CITATION: Roberts v. ZoomerMedia Limited, 2016 ONSC 1567

COURT FILE NO.: CV-12-450944

DATE: 20160304

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BILL ROBERTS

Plaintiff

– and –

ZOOMERMEDIA LIMITED

Defendant

James Renihan and Joseph Morrison for the Plaintiff

Julie A. O’Donnell for the Defendant

HEARD: February 18, 2016

PERELL, J.

REASONS FOR DECISION

A. INTRODUCTION

[1] On March 1, 2012, ZoomerMedia Limited (“Zoomer”) gave Bill Roberts working notice until the end of October 2012 and two months’ pay in lieu of notice to bring his employment with it to an end.

[2] Mr. Roberts now brings a summary judgment motion against Zoomer seeking an award of $940,000 plus pre-judgment interest of $47,173.32 for a total claim of $987,173.32. (His original claim was for $3.6 million.)

[3] For the reasons that follow, I grant Mr. Roberts a judgment for $640,000 plus pre-judgment interest of $32,452.96 for a total award of $672,452.96.

B. THE THEORIES OF THE PARTIES’ RESPECTIVE CASES

[4] The theory of Mr. Roberts’ case is straightforward. His theory is that he had a written Employment Agreement, which was taken over by Zoomer when it purchased Vision TV, his previous employer. The inherited Employment Agreement provided that upon termination of employment, Mr. Roberts was to receive a severance payment of $490,000 and a six-month sabbatical payment worth $150,000. Zoomer terminated his employment on March 1, 2012, but he received neither payment. He, therefore, sues for breach of contract, and he claims $640,000 plus $100,000 for bad faith damages, $100,000 for aggravated damages, and $100,000 for mental distress or punitive damages, for a total damages claim of $940,000 plus pre-judgment interest from April 11, 2012 (the date of the issuance of the Statement of Claim) to February 18, 2016 (1,409 days), at 1.3% per annum interest ($33.48 per day), totalling $47,173.32. The total claim is $987,173.32.

[5] Zoomer’s theory of its defence is far more complicated. It acknowledges that Mr. Roberts had a written Employment Agreement, but it says he agreed to waive certain elements of remuneration as the parties negotiated a possible extension of the Employment Agreement. Further, Zoomer submits that before an extension was culminated, the Employment Agreement came to an end and while the parties negotiated again for a new contract, Mr. Roberts agreed to become a “common law” employee; i.e., Zoomer submits that there was a fresh start to the employment relationship, but without a formal contract. Zoomer submits that under the new common law employment relationship, if Mr. Roberts was dismissed without cause, then he was entitled only to statutory and common law rights of compensation, which he received.

[6] In other words, Zoomer argues that Mr. Roberts’ written Employment Agreement was displaced by a common law relationship without a formal contract, and pursuant to that new arrangement, it dismissed Mr. Roberts, but provided him with working notice and pay in lieu of notice equal to ten months’ salary and benefits. Zoomer submits, therefore, that it has discharged any liability it might have had to Mr. Roberts.

C. SUMMARY JUDGMENT JURISDICTION

[7] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the court shall grant summary judgment if: “the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.”

[8] With amendments to Rule 20 introduced in 2010, the powers of the court to grant summary judgment have been enhanced. Rule 20.04(2.1) states:

20.04 (2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

[9] In Hryniak v. Mauldin, 2014 SCC 7, the Supreme Court of Canada held that on a motion for summary judgment under Rule 20, the court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers enacted when Rule 20 was amended in 2010. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.

[10] If, however, there appears to be a genuine issue requiring a trial, then the court should determine if the need for a trial can be avoided by using the powers under rules 20.04(2.1) and (2.2). As a matter of discretion, the motions judge may use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if their use will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[11] Hryniak v. Mauldin encourages the use of a summary judgment motion to resolve cases in an expeditious manner provided that the motion can achieve a fair and just adjudication. Speaking for the Supreme Court of Canada, Justice Karakatsanis opened her judgment by stating:

Ensuring access to justice is the greatest challenge to the rule of law in Canada today. Trials have become increasingly expensive and protracted. Most Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot afford to go to trial. … Increasingly, there is recognition that a culture shift is required in order to create an environment promoting timely and affordable access to the civil justice system. This shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just.

[12] At para. 22 of her judgment in the companion case of Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, Justice Karakatsanis summarized the approach to determining when a summary judgment may or may not be granted; she stated:

Summary judgment may not be granted under Rule 20 where there is a genuine issue requiring a trial. As outlined in the companion Mauldin appeal, the motion judge should ask whether the matter can be resolved in a fair and just manner on a summary judgment motion. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. If there appears to be a genuine issue requiring a trial, based only on the record before her, the judge should then ask if the need for a trial can be avoided by using the new powers provided under Rules 20.04 (2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice.

