Ontario Court Of Appeal Summaries (January 8 – January 12, 2018)

Below are this week's summaries of the civil decisions of the Court of Appeal.

Congratulations to our very own Bill Anderson for succeeding on the main issues in our client's appeal in Nemeth v. Hatch Ltd., 2018 ONCA 7. In this Employment law decision, the Court of Appeal found that it is not necessary to include an explicit stipulation in a termination clause of an employment agreement in order to displace the common law, as long as the intention is clear from the words used. Additionally, the Court of Appeal found that silence in a termination clause concerning an employee's entitlement to severance pay does not denote an intention to contract out of the Employment Standards Act.

In Trade Finance Solutions Inc. v. Equinox Global Limited, 2018 ONCA 12, the court enforced an arbitration clause in an insurance policy and stayed an action brought in Ontario in favour of arbitration in London, England. The "Action Against Insurer" clause stipulating the address for service of process on Lloyd's of London in Canada was found not to constitute an alternative dispute resolution clause. It was found to effectively be an address for service clause, which would include service of a notice of arbitration to be held in London.

Other topics include a review of the "Real and Substantial Connection Test" in Sgromo v. Scott., the Family law case of Lavie v. Lavie, in which the court reviewed the law relating to the imputing of income for the purposes of calculating support, and Brown v. Canada, which was a Charter damages case for unlawful detention of an illegal immigrant for the purpose of deportation.

Finally, I would like to invite all of our readers to attend the CLE that my partner, Lea Nebel and I will be chairing featuring the top Court of Appeal decisions of the year. Justice Epstein will be making the keynote address. The CLE has been scheduled as a casual evening/dinner program at the OBA offices on Toronto Street to take place on Monday, February 26, 2018. In-person registration will be at 5:30, dinner will be served at 6, and the formal program will run from 6:30 to 8pm. For those who cannot attend in person, you can participate via live webcast. Please see the program agenda for further details and to register.

There are three decisions being featured. The first is Moore v Sweet, 2017 ONCA 182, which relates to the remedy of constructive trust. That case will be heard by the Supreme Court in the coming months. Counsel on that matter, David M. Smith and Jeremy Opolsky, have agreed to participate in our panel discussion. The second case is Presidential MSH Corporation v. Marr Foster & Co. LLP, 2017 ONCA. That case canvassed, summarized and clarified the law regarding when the "appropriate means" analysis under s. 5(1)(a)(iv) of the Limitation Act, 2002, can be applied to delay the start of the running of the basic two-year limitation period. Counsel for the parties on that matter, Allan Sternberg, Daniella Murynka and Michael Girard, will be our panelists. The law in this area is continuing to evolve. The third decision featured is Hodge v Neinstein, 2017 ONCA 494. That case has certainly received the attention of the plaintiffs' personal injury bar and the media and has, no doubt, been a catalyst behind the Law Society's efforts to develop a standard form contingency fee agreement and disclosure obligations aimed at providing better information to clients. Counsel for the class plaintiffs, Peter Waldmann, will be joined on our panel by Bevin Shores and Audrey P. Ramsay, who are involved with the OBA and the Law Society working groups looking at this issue.

Enjoy the weekend,

CIVIL DECISIONS:

Nemeth v. Hatch Ltd., 2018 ONCA 7

[Sharpe, Benotto and Roberts JJ.A.]

Counsel:

DN Persaud and S Pope, for the appellant

William D. Anderson, for the respondent

Keywords: Employment Law, Termination Without Cause, Termination Clauses, Notice Employment Standards Act, 2000, S.O. 2000, c. 41, Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986,Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158

Facts:

The appellant appeals from the dismissal of his action for damages arising out of the termination of his employment without cause, following his motion for summary judgment. The appellant was employed by the defendant for just over 19 years when his employment was terminated. The defendant gave the appellant 8 weeks' notice of termination, paid him 19.42 weeks' salary as severance pay, and continued his benefits, including his pension benefits, during the 8-week notice period. This was consistent with the appellant's minimum entitlements under the Employment Standards Act, 2000, S.O. 2000, c. 41 (the "ESA"), and reflected the respondent's interpretation of the termination clause in the appellant's employment contract. The termination clause provided that "the notice period shall amount to one week per year of service with a minimum of four weeks or the notice required by the applicable labour legislation."

