Holland v. Hostopia.com Inc., 2015 ONCA 762

• Judge: Strathy, C.J.O., LaForme and Tulloch, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 14, 2015
• Jurisdiction: Ontario
• Citations: 2015 ONCA 762;(2015), 342 O.A.C. 99 (CA)

Holland v. Hostopia.com Inc. (2015), 342 O.A.C. 99 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. NO.018

Sean Holland (plaintiff/appellant) v. Hostopia.com Inc. (defendant/respondent)

(C56448; 2015 ONCA 762)

Indexed As: Holland v. Hostopia.com Inc.

Ontario Court of Appeal

Strathy, C.J.O., LaForme and Tulloch, JJ.A.

November 10, 2015.

Summary:

An employee signed a written offer of employment, which contained a statement that he would be required to sign an employment agreement. He started work. Nine months later, he was presented with an employment agreement, which he signed. That agreement provided for termination by notice under the Employment Standards Act (ESA). His employment was terminated without cause seven years later. The employer paid him an amount that was at least equal to his ESA entitlement. The employee sued for damages for wrongful dismissal.

The Ontario Superior Court, dismissed the action, holding that his damages were limited to the minimum amounts set out in the ESA. The employee appealed.

The Ontario Court of Appeal allowed the appeal in part. The court ruled that the employee's damages were not confined to the ESA amounts and he was entitled to common law reasonable notice or damages in lieu. The court, however, rejected the employee's argument that the trial judge erred in rejecting some of his claims for commissions.

Damages - Topic 6747

Contracts - Employment relationship or contract - For breach by employer - Loss of commissions - An employee, who was employed in a sales position, was dismissed without cause after seven years - He sued for damages for wrongful dismissal, including a claim for commissions - The trial judge dismissed the action, holding that the employee was only entitled to the statutory notice - The employee appealed - The Ontario Court of Appeal allowed the appeal, holding that the employee was entitled to common law damages (i.e., eight months' notice and commissions he would have been paid in the ordinary course during the reasonable notice period) - However, the court rejected the employee's argument that the trial judge erred in rejecting some of his claims for commissions for a new client - The trial judge's interpretation of the Commission Plan contained no extricable error of law and the appeal court deferred to that interpretation - See paragraphs 63 to 81.

Master and Servant - Topic 1011

Contract of hiring (employment contract) - Consideration - An employee signed a written offer of employment (offer letter), requiring him to sign an employment agreement - He started work - Nine months later, he signed an employment agreement, providing for termination by notice under the Employment Standards Act - His employment was terminated without cause seven years later - The employee sued for damages for wrongful dismissal - The Ontario Court of Appeal held that the employee was entitled to reasonable notice of termination at common law, notwithstanding the employment agreement - The offer letter and the employment agreement contained inconsistent terms respecting notice, i.e., the offer letter contained an implied term respecting reasonable notice and the employment contract an express term, being the statutory minimum - An express term contradicting an implied term of reasonable notice was a "tremendously significant modification" - A promise to perform an existing contract was not consideration - Fresh consideration was required where the employer sought to amend the employment contract - Without fresh consideration, the employment agreement could not replace the implied term of reasonable notice contained in the offer letter - See paragraphs 47 to 55.

Master and Servant - Topic 1263

Contract of hiring (employment contract) - Variation - Notice period - [See Master and Servant - Topic 1011 ].

Master and Servant - Topic 8000

Dismissal without cause - Notice of dismissal - What constitutes reasonable notice - An employee, who was employed in a sales position, was dismissed without cause after seven years - He sued for damages for wrongful dismissal - The trial judge dismissed the action, but opined that the appropriate notice period would have been eight months - The employee appealed - The Ontario Court of Appeal noted that while eight months' notice was at the very low end of the range, the court would not interfere with the exercise of the trial judge's discretion, notwithstanding that the judge erred in referring to the time it took the employee to find new work in determining the notice period - See paragraphs 56 to 62.

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting - A dismissed employee argued that a trial judge erred in principle by failing to increase his period of reasonable notice from eight to 12 months, having regard to the non-competition and non-solicitation provisions of his employment contract - The Ontario Court of Appeal saw no error in principle in the trial judge's failure to consider the impact of the non-competition covenants where there was no evidence that the non-competition provisions were likely to make it more difficult for him to find comparable employment - See paragraphs 56 to 60.

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting - A dismissed employee argued that a trial judge should not have considered the speed with which he found new employment in determining the period of reasonable notice - The Ontario Court of Appeal stated that notice was to be determined by the circumstances existing at the time of termination and not by the amount of time that it took the employee to find employment - "If two employees in identical circumstances are terminated at the same time, they are entitled to the same notice, regardless how long it takes each of them to find a new job ... The time it takes to find a new job goes to mitigation of damages, not to the length of notice" - The court found that in this case, however, the trial judge's consideration of this factor did not have a significant impact on the determination of the notice period - See paragraphs 61 and 62.

