CITATION: Victess Capital Corporation v. Intact Insurance Company, 2016 ONSC 7838
COURT FILE NO.: CV-13-494821
DATE: 20161213
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Victess Capital Corporation, operating as Adamson, Sullivan, Grys, Peters Insurance Brokers, aka AGSP Insurance Brokers
Plaintiff
– and –
Intact Insurance Company
Defendant
Dennis M. O’Leary, for the Plaintiff
Cara Zacks, for the Defendant
HEARD: December 12, 2016
REASONS FOR JUDGMENT
S.F. Dunphy, J.
[1] The plaintiff Victess Capital Corporation was party to a Broker Profit Sharing Agreement effective January 1, 2012 with the defendant Intact Insurance Company. As a result of a calculation error, Intact told the plaintiff in November 2012 that its accrued profit share amount as of the end of September 2012 calculated pursuant to the Agreement was $91,042 whereas in fact the accrued amount was $2,402. Under the Agreement, profit share was calculated and payable at the end of the year based either on the full year amount or, if an election was made, on the higher of the September accrual and the full year amount less a deduction of 15%. The plaintiff made the election and sought to hold Intact to its erroneous preliminary calculation. Although aware of the nature and magnitude of the calculation error made before year end, the plaintiff did not seek to withdraw its election. Since the full year profit share calculated for the plaintiff of $24,550 exceeded the $2,402 in actual profit share earned for the nine months ended September 30, Intact paid the plaintiff the greater of the two amounts less the deduction of $390 in respect of the election made.
[2] At the conclusion of the trial of this matter, I made the following endorsement:
“For written reasons to follow, I find that there was no contract to pay $91,042 under the pleaded Profit Share Option”. The Statement of Claim does not plead the November 19 letter as a stand-alone contract but even if it did, the actual profit accrual as of September 30, 2012 per the Profit Share programme was $2,402. The plaintiff has been paid in full and this action is dismissed. Costs reserved.”
[3] These are the written reasons I undertook to deliver.
Factual overview
[4] The plaintiff formerly carried on business as a broker representing, among others, the defendant Intact.
[5] Mr. Peters, the president and sole shareholder of the plaintiff testified that, prior to selling its business as the end of 2012, Victess had a book of business of generating premiums of about $10 million annually on which his company would expect to earn commissions of about 15% or $1.5 million. If things were going well, Mr. Peters said that also expected to earn an additional amount of about 10% of commissions (or $150,000 per year) from profit sharing. Some years would be better, others worse. The defendant Intact represented about 16-18% of Victess’ book of business which means that Mr. Peters’ expectations of profit sharing from Intact would have been in the range of about $24,000 per year based on the size of his book of business with Intact.
(i) Intact Profit Share Program
[6] Intact offered its brokers the ability to earn a bonus by participating in its profit sharing program. The purpose of the program was described in the revised agreement effective January 1, 2012 as being “to foster the development of profitable portfolios of business by sharing those profits generated by such business through the mutual efforts of the company and the broker”. In the insurance business, profitable portfolios are those generating higher premiums, lower risk or both.
[7] The Agreement was a contract designed by Intact and implemented across its brokers without individual negotiation. Mr. Peters was given a copy of the new form of agreement as signed by Intact on or shortly after December 15, 2011 and he himself signed it back on December 20, 2011 without negotiation or objection. The effective date of the agreement was January 1, 2012 and superceded a prior (2004) form of the agreement that Victess had also signed.
[8] In summary, the Agreement provided for the share of underwriting profit of Intact contributed by each eligible broker to be calculated by taking the Gross Earned Premium of each broker and deducting commissions earned by the broker, a share of Intact’s own administrative expenses and claim losses associated with the book of business placed by the broker.
[9] Pursuant to s. 4 of the Agreement, “the amount of the Broker’s Profit Share Payable will be determined on a yearly basis”. The agreement prescribes a formula for determining the broker’s profit share percentage based on a variety of factors such as growth, change in number of policies in force and other factors. For 2012, the plaintiff’s percentage (the “Profit Share Factor”) was 22.5%. The actual calculation is done based on a two-year average of profit and a schedule illustrating the operation of the calculation was attached as Schedule 1.
