In Boyer v. Callidus Capital Corporation, 2025 ONCA 79, the Court of Appeal for Ontario (OCA) dismissed the employer’s appeal of the motion judge’s order in Boyer v. Callidus, 2024 ONSC 20, discussed in detail here. The motion judge had ordered the employee was entitled to $1.8 million in damages for unpaid vacation, bonuses, and stock options. 

In dismissing the appeal, the OCA found the employer was attempting to “repackage” the material facts of a counterclaim, which the court had dismissed in 2023, for damages for breach of fiduciary duty based on allegations the employee mismanaged three loans so it could argue that the employee’s misconduct in connection with the three loans amounted to just cause for termination. The OCA found the employer was barred from doing so by issue estoppel, and that the preconditions for issue estoppel were met.

Background

The employer was a lender to distressed businesses in Canada and the United States. The employee was its Vice President of Underwriting and Portfolio Management from 2009 until 2016. His employment agreement was oral.

In addition to receiving a base salary, the employee participated in the employer’s deferred bonus program and stock option plan. The employee was entitled annually to four weeks’ vacation.

Under the bonus program, the employer withheld a portion of its employees’ bonuses, and would distribute 50% of the withheld amounts in each of the two following years. The deferred portion accrued interest at the quarterly rate of 3%. 

It was the employer’s usual practice to allow an employee’s entitlement to stock options to vest upon the employee’s departure.

In 2015, the employee notified the employer that he would be retiring at the end of 2016. The employee claimed that after providing this notice he was treated in an abusive manner, and his work environment was poisoned. At the end of the summer of 2016, the employee’s accounts were transferred to others. The employee then asked to take 24 weeks of accrued vacation, but the employer denied his request.

In September 2016, the employee provided a letter to his employer stating that he had no choice but to retire early because his work environment had become increasingly toxic, and he was being treated in an abusive manner. The letter also noted that the employer did not honour the employee’s entitlement to accrued vacation pay or compensate him on termination for his deferred bonus and unvested options.

Decision of OCA Dismissing Employer’s Counterclaim

In Boyer v. Callidus Capital Corporation, 2023 ONCA 233, the OCA dismissed the employer’s counterclaim for damages for breach of fiduciary duty based on allegations the employe mismanaged three loans.

Decision of the Motion Judge

The motion judge made the following findings:

Constructive dismissal

The employee failed to prove the employer committed an act or engaged in conduct amounting to constructive dismissal. The employee retired and was not entitled to damages for wrongful dismissal.

Accumulated and unused vacation

An employee’s entitlement to vacation or to pay in lieu is fundamental to a contract of employment. There was no written record or evidence it was communicated to the employee that he was required to take vacation annually and could not carry his entitlement over to subsequent years. The employee was entitled to damages in the amount of $93,076 for 22 weeks of unused and accumulated vacation at the time of his retirement.

Deferred bonus

No evidence was tendered to show the employee was provided a copy of the Deferred Bonus Policy, told he would not receive any amount for deferred compensation if he was not employed when payment became due, or that the employee agreed to this as a condition of his employment.

The employee is entitled to damages for unpaid and deferred bonus amounts that were awarded to him for 2014 and 2015 ($525,000) plus 3% quarterly interest on the deferred amounts to the date of the decision.

Stock options

The employee had an oral contract of employment. The employee’s evidence that his superior confirmed his stock options would vest upon his retirement was accepted. This confirmation became a term of his employment contract.

The employee is entitled to damages in the amount of $1,213,856 to compensate him for the value of his stock options, calculated by the difference in value between the grant price of each option award and the market price as of January 16, 2017, the date the employee would have exercised his vested options.

Employer’s Arguments on Appeal to the OCA

The employer argued the motion judge committed the following reversible errors in holding:

1. the employee was entitled to the benefits awarded;
2. issue estoppel barred the determination of allegations of just cause dismissal the employer sought to assert; and
3.  The relief granted was not appropriate for summary judgment.

