SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-19-00626638

DATE: 20210114

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Jean-Marc Sager

Plaintiff

– and –

TFI International Inc.

Defendant

Rahim Jamal, for the Plaintiffs

Flora Poon, for the Defendant

HEARD: December 2, 2020

Addendum to Judgement dated November 3, 2020

Davies J.

A. Overview

[1] Mr. Sager worked as a Vice-President at Loomis Express, a subsidiary of TFI International Inc., from in November 2016 until July 2019. Mr. Sager sued TFI for wrongful dismissal and brought a summary judgment motion. On November 3, 2020, I granted Mr. Sager’s motion. I found that the termination clause in Ms. Sager employment contract was unenforceable and he was entitled to nine months’ notice at common law (see Sager v. TFI International Inc., 2020 ONSC 6608).

[2] In my judgment, I dealt with Mr. Sager’s entitlement to be paid a bonus for the period he worked in 2019 before he was terminated. I found that Mr. Sager’s bonus was an integral part of his compensation and that he was entitled to a bonus for the time he worked in 2019 before he was terminated.

[3] I urged the parties agree on the calculation of damages. The parties were unable to reach an agreement and each made brief written submissions on the issues in dispute. At the same time, counsel for Mr. Sager brought to my attention two errors in my original decision.

[4] First, I incorrectly wrote (at para. 3) that Mr. Sager was paid three months’ base salary upon termination in accordance with the terms of his contract. In fact, Mr. Sager was only paid three weeks’ base salary when he was terminated.

[5] Second, I mistakenly wrote (at paras. 4 and 41) that Mr. Sager was not seeking damages for the bonus he would have earned during the notice period. Mr. Sager did claim damages in lieu of a bonus during the common law notice period in both his Statement of Claim (at para. 14) and his Notice of Motion (at para. 1(b)(ii)).

[6] I convened a hearing on December 2, 2020 to address the issue of Mr. Sager’s entitlement to a bonus during the notice period and the unresolved issues related to the calculation of damages. The parties also addressed the issue of Mr. Sager’s entitlement to a bonus after termination in their written submissions. Counsel for TFI agreed that, to the extent that my original reasons contained an inadvertent error in relation to of Mr. Sager’s entitlement to a bonus during the notice period, I should address that issue now.

[7] In my original reasons, I did not consider Mr. Sager’s entitlement to a bonus during bonus period, which was an inadvertent error. These reasons address that issue as well as the unresolved issues related to the calculation of damages and costs. These reasons should be read together with my earlier reasons.

B. Is Mr. Sager Entitled to a Bonus during the Notice Period?

[8] Damages for wrongful dismissal should put Mr. Sager in the same financial position he would have been if he had given reasonable notice of his termination: see Sylvester v. British Columbia, 1997 353 (SCC), [1997] 2 S.C.R. 315, at para. 1. Damages in wrongful dismissal cases will usually include all of the compensation and benefits the terminated employee would have earned during the notice period: see Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, at paras. 49-54.

[9] Damages for wrongful dismissal will also include any bonus the employee would have received or earned during the notice period if the bonus was an integral part of the employee’s compensation and the bonus policy does not unambiguously take away or limit the employee’s entitlement to a bonus on termination: see Paquette v. TeraGo Networks Inc., 2016 ONCA 618 at para. 17. In Andros v. Colliers Macaulay Nicholls, 2019 ONCA 679 at para. 52, the Court of Appeal held that where a bonus is an integral part of the employee’s compensation and non-discretionary, damages for wrongful dismissal should include “both the bonus actually earned before being terminated and the bonus that would have been earned during the notice period, unless the terms of the bonus plan alter or remove that right.”

[10] I have already found that Mr. Sager’s bonus was an integral part of his compensation. Mr. Sager’s employment contract said that he was eligible to participate in the company’s Short Term Incentive Plan (STIP) as of January 1, 2017. Mr. Sager received a letter dated April 30, 2019 confirming his entitlement to participate in the STIP program for 2019. While TFI retained the discretion to cancel or amend the STIP plan, so long as the STIP plan was in place, Mr. Sager was entitled to a bonus under his contract. There is no evidence that the STIP plan was cancelled in 2020.

[11] I also found that the STIP policy did not unambiguously alter or remove Mr. Sager’s right to the bonus he earned before he was terminated. The only remaining issue is whether the STIP policy unambiguously limits or takes away Mr. Sager’s entitlement to a bonus during the notice period. The April 30, 2019 letter confirming Mr. Sager’s entitlement to participate in the STIP program said that any bonus would not be earned and payable unless Mr. Sager was “actively employed” on the payment date. The STIP policy says that any bonus will be paid no later than “the end of the first Quarter following the STIP reference year.” For 2019, STIP bonuses would have been paid no later than March 31, 2020. For 2020, bonuses would be paid no later than March 31, 2021.

[12] In Paquette at para. 47, the Court of Appeal held that a requirement of active employment when a bonus is paid, without more, is not sufficient to deprive a terminated employee of damages in lieu of the bonus they would have received during the notice period. The same conclusion was reached in Taggart v. Canada Life Assurance Co., (2006) 53345 (ONCA) in relation to pension benefits. In my view, there is nothing in STIP plan or the letter received by Mr. Sager other than the reference to active employment that unambiguously takes away his entitlement to a bonus. As the Court of Appeal held in Paquette, without more, the requirement of active employment on the date the bonus was to be paid is not sufficient to displace Mr. Sager’s entitlement to damages in lieu of the bonus he would have earned during the notice period.