Master and Servant - Topic 8706

Dismissal - Practice - General - Appeals - Standard of review - An employee sued for damages for wrongful dismissal - The trial judge dismissed the action - The employee appealed - The Ontario Court of Appeal stated that the determination of reasonable notice in a wrongful dismissal case was entitled to deference - See paragraph 43.

Practice - Topic 8808

Appeals - General principles - Duty of appellate court respecting conclusions or interpretation of trial judge (incl. contractual interpretation) - An employee, who had allegedly signed an employment agreement limiting his notice to the requirements of the Employment Standards Act, sued his employer for damages for wrongful dismissal, including a claim for commissions for work in progress - The trial judge dismissed the action - The employee appealed - The Ontario Court of Appeal discussed the standard of review - The court held that the enforceability of the employment agreement, an issue of contract formation, was reviewable on a standard of correctness as to questions of law and palpable and overriding error for questions of fact - See paragraph 41.

Practice - Topic 8808

Appeals - General principles - Duty of appellate court respecting conclusions or interpretation of trial judge (incl. contractual interpretation) - An employee sued for damages for wrongful dismissal, including a claim for commissions for work in progress - The trial judge dismissed the action - The employee (appellant) appealed - The Ontario Court of Appeal stated that the employee's entitlement to commissions was a question of contract interpretation - The court stated that: "In Sattva [SCC 2014] ... the Supreme Court established that contractual interpretation is reviewed by appellate courts as a mixed question of fact and law ... Absent an extricable error of law, a trial judge's interpretation of the contract attracts deference, as it requires a court to apply the principles of contractual interpretation to the words of the contract, in the context of the factual matrix. The appellant's entitlement to commissions involved issues of mixed fact and law and is subject to review for palpable and overriding error, unless the trial judge made an extricable error in law, in which case the standard of review is correctness ..." - See paragraph 42.

Cases Noticed:

Hobbs v. TDI Canada Ltd. (2004), 192 O.A.C. 141; 246 D.L.R.(4th) 43 (C.A.), refd to. [para. 24].

Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986; 136 N.R. 40; 53 O.A.C. 200, refd to. [para. 30].

Bardal v. The Globe and Mail Ltd., [1960] O.W.N. 253; 24 D.L.R.(2d) 140 (H.C.), refd to. [para. 33].

Creston Moly Corp. v. Sattva Capital Corp. (2014), 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 41].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 41].

King v. Operating Engineers Training Institute of Manitoba Inc. (2011), 270 Man.R.(2d) 63; 524 W.A.C. 63; 341 D.L.R.(4th) 520; 2011 MBCA 80, refd to. [para. 43].

Minott v. O'Shanter Development Co. (1999), 117 O.A.C. 1; 42 O.R.(3d) 321 (C.A.), refd to. [para. 44].

McNevan v. AmeriCredit Corp. et al. (2008), 245 O.A.C. 28; 94 O.R.(3d) 458; 2008 ONCA 846, refd to. [para. 45].

Francis v. Canadian Imperial Bank of Commerce (1994), 75 O.A.C. 216; 21 O.R.(3d) 75; 120 D.L.R.(4th) 393 (C.A.), refd to. [para. 49].

BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12; 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241, refd to. [para. 49].

Braiden et al. v. La-Z-Boy Canada Ltd. (2008), 238 O.A.C. 71; 294 D.L.R.(4th) 172; 2008 ONCA 464, refd to. [para. 51].

K.M.A. Caterers Ltd. v. Howie, [1969] 1 O.R. 131 (C.A.), refd to. [para. 52].

Prozak v. Bell Telephone Co. of Canada (1984), 4 O.A.C. 12; 46 O.R.(2d) 385 (C.A.), refd to. [para. 58].

Kaufman v. Weston (1996), 18 C.C.E.L. (2d) 198 (Ont. Sup. Ct.), refd to. [para. 58].

Sharpe v. Computer Innovations Distribution Inc. (1994), 146 N.B.R.(2d) 254; 347 A.P.R. 254 (C.A.), refd to. [para. 58].

Murrell v. International Security Services Ltd., [1997] O.A.C. Uned. 545; 33 C.C.E.L.(2d) 1 (C.A.), refd to. [para. 59].

Ryan v. Laidlaw Transportation Ltd. et al. (1995), 86 O.A.C. 150; 26 O.R.(3d) 97 (C.A.), refd to. [para. 59].

Panimondo v. Shorewood Packaging Corp. (2009), 73 C.C.E.L. (3d) 99 (Ont. Sup. Ct.), refd to. [para. 61].

Harper v. Bank of Montreal (1989), 27 C.C.E.L. 54 (Ont. Div. Ct.), refd to. [para. 61].

Garland v. Consumers' Gas Co., [2004] 1 S.C.R. 629; 319 N.R. 38; 186 O.A.C. 128; 2004 SCC 25, refd to. [para. 83].

Counsel:

Craig Colraine and Chris Kalantzis, for the appellant;

George Avraam and Jeremy Hann, for the respondent.

This appeal was heard on May 14, 2015, before Strathy, C.J.O., LaForme and Tulloch, JJ.A., of the Ontario Court of Appeal. The following decision was delivered for the court by Strathy, C.J.O., on November 10, 2015.