OCA’s Decision

Did the motion judge commit reversible errors in holding the employee was entitled to the benefits awarded?

The employer argued the motion judge erred when he held the employee was entitled to the benefits he was awarded because (a) the claims were not properly pleaded and (b) the evidence filed on the summary judgment motion did not support the relief granted. 

For the following reasons, the OCA was not persuaded by this ground of appeal: 

• The employer had “ample opportunity to understand, test, and respond to the fundamentals of the claims asserted by [the employee] as framed by” the employee’s statement of claim and amended statement of claim, affidavits, cross-examinations, refusals and undertaking charts, and by the employee’s testing of the employer’s evidence; and
• The motion judge “dealt extensively” with the record and “clearly explained how he exercised his powers to weigh evidence, evaluate the credibility of a deponent, and draw reasonable inferences from the evidence.”

In response to the employer’s argument that the motion judge erred by limiting its ability to further expand the record on the stock option issue, the OCA held it was not an error for the motion judge to ensure that if he exercised his discretion to expand the record, it would be done in a procedurally fair manner.

Did the motion judge err in holding issue estoppel barred the determination of the employer’s allegations of just cause dismissal?

In the 2023 appeal, the OCA found the employer failed in its counterclaim to plead the required elements at law or factual details required to support its claim of breach of fiduciary duty, and it dismissed this counterclaim. The employer then delivered an Amended Statement of Defence and Counterclaim in which it argued the employee’s misconduct in connection with the three loans constituted breaches of his employment duties and responsibilities amounting to just cause for termination.

The OCA reviewed legal principles establishing that when an employer terminates a contract of employment without cause, it is required to give the employee reasonable notice, or pay in lieu of reasonable notice; however, if an employer has just cause to terminate an employee’s contract of employment, no notice is required. The OCA then found that because the motion judge rejected the employee’s constructive dismissal argument, the employer’s just cause defence was not relevant. The OCA recalled that in the 2023 appeal it dismissed the employer’s counterclaim and found the employer was now attempting to “repackage” the material facts of this dismissed counterclaim so it could litigate its just cause defence in the future. The OCA held this would be an abuse of the decision-making process barred by issue estoppel, and that the preconditions for issue estoppel were met.

Was relief granted by the motion judge not appropriate for a summary judgment motion?

The OCA found the summary judgment procedure was appropriate for the employee’s claim and held the motion judge did not err when it dealt with the employee’s claim on a summary judgment motion. Noting once again that the employer’s just cause defence was irrelevant and, in any event, barred by issue estoppel, the OCA characterized the employment contract claim as of “modest complexity” and found the paper record permitted the motion judge to make a determination on the merits. 

Bottom Line for Employers

Callidus Capital, in which the parties had an oral employment agreement, highlights the importance to employers of recording in writing any terms that limit an employee’s entitlements, particularly when they pertain to the vesting or forfeiture of equity compensation. In this case, the OCA resolved a dispute involving equity compensation, among other things, at great expense to the employer. 

Callidus Capital also encourages employers appealing a lower court’s decision to avoid attempting to “repackage” the material facts of a claim the appeal court has already dismissed because, provided the required preconditions are met, they may be barred from doing so by the legal doctrine of issue estoppel.

Finally, as noted in our publication analyzing the motion judge’s decision:

• Employers should take care when drafting employment agreements, policies and plans to ensure they accurately represent the terms and conditions of the employee’s employment and are properly communicated to their employees.
• If an employer wants to change the terms of an employee’s employment, or a policy or plan that applies to them, it should be appropriately documented and confirmed.
• Employers are encouraged to review their employment agreements, policies, plans, and communication practices on a regular basis and update them when required.
• In all cases, employers are encouraged to seek the guidance of experienced employment counsel when drafting and reviewing their employment agreements, policies, plans, and communication procedures.