[13] In my opinion, the case at bar is an appropriate case for a summary judgment. While there are a few genuine issues requiring a trial, those issues can be fairly and justly resolved on this summary judgment motion using the court’s powers under rule 20.04(2.1).

[14] In particular, I reject Zoomer’s argument that the case is inappropriate for summary judgment because Mr. Roberts did not provide affidavit evidence from Mr. Levine or Mr. Morrison, the lawyers who negotiated on his behalf with his past employers.

[15] Mr. Roberts’ best case is quite simple and straightforward, and he does not need his lawyers’ evidence to prove his case. Mr. Roberts has the onus to prove that there was an Employment Agreement, which he did, and that its terms were breached, which as I shall review below, he also did. Both of these elements of Mr. Roberts’ case do not need the evidence of Mr. Levine or Mr. Morrison. There is no reason to draw adverse inferences from Mr. Roberts’ decision - it is not a failure - to call his lawyers as witnesses.

[16] The negotiations that led up to the Employment Agreement, and the circumstances of the failed negotiations that followed the assumption of the Employment Agreement by Zoomer, are part of Zoomer’s hyper-complex theory of the case. The evidence of Mr. Levine or Mr. Morrison would concern matters raised by Zoomer that are not relevant to Mr. Roberts’ claim.

[17] If Zoomer needed the evidence of Mr. Levine or Mr. Morrison, then it should have summoned them as witnesses. Mr. Roberts cannot be faulted for how he presented his straightforward employment law case; he simply did not take the bait of engaging Zoomer in its complex defence. Of course, a party runs a risk if it does not call a witness to rebut the evidence of his or her opponent, but a party also runs a risk by calling a witness when it is unnecessary to rebut the opponent’s evidence. In the immediate case, Mr. Levine’s evidence or Mr. Morrison’s evidence might have assisted Zoomer’s case, but a litigant cannot be faulted for not calling witnesses that he or she does not need to call to succeed.

[18] Put in the context of the immediate summary judgment motion, as the description of the facts below will reveal, I do not have to make any hard finding of credibility against any of the witnesses and the genuine issues that might require a trial can be fairly resolved using the forensic resources of rule 20.04(2.1).

D. FACTUAL BACKGROUND and LEGAL ANALYSIS

1. Introduction

[19] As already foreshadowed, I shall grant Mr. Roberts a summary judgment. To summarize my reasoning, although I agree with some aspects of Zoomer’s theory of the case, ultimately I disagree with Zoomer’s conclusion, and, in the main, I agree with Mr. Roberts’ theory of the case, with the qualification that he has not proven his claims for bad faith damages, aggravated damages, and mental distress or punitive damages.

[20] To explain my reasons, I shall proceed by making my findings of fact and then pausing from time to time to explain my legal conclusions from those findings of fact. In other words, I shall integrate my factual and legal findings into one narrative that takes into account the competing theories of the parties and my own conclusions.

2. The Parties and Participants

[21] Zoomer is a public corporation that has a Television Division. Zoomer’s largest shareholder and Chief Executive Officer is Mr. Znaimer.

[22] Gord Poland is Zoomer’s Chief Operating Officer.

[23] Beginning in 2000, Mr. Roberts was the President and Chief Executive Officer of the S-Vox Trust, which owned and operated a specialty television station called Vision TV. Nine years later, in 2009, subject to regulatory approval, S-Vox Foundation, which was a federally incorporated registered charity, sold Vision TV to Zoomer.

[24] As the discussion below will reveal, Mr. Roberts, with the assistance of several lawyers; namely Joseph Morrison, Michael Levine, and David Cole, successfully negotiated an Employment Agreement with S-Vox Trust and an Amendment to it, but Mr. Roberts, still assisted by several lawyers, was unsuccessful in negotiating with Zoomer to achieve either an extension to his Employment Agreement or a new Employment Agreement.

3. Mr. Roberts’ Written Employment Contract

[25] As of November 1, 2007, while still employed by S-Vox Trust, Mr. Roberts signed an Employment Agreement with it for a fixed term ending on October 31, 2011.

[26] Under the Employment Agreement, Mr. Roberts received a salary of $245,000 per year and he participated in a bonus program called the Corporate Valuation Program (“CVP”). He was also entitled to take a six-month sabbatical at the end of the term, during which time he would continue to be paid his salary and to receive group insurance benefits. The November 1, 2007 Employment Agreement provided that in the event of termination without cause, Mr. Roberts was entitled to a lump sum payment equal to the lesser of two years’ salary or the salary he would have received to the end of the term of the Employment Agreement.

