COURT FILE NO.: CV-12-107902-00
DATE: 20151127
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Brent Chapman
Plaintiff
(Defendant by Counterclaim)
– and –
GPM Investment Management and Integrated Asset Management Corporation
Defendants
(Plaintiffs by Counterclaim)
Jerome R. Morse, for the Plaintiff
Christopher Cosgriffe, for the Defendants
HEARD: May 26, 27, 28, 29, 2015; June 1, 2, 3, 4, 5, 2015
Written Submissions dated: August 7, 2015, September 21, 2015, October 16, 23, 2015, and November 4, 2015
D. S. Gunsolus, J.
Background
[1] Brent Chapman brings this action claiming amongst other relief:
(a) Damages for constructive dismissal and breach of contract in the amount of $3,000,000.00;
(b) Damages based upon quantum meruit in the sum of $329,687.00;
(c) In the alternative to (b), damages of $329,687.00 for unjust enrichment;
(d) A declaration of entitlement to the costs, payable by the defendants (plaintiffs by counterclaim) to the plaintiff (defendant by counterclaim), incurred by the plaintiff (defendant by counterclaim) arising out of the defence to the counterclaim;
(e) A declaration of entitlement to indemnity by the defendants (plaintiffs by counterclaim) to the plaintiff (defendant by counterclaim) for any damages, interest or costs ordered payable by the plaintiff (defendant by counterclaim) as a result of the counterclaim;
(f) Special damages in the amount of $75,000;
(g) Pre-judgment and post-judgment interest and costs.
[2] The defendant, GPM, is seeking $1,687,592.30 by way of counter-claim as against the plaintiff claiming that he failed, as president of GPM, to cause GPM to enter into an asset management agreement with GPM Financial.
[3] The defendants are Mr. Chapman’s former employer (GPM) and GPM’s parent company Integrated Asset Management Corporation (IAM).
[4] Mr. Chapman commenced employment as president of the defendant, GPM Investments, on April 1, 2002. On November 20, 2008, he was appointed chief executive officer of GPM, in addition to his role as president. He was appointed to the IAM board of directors on February 28, 2007.
[5] Mr. Chapman entered into a series of employment contracts which were really nothing more than memorandums of understanding. The first MOU dated March 21, 2002 provided; 1) a base salary of $200,000.00 per annum; 2) an annual prorated bonus of 10% of the pre-tax profit of GPM and the related corporation (Darton) after the deduction of specified performance fees. He was also provided a car allowance, medical benefits, club dues, stock options and so on.
[6] Mr. Chapman’s second Memorandum of Understanding, dated October 18, 2005, took effect on November 1, 2005. It was similar to the first Memorandum of Understanding, except that the plaintiff’s base salary was increased to $240,000.00 per annum. The annual prorated bonus was stated to be 10% of pre-tax profit of GPMA and Darton less interest income and depreciation. A third Memorandum of Understanding was entered into, dated November 17, 2008, which contained terms which were, for the purposes of this matter, similar to those in the second Memorandum of Understanding.
[7] The 2008 MOU, in its entirety, provided as follows:
(1) Responsibility as president of GPMA to manage affairs of GPMA and to direct management of its divisions and subsidiaries in efficient and profitable manner and in accordance with in-place advisory contracts.
(2) It is the objective of GPMA and group to grow and BC shall be responsible for planning and execution of this growth.
(3) Basic salary of $240,000 per annum.
(4) Annual pro rata bonus available shall be 10% of pretax profit of GPMA and Darton less interest income and depreciation. Profit shall not include present level, if crystallized, of performance fees to GPMA on GPM/Endow (8) of $0.60MM.
(5) Car allowance of $1,200 per month plus parking, insurance, maintenance and business gas.
(6) Company medical and benefits plan.
(7) Club dues for club to be determined.
(8) Normal vacation period of 4 weeks.
(9) BC shall be eligible for stock options in IAM, if and when approved by management and the board of IAM.
(10) This employment shall be for a period of 3 years from the date hereof with termination only for cause.
(11) Report to Chairman of IAM or otherwise directed by IAM.
[8] This third MOU was in force at the time that Mr. Chapman ceased employment on or about October 21, 2011.
[9] Prior to Mr. Chapman’s employment with GPM, GPM acquired Darton Property Advisors and Managers Inc. which was a property management company intended to assist GPM. When Darton was sold in December of 2008, Mr. Chapman was paid a bonus for the successful divestiture of Darton.
[10] The other investment made by GPM, relevant to this action, was in relation to a 36.5% shareholding in GPM Financial Corporation (GPM Financial). GPM Financial’s only business was as a 50% owner of a corporation that owned land located on Ellerslie Road in Edmonton, Alberta (The EE land) . GPMF was a 50/50 joint venture with an Alberta corporation known as Cameron Development Corporation. The share ownership of GPMF was as follows: GPM, 36.58%; Tony Pacoe, 29.27%; Don Low, 29.27%; and Mr. Chapman, 4.89%.
[11] GPM Financial sold its interests in the EE Lands in May of 2011. GPM Financial paid to its shareholders (which included GPM and Mr. Chapman), both taxable and non-taxable dividends.
[12] In October 2011, Mr. Chapman claimed that he should also have been entitled to a bonus, in relation to the EE sale, of 10% of the taxable and non-taxable dividends received by GPM from GPM Financial in the amount of $328,682.00. As he did not receive same, he took the position on October 26, 2011, that he was constructively dismissed.
[13] At the opening of trial, the defendants admitted that Mr. Chapman’s employment with GPM was for an indefinite, and not a fixed, term.
[14] It is be noted that Mr. Chapman’s base income, plus bonuses from the year 2002 until his last year of employment were as follows:
Salary
Annual Incentive Plan
Other Annual Compensation
(1)
Option Based Award
Bonus
Total
Fiscal 2011 (September 30)
$240,000.00
$933,239.00
Nil
Nil
$1,173,239.00
2010
$240,000.00
$888,115.00
Nil
$19,200.00
$1,147,315.00
2009
$240,000.00
$659,635.00
Nil
Nil
$228,836.00
$1,128,471.00
2008
$240,000.00
$913,419.00
$16,400.00
$19,800.00
$1,189,619.00
2007
$240,000.00
$388,942.00
$14,400.00
$ 643,342.00
2006
$200,000.00
$444,050.00
$14,400.00
$ 658,450.00
2005
$200,000.00
$829,037.00
$14,400.00
$ 8,208.00
$1,051,645.00
2004
$200,000.00
$137,915.00
$14,100.00
$ 352,015.00
2003
$200,000.00
$125,245.00
$19,805.00
$ 345,050.00
2002
$112,500.00
(2)
$ 70,100.00
$ 8,100.00
$ 190,700.00
Related primarily to automobile. Not reported after 2009 as benefit disclosure not required unless benefit exceeds $50,000.00
Partial year as employment commenced April 1, 2002.