[10] Among the changes made in the 2012 version of the program was a raising of the “stop-loss” amount from the former level of $300,000 to what Intact described as the “industry standard” of $500,000. Mr. Peters understood this revision to be negative from the broker’s point of view because it meant that the amount of losses that might be deducted from profit would potentially be significantly higher. The “stop loss” fixes the maximum level of losses able to be charged to the profit share account of a broker based on actual experience of a portfolio of business placed by the broker with Intact.
[11] Mr. Peters testified that he was not in possession of the information necessary to do his own calculation of the profit share with accuracy. While he would have records of the volume of premium business written, some clients would notify has office of claims made while others dealt directly with the insurer without his knowledge. The adjustment of claims might also be made without his knowledge.
[12] The Agreement also provided a “nine-month option”. As the terms of this option are significant, I set forth the relevant parts of s. 5 of the Agreement below:
“The Broker may elect by giving written notice to the Company prior to November 1 of any year of the Agreement, to guarantee the minimum amount of the Profit (Loss) as calculated from this Agreement. In this event, the Profit (Loss) for the year will be the greater of the Profit (Loss) calculated on September 30th or December 31st, minus an amount equal to fifteen (15%) of the amount of Profit Share Payable which would have otherwise been payable as at December 31st.”
[13] The deduction in respect of the nine-month option was a second change made by the 2012 form of the Agreement (compared to the 2004 predecessor). The prior version of the Agreement calculated the deduction in respect of the election as 15% of the September 30 profit share; the 2012 version of the Agreement calculates the deduction on the December 31 profit share amount.
[14] While the Agreement does not actually require Intact to make a calculation of the estimated profit share as of September 30 each year for purposes of enabling brokers to consider whether to make the nine-month election, Intact did so in 2012 at least. Mr. Filice, the former Toronto Region Branch Manager of Intact, testified that the forms and election were often not ready to be sent by Intact to brokers until early November (after the prescribed November 1 deadline for making the nine-month election). However, the parties did not lead evidence of the practice in relation to the nine-month election in prior years and I have not made any findings in that regard.
(ii) November 19, 2012 election letter
[15] On or shortly after November 19, 2012 the plaintiff received a letter from the defendant. The letter was titled “Re: Broker Profit Sharing Program – Nine-month Option”. The relevant portion of the letter reads as follows (emphasis added by me):
“Dear Brian,
We hope that this is been a successful year for you and your staff. As you know, each year at this time we contact our brokers with respect to a unique feature of the Intact Insurance Profit Share Program known as the Nine Month Option.
Please find enclosed your preliminary Profit Sharing calculation as at September 30th, 2012. The Intact Insurance program is based on a two–year average earned loss ratio, resulting in a calculation which includes last year’s results along with the first nine months of this year. Please review this statement in conjunction with your copy of the profit-sharing program.
As detailed in the program, you may elect to insure the amount of profit sharing has calculated at the end of the third quarter. By doing so, your profit share will be the greater of the profit share calculated on September 30th, 2012 or December 31st, 2012. The cost of this option is 15% of the profit share amount as calculated on September 30, 2012. Election of this feature is absolutely at your discretion.
We request that you notify us in writing (see Option Fax Sheet attached) as to your intentions with regard to the bonus insurance no later than November 26, 2012. If no notification is received it will be deemed that no bonus insurance is in effect”
[16] Mr. Filice testified that the November 19 letter was a form letter sent to all brokers. While he was in the process of moving from the Ajax region to the Toronto region at that time, similar letters were sent to the brokers supervised by him in Ajax.
[17] Attached to the November 19 letter were two documents.