[27] For present purposes, the pertinent provisions of the Employment Agreement are set out below:

4. Employment Period

Subject to section 8, the Trust shall employ the Executive and the Executive shall serve the Trust as an employee in accordance with this Agreement for the period beginning on the date hereof and ending on the earlier of October 31, 2011 (the “Term”) or the effective date the employment of the Executive is terminated in accordance with section 8 (the “Employment Period”).

8. Termination

8.1 Notice

The Executive’s employment may be terminated prior to the end of the Term at any time: …

(c) by the Trust, for any reasons other than Just Cause (“Termination Without Cause”), at any time without prior notice and without further obligation to the Executive other than those obligations of the Trust pursuant to Section 9; or

8.2 The Executive’s employment shall terminate upon the death of the Executive.

8.3 Effective date

The effective date of which the Executive’s employment shall be terminated shall be the actual date that employment ceases or the date of the Executive’s death. For greater certainty, the effective date of termination does not include any period during which the Executive is in receipt or gives or is eligible to receive or give notice of compensation in lieu of notice or severance pay following the actual date of termination, whether pursuant to this Agreement or statute.

9. Rights of Executive on Termination and Lump Sum Payment

9.1 Where the Executive’s employment under this Agreement has been terminated under section 8 (1)(c), the Executive shall be entitled to receive from the Trust, in addition to accrued but unpaid Salary and bonus remuneration, in any, and any entitlement in respect of vacation as contemplated by section 6, a lump sum payment equivalent to the lesser of

(a) two (2) years Salary, less statutorily required deductions; and

(b) the Salary the Executive would have earned from the effective date of termination to October 31, 2011, less statutorily deductions

(the “Severance Payment”) plus, at the time they otherwise would have been paid, any payments that the Executive had earned pursuant to the CVP …. Together with the payments that the Executive had earned pursuant to the CVP, the Severance Payment shall be in full satisfaction of any and all entitlements that the Executive may have to notice of termination or payment in lieu of such notice, severance pay, and any other payments to which the Executive may otherwise be entitled pursuant to any applicable law. The Executive acknowledges that this provision as to Severance Payment shall apply regardless of the years of service or any changes to compensation, title or seniority.

23. Waiver, Amendment

Except as expressly provided in this Agreement, no amendment or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement shall constitute a waiver of any other provision nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.

SCHEDULE A – DESCRIPTION OF BENEFITS TO BE PROVIDED TO THE EXECUTIVE

5. Sabbatical

In the event that the Executive remains employed on October 31, 2011, the Trust shall facilitate a six-month sabbatical for the Executive through Massey College (or similar mutually acceptable institution) commencing on or about November 1, 2011 and continuing to April 30, 2012 or at another mutually agreed upon time. Salary and group Insurance plans described in Schedule A, equal to the salary and group insurance benefits provided during the last six months of the Term, except for disability plan coverage, shall continue to be paid and provided through the sabbatical. …

4. The Amendment of the Employment Agreement

[28] On June 11, 2009, the Employment Agreement was amended. It is a debated point about why the amendment was needed. Mr. Roberts says it came about because S-Vox Trust concluded that because it was a charity, it was not permitted to offer the CVP, which formed part of Mr. Roberts’ remuneration. Zoomer suggests that this explanation is untrue, but, in my opinion, nothing turns on this dispute, and, therefore, it does not present a genuine issue requiring a trial.

[29] Under the Employment Agreement, as amended, Mr. Roberts continued to be entitled to a lump sum payment of two years’ salary ($490,000) upon termination or upon expiration of the term of the Employment Agreement. He remained entitled to a take a six-month sabbatical.

[30] Although in my opinion, nothing ultimately turns on it, Zoomer makes much of the fact that Mr. Roberts had a great deal of legal assistance in negotiating and drafting his Employment Agreement and the Amendment to the Employment Agreement. The negotiations were protracted, and three lawyers acted for Mr. Roberts; namely, Mr. Morrison, Mr. Levine, and Mr. Cole. There was hard bargaining but there is nothing, as such, wrong with that, and both sides had legal representation. And, the negotiations were between Mr. Roberts and S-Vox Trust and so there is no basis for Zoomer to have a complaint about something that occurred before it became Mr. Roberts’ employer. Once again, there is nothing here that need occupy this court by way of a summary judgment motion or a trial.

[31] In its factum, Zoomer makes an argument that the Amendment to the Employment Agreement was unenforceable because the changes were only favourable to Mr. Roberts and there was no fresh consideration from him.

[32] Apart from the fact that Mr. Roberts forbore the CVP benefit and agreed to continue his employment despite the change in his benefits, and, thus, did indeed provide consideration, the invalidity of the Amendment would not affect the validity of the predicate Employment Agreement.

[33] Moreover, as will be seen, Zoomer assumed the Employment Agreement as amended and gave assurances to Mr. Roberts that these Employment Agreements continued to govern his employment.