Law
Constructive Dismissal
[15] Where the employer commits a repudiatory breach of the employment contract, which demonstrates that it no longer wishes to be bound by the contract, or which deprives the employee of substantially all of the benefits bargained for, a constructive dismissal will be found to exist.[^1]
[16] While minor alterations may give rise to damages, the changes must be fundamental in order for the employee to legitimately treat the contract as at an end. It is the effect of the breach, rather than the employer’s motive for introducing the change, which is to be examined and which determines the ultimate result.[^2]
[17] The test for determining whether a breach amounts to a constructive dismissal is an objective one. The employee’s perceptions and sensitivity to specific changes will not persuade a court that a constructive dismissal exists where objective evidence indicates the contrary.[^3]
[18] Changes to the employee’s position or remuneration must be unilaterally imposed by the employer. Therefore, it will be essential to determine the scope of the parties’ agreement in order to ascertain whether the employer is simply enforcing or, alternatively, breaching one of the agreements essential terms.[^4]
[19] Where the breach by the employer is considered fundamental, the employee will be entitled to treat the contract as at an end. Whether a breach is fundamental depends, in large, upon its consequence to the employee.[^5]
[20] In Poole, the British Columbia Court of Appeal defined the concept of fundamental breach as follows:
[W]hen determining whether a breach of contract justifies the innocent party terminating the contract rather than confining his remedy to the damages caused by the breach, it is that the breach must be tantamount to the frustration of the contract either as a result of the unequivocal refusal of one party to perform his contractual obligation or as a result of conduct which has destroyed the commercial purpose of the contract, thereby entitling the innocent party to be relieved from future performance.[^6]
[21] If a change is minor or if the change reflects a proper interpretation of an existing provision of an employment contract, the employee may not consider such a change to be an act of repudiation.[^7]
[22] In fact, in some cases a minor breach will entitle the employee to sue for damages, but will not enable them to repudiate the entire contract.[^8] In Poole, the plaintiff was found not to have been constructively dismissed when the defendant failed to pay a portion of a bonus. The plaintiff, in that case, was able to recover damages in the amount of the unpaid entitlement.[^9]
[23] Finally, there is no longer a requirement that a finding be made that the employer intended to repudiate the terms of the employment agreement. What matters in each instance is not the purity of the employer’s motives, but the degree of the breach and whether it can be said to constitute a substantial or fundamental alteration of the original employment contract.[^10]
[24] The analysis undertaken by courts in constructive dismissal actions is generally quite uniform. First, a court will determine the express and implied terms of the contract both before and after the alleged breach. Second, a court will decide whether the original terms had been breached by the imposed change. Third, a court will determine whether the breach is fundamental in nature so as to give rise to the employee’s right to treat the contract as terminated and succeed in an action for wrongful dismissal.[^11]
[25] The question that must be answered is whether a reasonable person, in the same position as the employee, would consider the essential terms of the employment contract to have been substantially changed? An employer’s motives are merely one factor to be considered in determining whether a particular breach is fundamental in nature.[^12]
[26] Nonpayment of all or part of an employee’s bonus may constitute, or contribute to, a finding of constructive dismissal. This is especially so when the bonus is non-discretionary and represents a significant amount of the employee’s overall compensation. In the alternative, to bringing a constructive dismissal action, an employee may sue to recover damages for the nonpayment of a bonus.[^13]
[27] While a review of the caselaw would indicate that nonpayment of a contractual right to a bonus may amount to a fundamental breach, often such a finding must be combined with a series of other factors or events sufficient to amount to a finding of constructive dismissal.[^14]
[28] For example, in Schumacher v. Toronto Dominion Bank, the reduction of an employee’s bonus was sufficient to trigger a constructive dismissal, when accompanied by other changes to the employee’s position.[^15] The Ontario Court of Appeal found that the trial judge’s findings were amply supported by the evidence and that the loss of bonus income, when added to the many other losses the employee experienced, amounted to a constructive dismissal.
[29] In Poole, Wallace J.A. was “of the opinion that even in the case of non-payment of an agreed salary there must be evidence of other circumstances, such as dismissal, etc., from which one can infer that such non-payment can properly be construed as an absolute refusal of the employer to perform the contract or otherwise evinces an intention of the employer not to be bound by the contract of employment.”[^16] Poole was entitled to recover $4,500 in damages for nonpayment of the bonus; however, the employer was found not to have engaged in a breach of sufficient gravity to warrant a finding of constructional dismissal.
[30] The foregoing would appear to demonstrate that the change to the bonus must be a permanent one and not simply a “one off”. There must be some circumstance beyond the mere nonpayment to give rise to the inference that the employer has refused to perform the contract.
[31] In Chapman v. Bank of Nova Scotia, the Court of Appeal of Ontario determined that a fluctuation, either up or down, in variable compensation is not constructive dismissal rather is the very nature of variable compensation.[^17] The Court of Appeal stated that “it is not every change which gives rise to constructive dismissal – the change must be substantial and must be to an essential term of the employment contract.”[^18] The court held that a 13% decrease in total compensation is not a fundamental breach to the employment contract. In addition, there was no decrease to the employee’s fixed salary, no change to the employee’s working conditions or responsibilities, and no indication that the employer did not intend to be bound by the employment contract.[^19]
[32] Where nonpayment of a bonus is minor in the grand scheme of things, the breach will not likely be considered fundamental. However, where a bonus amounts to a substantial portion of the employee’s remuneration and is considered a contractual entitlement, its loss is more likely to be considered fundamental.
[33] The test for constructive dismissal was articulated in the recent Supreme Court of Canada case of Potter v. New Brunswick (Legal Aid Services Commission)[^20]. The key analysis is set out at paragraphs 32 to 43:
There are two branches of the test that have emerged. Most often, the court must first identify an express or implied contract term that has been breached, and then determine whether that breach was sufficiently serious to constitute constructive dismissal. [Citations omitted.]
The first branch of the test for constructive dismissal, the one that requires a review of specific terms of the contract, has two steps: first, the employer’s unilateral change must be found to constitute a breach of the employment contract and, second, if it does constitute such a breach, it must be found to substantially alter an essential term of the contract (see Sproat, at p. 5-5). Often, the first step of the test will require little analysis, as the breach will be obvious. Where the breach is less obvious … a more careful analysis may be required.
At the first step of the analysis, the court must determine objectively whether a breach has occurred. To do so, it must ascertain whether the employer has unilaterally changed the contract. If an express or an implied term gives the employer the authority to make the change, or if the employee consents to or acquiesces in it, the change is not unilateral act and therefore will not constitute a breach. If so, it does not amount to constructive dismissal. Moreover, to qualify as a breach, the change must be detrimental to the employee.