[13] In my earlier reasons, I found that Mr. Sager would have earned a bonus of $47,141.79 in 2019. The parties agree that this figure should be used to calculate the damages he is owed in lieu of a bonus for July to December 2019. The parties do not agree on how his damages should be calculated for the period of January to April 2020. TFI argues that the Court should wait until March 2021 – when TFI’s 2020 financial position is known – to determine Mr. Sager’s damages for the 2020 bonus. In the alternative, TFI argues that the 2020 bonus should be determined using the same rate as 2019, which happens to be the year in which Mr. Sager received the smallest bonus. TFI argues that its financial performance in 2020 is likely to be similar to 2019. In my view, neither of these approaches is reasonable. Mr. Sager was terminated almost 18 months ago. It is not appropriate to delay the calculation of his damages any further. There is also no evidence before the Court to support TFI’s position that its financial position in 2020 will be similar to 2019.

[14] In my view, Mr. Sager’s damages in lieu of a bonus for 2020 should be based on an average of the bonuses he earned in the three previous years: see Bernier v. Nygard International Partnership, 2013 ONCA 780 at para. 5. Mr. Sager’s bonus was $60,000 in 2017, $71,141.74 in 2018 and $47,141.74 in 2019, which averages to $59,479.92. Mr. Sager is, therefore, entitled to $19,826.64 in damages in lieu of the bonus he would have earned in from January to April 2020.

C. Mitigation

[15] Mr. Sager started a new position as Vice-President of International Development at Soprema on March 2, 2020. As a term of his employment with Soprema, Mr. Sager was given a corporate car. TFI argues that this benefit is comparable to the $900 per month car allowance he received under his contract with Loomis. TFI argues that the $900 car allowance should be deducted from the damages owing to Mr. Sager for the 2 months he worked for Soprema during the common law notice period. I agree.

[16] I already found that to the extent that Mr. Sager received from Soprema benefits that are comparable to the benefits he received from Loomis those should be deducted from the damages owing to him by TFI. I find that Mr. Sager’s entitlement to a corporate car with Soprema is similar to the car allowance benefit that he received from Loomis. They are both designed to ensure that Mr. Sager had access to a car for work purposes at the company’s expense. The fact that these benefits are structured differently does not change the fact that Mr. Sager was being compensated for the use of a car under both contracts. A total of $1,800, reflecting two months of his car allowance, will be deducted from the damages owing by TFI.

D. Total Damages

[17] Based on my original reasons and these supplementary reasons, Mr. Sager is entitled to the following damages:

Description

Amount

Base Salary (July 31, 2019 to April 20, 2020)

$160,500.00

Group Insurance Benefits

$ 3,888.88

Car Allowance

$ 8,100.00

RRSP Contribution

$ 6,420.00

2019 STIP

$ 47,141.74

2020 STIP

$ 19,826.64

SUBTOTAL

$245,877.26

Deductions for amount paid on termination and mitigation income

$ 66,997.28

TOTAL DAMAGES

$178,879.98

E. Costs

[18] Mr. Sager seeks partial indemnity costs of $56,505.68 in fees ($50,000 plus HST) and $4,329.63 in disbursements, for a total of $60,83551. TFI does not take issue with Mr. Sager’s entitlement to some costs but argues that amount claimed is excessive and costs should be fixed in the range of $20,000 to $25,000 inclusive of HST and disbursements.

[19] The costs awarded in any given case must be a fair and reasonable. Cost awards are not intended to reflect an exact measure or percentage of the actual costs incurred by the successful litigant: see Zesta Engineering Ltd. v. Cloutier, 2002 25577 (ON CA), [2002] O.J. No. 4495 (C.A.) at para. 4, Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3rd) 291 (C.A.). The costs award must also be proportionate in all the circumstances: Rule 1.04(1).

[20] Rule 57.01 sets out a number of other factors the Court may consider in exercising its discretion to award costs, including the time spent, the experience of counsel, the results achieved, the complexity of the matter, the conduct of the parties and the amount the unsuccessful party could reasonably expect to pay.

[21] While the rates claimed by counsel are reasonable in light of their years of experience, the number of hours claimed is excessive. Mr. Jamal spent more than 160 hours preparing for and arguing this summary judgment motion and other members of his firm spent an additional 130 hours on the file. By contrast, counsel for TFI spent less than 80 hours in total. It is reasonable that Mr. Sager’s counsel spent more preparing and advancing his claim than counsel spent defending the claim. However, TFI would not reasonable to expect Mr. Sager’s counsel to spend more than three and a half times the number of hours its counsel spent on the matter.

[22] This was not an overly complex summary judgment motion. The result turned largely on two issues – the enforceability of the termination clause and Mr. Sager’s common law entitlement to a bonus. The validity of Mr. Sager’s employment contract required some research given that the Canada Labour Code, R.S.C., 1985, c. L-2 not the Employment Standards Act, 2000, S.O. 2000, c. 41, governed the contract. The determination of his bonus entitlement and calculation involved a significant evidentiary record. In addition, counsel were required to adjust to the new requirements for filing materials electronically. All of these issues reasonably took significant time and resources. However, they do not justify a claim for close to 300 hours of work.

[23] Having regard to all the circumstances, I award costs to Mr. Sager in the amount of $35,000 plus HST for fee plus disbursements, for a total of $43,879.63 to be paid forthwith.

Davies J.

Released: January 14, 2021

COURT FILE NO.: CV-19-00626638

DATE: 20210114

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Jean-Marc Sager

Plaintiff

– and –

TFI International Inc.

Defendant

ADDENDUM TO JUDGEMENT DATED NOVEMBER 3, 2020

Davies J.

Released: January 14, 2021