5. Zoomer’s Purchase of Vision TV and the March 4, 2010 Letter

[34] At around the time the amendment to Mr. Roberts’ Employment Agreement was signed, Zoomer was completing its own negotiations with S-Vox Trust to purchase Vision TV. Zoomer may not have been happy to learn about the amended Employment Agreement, but it, nevertheless, went ahead to complete its negotiations with S-Vox.

[35] On June 15, 2009, Zoomer entered into an agreement to purchase the Vision TV business (the “Vision TV Purchase Agreement”). The Vision TV Purchase Agreement was conditional on regulatory approval.

[36] In the Vision TV Purchase Agreement, Zoomer agreed to an assignment of Mr. Roberts’ Employment Agreement and the Amendment Agreement and to continue Mr. Roberts’ employment “on terms which will be no less favourable” to Mr. Roberts.

[37] In 2009, while the completion of the Vision TV Purchase Agreement was still pending, Mr. Roberts and Zoomer entered into negotiations regarding a possible extension to Mr. Roberts’ employment term. In the negotiations, Mr. Levine represented Mr. Roberts. Mr. Znaimer negotiated on behalf of Zoomer.

[38] On August 27, 2009, Mr. Levine e-mailed Mr. Znaimer a set of proposed terms for a new employment agreement. The e-mail proposed an employment term of three years at a salary of $340,000 per annum, severance of three-years’ compensation and preservation of the sabbatical payment.

[39] The proposed terms were not acceptable to Mr. Znaimer, and the negotiations continued through the summer and into the fall and early winter.

[40] In his affidavit for this motion, Mr. Znaimer swore that as of December 9, 2009, he and Mr. Levine had “reached agreement on all issues related to the extension of Roberts’ employment with the exception of Roberts’ severance entitlement.” In cross-examination, however, Mr. Znaimer admitted that the parties had also been unable to reach agreement on the terms of an extended Employment Agreement for Mr. Roberts.

[41] In his affidavit, Mr. Znaimer swore that after December 9, 2009, he and Mr. Levine reached agreement on the severance issue, based on terms set out in an e-mail from Mr. Znaimer of that date, which provided that Mr. Roberts would be entitled to severance of $701,000, payable over two years, as salary continuance. On his cross-examination, he said, however, that Mr. Roberts never accepted this proposal.

[42] The negotiations ended with a four-page, single-spaced, typed letter dated March 4, 2010 from Zoomer to Mr. Roberts. The letter stated:

Dear Bill

Further to our recent discussions, we are herein detailing the specifics of your engagement with ZoomerMedia Limited (“Zoomer”) as President and Chief Executive Officer of the Television Division upon the successful closing of the purchase transaction between Zoomer and Vision TV …

You will report directly to Moses Znaimer on all matters ….

Your compensation shall be the same as it is under your existing employment agreement which terminates October 31, 2011.

You will be granted options to purchase 1,000,000 common shares of Zoomer. ….

On November 1, 2011, the Company will enter into a new employment agreement with your for a minimum period of one year. The compensation terms of this employment agreement shall be as follows:

1. An annual salary of $275,000 that shall be paid on a semi-monthly basis;

You will be appointed to the Executive Management Committee of Zoomer.

Confidentiality

You acknowledge that in your employment with Zoomer that you will be making use of, acquiring and adding to confidential information. ….

Communications and Computer Systems

The communication and computer systems of Zoomer are for the sole benefit and use of Zoomer, its employees and contractors and are the property of Zoomer to be used in connection with normal business activities. All … electronic communications and transmissions, whether analog, digital, or voice recording made or received on the premises of Zoomer are property of Zoomer.

Acceptance

I would ask that you review the terms of employment and that you sign the enclosed copy of this letter in the space provided, signifying your acceptance. …

[43] Mr. Roberts signed the letter. However, the parties are in accord that the March 4, 2010 letter was not a binding agreement. On cross-examination, Mr. Znaimer explained: “Well, there was no agreement. There was no agreement. There was a discussion. This is part of a discussion. Eventually this discussion went to writing and there was no agreement.”

[44] Zoomer’s legal position is the same about the legal effect of the signed letter of March 4, 2010. Later, when Zoomer terminated Mr. Roberts’ employment, Zoomer’s lawyer wrote that there was “no valid and subsisting agreement between the parties that can be enforced by either party.”

[45] There is a dispute between the parties about whether Mr. Morrison or Mr. Levine - on Mr. Roberts’ behalf - agreed to forgo the entitlement to a six-month sabbatical or the other severance entitlements under the Employment Agreement during the negotiations or as a result of the March 4, 2010 letter. Zoomer submits that Mr. Roberts waived his severance payments and his sabbatical payment. This is denied by Mr. Roberts.

