Lischuk v K-Jay Electric Ltd, 2021 ABQB 280

Court of Queen’s Bench of Alberta Citation: Lischuk v K-Jay Electric Ltd, 2021 ABQB 280 Date: 20210412 Docket: 1503 03991 Registry: Edmonton Between: Glen Lischuk and 997878 Alberta Ltd. Plaintiffs - and - K-Jay Electric Ltd. Defendant _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice S.E. Richardson _______________________________________________________

Appeal from the Decision by W.S. Schlosser, Q.C., Master in Chambers Dated the 21 st day of November, 2019 ( 2019 ABQB 870 ) I. Introduction [ 1 ] Glen Lischuk (Lischuk) and 997878 Alberta Ltd (997) (together, the Plaintiffs) filed a wrongful dismissal claim against Lischuk’s former employer K-Jay Electric Ltd (K-Jay or the Defendant). 997 is Lischuk’s holding company, in which he held shares in K-Jay while he was employed by the Defendant. [ 2 ] K-Jay brought an application for

summary dismissal of portions of the Plaintiffs’ claim. Master Schlosser, Q.C. partially granted the

summary dismissal application. The Defendant appeals this decision and the Plaintiffs’ cross-appeal. [ 3 ] For the reasons that follow, the decision of the Master was correct. The appeal and the cross-appeal are both dismissed. II. Background [ 4 ] Lischuk began working at K-Jay in 1978, rising to the level of General Manager. As an employee, he was entitled to hold shares in K-Jay, which he did through 997.

On November 22, 2013, K-Jay terminated Lischuk’s employment. [ 5 ] Upon termination, K-Jay moved to begin a process, pursuant to a Unanimous Shareholders’ Agreement (the USA), which mandated that K-Jay buy back shares that 997 held in K-Jay. Articles 15 and 16 of the USA set out a multi-step buy-back valuation process, which concluded with a final valuation by a business valuator.

Article 18.1 of the USA provides that any disputes under the USA must be determined through arbitration. [ 6 ] Under the buy-back valuation process, the business valuator valued 997’s shares at $944,000, as at November 30, 2013. [ 7 ] The Plaintiffs attempted to appeal the final valuation to an arbitrator.

The arbitrator held that, although the USA gives exclusive jurisdiction to an arbitrator to decide disputes under the USA, the final valuation under the buy-back provision was not arbitrable, nor was it subject to any further litigation because the USA clearly provides that the final valuation is “final and binding”. [ 8 ] In 2015, the Plaintiffs filed their Statement of Claim, claiming Lischuk was wrongfully terminated.

They sought lost wages and benefits over a defined notice period on behalf of Lischuk, and on behalf of 997 damages for non-payment of a dividend and damages for the loss of anticipated profit (dividends). [ 9 ] In 2017, the Plaintiffs filed an application to amend their Statement of Claim to include a claim for losses they say arose from the forced sale of 997’s shares.

The amendments seek the difference in the valuation of the shares from the date of the sale (November 30, 2013) to the end of Lischuk’s notice period (the Added Claims). [ 10 ] After a contested Special Chambers application, Master Smart, Q.C. granted the application to amend the Statement of Claim on June 11, 2018. The Plaintiffs then applied to compel further production and K-Jay cross-applied seeking either to have the recent amendments struck, or alternatively, summarily dismissed. [ 11 ] The applications were heard on November 23, 2018, before Master Schulz, Q.C.

K-Jay sought to have its applications adjourned to Special Chambers. Master Schulz, Q.C. dismissed K-Jay’s application to strike, noting that K-Jay’s jurisdictional arguments ought to have been made in response to the application to amend. The Master adjourned K-Jay’s

summary dismissal application to Special Chambers, and also adjourned the Plaintiffs’ application to compel further production sine die , to be heard after K-Jay’s dismissal application. [ 12 ] K-Jay’s application for

summary dismissal was heard by Master Schlosser, Q.C. on October 21, 2019. [ 13 ] In his November 21, 2019 written decision, Master Schlosser found that the share valuation as at November 30, 2013, is final and binding vis-à-vis 997. He held that whether Lischuk has any other entitlements as a result of his dismissal from K-Jay should be left to the trial judge.

Master Schlosser also declined to find that Lischuk is estopped from challenging the valuation, saying that was best left to the trial judge. [ 14 ] Both parties appeal the Master’s decision. [ 15 ] The Plaintiffs appeal the dismissal of 997’s claims in relation to damages arising from loss of appreciation in share value in K-Jay.

They say the Master erred in determining that 997 was bound by the previous arbitration decision, which set the share value as at the time of dismissal instead of at the end of a reasonable notice period. [ 16 ] The Defendant appeals the Master’s decision not to dismiss Lischuk’s claims. K-Jay says the Master:

• Erred in failing to properly consider and apply the appropriate test for

summary dismissal, and • Erred in misapprehending or failing to fully consider or review the evidence before the Court and erred in law and in applying the law to the evidence or, in some cases, in failing to even consider the appropriate legal issues and tests. III. Standard of Review [ 17 ] The standard of review on an appeal of a Master’s decision is correctness. The appellate judge may substitute his or her own discretion and views for the Master’s: Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 at para 30 . IV.

Issues and Arguments [ 18 ] The Plaintiffs raise a preliminary issue for this Court to determine, namely, whether any or all of K-Jay’s arguments are a collateral attack on Master Smart’s and Master Schulz’s Orders. [ 19 ] The Plaintiffs argue that the Court’s jurisdiction to adjudicate the Added Claims was finally determined by Master Smart’s Order, in which he allowed the Added Claims as amendments.

