Executive Summary: Key Legal and Evidentiary Issues

• Court considered whether a binding settlement had been reached between an employee and employer post-termination.

• Employer brought a motion for summary judgment to enforce the settlement and dismiss the claim.

• Plaintiff’s counsel’s affidavit was found inadmissible in key parts for lacking direct knowledge and improper opinion.

• Court rejected the plaintiff's argument that additional terms remained unresolved and therefore no binding settlement existed.

• Plaintiff’s later attempt to modify terms was treated as post-agreement negotiation and not grounds to invalidate settlement.

• Claims related to housing damages were found to fall within the scope of the employment-related release.

Background to the dispute

Scott Johnstone had worked for Loblaws for over seven years before his employment was terminated in April 2022, shortly after relocating from Winnipeg to Ottawa. At the time of termination, he was in the process of purchasing a home in Ottawa. Loblaws terminated his employment without cause and offered a severance package that included seven months’ salary continuance with benefits.

Settlement negotiations between the parties

Following the termination, Mr. Johnstone’s legal counsel initiated settlement negotiations with Loblaws. Over the course of several weeks, the parties exchanged multiple proposals. The discussions covered key elements such as the notice period, continuation of benefits, legal fees, a letter of reference, and what became known in correspondence as the “housing issue.” Mr. Johnstone sought, among other things, guarantees related to his mortgage and additional relocation assistance.

On May 28, 2022, Mr. Johnstone’s lawyer emailed Loblaws’ counsel confirming instructions to accept their most recent proposal, “subject to mutual agreement on the supporting documentation.” Loblaws then provided draft settlement documentation and made payments in accordance with the terms.

Attempted renegotiation and breakdown

Instead of executing the settlement, Mr. Johnstone’s lawyer responded on June 6, 2022, with four new demands, including making the settlement contingent on the successful closing of the house purchase and securing a performance rating for bonus purposes. Loblaws rejected these additions, asserting that they had never been part of the negotiated terms and that a settlement had already been reached.

Mr. Johnstone did not sign the final settlement documentation. Nearly a year later, he initiated legal proceedings against Loblaws, seeking damages for wrongful dismissal, breach of contract, and losses associated with the failed home purchase.

Affidavit evidence and procedural issues

A critical issue arose over the admissibility of the affidavit filed by Mr. Johnstone’s lawyer, Mr. Wolfenden. The court found that large portions of the affidavit were improper as they contained opinion, argument, and facts not within the lawyer’s direct knowledge. The court emphasized that parties should submit evidence from individuals with firsthand knowledge of the facts in dispute. As Mr. Johnstone had not provided his own affidavit, the court drew an adverse inference and refused to admit the contested portions of the lawyer’s affidavit.

Summary judgment analysis and ruling on settlement

The court applied the legal standard for summary judgment under Rule 20 of the Rules of Civil Procedure. It found that there was no genuine issue requiring a trial, as the documentary evidence clearly showed that all essential terms of a settlement had been agreed upon. The late-stage demands raised by Mr. Johnstone’s counsel were deemed post-agreement renegotiation attempts, not outstanding terms.

The court confirmed that the parties had reached a binding legal agreement and that Mr. Johnstone’s indication of acceptance, coupled with Loblaws’ performance of its obligations, created an enforceable settlement. Failure to sign the final documentation did not undo the agreement already reached.

Scope of the release and housing-related claims

Mr. Johnstone argued that, even if a settlement was reached, it should not bar his claims related to the failed home purchase, as they were separate from his employment. The court disagreed. It found that the housing issue had been part of the settlement discussions and was covered by the release, which applied to all matters arising from the employment relationship and its termination.

Court’s conclusion and dismissal of the claim

The Ontario Superior Court granted Loblaws’ motion for summary judgment and dismissed Mr. Johnstone’s action in its entirety. The judge concluded that the parties had reached a binding settlement covering all claims, including those related to housing. Mr. Johnstone’s post-settlement attempts to negotiate better terms did not undermine the agreement.

If the parties cannot agree on costs, they were permitted to submit brief written arguments to the court.