Court File and Parties
COURT FILE NO.: CV-17-00588861 DATE: 20190424 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: John Cassaday, Plaintiff AND: Corus Entertainment Inc, Defendant
BEFORE: Madam Justice S.M. O’Brien
COUNSEL: T. Carsten and A. Radojcic, Counsel, for the Plaintiff H. Levitt, Counsel, for the Defendant
HEARD: April 18, 2019
Endorsement
[1] The Defendant, Corus Entertainment Inc., (“Corus”) brings this motion under Rule 21.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg 194 to strike the Statement of Claim and dispose of this action on the basis that it discloses no reasonable cause of action. Corus claims that the action is statute barred by the Limitations Act, 2002, S.O. 2002, c.24, Sched. B.
[2] The Plaintiff, Mr. Cassaday, is a former employee of Corus. He claims that Corus breached an agreement entered into upon his retirement, in that, after his retirement, Corus changed the amount of the monthly payment owed to him. On this motion, Corus argues that the limitation period began to run as of the date Mr. Cassaday knew of Corus’ unequivocal refusal to pay him the amount originally agreed upon. Mr. Cassaday says that in a case such as this one, where periodic retirement payments are due, the limitation period begins to run anew with respect to each individual failure to provide payment.
[3] The primary issue before me is whether the matter can be disposed of under Rule 21.01. That is, is it plain and obvious that the Plaintiff has no reasonable prospect of success? Mr. Cassaday argues that I should not decide the limitations issue on a motion to strike if I require additional facts in order to determine it and/or if there is uncertainty in the case law such that it is not plain and obvious that he cannot succeed.
[4] In my view, the jurisprudence in this area is not fully settled. The cases are either not entirely consistent or, at a minimum, turn on their specific facts. Therefore, in my view, it is not plain and obvious that Mr. Cassaday’s claim has no reasonable prospect of success.
Background
[5] Mr. Cassaday was employed by Corus for many years, from 1997 until his retirement on March 30, 2015. At the time of his retirement from Corus, Mr. Cassaday was the President and CEO of Corus, and a member of its board of directors.
[6] The allegations in the Statement of Claim plead a series of events related to Mr. Cassaday’s retirement and, in particular, his agreement with Corus upon retirement. Specifically, in early January, 2015, Heather Shaw, the Executive Chair of Corus, offered Mr. Cassaday an agreement whereby if he retired from Corus on March 30, 2015, Corus would agree to various financial arrangements, including a Supplementary Executive Retirement Plan (“SERP”). Ms. Shaw told him that under this arrangement, he would receive $53,000 per month for the rest of his life, and in any event for a period of not less than ten years. Ms. Shaw provided Mr. Cassaday with a term sheet setting out these terms and, subsequently, a letter of agreement again saying that Mr. Cassaday would receive $53,000 per month for life an in any event for a period of not less than 120 months [ten years]. Mr. Cassaday signed the letter of agreement. He agreed to and did retire on March 30, 2015, in reliance on Corus’ obligation to pay the SERP payments as set out in the letter of agreement.
[7] Initially, in late April, 2015, Corus paid Mr. Cassaday $53,000. However, on April 30, 2015, Corus informed Mr. Cassaday that the $53,000 referenced in the term sheet and letter of agreement was an estimated amount of the monthly payment, assuming that he retired at age 65, not age 62. They said that the actual amount of the monthly SERP payable to Mr. Cassaday would be only $40,354.20.
[8] Mr. Cassaday commenced this claim over two years later, by Statement of Claim dated December 20, 2017. Mr. Cassaday claims damages for the difference between the monthly payments he is receiving ($40,354.20) and the amount agreed upon originally ($53,000). He is also seeking a prospective order requiring Corus to pay him $53,000, as he alleges is owed under the letter of agreement.
Is it plain and obvious that Mr. Cassaday’s claim has no reasonable prospect of success?
[9] In my view, it is not plain and obvious that Mr. Cassaday’s claim has no reasonable prospect of success, as required under a Rule 21.01 motion.
[10] The motion to strike is a tool that must be used with care. A court should only strike out a claim or dismiss an action in plain and obvious cases, and where the court is satisfied “the case is beyond doubt.” (R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 SCR 45 at para 21; Hunt v. Carey Canada Inc., [1990] 2 SCR 959, at para 33). Further, at the interlocutory stage, courts should not dispose of matters of law that are not fully settled in the jurisprudence. Such issues should be decided at trial on the basis of a full evidentiary record. (Reynolds v. Smith, 2007 ONCA 166, at para 13)
[11] In this case, in my view, the jurisprudence is not fully settled. Moreover, the cases appear to turn on their facts, meaning that the availability of a full evidentiary record is important.