[18] The first was a form, entitled “Broker Profit Sharing Agreement” and containing a detailed calculation of profit share for the period ending September 30, 2012 in form similar to the full-year calculation found at Schedule 1 to the Agreement. The last line of the form reads “Profit Share at September 30, 2120 [Minimum Payable if Insurance Option Selected (less 15% of this amount)]: $91,042.
[19] The second attached page was titled “Option Fax Sheet” and “Re: Contingent Profit Share Nine-month Option”. Two boxes were provided – “Yes, I elect to insure my contingent profit share as of September 30, 2012 at a charge of 15% of my anticipated profit share” and “No, I decline to insure my profit share amount”. Mr. Peters signed and returned the Option Fax Sheet to Intact on behalf of the plaintiff on November 23, 2012 with the “Yes” box selected.
(iii) Intact Discovers Error in Calculation
[20] In early December 2012, Intact discovered that it had made an error in calculating the September profit share estimates sent to brokers on November 19, 2012 (including the plaintiff). The error appears to have had a number of causes including a merger with another insurance company and the raising of the “stop loss” level to $500,000 in 2012. The fact of the error being admitted, the precise means by which it occurred is not material.
[21] A “first” revised form calculating the profit share for each broker for the period ending September 30, 2012 was prepared on or about December 4, 2012. The calculation inputs shown on the revised form was in all respects identical to the form provided to the plaintiff on November 19, 2012 with one exception. The “Stop Loss Credit” was changed from $833,887 to $245,979. As a result of this change, the profit share of the plaintiff for the nine-month period dropped from $91,042 to $24,902.
[22] After this first recalculation was made, Mr. Filice contacted the plaintiff to explain the error and to determine whether the plaintiff wished to change its election. I find that this contact occurred in early December 2012 – likely a day or two after December 4, 2012 when the internal memo explaining the error was circulated among Intact personnel.
[23] Mr. Filice explained the fact of the error in the calculation and its magnitude to Ms. Grys. He asked whether the plaintiff wished to change its election. Mr. Grys was then a senior officer of the plaintiff (and purchased the business at the end of December 2012). Ms. Grys advised Mr. Filice to contact Mr. Peters.
[24] Mr. Filice called Mr. Peters; Mr. Peters returned the call. How many rounds of “telephone tag” were played is not known. At one point, Mr. Filice left a voice mail message for Mr. Peters. It is not suggested that he left significant details regarding the error made by voice mail however. Mr. Filice and Mr. Peters did not actually speak.
[25] I find that the plaintiff was advised (i) of the fact of the error in the November 19 calculation; (ii) of the order of magnitude of the error; and (iii) of Intact’s willingness to allow the plaintiff to withdraw its nine-month election. Ms. Grys was advised of these facts and I find that it is quite likely she so advised Mr. Peters. In any event, she was a senior and responsible officer of the plaintiff at the relevant time.
[26] There is conflict in the evidence between Mr. Filice and Mr. Peters as to what was communicated by Mr. Filice to the plaintiff in December 2012. I have no hesitation in preferring Mr. Filice’s evidence. Further, the plaintiff had the opportunity but failed to call Ms. Grys who had personal knowledge of much of what Mr. Filice related.
[27] On or about December 14, 2012, Intact discovered another error had made its way into the (re)calculation of the September figures done earlier in the month. Among other things, it was discovered that the August loss figures had been used instead of September. Once again, a new calculation of the broker profit share figures was produced. The sheet for the plaintiff shows the Stop Loss Credit declining to $45,979 from $245,979 in the earlier version (and $833,887 in the November 19 estimate). The impact of the change was to lower the plaintiff’s profit share amount for the period ending September 30, 2012 to $2,402.
[28] I find that the $2,402 figure for the plaintiff’s profit share for the period ending September 30, 2012 is the correct figure in the sense that this is the figure for the period ending September 20, 2012 calculated pursuant to the formula contained in the Agreement. The other two versions of this schedule were incorrect and did not correspond to the calculation required by the Agreement.
[29] Mr. Filice was unable to explain why neither of the two correcting schedules were actually sent to Mr. Peters and the plaintiff. A form letter had been generated to do so and was sent to at least two other brokers. Mr. Filice candidly admitted that this was an error on Intact’s part.