[46] I see no basis for any waiver. As set out above, the Employment Agreement provides that there are no amendments or waivers unless executed in writing by the party to be bound thereby. There was no written waiver. There was no consideration given to Mr. Roberts to forgo any his entitlements under the Employment Agreement. The parties’ shared position is that the March 4, 2010 letter has no contractual effect. I pause parenthetically to note that the case at bar is a testimonial to the virtue of the parol evidence rule. The virtue of the parol evidence rule is that it lets the writing express what the parties agreed which provides an objective measure far more reliable than the after-the-fact thoughts of the parties about an alleged meeting of the minds. In any event, in the case at bar, the parol evidence leads to the conclusion that there was no meeting of the minds about the March 4, 2010 letter notwithstanding that it was signed by both parties.

6. The Closing of the Vision TV Purchase Agreement

[47] With regulatory approval having been achieved, the conditions in the Vision TV Purchase Agreement were resolved, and on June 24, 2010, Katherine Pollock, counsel for S-Vox Trust, requested that letters acknowledging the assignment of the employment contracts of the executive management team be prepared.

[48] On June 26, 2010, the purchase of Vision TV closed.

[49] Zoomer provided Mr. Roberts with an assignment letter dated June 26, 2010 confirming that it was receiving an assignment of his current Employment Agreement and the Amendment Agreement and that the terms of those agreements would “be the terms of employment enjoyed by you at Zoomer.”

[50] Mr. Poland testified on behalf of Zoomer that he understood that the assignment letter was relevant only with respect to Mr. Roberts’ compensation up to October 31, 2011 and that a new employment contract - without any carry forward entitlements from the Employment Agreement - would be negotiated for Mr. Roberts. From this circumstance, Zoomer submits that because Mr. Roberts and his lawyers knew that Zoomer’s understanding about the relevance of the existing Employment Agreement differed from Mr. Roberts’ understanding, Mr. Roberts’ cannot rely on the June 26, 2010 assignment letter.

[51] I see no reason why Mr. Roberts’ cannot rely on the June 26, 2010 assignment letter. That said, I also regard whether he can or cannot rely on the letter as a red-herring. Mr. Roberts does not need to rely on the June 26, 2010 letter to make his case that Zoomer was the successor employer to S-Vox Trust and that at least up until October 31, 2011, Mr. Roberts’ employment relationship was governed by the Employment Agreement as amended.

[52] In any event, Mr. Roberts began working at Zoomer without any change to his compensation as described in the Employment Agreement or in the Amendment.

7. The Negotiations Resume

[53] In or around August 2011, in anticipation of the expiry of his Employment Agreement, Mr. Roberts contacted Mr. Znaimer to negotiate a new agreement. Mr. Znaimer asked Mr. Roberts to have his legal counsel prepare a letter setting out the terms of a new employment agreement as an extension of his current agreement.

[54] On September 16, 2011, Mr. Roberts sent Mr. Znaimer a letter setting out the proposed terms of a new employment agreement. Zoomer labels this letter the “Extension Letter”. The letter provided that Mr. Roberts’ current Employment Agreement would be extended for one year and that all of Mr. Roberts’ current entitlements were to be continued, with increases in some areas, including salary. The letter also provided that the sabbatical payment would be provided at the end of the one-year extension.

[55] Mr. Znaimer deposed that it was only after the receipt of the Extension Letter that he realized that the March 4, 2010 letter was not a binding agreement because the parties had not come to terms.

[56] Pausing here, it may be the case that up until the September 16, 2011, Mr. Znaimer thought the matter of Mr. Roberts’ future contract had been resolved by the March 4, 2010 letter, but that belief is at odds with Mr. Znaimer inviting Mr. Roberts to have his legal counsel prepare another letter. However, given the position of both parties that the March 4, 2010 letter did not constitute a binding agreement, nothing much turns on Mr. Znaimer’s belief. If Zoomer believed that the deal was done and that it was inappropriate or unfair for Mr. Roberts to re-open the matter, then it should not have engaged in the negotiations and rather should have firmly insisted on the terms of the March 4, 2010 letter.

[57] In any event, the negotiations continued. Various proposals were made. There was a consensus that Mr. Roberts’ base salary should be increased to $275,000 per annum. However, just as Mr. Roberts’ Employment Agreement was set to expire, the parties had not consummated their negotiations.

[58] The evidence for the summary judgment motion and the cross-examinations addressed the various proposals, but since no agreement was actually reached, nothing ultimately turns on what the parties thought, what they thought the other side thought, or what they thought the other side thought that they thought. The point remains that the Employment Agreement still existed, and the parties had not negotiated anything to replace it. The parties’ promises of performance under the Employment Agreement remained to be honoured.

