout of $15,000 for the fiscal year 2003.

(e) The LTIP

I. Copy of LTIP and Enforceability of Contract

[118] Mr. Duynstee argues the terms of the LTIP are not enforceable because he did not receive a copy of the plan during his employment with Sobeys. Mr. Morrissey testified that he does not specifically recall whether Mr. Duynstee received a copy of the plan but stated that if Mr. Duynstee did not receive a copy and had asked for one, it would have been provided.

[119] I am inclined to believe Mr. Duynstee did receive a copy of the LTIP. Perhaps, he misplaced it at some point. As Sobeys observes, and I have noted in relation to other issues, Mr. Duynstee is a sophisticated person, longstanding in the profession of chartered accountancy. He has held senior executive positions of considerable responsibility with several companies. He says he is a stickler for detail and he demonstrated that to the court with the precise style of his testimony and by his practice of taking notes during meetings which he relied on at trial. Mr. Duynstee clearly did not strike me as a person who would be entitled to the benefits of an employment plan and not apprise himself of the terms of the plan through assuring that he had a copy of the plan.

[120] However, even if I am wrong in that conclusion, I accept the applicability to this case of the authorities cited by Sobeys.

[121] Mr. Duynstee received a copy the Share Subscription Loan Agreement (the SSLA”), the provisions of which are related to the LTIP. He says he signed it without reading it. The LTIP is referenced in many sections of the SSLA. A provision of the SSLA actually states:

The Subscriber is familiar with and understands the terms of this Agreement and the provisions of the Plan, and the Subscriber has such knowledge and experience in financial and business matters that the Subscriber is capable of evaluating the merits and risks of the investment in the Shares. [emphasis added]

[122] Sobeys cited Fraser Jewellers Ltd. v. Dominion Electric in which the Ontario Court of Appeal held the onus is with the plaintiff to review a document before signing it. The Court held:

… in absence of fraud or other improper conduct inducing the plaintiff to enter the contract, the onus must rest with the plaintiff to review the document and satisfy itself of its advantages and disadvantages before signing it. There is no justification for shifting the plaintiff’s responsibility to act with elementary prudence onto the defendant.

… the Plaintiff had all the time needed to read the contract and consider its terms and, admittedly, could have questioned ADT’s representative on any provision about which it may have had doubt. It accordingly must be treated in the same manner as a subscriber who signed the contract with full knowledge of the exclusion provision. [emphasis added]

[Fraser Jewellers Ltd. v. Dominion Electric Protection Co., 1997 4452 (ON CA), [1997] O.J. No. 2359, p. 9, (Ont. C.A.); see also Bailey v. Cintas Corp., [2008 ] O.J. No. 1112 , paras. 44 and 46, (Ont. S.C.J.)]

[123] I agree with Sobeys that Mr. Duynstee must similarly be held accountable for his obligations under the contract. There is no evidence of any improper conduct by Sobeys in relation to the contract, of any pressure or rush for him to sign it. I find that even if he did not receive a copy of the LTIP, the contract is nonetheless enforceable.

II. LTIP Entitlement for Fiscal 2004

[124] Mr. Duynstee seeks payment of an award under the LTIP for the fiscal year 2004.

[125] The LTIP expressly precludes participation in the LTIP award and the Executive Stock Purchase Plan (“the ESPP”) during the reasonable notice period. In spite of this, as an act of goodwill, Sobeys paid Mr. Duynstee an LTIP award of $54,000 for the 6.5 months reasonable notice period for the fiscal year 2003. Sobeys acknowledges this payment was not required under the terms of LTIP.

[126] I accept Sobeys position that what is critical is the language in LTIP which precludes payment during the reasonable notice period. This language must govern the payments to a terminated employee during the notice period [Gryba v. Moneta Porcupine Mines Mintes Ltd., 2000 16997 (ON CA), [2000] O.J. No. 4775 and Brock v. Matthews Group Ltd., [1991] O.J. No. 83 (Ont. C.A.)].

[127] Mr. Duynstee is therefore not entitled to an LTIP award for 2004.

III. Maturity and Repayment of Loans

[128] Sobeys demanded repayment of the Loan in March 2003 shortly after termination.

[129] Paragraph 2.4(a) of the LTIP contains the provisions that govern the repayment and maturity of Loans. Paragraph 2.4(a)(ii) provides in its relevant part that all or the balance of the Loan shall mature and be repayable on the first to occur of 30 days following the date of termination of employment and the maturity date. “Maturity date” is defined as the date of the demand for payment or the 10^th anniversary of the date on which the Loan was made.

[130] Paragraph 2.6(c) provides if a participant in the LTIP ceases employment with the employer for any reason other than death, the participant is required to pay the company all the amounts outstanding under a Loan on or before the date determined under Paragraph 2.4(a)(ii).

[131] I agree with Sobeys’ position that the combined effect of those Paragraphs when read together is that any participant who ceases employment for a reason other than death must pay the employer all amounts under the Loan on or before the date set under Paragraph 2.4(a)(ii). That date is the earlier of 30 days following the date of termination or the maturity date, which is the date on which the demand for payment was made. Mr. Duynstee acknowledged in testimony that a demand for payment was not dependent on termination and that Sobeys could make a demand at any time.