(iv) Final Calculation and Payment of Bonus
[30] Intact prepared the required profit share bonus calculation pursuant to the Agreement for the period ending December 31, 2012 in early 2013. No errors were made this time.
[31] The final calculation for the full year showed a final profit share amount of $24,550. Given the nine-month election made by the plaintiff, a deduction of 15% of the (corrected) September profit share calculation of $360 was made, resulting in a final bonus amount of $24,190. This amount was sent to the plaintiff by cheque at the end of March.
[32] It is to be noted that the defendant applied the 15% deduction to the (corrected) September profit share amount of $2,402 instead of the “amount …which would have otherwise been payable as at December 31st” being $24,550. In so doing, the plaintiff carried forward the practice from the former version of the Agreement and an internal memo indicates that the change would be applied in subsequent years after explaining it to brokers (this change had not been referenced in the memo accompanying the 2012 version of the Agreement that explained other changes made).
[33] Nothing turns on this in my view – the discretion exercised in the plaintiff’s favour in this case was to its advantage and resulted in a payment to the plaintiff that was $3,322.20 higher than it would otherwise have been had Intact strictly applied s. 5 of the Agreement.
[34] There had been a dispute between the parties as to whether the cashing of this cheques by the plaintiff was in full and final satisfaction of its claim to bonus for 2012. The defendant declined to press that argument at trial.
[35] The plaintiff urged me in final argument to find that it had been singled out and that other brokers had received the “promised” September bonus amounts. I do not so find. Mr. Filice had no knowledge of whether that was true and disagreed with the plaintiff’s assertion when examined on the point. The plaintiff pointed to a single document (tab 18 of Exhibit 1) that was a draft template for a form letter that in some form was ultimately sent out to two other brokers. The draft is, at best, equivocal. I find this to be the sort of thing that would have come to Mr. Filice’s attention (it provided for the “Branch Manager” to sign it and this was Mr. Filice’s title at the time) and his inability to confirm the plaintiff’s suspicion leads me to infer that the suspicion is both unproved and misplaced. I cannot draw the inferences from Tab 18 of Exhibit 1 that the plaintiff would have me draw. Even if sent as is, the document is capable of more than one reading. The fact alleged was neither pleaded nor relevant to the claim in any event.
(v) Credibility of witnesses
[36] Three witnesses were called by the parties, although only Mr. Peters and Mr. Filice testified.
[37] The defendant called Mr. Nadeau, an actuary working at Intact, to explain the error that had been made, to demonstrate that the calculation of $2,402 for the plaintiff’s profit share amount as at September 30, 2012 was accurate and to explain the basis of the error originally made in calculating the profit share estimate for certain brokers as of September 30, 2012 in the election letters. Mr. Nadeau was excused from testifying on the basis of the plaintiff taking no dispute with the fact of the error made in calculating the plaintiff’s profit share as of September 30 in November 2012 and with the accuracy of the corrected numbers produced by Intact in December 2012 (when the $2,402 figure was produced).
[38] Mr. Peters was the only witness who testified on behalf of the plaintiff. I found his testimony to be quite lacking in candour and unduly self-serving on occasion. He seemed to be striving to frame his answers carefully so as to infer things he was unwilling (or unable) to state. An examples of this was his careful assertion that he had no personal voice mail while not addressing whether his firm had voice mail where messages for him could be left. I found his testimony unconvincing and at times artificial and rehearsed (especially when attempting to have his testimony dove-tail with the “Insurance Act” amendment made to the pleading at the outset of the trial. Mr. Peters had an obvious and direct financial interest in the outcome of the litigation as sole shareholder of the plaintiff.
[39] Mr. Filice, on the other hand, was neutral and fair-minded in his testimony. He is no longer employed by Intact, having changed employers since 2012 to pursue a promotion in his career. He had no financial stake in the matter and appeared under subpoena. He was careful to stick to what he knew and I found him both candid and credible.
