



COURT OF APPEAL FOR ONTARIO

CITATION: Gadbois v. Newcom Business Media Inc., 2016 ONCA
    898

DATE: 20161129

DOCKET: C62152

Weiler, Rouleau and Roberts JJ.A.

BETWEEN

Marc Gadbois

Respondent (Plaintiff)

and

Newcom Business Media Inc.

Appellant (Defendant)

John A. Howlett, for the appellant

Daniel Chodos, for the respondent

Heard: November 8, 2016

On appeal from the judgment of Justice Sidney N. Lederman of the
    Superior Court of Justice, dated April 8, 2016, with reasons reported at 2016
    ONSC 2310.

ENDORSEMENT

[1]

Mr. Gadbois was terminated without notice from his employment. He
    brought an action for damages for wrongful dismissal and the trial judge
    determined the period of reasonable notice was 16 months. That determination is
    not at issue in this appeal. The issue is the amount that the appellant is
    entitled to receive in compensation as damages for the failure to give him
    reasonable notice of termination. Gadbois compensation had three components:
    base salary, commission income and bonus, if any. The commission income and
    bonus form the subject of this appeal.

[2]

The following facts are relevant to the commission income issue.

[3]

Gadbois was primarily responsible for selling advertising space in two
    magazines owned by Business Information Group (BIG), namely,
Service
    Station Garage Management
(SSGM) and
Lautomobile
. Newcom
    acquired the assets of BIG in January 2015 and retained Gadbois. The parties
    signed a new employment contract on January 24, 2015, which essentially
    provided for the same salary, commission, bonus and benefits as Gadbois had
    been receiving from BIG.

[4]

Newcom merged its pre-existing publication
Canadian Technician
(CT) with SSGM to form a new magazine:
Canadian Auto Repair & Service
(CARS).
Upon merging, Newcoms existing CT advertising
    contracts were handed over to Gadbois so that he could arrange with the clients
    to switch their ads into CARS.
Emails from Newcoms representative Joe
    Glionna to Gadbois, dated January 31 to February 27, 2015 indicated he was to
    make efforts to convince CT advertisers to switch their advertising into CARS
    and they would talk commission later. The parties agree that a new agreement on
    commission was never reached.

[5]

Newcom submits that Gadbois did not earn commission on the CT sales
    because they were simply switched into CARS and the trial judge erred in
    awarding Gadbois commission based on the full amount of CARS advertising
    revenue.

[6]

The fact is that for the first six months of the year preceding his
    termination, Gadbois was paid commission respecting advertising for CARS,
    including the CT sales, at the rate stipulated for SSGM in the contract. It was
    open to the trial judge to hold that as Newcom had continued to pay Gadbois for
    all CARS revenue at the commission rate under the SSGM contract this should be
    continued during the notice period. The trial judge did not commit any
    overriding and palpable error in this regard.

[7]

With respect to the bonus, the
    appellant submits that the motion judge erred in awarding a bonus for 2015.
    Specifically, the appellant points to the evidence of its representative and
    submits that it did not support the motion judges conclusion that the
    appellant had promised the respondent he would receive a bonus regardless of
    the companys profits.

[8]

We agree.

[9]

There is no question that a
    judges findings of fact are entitled to deference and cannot be disturbed on
    appeal in the absence of overriding and palpable error, such as a
    misapprehension of the evidence. In our view, the motion judge erred by misapprehending
    the evidence given by the appellants representative, which was the foundation
    for his conclusion that a bonus was promised and should be paid to the
    respondent.

[10]

Mr. Glionna testified as follows:

Also, some people were compensated based on a bonus on profit,
    and obviously with bank debt and changes, theres no profit in the company for
    the next couple of years, we honoured  we told Mr. Gadbois and other sales
    reps and other publishers that we would honour those bonuses, you know, despite
    the fact that there really would be no profit in the company.

So the basic message was we would guarantee nobody goes down
    after all the changes were taking place throughout transition.

[11]

In our view, Mr. Glionnas evidence about payment of bonuses ought to
    have been read in the context of the entirety of his evidence that qualified it.
    In the portion of the transcript immediately preceding this excerpt, Mr.
    Glionna explained that the company had given all sales representatives a
    guarantee that their total compensation for 2015 would not decrease relative to
    the previous years because of the change in ownership. He then went on to
    explain, as noted above, that the company understood that some people were
    compensated based on a bonus on profit. Those bonuses would be honoured so
    that compensation for those employees would not decrease in 2015. And again, in
    the portion following the above excerpt, Mr. Glionna confirmed that we
    guaranteed Mr. Gadbois would not have a decrease in total compensation over the
    previous years is what was guaranteed.

[12]

Moreover, this evidence had to be considered in light of all of the evidence
    before the motion judge. Specifically, the evidence was that the respondents
    bonus was discretionary and that none had been paid to him in 2014. Further,
    because of the commissions he earned, his 2015 compensation, including the pay
    in lieu of reasonable notice awarded by the motion judge, greatly exceeded what
    he received in 2014. Even in the absence of any bonus, his income went from
    $88,605 in 2014 to well in excess of $130,000 in 2015.

[13]

Finally, the respondent does not
    allege, in his affidavit, that he was promised a bonus regardless of the
    companys profits. The respondent did not give any evidence that the appellant
    made a verbal commitment to pay a bonus regardless of the companys profits. Indeed,
    on his cross-examination, the respondent testified that he could not recall
    having any conversation with the appellant concerning a verbal commitment that
    his 2015 compensation would not be less than his rate of compensation in 2014.

[14]

As a result, we would therefore
    allow the appeal with respect to the bonus issue.

Disposition

[15]

Accordingly, we dismiss the appeal
    with respect to the motion judges award of commission but allow the appeal
    with respect to the payment of a bonus to the respondent during the period of
    reasonable notice. We leave it to the parties to calculate the adjustment to
    the amount of damages otherwise payable to the respondent.

[16]

The appellant argues that, in
    light of the reduction in the damages awarded to the respondent, the cost award
    in the court below should be revisited. Specifically, the costs awarded below
    were based on partial indemnity up to October 13, 2015, the date of the
    respondents offer to settle, and substantial indemnity thereafter. The
    reduction in the award has brought the award below the amount in the offer to
    settle.

[17]

For his part, the respondent
    argues that the cost award of $28,000 plus HST was a negotiated figure and
    reflects a reduction in the amount that he could have properly claimed.

[18]

In our view, a modest cost
    adjustment is appropriate in the circumstances. Significant costs will have
    been incurred after the date of the offer to settle and the inability to
    recover those costs on a substantial indemnity basis dictates a reduction in
    the amount awarded. As a result we would reduce the costs awarded on the motion
    to $22,000 plus HST.

[19]

As for the costs of the appeal,
    the respondent was largely successful and is awarded costs fixed at $7,500
    inclusive of disbursements and applicable taxes.

K.M.
    Weiler J.A.

Paul
    Rouleau J.A.

Lois Roberts J.A.