[59] On October 28, 2011, Zoomer increased Mr. Roberts’ salary to $275,000 per annum, effective November 1, 2011. Mr. Znaimer later testified that the salary increase was provided as an act of good faith. Later that day, Mr. Morrison, wrote to Zoomer advising that:

… the acceptance of any increase in base salary or other consideration by Bill as indicated in the exchange of emails earlier today should not be construed as any waiver or forfeiture of any rights Bill may have to strictly enforce the terms of his Employment Agreement, including the provision of the expiry payment. The acceptance is in no manner an agreement to extend the current employment agreement.

8. The Negotiations Implode

[60] As I shall explain in more detail below, on October 31, 2011, Mr. Roberts’ Employment Agreement - but not his employment - came to an end.

[61] By way of an analogy, which was discussed during the hearing of the summary judgment motion, just as the fixed-term lease can come to an end and the landlord and tenant relationship change to a monthly-tenancy for the overholding period, Mr. Roberts’ fixed-term employment contract had come to an end, and now his employee-employer relationship was a so-called common law employment relationship.

[62] On November 1, 2011, there was a telephone conversation between Mr. Morrison and Mr. Poland. During this call, Mr. Morrison proposed that the parties “agree to disagree” about Mr. Roberts’ entitlement to a sabbatical payment. Mr. Poland did not think that this was a reasonable approach, and he indicated that Zoomer did not agree to Mr. Roberts’ proposals about how to deal with severance payments.

[63] On November 4, 2011, Mr. Znaimer and Mr. Roberts had a meeting in an attempt to resolve the matter of the terms of Mr. Roberts’ continuing employment and to formalize the employment relationship. At this meeting, Mr. Znaimer said that Mr. Levine had waived Mr. Roberts’ entitlement to the sabbatical payment and that Zoomer would not enter into a further agreement that included an entitlement to a sabbatical payment.

[64] As a legal matter, for the reasons expressed above, Mr. Znaimer was incorrect in suggesting that Mr. Roberts’ entitlement to the sabbatical payment had been waived. In any event, the meeting of November 4, 2011 resolved nothing and it changed nothing.

[65] With no new agreement in place and while the parties were still negotiating, on January 10, 2012, Zoomer was advised that Mr. Roberts intended to commence legal proceedings by January 20, 2012 if his claim to the severance payment and to his sabbatical payment were not resolved.

[66] Mr. Znaimer responded to this advice by arranging a meeting with Mr. Roberts. At the meeting, he urged Mr. Roberts not to litigate. He told Mr. Roberts that he thought a deal could still be reached and that it would include a two-year severance payment.

[67] However, after January 16, 2012, there were no new negotiations, and instead on March 1, 2012, Mr. Poland advised Mr. Roberts that his employment was being terminated. Mr. Poland gave Mr. Roberts a letter from Mr. Znaimer that stated that Mr. Roberts would receive eight months working notice followed by a two-month severance package. The letter stated:

Dear Mr. Roberts:

This letter will confirm the termination of your employment with ZoomerMedia Limited (“Zoomer”) effective October 31, 2012.

As discussed with you, between now and October 31, 2012 (the “Notice Period”), we expect that you will continue to perform the employment responsibilities as President and CEO of the Television Division of Zoomer in a professional and competent manner.

During the Notice Period, you will continue to receive your regular salary and pension and will continue to participate fully in the company’s benefit programs. In short, there will be no change to the terms and conditions of your compensation.

Upon satisfactory completion of the Notice Period, Zoomer will:

(i) make payment to you of an amount equal to your base salary for a two month period; and

(ii) continue your health and dental coverages under December 31, 2012. All other benefit coverages will cease on October 31, 2012.

In the event you resign your employment before the end of the Notice Period or your employment is terminated for cause by Zoomer on or before the end of the Notice Period, you will not be entitled to the severance payment and benefit continuation set out above.

I trust this is satisfactory and look forward to your continued contribution to Zoomer.

[68] On the same day, Zoomer’s lawyer, Julie O’Donnell, wrote to Mr. Morrison. The letter indicated that Zoomer was prepared to continue negotiations on a without prejudice basis towards a new employment contract but that Mr. Roberts’ employment had been terminated in what was said to be a fair and reasonable manner.

[69] The termination letter explains Zoomer’s theory as to why the Employment Agreement no longer applied and why it had been replaced by an indefinite common law employment relationship. Ms. O’Donnell’s letter stated:

It is very clear that our clients are not in agreement on the terms of any entitlements upon termination of Mr. Roberts’ employment. They are certainly not in agreement on your client’s entitlement to a sabbatical, any benefit extension or any entitlement Mr. Roberts might have had under Section 9.1 of his employment agreement with Vision TV (as you no doubt recall, this is the provision that entitled your client to a severance payment equal to 2 years’ salary, payable upon termination of his employment). Further, there is certainly no basis for which Mr. Roberts can conclude that any alleged payment owing under Section 9.1 became due November 1, 2011.

