



COURT OF APPEAL FOR ONTARIO

CITATION: Couper v. Nu-Life Corp., 2017 ONCA 571

DATE: 20170705

DOCKET: C62529

LaForme, Hourigan and Paciocco JJ.A.

BETWEEN

Mark Couper

Plaintiff
    (Respondent and

Appellant by way of cross-appeal)

and

Nu-Life
    Corp., Nu-Life Nutrition Ltd.,

Vitaquest International
    LLC and Keith Frankel

Defendants
    (Appellants and

Respondents by way of cross-appeal)

John J. Pirie and Jennifer R. Bernardo, for the
    appellants and respondents by way of cross-appeal

John J. Adair, for the respondent and appellant by way
    of cross-appeal

Heard: Thursday, June 29, 2017

On appeal from the judgment of Justice John A.B.
    MacDonald of the Superior Court of Justice, dated April 29, 2016.

REASONS FOR DECISION

[1]

This appeal and cross-appeal concern a contractual dispute between two
    friends and their respective companies.

[2]

Mark Couper was the president of the appellant Nu-Life Corp., which was
    affiliated with Nu-Life Nutrition Ltd (Nu-Life). He was friends with Keith
    Frankel, the senior executive officer of Vitaquest International LLC
    (Vitaquest). Nu-Life was a vitamin retailer based in Ontario and Vitaquest
    was a vitamin manufacturer based in New Jersey.

[3]

For a period of time, Vitaquest supplied Nu-Life with vitamins for the
    purpose of sale. Vitaquest eventually became the primary financier of Nu-Life.

[4]

Nu-Life became insolvent in 2002, requiring it to make a restructuring
    proposal. As a result of the restructuring, Vitaquest held a 90 per cent equity
    interest in Nu-Life. Mr. Coupers employment contract with Nu-Life was
    terminated. Discussions between Mr. Frankel and Mr. Couper ensued about an
    employment contract for Mr. Couper with Vitaquest. The trial judge found that
    an oral agreement was reached in October 2003 (the employment agreement). His
    findings about the terms of the contractual arrangements between Mr. Couper and
    Vitaquest are the subject of this appeal and cross-appeal.

[5]

The issues on the appeal and the cross-appeal
    were narrowed considerably by the parties. On the appeal brought by Nu-Life,
    Vitaquest and Mr. Frankel, the only issue is whether the trial judge erred in
    finding that Mr. Couper was entitled to damages equivalent to base pay for the
    period October 2003 to March 2005. On the cross-appeal brought by Mr. Couper,
    the only issue is whether the trial judge erred in finding that Mr. Couper was
    not entitled to a US$5 million payment from Vitaquest. For the reasons that
    follow, we dismiss the appeal and the cross-appeal.

[6]

On the issue of the base pay, Vitaquest submits
    that, because the trial judge found that Mr. Coupers employment was one of
    indefinite duration, the only basis to calculate damages is by conducting an
    analysis of the appropriate amount of pay in lieu of reasonable notice, having
    regard to the factors enunciated in
Bardal v. The Globe & Mail
    Ltd.
(1960), 24 D.L.R. (2d) 140 (Ont. H.C.). Vitaquest
    submits that the trial judge erred in not adopting this approach. It further
    submits that the employment agreement came to an end on November 14, 2013, when
    counsel for Vitaquest repudiated the employment agreement by proposing
    alternative employment terms that Mr. Couper rejected.

[7]

Mr. Couper submits that damages principles from
    wrongful dismissal cases have no application to the present case because he
    never sued for wrongful dismissal; his claim was for unpaid base wages under the
    employment agreement. In Mr. Coupers submission, the trial judge found that
    the employment agreement was repudiated in early March 2005. Accordingly, Mr.
    Couper says that the correct measure of damages is a straightforward
    calculation of unpaid base wages from October 20, 2003 to March 2005.

[8]

We accept the submissions made by Mr. Couper on
    this issue. The claim he asserted was for unpaid base salary and not wrongful
    dismissal. In written submissions to the trial judge, counsel for Mr. Couper argued
    that the employment agreement was repudiated in early March 2005. Vitaquest
    made a tactical decision to take the position at trial that no employment
    contract ever existed. It declined to make an alternative argument that, if an
    agreement existed, it was repudiated in November 2003.

[9]

On a careful review of his reasons, we are of
    the view that the trial judge found that the employment agreement was repudiated
    by Vitaquest in early March 2005. That finding is entitled to deference. There
    was an evidentiary basis for it, including the clear breakdown in the parties
    relationship resulting from dealings with a private equity firm interested in
    purchasing part of Vitaquest and the evidence of Mr. Couper that he began
    looking for alternative employment in March 2005.

[10]

As noted above, a November 2003 repudiation
    defence was never posited at trial by Vitaquest and, accordingly, there was no
    finding to this effect. It would be unfair to Mr. Couper to permit Vitaquest to
    advance alternative arguments such as a November 2003 contractual repudiation
    defence and wrongful dismissal for the first time on appeal. In any event, we are
    not satisfied that it was clear from the evidence regarding what transpired in
    November 2003 that there was a repudiation at that time.

[11]

We conclude, therefore, that there is no basis
    to interfere with the trial judges finding regarding base pay.

[12]

With respect to the issue raised on the
    cross-appeal of whether the employment agreement or any other agreement contained
    a term entitling Mr. Couper to a US$5 million payment, we also see no basis to
    interfere with the trial judges conclusion that no such term was included
    either in the employment agreement or in any separate agreement

[13]

The trial judge held that an October 14, 2003 email
    from Mr. Frankel to Vitaquests in-house counsel was the most reliable
    evidentiary support for his findings as to the content of the employment
    agreement. The contractual terms outlined in that email did not contain any
    reference to the US$5 million payment from Vitaquest to Mr. Couper, and the
    trial judge did not find that any other communication between the parties
    evidenced an agreement on such a payment

[14]

The trial judge was in the best position to consider
    the evidence regarding the US$5 million payment. In doing so, he drew upon his
    assessments of the credibility of Mr. Couper and Mr. Frankel, choosing not to
    place significant weight on Mr. Coupers testimony on this issue. He also chose
    not to place significant weight on surrounding facts that might support an
    argument that the disputed term was intended to be included in either the
    employment agreement or a separate agreement. These were highly fact-sensitive
    choices that the trial judge had to make.

[15]

Mr. Couper has not identified any extricable
    legal error in these choices. He points to elements of the factual matrix
    surrounding the October 14, 2003 email that he says support the existence of
    the disputed term. However, given the appropriate division of labour between
    trial and appellate courts, Mr. Couper must demonstrate something more than
    facts that support findings contrary to those made by the trial judge. In the
    absence of a palpable and overriding error in the trial judges choices as to
    which facts to rely on to make his findings, this court must defer to those
    factual findings:
Ledcor Construction Ltd. v. Northbridge Indemnity
    Insurance Co.
, 2016 SCC 37, [2016] 2 S.C.R. 23, at paras.
    35-37. We see no such palpable and overriding error.

[16]

The appeal and cross-appeal are dismissed. The
    parties agreed that the winner of the main appeal would be entitled to costs of
    $20,000 and that the winner of the cross-appeal would be entitled to costs of
    $15,000. In the result, there will be a cost order in favour of Mr. Couper in
    the amount of $5,000, inclusive of fees, disbursements and taxes.

H.S. LaForme J.A.

C.W. Hourigan J.A.

David M. Paciocco J.A.


