Executive Summary: Key Legal and Evidentiary Issues

Maresky failed to meet the express contractual requirement to remain engaged with Enthusiast on the vesting dates to claim non-vested options. The agreement was not a fixed term contract despite providing for staggered vesting over 24 months. Clear and unequivocal language in the February 2018 email established that continued engagement was a condition precedent to receiving the deferred compensation. Applying such a condition to every contract with vesting schedules would produce unreasonable commercial results. The motion judge correctly determined there was no genuine issue for trial because the terms of the agreement made summary judgment appropriate. Maresky's good faith argument was not properly raised below and could not be considered on appeal.

Background and the Consulting Agreement

Isaac Maresky and Gainsborough Capital Corp. (collectively "Maresky") retained Enthusiast Gaming Inc. and Enthusiast Gaming Holdings Inc. ("Enthusiast") to provide financial and consulting services in anticipation of Enthusiast becoming a publicly traded company. The parties memorialized their engagement through an agreement that provided for compensation to be paid through shares and options to be issued in stages. The compensation structure was designed to create an incentive for ongoing involvement, with one third of the options to vest immediately upon execution of the agreement, one third to vest on the 12-month anniversary, and the final third to vest on the 24-month anniversary of the agreement date. Importantly, Maresky was only entitled to claim the non-vested options if he continued to remain engaged with Enthusiast at the capacity and time level originally agreed at each vesting date.

The Termination and Initial Proceedings

The anticipated long-term relationship did not materialize as planned. Enthusiast terminated the relationship with Maresky after only five months of engagement, well before any of the material vesting dates. This termination triggered a series of legal proceedings. Maresky brought an initial application before Justice Steele, arguing that Enthusiast had breached the contract by failing to provide the options that were supposed to vest immediately upon execution of the agreement. Justice Steele agreed with this position, finding that Enthusiast's failure to issue the immediately vesting options constituted a clear breach of contract. Maresky was awarded damages in lieu of specific performance in the amount of $173,255.21 based on this finding.

The Motion for Summary Judgment on Non-Vested Options

Subsequently, Maresky commenced a second proceeding seeking summary judgment to obtain the non-vested options (those that were to vest at the 12-month and 24-month marks). Maresky argued that despite the termination, he remained entitled to these options and sought damages accordingly. He also initially advanced a wrongful dismissal claim, but withdrew this employment-based argument during a case conference. Enthusiast responded by filing its own cross-motion for summary judgment, contending that Maresky had no entitlement whatsoever to the non-vested options and that no genuine issue existed requiring trial.

Before Justice Loretta P. Merritt, the parties agreed to narrow the central issue: whether the agreement constituted a fixed term contract. Maresky conceded that absent a fixed term contract, he would not be entitled to the shares and options that had not vested. Justice Merritt granted summary judgment in favor of Enthusiast, finding that the agreement was not a fixed term contract and therefore Maresky bore the burden of remaining actively engaged to receive the deferred compensation.

The Court's Analysis and Key Contract Interpretation

The motion judge's reasoning was grounded in a straightforward interpretation of the contractual language. A February 26, 2018 email setting out the terms of the agreement explicitly stated that the vesting schedule was contingent upon Maresky remaining with Enthusiast "on at least the same capacity and time as initially agreed on each vesting date." The court found this language to be clear and unequivocal: the plaintiffs had to remain actively engaged with Enthusiast to receive the shares and options. Since it was undisputed that Maresky was no longer engaged with Enthusiast in any capacity on the vesting dates (other than the immediate vesting date which was the subject of the earlier application), there was no breach of contract and no corresponding entitlement to damages.

The motion judge further reasoned that interpreting every contract providing for shares or options that vest over time as a fixed term contract would lead to unreasonable and absurd results in a commercial context. The contractual language was sufficiently clear that it did not require such an interpretation. The logic of the motion judge's analysis flowed inexorably from the terms of the agreement itself, and no genuine issue for trial existed.

The Appeal Decision

When Maresky appealed to the Court of Appeal for Ontario, he raised a new argument that the motion judge had failed to consider whether Enthusiast's termination breached an implied duty of good faith governing contractual relations. However, the Court of Appeal declined to consider this argument, noting that it had not been advanced in the court below. While Maresky's amended claim had alleged that the termination was "unilateral and unlawful," the parties had agreed at the motion hearing that the sole issue to be determined was whether the agreement was a fixed term contract. The appellate court found no error in the motion judge's analysis and dismissed the appeal.

Costs and Final Outcome

At the summary judgment stage, Justice Merritt awarded costs to Enthusiast in the amount of $118,490.30 while awarding $7,091.74 to Maresky, resulting in a net cost payment to Enthusiast of $111,398.56 after set-off. The motion judge considered the procedural complexities and the conduct of the respective parties in reaching this decision. The Court of Appeal upheld the costs award, noting that discretionary costs decisions are entitled to deference when the reasons clearly set out the basis for the conclusions.

On appeal, the Court of Appeal ordered additional costs of $17,500 against Maresky in favor of Enthusiast. Ultimately, Enthusiast Gaming Inc. and Enthusiast Gaming Holdings Inc. prevailed as the successful parties, with total costs awarded in their favor amounting to $128,898.56 from the motion proceedings and appellate stages combined.