[40] In all cases of conflict between Mr. Peters’ testimony and Mr. Filice, I have preferred the testimony of Mr. Filice.
Issues to be decided
[41] Is the November 19, 2012 letter a contract separate and apart from the January 1, 2012 Agreement?
[42] Is the November 19, 2012 letter a contract of insurance within the meaning of the Insurance Act, R.S.O. 1990, c. I.8?
[43] Is the defendant entitled to the remedy of rectification in respect of the error made in calculating the September 30 profit share amount attached to the November 19, 2012 letter?
[44] Is the defendant otherwise bound by the calculation of the September 30 profit share amount attached to the November 19, 2012 letter?
Analysis and discussion
(a) Is the November 19, 2012 letter a contract separate and apart from the January 1, 2012 Agreement?
[45] In final argument, the plaintiff very strongly urged upon me the proposition that the November 19, 2012 letter, together with the Option Fax Sheet and the Schedule containing the $91,042 profit share calculation as a stand-alone contract, separate and distinct from the January 1, 2012 Agreement.
[46] I cannot agree with this characterization.
[47] Firstly, no such stand-alone agreement was pleaded in the Statement of Claim.
[48] The Statement of Claim clearly pleads the “Agreement” dated January 1, 2012 and the “Profit Share Option” provided in paragraph 5 thereof. Paragraph 9 pleads that the letter of November 19, 2012 “offered to the plaintiff the Profit Share Option and requested that the plaintiff indicate its intention to accept the Profit Share Option”. This is a clear and direct admission that the November 19, 2012 letter provided an option pursuant to the Agreement and is thus inconsistent with such letter being a stand-alone contract separate and independent of the Agreement.
[49] Paragraph 11 of the Statement of Claim pleads that the plaintiff accepted the Profit Share Option, once again referencing term defined in reference to paragraph 5 of the Agreement.
[50] Apart from the pleadings issue – by no means a minor obstacle given the admissions made – the argument advanced by the plaintiff is simply without merit. The text of the November 19 letter makes numerous references to the Agreement and advises the reader to consult it. The letter could not and does not purport to stand by itself as a “stand-alone” agreement. It has meaning only when read with the Agreement. It cannot be read as having any intent other than to apply the Agreement.
[51] The plaintiff submitted that the November 19 letter departed from the strict terms of the Agreement in two respects and must therefore be viewed as a separate contract. I cannot agree with the logic of the proposition, nor the facts alleged.
[52] The Agreement provided a deadline for electing the nine-month option of November 1 of each year. The letter of November 19 stipulated an election deadline of November 26. The election deadline being for the benefit of Intact was certainly one that could be waived by Intact and the letter satisfies the writing requirement for waiver stipulated by the Agreement.
[53] The second departure from the strict terms of the Agreement was the stipulation that the deduction made in respect of the election would be calculated based on the September bonus amount rather than the December amount as provided in s. 5 of the Agreement. The departure was no more than a simple error. This was the basis of calculating the deduction under the prior version of the Agreement and the practice was unwittingly carried forward. As it turns out, the “error” was to the manifest benefit of the plaintiff in any event.
[54] I find that the November 19 letter was not a separate stand-alone contract. To the extent it intended to have legal consequences – a matter discussed in further detail below – that intention cannot reasonably be extended beyond the application of the January 1 2012 Profit Sharing Agreement. There was no separate “offer” contained in the letter. The only “offer” extended was to exercise the option conferred by s. 5 of the Agreement in circumstances and governed by the terms of that Agreement. The only contractual intent that I would infer from the letter is the intent to waive the application of the November 1 election deadline – a waiver that Intact was perfectly entitled to grant unilaterally of a condition for its sole benefit.
(b) Is the November 19, 2012 letter a contract of insurance within the meaning of the Insurance Act?