[12] A number of cases in Ontario suggest that, where the agreement between the parties requires periodic payments, a new cause of action arises when each new payment becomes due. In Pickering Square Inc. v. Trillium College Inc., 2016 ONCA 179, the Court of Appeal noted that, in situations where a breach of contract involves a failure to perform a periodic obligation, like periodic payments, ordinarily a claim arises from the date of each individual breach. (at para 24)
[13] This principle was applied in Sunguard Availability Services Inc. v. ICON Funding ULC, 2011 ONSC 7367. There, the parties had entered into a disaster recovery services contract. The Plaintiff contended that the Defendant repudiated the contract for no good reason. It continued to treat the contract as ongoing and sent monthly invoices to the Defendant, which the Defendant never paid. The court found that the Plaintiff was entitled to payment for the monthly losses for the final two years of the agreement on the basis of a new breach at the time each payment was due:
The authorities support the proposition that where there is a failure to make the periodic payments that are due under the terms of such a contract, each individual failure to make such required payments constitutes a new breach of the contract, for which a new limitation period begins. (at para 37)
[14] Corus attempts to distinguish this case on the basis that the Plaintiff continued to treat the contract as ongoing; however, it is clear that the Defendant’s position was unequivocal, with the court finding that by a particular date, it was clear that the Defendant was “steadfastly adhering to the position that the contract between the parties had been terminated.” (at para 6)
[15] Another example of a case which applies the periodic approach is Dinney v. Great-West Life Assurance Co., 2007 MBQB 120, aff’d 2009 MBCA 29, leave to appeal to the SCC denied, 2009 SCCA No. 257. The facts in that case have some similarity to the situation here, as they involve payments due to pensioners. The issue was whether Great-West Life was bound to pay pensioners annual increments based on the investment performance of the pension fund. The court measured the running of the limitation period from the time each monthly payment became due, and not from the date Great-West Life decided that the annual increment would not be related to investment performance.
[16] However, Corus has pointed me to cases in which courts are reluctant to treat the accrual of a periodic payment as a fresh cause of action. These include Huang v. Telus Corp. Pension Plan (Trustee of), 2005 ABQB 40 and Beccarea v. Canadian National Railway Company, 2018 ONSC 630. In Huang, the dispute related to whether the pension trustee was permitted to exclude incentive payments from pensionable earnings. The Plaintiffs argued that each new monthly benefit payment created a new cause of action. The court dismissed this argument, finding instead that the terms on which the pension payments were to be made crystallized at the point when employment ceased. The Plaintiffs knew or ought to have known of their pension entitlement when they were notified of their pension calculation.
[17] In Beccarea, the former spouse of a retired employee sought a survivor benefit under his pension plan. The plan’s administrator denied payment on the basis that the two were not married at the time of the pensioner’s death. The court found that the case was commenced after the expiry of the limitation period. It rejected the argument that a fresh cause of action accrued each month a payment was not made, stating that the employer had rejected the claim, because of the parties’ divorce, from the beginning. It went on to state: “In this case there has not been – nor could there be – any new fact which could have affected either party’s legal position.” (at para 17)
[18] After a review of these cases, I conclude that the jurisprudence is somewhat unsettled. At a minimum, each case requires a close examination of the facts. Corus’ own attempts to distinguish the cases is fact-dependent. For example, Corus says that the common feature between the cases it relies on and the current case is that there is no ongoing agreement between the parties. It argues that the alleged breach has occurred here and there are no new facts that need to be re-evaluated each month to determine whether a fresh breach has occurred.
[19] Even if this is the case, and I note that this reasoning does not appear to be consistent with the Dinney case, in my view, the court needs an evidentiary record in order to fully understand the ongoing relationship between the parties in the current case. We know, for example, that the agreement between the parties anticipates that some changes in the parties’ relationship – in particular, Mr. Cassaday’s death – could change Corus’ obligation to provide periodic payments. However, the letter of agreement and other details of the parties’ communications are not before the court. We do not know, for example, whether there is any reduction in the SERP to be paid if Mr. Cassaday obtains new employment. We do not know whether the agreement includes a non-competition or non-disclosure agreement, and, if so, whether contravention of those clauses would reduce or eliminate the SERP payments. If Mr. Cassaday had ongoing obligations under the agreement between the parties, on Corus’ theory of the case law, this would put his case closer to the situation in Sunguard and further from the situation in Beccarea.
[20] I note that none of the cases Corus relies on to say that periodic payments do not constitute new causes of action were decided on Rule 21 motions. In this case, all I have before me is a five page Statement of Claim. Corus brought this motion prior to filing a Statement of Defence. Accordingly, they have not pled the limitations defence, Mr. Cassaday has not filed a Reply, and, again, the parties have not filed any evidence. In short, in my view, the cases in this area of law require a close examination of the factual context, which I do not have. There is not sufficient information before me to dispose of Mr. Cassaday’s action on the basis that it is plain and obvious that he has no reasonable prospect of success.
[21] The motion is dismissed.
[22] I have reviewed the parties’ costs outlines. Mr. Cassaday seeks costs on a partial indemnity basis of $16,942.67, an amount that I consider high for a motion that did not require the filing of any evidence. However, I understand from Mr. Cassaday’s cost submissions that the Defendant’s motion was adjourned three times, through no fault of the Plaintiff. In all of the circumstances, I will award partial indemnity costs in an amount closer to the amount Corus would have claimed had it been successful on the motion. Specifically, Corus is ordered to pay costs of $7,500 to Mr. Cassaday within 30 days.
Madam Justice O’Brien Date: April 24, 2019