In the circumstances, I have advised my client that, as it cannot be said that the parties were ever ad item on any terms relating to the termination of Mr. Roberts’ employment, there is no valid and subsisting agreement the parties that can be enforced by either party. Mr. Roberts is therefore a full time employee employed on a contract of indefinite duration. Mr. Roberts is entitled to notice of termination of employment or pay in lieu of such notice in accordance with the common law.

[70] Pausing here, I disagree with Zoomer’s conclusion that Mr. Roberts was only entitled to notice in accordance with the common law for wrongful dismissal cases.

[71] The written Employment Agreement had not been discharged, and the promises under it remained in force. Under the Employment Agreement, Mr. Roberts was entitled to receive a severance payment of $490,000. He was also entitled to a six-month sabbatical payment worth $150,000. He did not receive the lump sum payment of $490,000 or the sabbatical payment. It follows that, subject to Mr. Roberts’ other alleged heads of damages, his damages from Zoomer’s breach of contract are $490,000 plus $150,000; i.e., $640,000 plus pre-judgment interest.

[72] To be more precise, the first point to note is that the Employment Agreement had run its course. Since Mr. Roberts’ employment under the Employment Agreement had ended, he was, therefore, entitled to the severance payment provided for under the Employment Agreement; i.e., $490,000.

[73] The next point is subtle. Although Mr. Roberts’ employment under the Employment Agreement had ended, his employment with Zoomer had not ended. His employment continued under a common law employment relationship. Thus, the situation on October 31, 2011, was that Mr. Roberts’ employment under the Employment Agreement was terminated, but he “remains employed on October 31, 2011,” which situation triggered his entitlement to the sabbatical payment.

[74] Thus, on October 31, 2011, under the Employment Agreement, Mr. Roberts was entitled to be paid his severance pay and also his sabbatical payment, and Zoomer breached the Employment Agreement, and it is liable for breach of contract for not performing its obligations under the Employment Agreement.

[75] In other words, and perhaps ironically, some of the premises of Zoomer’s theory of the case are correct. The theory is correct insofar as it posits that the Employment Agreement had ended, and it is correct insofar as it posits that Mr. Roberts and Zoomer had entered into a common law employment relationship as of October 31, 2011. Zoomer, however, is incorrect in its conclusion that the common law employment relationship somehow discharged Zoomer of its obligations under the Employment Agreement. There was no novation. What happened after October 31, 2011 is that the common law employment relationship governed, but it did not waive or discharge the promises under the Employment Agreement.

[76] It is a neat question, but one I need not answer, whether Zoomer properly discharged its obligations under the common law relationship when it terminated that relationship pursuant to the termination letter of March 1, 2012. I need not answer the question because Mr. Roberts makes his claim only under the Employment Agreement.

[77] As for pre-judgment interest, using the interest rate of 1.3% per annum, the daily interest charge is $22.79 and commencing the interest charges from April 11, 2012 (the date of the issuance of the Statement of Claim) to and including March 4, 2016 (1,424 days), the pre-judgment interest charge is $32,452.96.

[78] The result is that, subject to Mr. Roberts’ other heads of damages, he is entitled to judgment for $640,000 plus pre-judgment interest of $32,452.96 for a total award of $672,452.96.

[79] I note here that Zoomer submits that Mr. Roberts was obliged to mitigate his damages and that he has failed to do so. I disagree. While it would have been the case that Mr. Roberts would have been obliged to mitigate his damages from his common law wrongful dismissal claim, he was under no obligation to mitigate his damages for the loss of his entitlements under the Employment Agreement.

[80] Where the parties to an employment agreement fix the entitlements upon termination, those entitlements are treated as a contractual entitlement for which mitigation is not required: Bowes v. Goss Power Products Ltd., 2012 ONCA 425; Maxwell v. British Columbia, [2014] B.C.J. No. 2239 (B.C.C.A).

9. From March 1, 2012 to October 31, 2012

[81] After the delivery of the March 1, 2012 letter, Mr. Roberts continued to be the President and CEO of the Television Division of Zoomer.

[82] Based on my review of the evidence, he was respected and treated fairly during this period of his presidency and he has no cause for complaint.

[83] While he was still working at Zoomer, Mr. Roberts commenced this action in April 2012 and he finished work in October 2012.

10. The Claim for Bad Faith Damages, Aggravated Damages and Punitive Damages

[84] I turn now to Mr. Roberts’ other heads of damages. Mr. Roberts claims $100,000 for bad faith damages, $100,000 for aggravated damages, and $100,000 for mental distress or punitive damages.

