Blackman v. Merrill Lynch Canada Inc., (2013) 328 N.S.R.(2d) 167 (SC)

• Judge: Boudreau, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: March 08, 2013
• Jurisdiction: Nova Scotia
• Citations: (2013), 328 N.S.R.(2d) 167 (SC);2013 NSSC 87

Blackman v. Merrill Lynch Can. Inc. (2013), 328 N.S.R.(2d) 167 (SC);

    1039 A.P.R. 167

MLB headnote and full text

Temp. Cite: [2013] N.S.R.(2d) TBEd. MR.032

Richard George Blackman (plaintiff) v. Merrill Lynch Canada Inc. (defendant)

(Hfx. No. 266089; 2013 NSSC 87)

Indexed As: Blackman v. Merrill Lynch Canada Inc.

Nova Scotia Supreme Court

Boudreau, J.

March 8, 2013.

Summary:

In 1996, the plaintiff investment advisor agreed to leave RBC-Dominion Securities to work for Midland Walwyn (later purchased by the defendant Merrill Lynch). The plaintiff commenced employment with a "Length of Service" designation of zero (LOS (0)). An LOS designation did not affect compensation. It reflected years in the industry. Although the plaintiff had been in the industry for 12 years, his concern that not all of his "book of business" would follow him to the defendant made him want his performance to be compared, for personal reasons, with the least experienced advisors (i.e., so he would be a high performer in his comparator group). Although the formal employment contract did not include this "promise", the plaintiff claimed that it constituted a binding collateral agreement. The plaintiff was given an LOS (0) designation his first year, and (2) and (3) designations his second and third years. In the fourth year, he was given an LOS (10) designation. The growth of his "book of business" stagnated. Although the plaintiff's income was unaffected by his designation, he did not compare favourably to other advisors in his new designation. The plaintiff began an unsuccessful campaign to have his LOS designation lowered. In 2002, CIBC purchased the defendant's business and the plaintiff's employment was transferred to CIBC upon signing a new employment contract and resigning from the defendant. Two years later (2004), with his "book of business" still stagnating, and his LOS designation dispute unresolved, the plaintiff resigned his CIBC employment. The plaintiff sued the defendant for damages for breach of the collateral agreement respecting his LOS designation, claiming that it should have progressed only one numeral each year, rather than jumping from (3) to (10) after his third year. He claimed substantial damages for lost income attributable to his designation.

The Nova Scotia Supreme Court dismissed the action. Although the plaintiff established a collateral agreement to commence his employment at the LOS (0) designation, there was no breach of that agreement. There was no agreement that after three years the designation would continue to rise only one numeral. The jump from a designation (3) to (10) was consistent with the defendant's policies applied to all advisors and was not unreasonable. In any event, the plaintiff failed to establish that the LOS designation had any effect on the income he earned or his employment status (i.e., no damages established). Even lost income had been proven, there was no connection between any lost income and the LOS designation.

Contracts - Topic 1484

Formation of contract - Collateral contracts - What constitutes a collateral contract - In 1996, the plaintiff investment advisor agreed to leave RBC-Dominion Securities to work for Midland Walwyn (later purchased by the defendant Merrill Lynch) - The plaintiff commenced employment with a "Length of Service" designation of zero (LOS (0)) - An LOS designation did not affect compensation - It reflected years in the industry - Although the plaintiff had been in the industry for 12 years, his concern that not all of his "book of business" would follow him to the defendant made him want his performance compared, for personal reasons, with the least experienced advisors (i.e., so he would be a high performer in his comparator group) - Although the formal employment contract did not include this "promise", the plaintiff claimed that it constituted a binding collateral agreement - The plaintiff was given an LOS (0) designation his first year, and (2) and (3) designations his second and third years - In the fourth year, he was given an LOS (10) designation - The growth of his "book of business" stagnated - Although the plaintiff's income was unaffected by his designation, he did not compare favourably to other advisors in his new designation - The plaintiff began an unsuccessful campaign to have his LOS designation lowered - In 2002, CIBC purchased the defendant's business and the plaintiff's employment was transferred to CIBC upon signing a new employment contract and resigning from the defendant - Two years later (2004), with his "book of business" still stagnating, and his LOS designation dispute unresolved, the plaintiff resigned his CIBC employment and sued the defendant for damages for breach of the collateral agreement respecting his LOS designation - He claimed that it should have progressed only one numeral each year, rather than jumping from (3) to (10) after his third year - He claimed substantial damages for lost income attributable to his designation - The Nova Scotia Supreme Court dismissed the action - Although the plaintiff established a collateral agreement to commence employment at the LOS (0) designation, there was no breach of that agreement - There was no agreement that after three years the designation would continue to rise only one numeral - The jump from a designation (3) to (10) was consistent with the defendant's policies applied to all advisors - In any event, the plaintiff failed to establish that the LOS designation had any effect on his income or his employment status (i.e., no damages established) - Even if lost income had been proven, there was no connection between any lost income and LOS designation.

Contracts - Topic 4023

Remedies for breach - Damages - Extent of liability - Losses attributable to breach - [See Contracts - Topic 1484 ].

Contracts - Topic 8406

Collateral agreements - General - What constitutes - [See Contracts - Topic 1484 ].

Damages - Topic 201

Entitlement - Requirement of loss - [See Contracts - Topic 1484 ].

Damages - Topic 5702

Contracts - Breach of contract - Based on loss to the plaintiff - [See Contracts - Topic 1484 ].

Cases Noticed:

Ahone v. Holloway (1988), 30 B.C.L.R.(2d) 368 (C.A.), refd to. [para. 74].

Total Petroleum (North America) Ltd. et al. v. AMF Tuboscope Inc. et al. (1987), 81 A.R. 321; 54 Alta. L.R.(2d) 13 (Q.B.), refd to. [para. 75].

Hi-Alta Capital Inc. v. Montreal Trust Co. of Canada et al., [2004] A.R. Uned. 619; 2004 ABQB 687, affd. (2007), 412 A.R. 161; 404 W.A.C. 161; 2007 CarswellAlta 1018 (C.A.), refd to. [para. 76].

Carrigan v. Berkshire Securities Inc. (2010), 296 N.S.R.(2d) 42; 940 A.P.R. 42; 2010 NSSC 373, refd to. [para. 78].

King et al. v. Merrill Lynch Canada Inc., [2005] O.T.C. 994 (Sup. Ct.), refd to. [para. 79].

Counsel:

Eric K. Slone, for the plaintiff;

Dennis James and Melissa MacAdam, for the defendant.

This action was heard on January 7-10, 2013, at Halifax, N.S., before Boudreau, J., of the Nova Scotia Supreme Court, who delivered the following judgment on March 8, 2013.