[55] The plaintiff amended its pleading at the opening of the trial to plead s. 124 of the Insurance Act on the theory that the November 19 letter can be construed as a “contact of insurance” as defined in the Insurance Act. If successful in arguing that the letter can be considered to be a “contract of insurance”, the plaintiff submits that no term of the contract is admissible in evidence to the prejudice of the insured unless set out in writing and attached securely to the contract of insurance: s. 124 Insurance Act. By this means, the Agreement would be excluded as would the subsequent corrected calculations of the profit share as at September 30 performed by Intact.
[56] The Section 1 of the Insurance Act defines “contact” to mean “a contract of insurance”. The term “insurance” is defined to mean “the undertaking by one person to indemnify another person against loss or liability for loss in respect of a certain risk or peril to which the object of the insurance may be exposed, or to pay a sum of money or other thing of value upon the happening of a certain event, and includes life insurance”.
[57] The plaintiff submitted that the profit share plan provided that the plaintiff was entitled to profits, which profits were subject to the risk of claims being made. By electing the nine-month option, the plaintiff was insuring itself against the occurrence of further claims in the fourth quarter than might cause it to “lose” profit.
[58] In my view the plaintiff’s position is neither sound nor relevant.
[59] It is not sound because it is premised on a fundamental misconstruction of the relationship between the parties. The election contained in paragraph 5 does no more than provide an optional alternate means of calculating the entitlement of the plaintiff to bonus. That entitlement is either premised on the profit calculated for the full year, or, if so elected, the greater of the September and December profit figures less the 15% deduction. Section 5 of the Agreement is not providing “insurance” against losses or liabilities of the plaintiff arising from claims made by others. It merely provides an alternate means of calculating the liability of the defendant. The plaintiff could never be at risk of suffering a “loss” nor of having a “liability” under s. 5 of the Agreement. The “loss” being “insured” against is inherent in the nature of the right that the plaintiff enjoyed under the Agreement.
[60] The colloquial use of the word “insure” or “profit loss insurance” does not alter this analysis.
[61] The plaintiff’s position is not relevant because it begs the question of the enforceability of the schedule calculating the September 30 profit figure – error and all – attached to the November 19 letter. If the schedule bound Intact when delivered despite the errors it contained, it is not “more” binding by reason of s. 124 of the Insurance Act if considered as an insurance contract. If it was not binding, than it formed no part of the alleged “insurance contract” in the first place.
(c) Is the defendant entitled to the remedy of rectification in respect of the error made in calculating the September 30 profit share amount attached to the November 19, 2012 letter?
[62] There is no question that the schedule attached to the November 19 letter was in error. It has been admitted that the revised Schedule of December 14 (Tab 19 of Exhibit 1) is the correct calculation of the plaintiff’s profit share under the Agreement for the period ending September 30, 2012.
[63] Not only was the attached schedule in error, but the error was one that I would have no hesitation in finding that the plaintiff either knew of or strongly suspected. The bonus implied for nine months was far in excess of what Mr. Peters testified that he hoped to earn by way of bonus in 12 months of a good year. He hoped to earn about profit sharing bonus of about 10% of his commission income. The November 19 schedule revealed the plaintiff’s commissions (a figure that was not corrected) were $237,963 as of September 30, 2012, suggesting an expected “good” bonus of under $24,000 compared to the $91,042 figure shown on the erroneous schedule. Further, Mr. Peters’ expectations for 2012 were, if anything, lower given the rise in the stop loss amount that subjected his share of profits to a greater portion of actual losses. This fact coupled with the dramatic year over year increase in claims (increased from $542,098 to $1,555,265 between 2011 and 2012 - another figure that did not change on the schedule when it was corrected) would have led any reasonable person to suspect that something was too good to be true. Indeed, the plaintiff cross-examined Mr. Filice on whether the number on the November 19 version of the schedule appeared unusual and he said that based on his experience the figure appeared to be “a high amount” and “a large payout”.
[64] Were it necessary, I should have had no hesitation in applying the doctrine of rectification to avoid conferring a windfall upon a party seeking to take advantage of an error in this fashion. However, in light of my findings on the effect of the November 19 letter below, I do not find that the contract needs rectification.