Once it has been objectively established that a breach has occurred, the court must turn to the second step of the analysis and ask whether, “at the time the [breach occurred], a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed” (Farber, at para. 26). A breach that is minor in that it could not be perceived as having substantially changed an essential term of the contract does not amount to constructive dismissal.
In each case, determining whether an employee has been constructively dismissed is a “highly fact-driven exercise” in which the court must determine whether the changes are reasonable and whether they are within the scope of the employee’s job description or employment contract. [Citations omitted.]
The second branch of the test for constructive dismissal necessarily requires a different approach. In cases in which this branch of the test applies, constructive dismissal consists of conduct that, when viewed in the light of all the circumstances, would lead a reasonable person to conclude that the employer no longer intended to be bound by the terms of the contract. The employee is not required to point to an actual specific substantial change in compensation, work assignments, or so on, that on its own constitutes a substantial breach. The focus is on whether a course of conduct pursued by the employer “evince[s] an intention no longer to be bound by the contract”: Rubel Bronze, at p. 322. A course of conduct that does evince such an intention amounts cumulatively to an actual breach. Gonthier J. said the following in this regard in Farber:
In cases of constructive dismissal, the courts in the common law provinces have applied the general principle that where one party to a contract demonstrates an intention no longer to be bound by it, that party is committing a fundamental breach of the contract that results in its termination. [para. 33]
Thus, constructive dismissal can take two forms: that of a single unilateral act that breaches an essential term of the contract, or that of a series of acts that, taken together, show that the employer no longer intended to be bound by the contract.
Interpretation of a contract
[34] The interpretation of a contract is now a question of mixed fact and law requiring the trier of fact to ascertain the objective intent of the parties at the time of the contract formation, with reference to the context in which the agreement was formed, along with the factual matrix surrounding the agreement[^21].
[35] The following principles may be considered in the interpretation of a contract and a determination of the objective intentions the parties, at the time of the contract’s formation:
The trier of fact should imply a practical, common-sense approach to contractual interpretation;
The trier of fact must give the words of the contractor ordinary and grammatical meaning;
The trier of fact should have regard to the surrounding circumstances of the contract (the factual matrix).
The trier of fact must read the contract as a whole; and,
The interpretation of a written contract provision must always be grounded in the text and read in light of the entire contract.
[36] Post contractual conduct of the parties may be a useful guide to interpretation of a written contract, as “there is no better way of determining what the parties intended than to look at what they did under the contract”. I turn now to the application of these principles of law to the facts of this case.
Was Mr. Chapman constructively dismissed?
[37] The “Memo Re: Employment Terms” entered into between Mr. Chapman and GPMA and IAM, included the following terms in relation to the bonuses available to Mr. Chapman: “Annual pro-rated bonus available shall be 10% of pretax profits of GPMA less interest income and depreciation. Profits shall not include present level, if crystallized, of performance fees of GPMA on GPM/Endow (8) of $0.60MM.”
[38] In the spring of 2011, when GPM Financial disposed of its interest in the EE Lands, GPM received taxable and tax free capital dividends totalling $3,338,772.26. From this, Mr. Chapman received a taxable dividend of $209,516.75 and tax free capital dividends of $235,889.61, together with his return of capital in the amount of $112,023.28, for a total of $557,429.64. In this action, Mr. Chapman claims to be entitled, additionally, to a 10% bonus on the dividends received by GPM from GPM Financial which he calculates to be $328,862.00.
[39] Turning to the analysis required by the Supreme Court of Canada, in Potter v. New Brunswick[^22], the first branch of the test requires me to identify an express or implied contract term that has been breached. If it is found that there was a breach of an express or implied term of the 2008 employment memorandum, then the second step of the first branch of the test for constructive dismissal, requires that I make a finding as to whether the breach substantially altered an essential term of the contract.
[40] The plaintiff takes the position that the plain and ordinary meaning of the language in his employment memorandum; the commercially reasonable interpretation of the memorandum; and the factual matrix surrounding his employment contract, indicates that the defendants breached it by failing to pay him a 10% bonus on the pretax profit GPM earned on the project. The defendants take the position that they have not breached a term of Mr. Chapman’s contract insofar as they were not contractually obligated to pay a 10% bonus on the EE land sale capital gain, as it would be considered, amongst other things, the equivalent of interest or other investment income and was not from the generation of fees. The defendants argue that the 10% bonus applied only to the normal course of their business which would exclude the capital gains achieved on this “out of the ordinary course of business” transaction.
[41] Tony Pacaud, the former chairman of GPM, was instrumental in the negotiation and drafting of the original and second MOU’s that provided a point form outline of Mr. Chapman’s employment terms. Mr. Pacaud, in evidence, advised the Court that he understood that the capital gain from the sale of EE Lands would be included in the bonus scheme for Mr. Chapman. Mr. Pacaud retired before the third MOU was entered into. Steven Johnson, Chief Financial Officer of IAM, negotiated the third MOU on behalf of the defendants. The third MOU did not change the essential way by which Mr. Chapman’s bonus was to be calculated.
[42] Mr. Chapman assumed that he would receive his 10% bonus on the gain that his employer would ultimately obtain on the sale of the EE land. On April 17, 2008, Mr. Chapman sent an email to Mr. Johnson confirming this understanding. In 2011, Mr. Chapman caused to be created a fiscal bonus calculation sheet in which his expectation, (and other employees’ expectations) of a bonus on the EE Project was clear and unambiguous. While Mr. Johnston’s internal corporate memos, presented to the court, indicate that he was well aware of Mr. Chapman’s expectation of such a bonus, at no time, prior to the closing of the EE transaction, did Mr. Johnson make it clear to Mr. Chapman that he would not receive a 10% bonus on the sale. While Mr. Johnson shared with others within the corporate empire his belief that the matter was not resolved, he did not share that belief with Mr. Chapman. On August 26, 2008, Stephen Johnson prepared a memo in relation to Mr. Chapman’s employment Memorandum of Understanding. In that memo, he carefully detailed his belief that he had discussed this issue with Mr. Chapman “without a conclusion reached”. He set out that it was his belief that they were not obligated to pay a bonus on the profits in relation to the EE Lands “as interest income is excluded”. A plain and simple reading of the contract defies Mr. Johnson’s equation of “interest income” with “a capital gain” to exclude the EE profit from the bonus provision of the 2008 memorandum.
[43] Mr. Johnson’s detailed memorandum acknowledged that, in August of 2008, he was “confident GPMA was not obligated to include the profits on the sale of GPM Financial (the EE Project) in the bonus calculation under Mr. Chapman’s employment terms. In this memo, he did not indicate the basis for his confidence that the defendants would not be obligated to pay Mr. Chapman a bonus in relation to the EE lands. What it did underline was the fact that Mr. Chapman, and at least two other employees, expected or hoped that they would get something in the nature of such a bonus. As stated above, this was an internal corporate document that was not shared with Mr. Chapman at the time.