[85] Mr. Roberts submits that Zoomer’s conduct warrants the condemnation of the court and that he is entitled to bad faith damages, aggravated damages, and damages for mental distress or punitive damages because: (a) Zoomer knowingly and intentionally breached his Employment Agreement; i.e., Zoomer knew that he was entitled to a predetermined severance package but offered him only common law damages; (b) Zoomer, while denying his entitlements, was simultaneously claiming an adjustment from S-Vox Trust for the same sum; (c) Zoomer acknowledged in its Management Information Circular that his Employment Agreement “includes a clause which provides payment of 24 months’ salary, bonus and benefits if he is terminated without cause or if he stays to the end of the term of the contract which is October 31, 2011”; (d) Zoomer’s representatives deposed that he had waived his severance entitlements but later admitted on cross-examination that the parties had not consummated a new employment agreement; (e) Zoomer searched his email archives for privileged communications; and (f) Zoomer intentionally delayed and stalled the litigation to discourage him.

[86] Thus, there are varieties of circumstances upon which Mr. Roberts relies to base his bad faith, aggravated damages, and punitive damages claims. As I shall now explain, it is not necessary for me to review the legal basis for such claims because my review of the evidence satisfies me that there is no factual basis for any of them.

[87] One of the circumstances Mr. Roberts relies on is the circumstance that in the context of this litigation, Zoomer conducted a search of its computer system and obtained archived copies of Mr. Roberts’ email communications, including his possibly privileged communications with his various lawyers.

[88] I give no legal weight to this particular circumstance. It was at least foolish and possibly contrary to his Employment Agreement for Mr. Roberts to do personal business and to communicate with his lawyers on his employer’s computer system. It is possible that by communicating in this way, Mr. Roberts waived privilege, but, in any event, he made no claim for privilege in this action. I see no reason why Zoomer should be fastidious about protecting Mr. Roberts’ privilege when he is so cavalier about protecting it.

[89] Another circumstance relied on by Mr. Roberts in his pursuit of these various heads of damages is that at the same time as Zoomer was disputing Mr. Roberts’ Employment Agreement entitlements, it was claiming a working capital adjustment from S-Vox Trust under an adjustment provision in the Vision TV Purchase Agreement. In this regard, Zoomer included an adjustment claim for its liability to Mr. Roberts.

[90] I give no legal weight to this circumstance. While Zoomer might have engaged in hypocritical posturing, it did not change Zoomer’s right to dispute Mr. Roberts’ entitlement and if anybody would have been harmed by the hypocrisy, it would have been S-Vox Trust if it turned out that Mr. Roberts was not entitled to severance payments, which, as it turns out, is not the case. It is for these reasons that I give no legal weight to this circumstance.

[91] Another circumstance that is relied on by Mr. Roberts is the circumstance that Zoomer was disputing the matter of his entitlements while at the same time stating in its Management Information Circular (a regulatory requirement for a public company) that it had an Employment Agreement with Mr. Roberts that had a provision for payment of two years’ severance.

[92] Once again, I give no legal weight to this circumstance. There is nothing false or misleading about the statement in the Management Information Circular and the fact that it was made cannot be taken as an admission of liability or as precluding Zoomer from disputing Mr. Roberts’ contractual entitlements.

[93] Mr. Roberts alleges that Zoomer’s actions caused significant mental and emotional distress and that he had to seek medical attention. There is no evidence to support these allegations. The fact is that Mr. Roberts quite capably performed his working notice and there was nothing mean spirited in how he ended his time at Zoomer.

[94] Mr. Roberts alleges that Zoomer stalled and delayed the progress of the litigation. This allegation is not made out. Mr. Roberts originally sued Zoomer for $3.6 million, which claim he reduced to $940,000 for the purposes of this summary judgment motion. Zoomer was under no obligation to confess judgment, and it was entitled to mount a defence, which it did without undue delay.

[95] I have found that Zoomer breached the Employment Agreement but there is nothing in its breach that was egregious or shocking to the conscience of the court. If anything, Zoomer was tolerant in accepting, as it did, that the March 4, 2010 letter was not a binding agreement. I see nothing in the positions that Zoomer took that were not at least arguable, and there was nothing reprehensible in how it defended Mr. Roberts’ aggressive $3.6 million claim.

E. CONCLUSION

[96] For the above reasons, I grant Mr. Roberts a judgment for $672,452.96.

[97] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with Mr. Roberts’ submissions within 20 days of the release of these Reasons for Decision followed by Zoomer’s submissions within a further 20 days.

Perell, J.

Released: March 4, 2016

CITATION: Roberts v. ZoomerMedia Limited, 2016 ONSC 1567

COURT FILE NO.: CV-12-450944

DATE: 20160304

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BILL ROBERTS

Plaintiff

– and –

ZOOMERMEDIA LIMITED

Defendant

REASONS FOR DECISION

PERELL J.

Released: March 4, 2016