(d) Is the defendant otherwise bound by the calculation of the September 30 profit share amount attached to the November 19, 2012 letter?
[65] In my view, the plaintiff is seeking to attach to the November 19 letter and the schedule attached more weight than it can bear.
[66] The starting point is the Agreement.
[67] Section 5 of the Agreement imposes no obligations upon Intact at all. The right to make the election belongs to the broker. Intact is not obliged by the terms of s. 5 of the Agreement to remind the broker about the election nor even to provide information on what the accrual of profit share entitlement might look like.
[68] Section 7(c) provides that the “Company’s records will be used for all calculations in this Agreement” while s. 7(j) provides that the “final determination of any questions or disputes relating to calculations, conditions or terms of the Agreement will be made by the President of the Company.
[69] The plaintiff points to the lack of evidence of a determination having actually been made by the President. The submission misses the point. Nothing in the agreement gives any definitive status to a calculation delivered that contains an error. The fact that the companies “records” will be used to make the calculations and the fact that the President has the right to make “final determinations” are both strongly indicative of the fact that a statement that is made in error is not beyond correction.
[70] The fallacy in the plaintiff’s position can easily be seen by simply reversing the facts. If the plaintiff had actually been entitled to $91,042 in accrued bonus as of September 30 and been given a schedule representing only $2,402, it could not be said that the plaintiff would be bound by the defendant’s error.
[71] The bonus entitlement of the plaintiff – whether under the “default” full-year option or the optional nine-month option – is in either case the actual entitlement of the plaintiff calculated in accordance with the Agreement from the records of the Company. A statement delivered at variance with the contract between the parties cannot operate to amend the contractual entitlement of the plaintiff nor the contractual obligation of the defendant.
[72] The plaintiff’s claim actually amounts to a pleading of a collateral contract in disguise, a claim that would not succeed if directly made and can fare no better if made in disguise.
[73] Turning next to the letter of November 19, no intent to attach “definitive” status to the Schedule may be discerned. The calculation is termed a “preliminary” profit sharing calculation. The same paragraph of the letter that references the attached schedule directs the reader to review it “in conjunction with your copy of the Profit Sharing Program”. .
[74] While the schedule misrepresented matters when received, the plaintiff was advised of the error and its magnitude. It was given a chance to rescind its election – the only step that could be referred to as reliance. Not only did the plaintiff fail to plead the tort of negligent misrepresentation (having failed to file the motion it served to that effect) but the plaintiff’s reliance damages in this case would be limited to $360 (being the actual deduction made from the year-end bonus in respect of the election made based on the erroneous information).
[75] The simple fact of the matter is that the plaintiff had no entitlement at all on November 18, 2012. The time for electing the nine-month option had expired and the plaintiff’s actual accrued bonus entitlement as of September 30, 2012 was $2,402. The letter of November 19 did intend to confer the right to make a late election but cannot be construed as having also intended to create a collateral contract giving the plaintiff a gratuitous right to an accrued bonus almost 40 times larger than that provided for in the Agreement and in direct contradiction of it.
[76] I find that the schedule attached to the November 19 letter was prepared in error and did not bind the plaintiff to pay the amount so calculated in error.
Disposition
[77] The plaintiff’s action was dismissed at the conclusion of the trial. The defendant’s outline of costs has been filed with me and I shall receive written submissions of the parties on the matter of costs by December 23, 2012.
S.F. Dunphy J.
Released: December 13, 2016
CITATION: Victess Capital Corporation v. Intact Insurance Company, 2016 ONSC 7838
COURT FILE NO.: CV-13-494821
DATE: 20161213
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Victess Capital Corporation, operating as Adamson, Sullivan, Grys, Peters Insurance Brokers, aka AGSP Insurance Brokers
Plaintiff
– and –
Intact Insurance Company
Defendant
REASONS FOR JUDGMENT
S. F. Dunphy, J.
Released: December 13, 2016