[44] Mr. Chapman pointed to the bonus that he was paid for the successful divestiture of Darton, suggesting that, since he received a bonus on that capital gain, he should have been treated in the same way in relation to the EE transaction. I note, however, that in December 2009, IAM publically reported to its shareholders that this bonus was paid to Mr. Chapman, on the successful sale of Darton, as a discretionary bonus. I agree with the position taken by the defendants that as this was a discretionary bonus, it cannot be used to suggest that the payment of such a discretionary bonus should be translated in such a way as to require payment of a bonus on the EE transaction.
[45] The third (2008) Memorandum of Understanding entered into by Mr. Chapman with the defendant was negotiated with Mr. Johnson. If the exclusion of the capital gain on the sale of the EE Lands was important to Mr. Johnson, he could have, and should have, insisted that it be listed as an exclusion from the bonus scheme. Mr. Johnson insured that any crystallized investments were listed as exclusions. He made sure that interest income and depreciation were listed as exclusions. Mr. Johnson even went so far as to remove a clause that provided a 10% bonus to Mr. Chapman in the event of a sale of GPM. Why he did not insist upon an exclusion of the EE sale from the bonus scheme is inexplicable. All of Mr. Chapman’s employment MOU’s specified “pretax profit” as the profit that would qualify for the calculation of his annual bonus. Each memorandum clearly listed three specific exclusions to pretax profit and they were the specific performance hurdles, interest income and depreciation. The gain on the pending sale of the EE Lands was not listed as an exclusion.
[46] Mr. Chapman also wished to rely upon the defendants’ past inclusion in pretax profits of “fees” earned in relation to what he saw as three similar real estate deals. These were not similar at all. In those transactions, GPM would secure an agreement to purchase, assign the rights to a third party and earn what amounted to a fee by assigning its rights to the third parties. While these funds constituted pretax profit in the way that such profits were calculated by the defendants, I find that these transactions were dissimilar to the EE transaction.
[47] Mr. Pacaud’s evidence in relation to these transactions was that, in effect, they would “tie the building up” as GPM really did not even have the funds with which to complete a purchase of such lands. He would then “take it to others” and assign the agreement of purchase and sale to an interested third party. A fee would then be paid to GPM by the third party in an exchange for the assignment of the agreement of purchase and sale. These were a different type of transaction when compared to the EE sale. The EE transaction was clearly not the type of transaction that the defendants normally entered into. In fact, they took the position that such an investment should never have been entered into in the first instance, let alone ever again, as it was viewed as a conflict in relation to its investors. Be that as it may, the investment in the EE Lands was the only investment of this nature that the defendants entered into. Given the unique nature of the EE investment, this would indicate all the more reason for it to have been dealt with specifically as an exclusion in Mr. Chapman’s employment memorandums. Clearly, it was not intended to be excluded, given the evidence of Mr. Pacaud who negotiated the first and second Memorandum of Understanding with Mr. Chapman. All of the MOU’s reflected the first MOU as to the essential terms of Mr. Chapman’s bonus.
[48] It is also important to note that, on April 16, 2008 when Mr. Johnson, CFO of IAM, met with Mr. Chapman and others, the purpose of the meeting was for Mr. Johnson to obtain clarification on any fees or commissions, owed by GPMF for the EE Project, and further to determine if there was any understanding with Mr. Pacaud about fees or commissions relating to the EE Project. On April 17, 2008, Mr. Chapman followed up on the April 16, 2008 meeting by sending Mr. Johnson an email confirming that, under the terms of his own employment agreement, he would be entitled to 10% of GPM’s pretax profit on the sale of the EE Lands. Mr. Chapman gave evidence that he wished to avoid confusion and thus sent the following email:
“I’d like to confirm how the GPMA [GPM] land profit will be treated for me personally if and when we sell so that you can deal with the tony arbitration appropriately. Also, it will be good to avoid any confusion in the future.
With respect to my employment contracts, any profit I can create for GPMA [GPM] on this investment will be subject to my 10% bonus as per paragraph 4 [of his employment contract].”
[49] Mr. Johnson did not respond to Mr. Chapman’s email. Mr. Johnson did not recall receiving this email. There is no question that neither Mr. Johnson nor anyone else responded to Mr. Chapman’s email that detailed his belief and understanding that he would receive a 10% bonus on the EE sale. Mr. Johnson did not deny that this email was sent and received. Rather, he said, he often did not read his email, relying on his assistant to undertake such tasks for him.
[50] While it is clear that Mr. Johnson communicated to others, within the defendants corporate structure, the position that the defendants wished to take contrary to Mr. Chapman’s belief, this was never communicated to Mr. Chapman.
[51] It was not until after the EE transaction had closed and Mr. Chapman had overseen the preparation of the proposed bonus scheme showing that he would receive a 10% bonus on the EE Project, that Mr. Chapman was ultimately advised by Mr. Johnson that it was his view that the EE Project gain was not a bonusable “profit” because GPM had invested its own capital in the EE Project. And yet, again, it was not a listed exclusion in Mr. Chapman’s employment memorandum.
[52] In the end, GPM, through Mr. Johnson, took the position that it would consider paying a “discretionary bonus” to Mr. Chapman so long as the other GPM Financial shareholders were prepared to contribute to such a bonus.
[53] Mr. Chapman and Mr. Johnson both, in their evidence, confirmed that Mr. Chapman’s bonuses had been calculated the same for each and every year of his employment from 2002 up until 2011. It was calculated the same for the year 2011 save and except that Mr. Johnson took the position that Mr. Chapman should not receive a bonus on the capital gains realized on the sale of the EE lands. Mr. Johnson acknowledged that it was his interpretation of the employment memorandum, that “investment income” and “interest income” were excluded. In an extension of that view, he also took the position that, clearly, to him, at least, a “capital gain” should therefore also be excluded. While that may have been his interpretation, I cannot find any factual or legal basis for such an interpretation.
[54] Mr. Johnson knew that there was nothing specific in Mr. Chapman’s agreement that specifically excluded the capital gain realized in the EE land sale. He knew that Mr. Chapman took the view that he would receive a bonus on the sale and that he had never put anything in writing to Mr. Chapman indicating that he disagreed with Mr. Chapman’s interpretation of the employment memorandum.
[55] During cross-examination, counsel for the defendants went to great lengths to get Mr. Chapman to agree that included in pre-tax profits were asset management, asset acquisition, development, leasing, property management, incentive, consulting and miscellaneous “fees”. Again, this is of no assistance to a determination as to whether the capital gain received on the EE land sale was to be excluded from Mr. Chapman’s bonus scheme. Rather, this was a one off transaction, outside the normal course, of the defendants’ business. If it was to be excluded it should have been specifically excluded and certainly Mr. Johnson, on behalf of the defendants, had every opportunity to do so when he negotiated the 2008 Memorandum of Understanding with Mr. Chapman.
