The Court of Appeal for Ontario has dismissed an appeal from investment advisor Robert Shewchuk, who sued his former firm claiming he didn’t receive proper compensation for referrals to the firm’s capital markets arm.
In 2015, a lower court sided with Shewchuk’s former firm Blackmont Capital Inc., which has since been acquired by Richardson GMP Ltd., in a lawsuit in which Shewchuk claimed that he was not properly paid for corporate finance deals he brought to the firm, among other claims.
In the original lawsuit, Shewchuk had claimed that he was entitled to a 10% commission on four capital markets transactions that he brought to the firm under an agreement he reached with the firm, amending its normal compensation plan for advisors. The firm argued that the agreement only governed his dealings with the firm’s retail division and did not apply to transactions involving its capital markets group.
The trial judge, Justice Suhail Akhtar of the Ontario Superior Court of Justice, said that the primary issue “is whether the disputed transactions fell within the scope” of that agreement. “In other words, was the April 11 agreement simply a retail document created to compensate Shewchuk for work done as a retail broker or was it a much broader agreement including all transactions involving capital markets?”
According to the appeal court’s decision, Justice Akhtar found that the agreement between Shewchuk and the firm “was ambiguous” and he considered “the factual circumstances surrounding the contract to interpret it and to resolve the ambiguity.”
On appeal, the court says the main question is whether the trial judge erred in considering the parties’ conduct after the formation of the contract. The appellate court ruled that this was the correct approach, and it dismissed the appeal.
“Because the contract was ambiguous, the trial judge properly considered the parties’ subsequent conduct to assess their evidence about the intended scope of their contract,” says Justice George Strathy in the appeal court’s decision. “The appellant has not identified either a palpable and overriding error in the trial judge’s factual findings about the parties’ subsequent conduct or an extricable error of law in his interpretation of the contract.”
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