Ontario Superior Court of Justice dismisses motion for summary judgements in contested breach of contract dispute

January 1, 2021

Marco Bailetti v. Gale Partners LP, 2020 ONSC 6616

In a December 31, 2020 decision, the Honourable J. Ramsay of the Ontario Superior Court of Justice ruled against a summary motion seeking damages totaling over $1.1 million for breach of an employment contract, as well as an alternative motion seeking a partial summary judgement declaring on a specific key element in the case. The summary motions involved differing accounts by the plaintiff and defendant as to what was said or represented pre-employment, and what was intended to be part of the parties’ agreed upon term sheet.

The plaintiff was hired by the defendant, a limited partnership digital marketing agency, in 2016, and later resigned in 2018 to pursue other opportunities. Upon his resignation, the plaintiff contended that he was entitled to $1,057,500, representing the fair market value of his equity interest in Gale LP, the defendant’s partnership entity, and an additional $63,590.57 for lost profit and distributions, in accordance to the agreement contemplated in his pre-employment negotiations, which were further referenced in email exchanges between the plaintiff and the defendant’s Chief Executive Officer.

The defendant argued that it was the employment contract, signed by the plaintiff, and the accompanying term sheet that govern and show that the plaintiff agreed to have an equity stake in the defendant’s corporation entity, Gale 43, rather than Gale LP. As such, the defendant sustained that the damages should be measured on the basis of the Gale 43 unanimous shareholders agreement and the exit purchase price formula set out therein, a scenario assessment which yielded different results to the plaintiff’s calculations. The defendant further indicated that an assessment of damages was premature until the intention of the parties was determined.

The court agreed with the defendant that given the conflicting evidence on the material issues in dispute, there were genuine issues that require a trial to determine the factual agreement between the plaintiff and the defendants, and the value, if any, of the plaintiff’s equity interest with either Gale LP or Gale 43. The court thus decided that a summary judgement motion, or a partial summary judgement, would not result in an affordable and proportionate procedure under the Rules of Civil Procedure and therefore would not lead to a fair and just result, ultimately dismissing the plaintiff’s motion for summary judgement and alternative relief for partial summary judgement.

Rohit Kumar and Emily Compton (Commercial Litigation) of Miller Thomson represented the defendant in the summary motion proceedings.