[56] The Memorandum of Understanding that was entered into between Mr. Chapman and GPM, as originally negotiated and drafted by Tony Pacaud, was simple and clear. Mr. Chapman and Mr. Pacaud gave evidence that their goal was to enter into a simple and clear understanding. Mr. Chapman was to receive a 10% bonus on the pretax profit earned by GPM. Anything that was to be excluded was clearly set out as an exclusion in all three of the MOU’s. In each and every year of his employment, Mr. Chapman’s bonuses were easily calculated, applying these exclusions. The gain that GPM might receive on the EE Project was not so excluded. Based on the plain and simple wording of the memorandum and the evidence of Mr. Chapman and Mr. Pacaud, any gain on the EE Project was never intended to be excluded from the bonus scheme benefitting Mr. Chapman. The second and third memorandums did not exclude the EE Project. Evidence led as to how profits were treated in dissimilar transactions is neither relevant nor of assistance in the interpretation of the MOU’s. The EE investment was outside of the normal course of the defendants’ business, in any event. To that end, I find that Mr. Chapman should have been paid a bonus in the amount of $328,862.00, in accordance with paragraph 4 of his employment Memorandum of Understanding, dated November 17, 2008.
Does the non-payment of a portion of Mr. Chapman’s bonus in these circumstances amount to constructive dismissal?
[57] Having found that, pursuant to the terms of his contract, Mr. Chapman should have received the bonus, it is now necessary to determine whether this amounted to a substantial breach which altered an essential term of Mr. Chapman’s contract. Each constructive dismissal case must be decided on its own facts, since the specific features of each employment contract and each situation must be taken into account to determine whether the essential terms of the contract have been substantially changed^23. For the following reasons, I do not find that the one time non-payment to Mr. Chapman of a portion of his bonus to be a substantial alteration of the terms of his employment MOU.
[58] It is clear that the parties each held a strong view as to the interpretation of Mr. Chapman’s contract and the applicability of a 10% bonus on the EE capital gain. A disagreement regarding the calculation of a bonus is not necessarily constructive dismissal[^24]. This was not a unilateral change to Mr. Chapman’s bonus structure[^25].
[59] While Mr. Johnston made it clear that he interpreted the contract in such a way that no bonus should be paid, it is also clear from his evidence that the defendants intended to be bound fully in the future by the terms of Mr. Chapman’s contract. In his evidence, he assumed that business would “go on as usual”.
[60] There was no attempt by the defendants to alter paragraph 4 of the 2008 Memorandum of Understanding. No relevant term was, in effect, altered in any way. The EE transaction was a one of a kind deal and the interpretation of it taken by GPM/IAM did not, in anyway, alter Mr. Chapman’s contract going forward. Mr. Chapman would have been entitled to a bonus on the pretax profit of GPM just as he had been in the past. A transaction similar to EE could never happen again as it was considered to be a possible conflict of interest in relation to the defendants’ investors and the entering into such an investment in the future was clearly not going to occur. Mr. Chapman would have been paid, as he had been in the past. Any reasonable person would conclude that the essential terms of the employment contract had not been changed, but in fact remained intact.
[61] Mr. Chapman’s income, as a result of the bonus scheme, increased each and every year, and in 2011, when he left his employment, his income was at its pinnacle amounting to $1,173,239.00.
[62] This is not a case where a reduction in compensation was unilaterally imposed by the employer on a permanent basis going forward. There was no substantial change to any term, let alone an essential term of Mr. Chapman’s contract, and therefore he was not entitled to claim that he had been constructively dismissed.
[63] The onus is upon Mr. Chapman to demonstrate that a reasonable person would conclude that the defendants no longer intended to be bound by the terms of his memorandum of employment. Mr. Johnson’s evidence was clear and unequivocal. He assumed that matters would continue as they had in the past and that Mr. Chapman would be paid bonuses, going forward, in accordance with paragraph 4 of the Memorandum of Understanding. Mr. Chapman’s reliance upon a onetime nonpayment of a bonus cannot be said to have altered his contract in a substantial way. Further, and in any event, similar circumstances could not happen again because GMP held no similar investments. As already stated, GPM would not be entering into any similar investments in the future, given the view of Mr. Johnson and others involved with the defendants’ management, that it would be a conflict with its investors to do so.
[64] No evidence was presented upon which one could conclude that GPM did not intend to be bound by the terms of the 2008 employment Memorandum of Understanding. The year that Mr. Chapman left his employment he earned more than he had ever in the past, and going forward he would have continued to be compensated on the identical terms as set out in the 2008 memorandum.
[65] Of the total compensation paid to Mr. Chapman, the bonus that he did not receive is similar to the fact situation found in Chapman v. Bank of Nova Scotia[^26]. In that case, there was a compensation reduction of approximately 13% upon which the plaintiff believed he had been constructively dismissed. It was found that such a reduction, in and of itself, was not a fundamental breach of the employment contract because, among other things, the plaintiff’s working conditions or responsibilities had not changed and there was absolutely no indication that the defendant bank did not intend to be bound by the employment contract, going forward. The same factors apply to this case in that there was no reduction of compensation going forward; there was no change to the terms of Mr. Chapman’s employment in any way whatsoever. Disagreement over the interpretation of the application of Mr. Chapman’s bonus scheme to an “out of the ordinary course of business” transaction does not, based on the facts before me, constitute constructive dismissal.
[66] It is also to be noted that in Mr. Johnson’s evidence, he did not shut the door on the issue of the payment of a bonus to Mr. Chapman in relation to the EE Project. To the contrary, he told Mr. Chapman that he would be open to a reconsideration of the issue if the other investors in the EE Project were also willing to contribute to such a bonus.
[67] Mr. Chapman’s position that he was left in a position such that he would have had to sue his employer, and thus would be in the untenable position of having to leave his employment, does not persuade me that this was a constructive dismissal. In today’s modern commercial world, there were many other steps that Mr. Chapman could have considered. For example, mediation and/or arbitration could have been pursued. Mr. Chapman could have pursued the other investors in the EE Project as suggested by Mr. Johnson. Mr. Chapman was not put in an untenable position. He left his employment at a time when he had earned more than he ever had in his nine year history with the defendants. In addition to that, he received over $557,000.00 as a return on his personal investment in the EE Project. No reasonable person, in the shoes of Mr. Chapman, would consider themselves to have been constructively dismissed.
[68] Going forward, nothing had changed for Mr. Chapman. His employer intended to be bound by the terms of his employment memorandum and Mr. Johnson gave evidence that he thought it would be “business as usual” and that the defendants intended to be bound by the terms of Mr. Chapman’s employment memorandum. Mr. Chapman could have continued in his employment with the identical job description, salary and bonus scheme. There would be no variation to the conditions or terms of his employment.