[132] However, Mr. Duynstee attempts to make the argument that employment lawfully ends at the end of the reasonable notice period. He argues the language that provides that the balance of the Loan shall mature and be payable “thirty days following the date of termination of employment” means at the end of the reasonable notice period.

[133] Similar to the case before me, in Love v. Acuity, supra, where the employee was paid severance in lieu of notice rather than working notice, the court held the “date the employee ceased to be employed” was the date the employee received notice of his termination, and not the end of the reasonable notice period.

[134] Applied to the case before me, it does not matter which date is applied. Mr. Duynstee was required to repay all amounts outstanding on or before the date on which Sobeys demanded payment which Sobeys did in March 2003 shortly following termination. Mr. Duynstee ceased participating in the LTIP in accordance with its terms following the demand for payment in March 2003 before the May 2003 end of the 2003 fiscal year. For that reason, as noted earlier, the $54,000 payment was gratuitous because under the LTIP no payment was required to be made during the reasonable notice period.

[135] I therefore will order no further award under the LTIP because Mr. Duynstee cannot be said under these circumstances to have suffered any damages.

IV. The ESPP

[136] Mr. Duynstee gave evidence that he repaid the Loan under the LTIP in March 2003. He claims entitlement to damages for 2004 valued at $15,614.61, being the 2002 T4 taxable benefit valuation of the Loan. The ESPP is a part of the LTIP. I agree with Sobeys that as such the ESPP is subject to the same analysis as applied to the LTIP. Hence, Mr. Duynstee would not under the ESPP terms be entitled to any award of damages during the reasonable notice period or for the fiscal year 2004.

[137] Mr. Duynstee’s position however suffers from other frailties. He provided evidence that from the time he repaid the Loan in March 2003, Sobeys’ stock fell from $36.90 in March 2003 to $33.30 in December 2003, a nearly 9.75% decrease in value. However, Mr. Duynstee did not provide evidence of when he sold his ESPP stocks, the quantity of stock he sold or evidence that he actually sustained a loss. Mr. Duynstee did not fulfill his obligation to Sobeys to disclose documentation about the sale of the stock. When cross-examined about this he surprisingly asserted that he did not provide the documentation because Sobeys had not requested it. In any event, absent supporting evidence, the court would be unable to determine the effect if any of Mr. Duynstee’s termination on his ESPP.

[138] I therefore conclude Mr. Duynstee is entitled to no damages with respect to the ESPP.

(f) Group Medical Benefits and Life Insurance

[139] The parties agree that Mr. Duynstee was paid his full group medical and life insurance benefits for the duration of the 6.5 months’ reasonable notice period. Mr. Duynstee is therefore not entitled to further benefits.

(g) Professional Fees

[140] Mr. Duynstee claims $909.50 for professional fees he incurred in 2003 for his license to practice as a chartered accountant. He claims he also incurred professional fees in 2004.

[141] However, Mr. Sobey was terminated in January 2003. He brought no evidence to show he provided any services as a chartered accountant after termination. I therefore have no basis to find any entitlement to damages for professional fees.

(h) Automobile

[142] There is no dispute between the parties that Mr. Duynstee was provided at the time of termination with his full car entitlement for the 6.5 months’ reasonable notice period.

(i) Pension Plan

[143] There is no dispute between the parties that Mr. Duynstee received his full pension entitlement during the 6.5 months’ reasonable notice period. At termination, Mr. Duynstee received $15,550 in pension contributions from Sobeys, the maximum allowable under the pension plan. He is therefore entitled to no further amount under the pension plan.

4. Mitigation Expenses

[144] Mr. Duynstee claims expenses claimed for his mitigation efforts. For reasons set out, I found that Sobeys furnished Mr. Duynstee with a reasonable severance package. It follows he is therefore not entitled to recover for any mitigation expenses.

D. SET OFF

[145] Earlier I determined it is appropriate to allow Sobeys a set off against any damages I order in respect of the $70,830 overpaid to Mr. Duynstee for the AMIP award for 2003 fiscal year. Sobeys has not brought a counterclaim. I granted Mr. Duynstee damages in the amount of $15,000 for the SMART objectives bonus for fiscal year 2003. Sobeys is allowed to set the $78,830 overpayment off of the $15,000 damages awarded.

E. CONCLUSION

[146] For all the reasons cited above, Mr. Duynstee is not entitled to any further compensation for base salary, payments under any of the award or bonus plans, or for any further payments for group medical or life insurance benefits, for an automobile, under the pension plan or for recovery for professional fees, car expenses or mitigation expenses.

F. COSTS

[147] The parties should try to settle costs of the action. If they are unable to settle costs, in addition to the cost outlines and sealed settlement offers they have already delivered, they shall also deliver brief written submissions (no more than 3 pages, tabbed) within 30 days of this Order. The parties shall promptly advise the court if the costs issue is settled.

G. ORDER

[148] Order accordingly.

Allen J.

Released: April 8, 2013

COURT FILE NO.: 07-CV-335331PD3

DATE: 20130408

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Eugene Duynstee

Plaintiff

-and –

Sobeys Inc.

Defendant

REASONS FOR JUDGMENT

Allen J.

Released: April 8, 2013