Lin v. Ontario Teachers' Pension Plan Board, (2016) 352 O.A.C. 10 (CA)

• Judge: Simmons, Pepall and van Rensburg, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: February 11, 2016
• Jurisdiction: Ontario
• Citations: (2016), 352 O.A.C. 10 (CA);2016 ONCA 619

Lin v. Teachers Pension Plan Bd. (2016), 352 O.A.C. 10 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. AU.008

David Tay Der Lin (plaintiff/respondent) v. Ontario Teachers' Pension Plan Board (defendant/appellant)

(C60635; 2016 ONCA 619)

Indexed As: Lin v. Ontario Teachers' Pension Plan Board

Ontario Court of Appeal

Simmons, Pepall and van Rensburg, JJ.A.

August 9, 2016.

Summary:

Lin was hired by the Ontario Teachers' Pension Plan Board in April 2003, in the position of Senior Associate in Teachers' investment bank division, and was promoted four times. His final position was Head of Global Funds Investments and Head of Asia Direct Investments. In March 2011, the Board dismissed him for cause after he emailed a copy of a private placement memorandum (PPM) to a personal friend who was also in the investment business. The Board initially asserted that Lin breached his obligations of confidentiality and the Board's Code of Business Conduct Manual. In the course of trial, the Board abandoned its claim that the PPM contained confidential information, and relied on the Code breach.

The Ontario Superior Court, in a decision with neutral citation 2015 ONC 3494, held that Lin was terminated without cause and that the appropriate notice period was 15 months. He fixed damages at $1,002,905, after mitigation. The damages included amounts that Lin would have received and earned under the short-term incentive plan (AIP) and long-term incentive plan (LTIP) in which he participated during the period of reasonable notice. The Board appealed, raising a number of issues. First, the Board asserted that the court ignored the Code's plain meaning and failed to consider the factual matrix surrounding the PPM's release and the Board's position in the investment community. The Board argued that, contrary to the court's view, if the Code was breached, such misconduct justified Lin's dismissal without notice. Second, it asserted that the court erred in fixing the notice period by extending what would have been an appropriate notice period of 12 months without a finding of bad faith. Third, it asserted that the court erred in including in the award of damages amounts under the AIP and LTIP. The Board argued that the that the forfeiture provisions of its new plans, introduced in 2010, applied and disentitled Lin to any bonus after his employment was terminated. Alternatively, the Board relied on the limiting terms of the pre-amendment plans, which provided for no bonus payment after termination of employment, and asserted that the court erred in concluding, in effect, that dismissed employees were always entitled to compensation for lost bonuses.

The Ontario Court of Appeal dismissed the appeal. There was no extricable error law in the trial judge's interpretation of the Code and Lin's conduct in relation to the PPM. As such, his conclusion respecting cause was entitled to deference. The judge did not determine an appropriate period of reasonable notice and then increase the period as a result of bad faith conduct by the Board. Rather, he established a range of 12-15 months for reasonable notice, and selected the higher end of that range because of the difficulty Lin would encounter in securing employment as a result of his dismissal "under an ethical cloud". That was a relevant consideration and a question of fact, not to be interfered with on appeal absent a material error in principle. The judge did not err in concluding that the forfeiture and clawback provisions of the new plans did not form part of Lin's employment contract. Lin's entitlement to damages for lost bonuses depended on the wording of the pre-2010 bonus plans. The wording of the pre-2010 plans did not limit Lin's common law rights to the bonus income that he would have earned during the reasonable notice period.

Master and Servant - Topic 1010

Contract of hiring (employment contract) - General - Interpretation - See paragraphs 29 to 41.

Master and Servant - Topic 1912

Remuneration - Bonuses - Entitlement to - See paragraphs 58 to 93.

Master and Servant - Topic 7561.1

Dismissal or discipline of employees - Grounds - Breach of confidentiality - See paragraphs 37 to 41.

Master and Servant - Topic 8000

Dismissal without cause - Notice of dismissal - What constitutes reasonable notice - See paragraphs 47 to 56.

Counsel:

Paul J. Pape and Andrea M. Bolieiro, for the appellant;

Chris Dockrill, for the respondent.

This appeal was heard on February 11, 2016, by Simmons, Pepall and van Rensburg, JJ.A., of the Ontario Court of Appeal. van Rensburg, J.A., released the following judgment for the court on August 9, 2016.