[69] During cross-examination, Mr. Chapman admitted the following:
i. No one told him that his duties as president/CEO of GPM had or would change;
ii. No one said that his duties as a director of IAM had or would change;
iii. No one told him that his base salary had or would change;
iv. No one told him that the way in which his bonuses would be calculated in the future would or had been changed.
[70] Mr. Chapman further acknowledged that he expected that his bonuses would be paid as they had been in the past. To quote Mr. Chapman, when asked whether he expected his bonuses would continue, he said, “Oh, yes; most certainly.”
[71] Not only did Mr. Chapman believe that the terms of his employment had not and would not change, but Mr. Johnson also confirmed that to be his understanding. Mr. Johnson gave evidence that he had no issue whatsoever with Mr. Chapman’s performance in his position as President/CEO of GPM. He assumed that Mr. Chapman would continue in both roles as president and as CEO, and that he would continue to earn the same income and bonuses as set out in the employment Memorandum of Understanding. In short, this amounted to a dispute over the interpretation of the application of one transaction to Mr. Chapman’s bonus scheme and nothing more.
[72] The non-payment of the bonus to Mr. Chapman was not combined with a series of other factors or events, which in my view, were sufficient to amount to a finding of constructive dismissal[^27]. These facts do not indicate that the defendants did not intend to be bound by the terms of the memorandum of understanding or otherwise “evince an intention” not to be bound by the terms of the memorandum of understanding. This was not a breach of sufficient gravity indicative of an intention by the defendants to not be otherwise bound by the memorandum of understanding that they had entered into with Mr. Chapman[^28]. In large part, this was nothing more than the defendant employer enforcing what they believed to be a right to exclude the EE project from the bonus payments required under paragraph 4 of the MOU[^29]. Contrary to the plaintiff’s view, the caselaw relied upon, does not suggest that our courts have consistently held a deduction in total remuneration of 20 to 50%, without any other changes to the terms of employment, to be constructive dismissal. A review of the facts in those cases, discloses that each involved a permanent reduction of remuneration, and, in most cases, a change in other terms of employment. In the case before me, there was no attempt to permanently reduce how Mr. Chapman’s bonuses were to be determined. Rather, the facts disclose, a disagreement as to the applicability of the bonus scheme to a single transaction. This non-payment, of such a one time bonus, cannot be said to have substantially changed an essential term of Mr. Chapman’s MOU. While Mr. Chapman may be entitled to compensation in order to address this non-payment, the unique facts of this case do not support an entitlement to damages for constructive dismissal[^30].
Unjust Enrichment/Quantum meruit
[73] As I have found that Mr. Chapman was entitled to a bonus on the EE transaction, it is not necessary for me to consider his alternative claims under unjust enrichment/quantum meruit.
[74] I would agree, in any event, with the defendants’ submissions in that Mr. Chapman cannot show the requisite deprivation as required by Garland v. Consumers Gas Co[^31]. The evidence that Mr. Chapman gave in relation to his involvement in the EE Project would indicate that it required very little of his time. Mr. Chapman’s involvement was really receiving reports as to the progress being made in relation to the actual work being undertaken by the Cameron Group. As Mr. Chapman indicated, he received and reviewed reports to be satisfied matters were progressing within budget.
[75] Based upon the evidence that I heard, it was clear that Mr. Chapman had little involvement in the process that was required in relation to rezoning, servicing and preparing the EE lands for development. Clearly, that work was being undertaken by the Cameron Group. From Mr. Chapman’s end, he received and communicated to his employer status reports on the progress being made by the Cameron Group in relation to the EE Project.
[76] Indeed, Mr. Chapman acknowledged that the day to day work in relation to the EE lands was undertaken by the Cameron Group and not by GPM or GPMF. He acknowledged that, essentially, his involvement was one of keeping on top of the progress and satisfying himself that the matter was proceeding within budget. Mr. Pacaud, in his evidence, also confirmed that the majority of the work was being undertaken by the Edmonton partners, and that “we were just providing capital”. Mr. Johnson gave evidence that he was of the view that, Mr. Chapman put in little or no effort in relation to the EE lands. I agree that, based upon the evidence, GPMF was nothing more than an investor and not otherwise actively engaged in the development of the EE lands.
[77] Throughout, Mr. Chapman was paid his salary, bonuses and ultimately received, in relation to the EE Land specifically, his dividends and return on equity in the amount of $557,429.64.
Reasonable Notice
[78] Had I found that Mr. Chapman was constructively dismissed, I would have determined that he was entitled to reasonable notice of 18 months.
[79] I agree with counsel for Mr. Chapman that it is a well-established principle of employment law that employees terminated from a senior executive or management position are entitled to longer periods of notice than more junior employees in recognition of the difficulties senior employees face in attempting to find comparable alternate employment.
[80] Given the nature of his position, the length of service and the availability of similar employment, 18 months would be reasonable notice.
[81] I further do not find that Mr. Chapman failed to mitigate his damages insofar as he pursued numerous avenues of employment and self-employment until he ultimately secured his current position.
Counterclaim
[82] The defendants put forward a counterclaim on the basis that Mr. Chapman failed to enter into an asset management agreement for the EE Project.
[83] The EE Project was negotiated by Mr. Chapman’s predecessor, Tony Pacaud. It would have been at that stage that such an asset management agreement should have been considered and entered into.
[84] Further, the defendants were well aware that such an asset management contract had not been part of the EE Project investment and I find that the counterclaim is entirely without merit and is to be dismissed.
[85] The evidence of Mr. Pacaud, Mr. Johnson and Mr. Chapman confirmed that a management fee agreement was not negotiated in relation to the EE lands. Mr. Pacaud said he did not wish to have such an agreement. I agree there was no reason to seek such an agreement as the majority of the work was being undertaken by the Cameron Development Group in Edmonton. GPM Financial Corporation’s involvement was basically one of an investor and nothing more.
[86] Further, it would have been in Mr. Chapman’s interest if such an agreement had been entered into as it would have increased the profit base of GPM and he would have received a bonus attributable to such a management fee agreement. From the evidence, it would appear that there would be no reason for Mr. Chapman not to have pursued a fee management agreement, had he been instructed to do so, as he would have personally benefitted from such an agreement. I accept Mr. Chapman’s evidence and Mr. Pacaud’s evidence that such an agreement was not to be entered into, was never contemplated nor discussed and was, indeed, never mentioned by Mr. Johnson or anyone else until long after the EE agreement had been entered into. One wonders how such an agreement could have been entered into, in any event, insofar as the corporation created to enter into the EE land agreement, was not a client of GPM? As Mr. Chapman, Mr. Pacaud and Mr. Johnson acknowledged, the EE agreement was entered into as an investment, and to establish a business relationship with the Cameron Group and not for the purpose of pursuing management fees. Mr. Johnson understood that Cameron Development was undertaking all the work relative to the development of the EE Lands, and so one wonders why he would have raised the issue of Mr. Chapman pursuing a fee management agreement in the circumstances of that arrangement? Mr. Johnson further gave evidence that he believed that Mr. Chapman was doing very little on behalf of GPM in relation to the EE lands. The pursuit of a counterclaim against Mr. Chapman on the basis of his alleged failure to enter into such a fee management agreement has no basis on the facts of this case and is dismissed.
