Ontario’s top court has upheld an award of more than $1.8 million to a former executive who quit his job amid allegations of a toxic work environment and mismanagement of loans, while also rejecting his claim of constructive dismissal.
C.B. worked at Callidus Capital Corporation as an underwriter on its loan portfolio. His employment contract was oral and did not include any written terms about compensation or the conditions under which he could be dismissed for cause.
In 2015, C.B. gave notice of his intent to retire at the end of the following year, but left earlier than planned. After departing, he launched legal action against Callidus, alleging that a “toxic work environment” forced him out. He sought payment for unpaid vacation time, stock options and deferred bonuses, arguing he was constructively dismissed.
Employer’s counterclaim
Callidus responded with a counterclaim, alleging C.B. had breached his fiduciary duties while managing three loans. According to Callidus, C.B. mishandled the deals, potentially exposing the company to millions of dollars in losses. However, in prior proceedings, the court dismissed that counterclaim as a strategic lawsuit, noting Callidus had admitted its damages claim was “baseless.”
Despite the dismissal of its counterclaim, Callidus continued to assert in an amended statement of defence that the same alleged misconduct gave it grounds to dismiss C.B. for cause, or at least negate his right to certain benefits. The employer argued that the trial-level judge, who first heard the motion for summary judgment, should have allowed a full trial to determine whether C.B.’s conduct merited a for-cause termination.
When the summary judgment motion resumed, three principal issues emerged:
1. Whether C.B. retired or was constructively dismissed
2. Whether he was entitled to unpaid vacation, stock options, and deferred bonuses
3. Whether the doctrine of issue estoppel prevented C.C.C. from using facts underlying the dismissed counterclaim to argue just cause
The motion judge ruled that C.B. had not been constructively dismissed, finding instead that he voluntarily chose to retire. But the judge still awarded him over $93,000 in unpaid vacation pay, more than $500,000 in deferred bonuses and around $1.2 million in the value of lost stock options. Although there was no constructive dismissal, the judge concluded that C.B. should receive compensation for vacation time and performance-based rewards he had already earned. The judge also ruled that because the facts underpinning the just cause argument were the same as those in the dismissed counterclaim, issue estoppel barred Callidus from relitigating the allegations.
Employer’s appeal
On appeal, the employer contended the motion judge committed several errors. First, it claimed the judge granted relief for claims C.B. had not properly pleaded. The appellate court rejected that argument, pointing to the record before the lower court: C.B.’s statements of claim, affidavits, cross-examinations, refusals and undertakings, as well as amendments to his pleadings.
These materials gave Callidus “ample opportunity to understand, test, and respond” to the specific claims. As the court put it, the argument that the motion judge granted relief “that was not substantially disclosed by the summary judgment record simply is not tenable.”
Second, Callidus argued the evidence did not support the damages awarded. The court disagreed, emphasizing the motion judge’s careful approach to weighing evidence, assessing credibility, and drawing inferences. Because the motion judge did not misapprehend the facts, and because the relief awarded was lawfully open to him on those facts, the appellate court deferred to those findings.
Third, Callidus challenged the motion judge’s conclusion that issue estoppel prevented the employer from raising its just cause defence. That defence centred on C.B.’s alleged misconduct in managing the three loans. According to Callidus, the court’s earlier dismissal of the counterclaim under anti-SLAPP legislation did not preclude a separate examination of whether the same behaviour was enough to justify terminating C.B. for cause.
‘Same factual core’
The appellate court disagreed, describing the allegations in the counterclaim and the just cause defence as resting on the “same factual core.” Once that counterclaim was dismissed, said the court, the employer could not relitigate the same underlying issues to defeat C.B.’s claims for accrued benefits.
The final part of the employer’s challenge was that the summary judgment process was not appropriate for a case involving substantial damages, allegations of misconduct, and multiple legal issues. The appellate court rejected that contention, noting that once the court determined the employer’s allegations on cause were off the table, what remained was “an employment contract claim of modest complexity.” The record, in the court’s view, was sufficient to allow the lower court to decide all remaining claims without a full trial.
No damages for wrongful dismissal
With that, the court dismissed the appeal. Because the motion judge held C.B. had in fact retired, no damages were awarded for wrongful dismissal. Instead, the judgment confirmed C.B.’s right to accrued vacation pay, vested stock options and deferred bonuses earned before his departure.
The court also reiterated that once allegations of wrongdoing had been rejected in earlier proceedings, it was an abuse of process for the employer to reintroduce them to justify withholding compensation.
Despite the disputed employment relationship and the push by Callidus to show cause, the appellate court concluded the motion judge’s factual determinations were sound. It found C.B. was entitled to payment of the amounts promised, even though he was not entitled to notice or damages for a dismissal the court ultimately found never occurred.
For more information, see Boyer v. Callidus Capital Corporation, 2025 ONCA 79 (CanLII).
