Canada: Love Hurts – SCC Refuses Leave To Appeal In Love v. Acuity Investment Management Inc.

Last Updated: October 19 2011
Article by David Elenbaas

Love hurts.

That's how Paul Love is feeling, now that the Supreme Court of Canada has refused his application for leave to appeal the Ontario Court of Appeal's decision in his wrongful dismissal action (Love v. Acuity Investment Management Inc., 2011 ONCA 130). Love hurts despite the fact that the Court of Appeal took the unusual step of increasing Love's period of reasonable notice in his action against his former employer.

Love sued Acuity, an investment management firm, when he was dismissed without cause. He had been a senior vice president and, at the time of his dismissal, was 50 years old with approximately two and a half years of service. He also held two percent equity in the company with his annual compensation including salary, commissions, profit sharing and the value of his shareholdings totalling approximately $633,000. At trial, the judge awarded Love damages based on a five month notice period. Love appealed that finding and the Court of Appeal substituted a nine month notice period. The Court's decision was based primarily on its view that the trial judge over-emphasized one factor (in this case length of service) to the apparent de-emphasis of others (the character of employment including level of position and compensation, and the availability of comparable employment). So Love looked like a winner at the Court of Appeal. Right?

Not so fast. There were also the "small" matters of Acuity's cross-appeal and the issue of costs. The cross-appeal challenged the trial judge's finding that Love was entitled to the value of incremental capital appreciating on his shares ($219,000) plus the value of incremental profit sharing and dividends ($273,000), to the end of the notice period. Acuity argued that the trigger date for Love's obligation to sell his shares back to the company and their valuation occurred when his employment ended, and not at the end of the notice period. The relevant provision in the Investment Agreement between Love and Acuity read:

"Subject to paragraph 4 hereof, if at any time:

Love's employment is terminated by Acuity without cause; or
Love should cease to be an employee of Acuity by reason of death or disability,

...Love agrees that Acuity shall have the purchase the shares for a purchase price, determined at the date that Love ceases to be an employee of Acuity... ."

In reviewing the trial judge's finding on that issue, the Court of Appeal began by distinguishing the concept of notice of termination from payment in lieu of notice. The termination of employment without working notice is a breach of the implied contractual right to reasonable notice. Any payment by the employer in lieu of notice is not in compliance with the contractual right, but rather is intended to compensate for the breach. Contrary to the finding of the trial judge, the Court of Appeal agreed with Acuity and found that, based on the language of the Investment Agreement, the trigger date for Acuity's right to repurchase the shares and for valuing those shares was the date that Love's employment was terminated without cause, and not at the end of the notice period. In making this determination, without expressly stating so the Court of Appeal was clearly distinguishing the Investment Agreement in Love from the share option agreement in a previous Court of Appeal decision: Veer v. Dover Corp. (Canada) Ltd. (1999), 2 BLR (3d) 234. That is, there is a distinction to be drawn between "ceases to be an employee" (Love) and "terminate as of the effective date of such termination" i.e. upon lawful termination (Veer).

Equally as important to the case, Acuity made formal offers to settle the case well before trial, in amounts that exceeded Love's ultimate award of damages. After adjustment of the costs by the Court of Appeal, Love remained on the hook for the majority of the costs. At the end of the day Love's damages were reduced from $528,000 to $131,434, while the costs awarded to Acuity were $269,568. It was a costly lawsuit for Love.

What Love means for employers

The Court of Appeal's decision, which the Supreme Court has chosen not to review, makes it clear that an employer must be very careful in crafting language that deals with an employee's entitlements around shares and share options on termination of employment. Moreover, an employer is well advised not to place too much weight on any single factor, such as length of employment, when assessing the notice entitlement of an employee it is about to dismiss without cause.

The Supreme Court having refused his application for leave to appeal, Love is left without a further remedy. In the words of the great Leonard Cohen: there ain't no cure, ain't no cure, ain't no cure, for Love.

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2011 McMillan LLP

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

David Elenbaas
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.