Is Mr. Chapman entitled to Indemnification in relation to the failed counterclaim brought by the defendants against him?
[87] IAM entered into an indemnification agreement on the 1st day of June 2007 with Brent Chapman. This agreement was intended to protect Mr. Chapman in “indemnified capacities”, including his role as a director and officer of the corporation.
[88] Paragraph one of the agreement provided that IAM shall indemnify and hold Mr. Chapman harmless for the full amount of any costs reasonably incurred by him in connection with any proceeding that may be made, or asserted, against him provided it related to, was from or was based upon his service in the aforesaid indemnified capacities. IAM further agreed to indemnify and hold him harmless for the full amount of any other cost reasonably incurred by him.
[89] In the definition of “cost”, legal and professional fees were included as well as out of pocket expenses for attending discoveries, trials, hearings and meetings. “Proceeding” was defined to include any “claim, action, suit, application, litigation, charge, complaint, prosecution, assessment, re-assessment, investigation, inquiry, hearing or proceeding of any nature or kind whatsoever, whether civil, criminal, administrative or otherwise”.
[90] By paragraph 3 of the indemnification, Mr. Chapman would not be indemnified if it were determined that he did not act honesty and in good faith with a view to the best interests of the corporation. Paragraph 5 provided that he could make a claim for payment of an indemnified amount by delivering written notice of such claim for payment to the corporation. Mr. Chapman did provide the required written notice through his counsel.
[91] Although paragraph 7 of the indemnification permitted IAM to step into the shoes of Mr. Chapman in order to assume carriage of the defence for the benefit of Mr. Chapman, paragraph 8 of the indemnification provided that he would be “entitled to assume carriage of the director’s (his) own defence” if, amongst other things, in the reasonable opinion of his counsel his interests in respect of the relevant matter conflicted with the interests of the corporation in respect of such matter.
[92] It is the plaintiff’s position that he is owed an indemnity for all reasonable costs, including any damages ordered, payable as a result of his position as president of GPM and director of IAM. It is his further position that relevant caselaw establishes that a corporation may indemnify an officer or director for anything done at the request of the corporation so long as the director or officer has acted in good faith. The plaintiff alleges, therefore, that unless Mr. Chapman is found to be acting in bad faith, the corporation must indemnify him for his legal costs as well as any liability to the corporation arising from a finding that he breached his duty to the corporation as claimed by the defendants in their counterclaim.
[93] The defendant argues that “1) indemnified claims do not include claims brought by the corporation; 2) there is no authority for indemnification of a director who is liable to the corporation after trial, and; 3) if the defendant is found to be liable under the counterclaim, he is disentitled to indemnification pursuant to both the director’s agreement and the Ontario Business Corporations Act”. The defendants’ submissions in relation to number 2 and 3 above are premised on the assumption that the defendants’ counterclaim succeeded. Insofar as I have dismissed the counterclaim, it is not necessary for me to address the defendants’ second and third positions on this issue.
[94] Section 136.1 of the Ontario Business Corporations Act[^32] provides for the indemnification of directors or officers who face legal action as a result of their position with the company. Section 136 also limits the scenarios in which corporations may indemnify directors or officers to those in which they were acting in good faith and in the interests of the corporation.
[95] The defendants’ submission that an indemnified claim was not intended to be a claim brought by the corporation against Mr. Chapman is not supported by the wording of the indemnification agreement itself. There is no exclusion within the indemnification agreement such that I could find that an “indemnified claim” shall not include an action brought by the corporation against Mr. Chapman in his capacity as an officer or director. The leading cases on indemnification make it clear that, absent a finding of bad faith, the director or officer is entitled to reasonable costs incurred to defend the action[^33].
[96] In Bennett v. Bennett Environment Inc.[^34] the Court quoted Justice Iaccobucci’s judgment in Blair and stated that indemnification will only be prohibited where the director acted with mala fides[^35]
[97] In Med-Chem Health Care Ltd. v. Misir[^36] the Court considered a request for indemnification where the corporation was suing three former directors for allegedly breaching their duties to the company. Since the corporate by-law in that case made payment of the indemnities permitted by the OBCA mandatory, the directors were entitled to indemnification by way of advance payments absent a showing of bad faith. This case would tend to show that an obligation to indemnify applies even where the corporation is the complainant against the officer or director.
[98] In Cytrynbaum v. Look Communication Inc.[^37] the Court was again required to consider whether or not former directors and officers could claim indemnification in advance in relation to their legal costs in the action which is brought by the corporation against them. Again, the Court found in favour of former directors and officers and did not distinguish between cases brought by third parties and cases brought by/or on behalf of the corporation against former officers and directors.
[99] Finally, in Unique Broadband Systems Inc. Re,[^38] the ONCA again considered the indemnification provisions of the OBCA. In that case, the director moved for partial summary judgment on the issue of payment of legal fees, which the trial judge granted subject to any finding of misfeasance that the court might make against the director subsequently. The trial judge found that the Board had breached its fiduciary duty to the corporation and concluded, amongst other things, that the corporation had no obligation to indemnify the director for his legal fees because he had breached his fiduciary duties to the corporation. The Court of Appeal upheld the trial judge’s decision and stated at para. 77:
The purpose of statutory and contractual indemnity provisions is to ensure that officers and directors who are acting in good faith and in the best interests of a corporation are not exposed to legal costs. It is commercially sensible and good public policy to offer this protection. The rationale for offering the protection is eliminated, however, where the officer or director has not acted in good faith and in the best interests of the corporation.
[100] I find that the caselaw regarding indemnification of directors does not exclude actions brought by a corporation against its directors or officers. In this matter, the defendants have failed to show that Mr. Chapman was not acting in good faith with a view to the best interests of the corporation and is therefore liable to indemnify him for his cost of defending the counterclaim. In essence, the defendants submitted that because Mr. Chapman failed to enter into a fee management agreement in relation to the EE lands, that he had breached his obligations and did not act in the best interest of the corporation. Further, the defendants argued that for GPM to enter into such an agreement was a conflict of interest with the GPM’s investors. The agreement in relation to the EE lands was entered into by Tony Pacaud prior to Mr. Chapman becoming an employee and/or director of GPM. At no time, prior to this litigation, did the defendants raise the issue of the need for a fee management agreement or the allegation of a conflict of interest, or a breach of GPM’s code of ethics. I found in the counterclaim, and I repeat, there were no facts presented to me upon which I could make any such findings against Mr. Chapman. Since the defendants have failed to show that Mr. Chapman was not acting in good faith with a view to the best interest of the corporation, the indemnifying defendant, IAM, is liable to indemnify Mr. Chapman pursuant to the terms of the agreement entered into by IAM. I note that the indemnification agreement did not include GPM as a party. As to the quantum of the indemnification costs, I will be seeking written submissions from counsel for the plaintiff and the defendants as to the appropriate amount.