The appellant appeals on three grounds (1) That the appellant retained his rights to common law notice because the termination clause does not contain express language excluding entitlements under the common law; (2) the termination is void under s. 5(1) of the ESA because it purports to contract out of the appellant's statutory entitlements to severance pay by absence of reference; and (3) the motion judge erred in failing to consider the appellant's alternative argument that he is entitled to one week's notice for every year of employment under the termination clause, with the result that he should have received 19 weeks' notice.

Issues:

(1) Is it necessary to include an explicit stipulation in a termination clause in order to displace the common law?

(2) Is the termination clause void because it purports to contract out of the ESA?

(3) Does the termination clause entitle the appellant to 19 weeks' notice of termination of his employment?

Holding:

Appeal allowed, in part.

Reasoning:

(1) No. The well-established presumption is that on termination, an employee is entitled to common law notice. However, in accordance with the Supreme Court of Canada decision in Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, this presumption may be rebutted if the contract of employment "clearly specifies some other period of notice, whether expressly or impliedly", provided that it meets the minimum entitlements prescribed under the ESA. In accordance with Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158, the intention to displace an employee's common law notice entitlement must be clearly and unambiguously expressed in the contractual language used by the parties. The need for clarity does not mean that the parties must use a specific phrase or particular formula, or state literally that "the parties have agreed to limit an employee's common law rights on termination". It suffices that the parties' intention to displace an employee's common law notice rights can be readily gleaned from the language agreed to by the parties. Here, in accordance with Matchinger, the clause clearly "specifies some other period of notice" and, accordingly, this ground of appeal was dismissed.

(2) No. Silence of the termination clause concerning the appellant's entitlement to severance pay does not denote an intention to contract out of the ESA.

(3) Yes. The motion judge did not consider this argument, however even if the motion judge had considered it, the Court of Appeal is of the view that the clause gives rise to two possible interpretations: one that would limit the appellant's notice entitlement to the minimum prescribed by the ESA; the other that would not. Pursuant to the decision in Wood, when presented with a termination clause that could reasonably be interpreted in more than one way "courts should prefer the interpretation that gives the greater benefit to the employee". The second sentence of the termination clause provides that the appellant is entitled to receive one week's notice for every year of service. It is not limited by the subordinate clause following the preposition "with". Rather, the words "a minimum of four weeks or the notice required by the applicable labour legislation" prescribe the minimum floor of the appellant's notice entitlement under the agreement, in order that the notice provision of "one week per year of service" does not run afoul of the minimum requirements of the ESA. There is no language restricting the appellant's entitlements to only the minimum notice period under the ESA. Therefore this ground of appeal was allowed and the appellant was entitled to receive 19 weeks' notice.

Sgromo v. Scott, 2018 ONCA 5

[Laskin, Miller and Paciocco JJ.A.]

Counsel:

A Challis and A Fletcher, for Leonard Gregory Scott and Eureka Inventions LLC

P Henein and K Byers, for the respondents Bestway (USA), Inc., Bestway (Hong Kong) International Ltd., Bestway Inflatables & Material Corp. (Shanghai), and Patrizio Fumagali

J Lester and W Mouck, for the respondent Bail Hotline Bail Bonds, Inc.

P Choe, for the respondents Polygroup International, Polygroup Limited, Polygroup Services N.A., Inc., Ricky Tong, William Kaufmann, Scott Hershock, Lewis Cheng, Elmer Cheng, and Paul Cheng

D Zulianello and K Commisso, for the respondent Imperial Toy LLC, Peter Tiger, and Art Hirsch Pietro Sgromo, acting in person on his own behalf and on behalf of the appellant, Wide Eyes Marketing Ltd.

Keywords: Contracts, Civil Procedure, Jurisdiction, Real and Substantial Connection, Club Resorts Ltd. v. Van Breda, 2012 SCC 17

Facts:

The appellant, Peter Anthony Sgromo ("Mr. Sgromo"), brought four related actions arising out of various dealings with the...