The Ontario Superior Court of Justice has granted a partial appeal of an arbitration decision involving the termination of an employee and minority shareholder from Cooper-Gordon Ltd. (CGL).
The arbitration, led by arbitrator Claude Freeman, had addressed various issues following RR’s departure from CGL, including claims for unpaid bonuses, contributions to his RRSP, and the valuation of his shares in the company.
RR, who commenced his employment with CGL in 1999 and held a 12% share in the company through his holding company, Creekside EAP Holdings Inc., challenged the arbitration’s findings. His dissatisfaction stemmed from the arbitration awarding only six months’ pay in lieu of notice, calculating unpaid bonuses and RRSP contributions based on this period, and valuing his shares at 12% of the company.
The dispute began in September 2018 when RR notified CGL of his intention to leave the company as a shareholder, leading to the end of his employment in June 2020. He initiated legal action for unpaid bonuses, share of RRSP contributions, punitive damages for shareholder oppression, and payment in lieu of notice for 30 months.
The motion for leave to appeal was based on Section 45(1) of the Arbitrations Act, 1991, which allows for appeal on legal questions under specific circumstances. The primary issues under appeal included the notice period for wrongful dismissal, unpaid RRSP and bonus payments, the valuation of RR’s shares in CGL, and his claims for punitive damages for shareholder oppression.
The court, while acknowledging the principles of finality in arbitration, granted leave to appeal limited to the difference in the notice period for the wrongful dismissal claim and whether the arbitrator adequately addressed RR’s claims for unpaid RRSP and bonus payments. The court dismissed the remainder of the motion, emphasizing the importance of respecting arbitration agreements and the limited scope for appellate intervention in arbitration awards.
The parties were encouraged to resolve the costs of the motions, with a deadline set for filing written submissions if necessary. If no submissions are received by the specified date, it will be deemed that the parties have resolved the costs issue among themselves.
For more information, see Reed v. Cooper-Gordon Ltd. et al, 2023 ONSC 5261 (CanLII)