Conclusion
Based upon the above reasons, judgment shall issue as follows:
The defendants, plaintiffs by counterclaim, shall pay to the plaintiff, defendant by counterclaim, the amount of $329,687.00, being the bonus owed to Mr. Chapman pursuant to paragraph 4 of the Memorandum of Understanding, dated November 17, 2008 in relation to the EE lands.
The defendants’ counterclaim, plaintiffs by counterclaim, shall be dismissed.
The plaintiff, defendant by counterclaim, shall be entitled to indemnification costs from IAM in relation to the plaintiff’s successful defence of the counterclaim, to be fixed following further submissions.
All other claims made by the plaintiff, defendant by counterclaim, shall be dismissed.
The plaintiff, defendant by counterclaim, shall be entitled to pre and post judgment interest.
In relation to costs, counsel may make an appointment to attend before me in order to make submissions if they are unable to agree as to same. If arrangements for such an appointment are not made within the next 30 days, the issue of costs shall be deemed to have been resolved.
D. S. Gunsolus, J.
Date: November 27, 2015
Brent Chapman v. GPM Investment Management and Integrated Asset Management Corporation
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Brent Chapman v. GPM Investment Management and Integrated Asset Management Corporation
REASONS FOR JUDGMENT
D. S. Gunsolus, J.
Released: November 27, 2015
[^1]: Randall Scott Echlin & Jennifer Fantini, Quitting for Good Reason: The Law of Construction Dismissal, (Aurora, Ont: Canada Law Book, 2001).
[^2]: Farber v. Royal Trust Company, 1997 387 (SCC), [1997] 1 S.C.R. 846, at paras. 33-34.
[^3]: Farber, at para. 46.
[^4]: Farber, at para. 35.
[^5]: Garcia v. Fish House, [1995] O.J. No. 4273 (C.J.), at para. 3.
[^6]: Poole v. Tomenson Saunders Whitehead Ltd., 1987 2647, 43 D.L.R. (4th) 56 (B.C.C.A.), at para. 23.
[^7]: Snyders v. St. John Shipbuilding Ltd. (1989), 1989 210 (NB CA), 100 N.B.R. (2d) 14 (C.A.), at p.
[^8]: Poole, at para. 24.
[^9]: Poole, at paras. 47-48.
[^10]: Faber, at paras. 25-26.
[^11]: Echlin & Fantini, Quitting for Good Reason: The Law of Construction Dismissal.
[^12]: Farber, at para. ?
[^13]: Echlin & Fantini, Quitting for Good Reason: The Law of Construction Dismissal.
[^14]: Bethell v. Leader Frames Ltd., [1995] O.J. No. 3887; Gillespie v. Ontario Motor League Toronto Club (1980), 4 A.C.W.S. (2nd) 87 (S.C.); Johnstone v. Harlequin Enterprises Ltd. (1991), 36 C.C.E.L. 30 (C.J.); Stephens v. Globe and Mail (1996), 1996 10215 (ON CA), 28 O.R. (3d) 481 (C.A.); and Wood v. Owen DeBathe Ltd., 1999 BCCA 29, [1999] B.C.J. No. 173.
[^15]: Schumacher v. Toronto Dominion Bank, 1997 12329, 147 D.L.R. (4th) 128 (Ont. S.C.), aff’d 1999 3727, 173 D.L.R. (4th) 577 (Ont. C.A.).
[^16]: Poole, at para. 38.
[^17]: Chapman v. Bank of Nova Scotia, 2007 18732, 58 C.C.E.L. (3d) 25 (Ont. S.C.), aff’d 2008 ONCA 769.
[^18]: Chapman, at para. 102.
[^19]: Chapman, at para. 113.
[^20]: Potter v. New Brunswick (Legal Aid Services Commission), 2015 SCC 10, [2015] 1 S.C.R. 500
[^21]: Sattva Capital Corporation v. Creston Moly Corporation 2014 SCC 53
[^22]: See note 20
[^24]: Bevis v Renaissance Wine Merchants Ltd., 2006 ABQB 8, [2006] A.J. No. 6, aff’d 2007 ABCA 356, at para 11
[^25]: Cardwell v. Young Manufacturer Inc., 20 C.C.E.L. 272, 1988 CarswellOnt 894, aff’d 1989 CarswellOnt 5126 (S.C.Div.Ct.), at para. 1
[^26]: 2007 18732, 58 C.C.E.L. (3d) 25 (Ont. S.C.), aff’d 2008 ONCA 769.
[^27]: Bethell v. Leader Frames Ltd. 1980 1913 (ON CA), 1980 OJ 3887 / Gillespie v. Ontario Motor League Toronto Club 1984 ACWS 2nd 87 / Johnstone v. Harlequin Enterprises Ltd.1991 36 CCEL 30 / Stephens v. Globe and Mail 1996 10215 (ON CA), 1996 19 CCEL 2nd 153 OCA / Wood v. Owen DeBathe Ltd. 1999 BCCA 29, 1999 BCJ 173 BC CA1997 12329 (ON SC), 1997 29 CCEL 2nd 96
[^28]: See note 6
[^29]: See note 3
[^30]: Bevis v. Renaissance Wine Merchants Ltd., 2006 CarswellAlta 6 (AB Q.B.) (Kenny J.); Poole v. Tomenson Saunders Whitehead Ltd., 1987 CarswellBC 237 (BC C.A.) (Taggart, Macdonald and Wallace JJ.A.)/ Scaffold Connection Corp., Re, 2001 CarswellAlta 1747 (AB Q.B.) (Wachowich C.J.Q.B.)
[^31]: 2004 SCC 25, 2004 CarswellOnt 1558, (S.C.C.
[^32]: R.S.O. 1990, c. B. 16 (OBCA)
[^33]: Blair v. Consolidated Enfield Corp., 1995 76 (SCC), [1995] 4 S.C.R. 5.
[^34]: 2009 ONCA 198, 2009 ONCA 1998, 94 O.R. (3d) 481
[^35]: Blair, at para. 28
[^36]: 2010 ONCA 380, 103 O.R. (3d) 769
[^37]: 2013 ONCA 455, 116 O.R.(3d) 241
[^38]: 2014 ONCA 538, 121 O.R. (3d) 81