The Plaintiffs contend that K-Jay is attempting to attack the jurisdiction already determined by the Court. [ 20 ] The Plaintiffs submit that K-Jay ought to have made its arguments in relation to estoppel and jurisdiction when the amendment application for the Added Claims was in front of Master Smart, and indeed, the Plaintiffs say K-Jay referred to these arguments during oral argument. [ 21 ] The Plaintiffs say that by granting the amendments, the Court has already ruled that the basis for the Amendments is proper and K-Jay should have appealed Master Smart’s decision if it did not agree. [ 22 ] If it is determined that some or all of K-Jay’s arguments are not a collateral attack on earlier decisions and may proceed, the Court must then decide whether K-Jay has established the requisite elements for

summary dismissal. [ 23 ] K-Jay argues first that the Plaintiffs are estopped from seeking relief for the Added Claims. K-Jay relies on estoppel by convention, issue estoppel, cause of action estoppel, and abuse of process.

In the alternative, K-Jay argues that the Court does not have jurisdiction to consider the Added Claims. [ 24 ] More specifically, K-Jay’s arguments can be described as follows: • The Added Claims are clearly matters arising from the USA, and an arbitrator has already ruled that the USA prohibits any further litigation or dispute resolution about the valuation of 997’s shares once the “final and binding” valuation process was completed. • Due to the USA, and the arbitrator’s decision, the Plaintiffs cannot seek adjudication or another outcome from the Court that may affect the “final and binding” valuation of 997’s shares for any reason, including affecting the valuation date, because the Plaintiffs are: o Estopped from doing this, and o This would be an abuse of the court’s process. • In the alternative, the arbitrator found they had no jurisdiction to affect the valuation, and the Court similarly has no jurisdiction to address the Added Claims because: o The USA strictly governs all issues surrounding the valuation of 997’s shares and the parties have submitted to the processes required under the USA, resulting in a “final and binding” valuation that is not subject to further litigation; and o Even if valuation were subject to further litigation, the disagreement is about matters covered by the USA and so, in light of the arbitration clause in the USA, at best, an arbitrator would have exclusive jurisdiction over the matter, not the Court.

V. Analysis – Preliminary Argument [ 25 ] The Plaintiffs note that their claim, including the Added Claims, is a wrongful dismissal action. The main issue in the action will be determining Lischuk’s entitlements during a reasonable notice period. [ 26 ] The Plaintiffs argue that the Added Claims were permitted after a contested Chambers application to amend the Statement of Claim. They say the Defendant’s application for

summary dismissal is a collateral attack on the previous Orders of Master Smart, Q.C. and Master Schulz, Q.C. [ 27 ] The preliminary issue is whether

summary dismissal of the Added Claims is available given the history of these claims and specifically the fact that Master Smart allowed the Added Claims by amendment. [ 28 ] The Plaintiffs argue that, overall, K-Jay’s arguments all go to whether the amendments should have been allowed (attacking the basis for the amendments), and not to the merit of the arguments, which is the proper route of attack under

summary dismissal. [ 29 ] The Plaintiffs argue that in allowing the Added Claims by amendment, Master Smart expressly or implicitly found that the

Added Claims raise a triable issue and therefore the Court has jurisdiction to adjudicate the amendments; otherwise, these amendments would not have been permitted. K-Jay cannot attack the amendments on these bases now, as this is a collateral attack on previous orders. [ 30 ] Rule 3.65 of the Alberta Rules of Court , Alta Reg 124/2010 gives the Court jurisdiction to allow amendments after pleadings close. Generally, amendments are allowed no matter how late or careless: Balm v 3512061 Canada Ltd , 2003 ABCA 98 at para 43 .

However, there are certain circumstances when amending a Statement of Claim may not be allowed: • If the amendments add a new cause of action after a limitation period has expired; • If the amendment causes the opposing party prejudice that is not compensable by costs; • If the amendment is hopeless, or • If the failure to amend earlier indicates bad faith. ( Kent v Postmedia Network Inc , 2012 ABQB 559 at para 5 ( Kent )) [ 31 ] The Plaintiffs say that Master Smart’s decision to allow the Added Claims as amendments means that he did not find the Added Claims to be “hopeless”.

Some examples of “hopeless” amendments are: claims that do not disclose a cause of action, claims that have less than a modest degree of evidence in support, and claims that would be struck out under Rule 3.68: Attila Dogan Construction and Installation Co Inc v AMEC Americas Limited , 2014 ABCA 74 at para 27 ; Donoghue v Johnson , 2012 ABQB 295 at para 25 ; Canexus Corporation v MEG Energy , 2017 ABQB 739 at paras 28-30 . [ 32 ] Claims that could be struck under Rule 3.68 include claims where: • The Court has no jurisdiction; • The pleading discloses no reasonable claim or defence to a claim; • The pleading is frivolous, irrelevant, or improper; • The pleading constitutes an abuse of process; or • An irregularity in the pleading is so prejudicial to the claim that it is sufficient to defeat the claim. [ 33 ] The Plaintiffs argue that by allowing the amendments, Master Smart had to implicitly find the following: 1.

The evidence in support of the Added Claims raised a triable issue; 2. The Added Claims were not hopeless; and 3. The Court had jurisdiction to adjudicate the Added Claims. [ 34 ] By allowing the Added Claims, Master Smart had to have found that they could not be struck under Rule 3.68. And indeed, the Defendant’s application to have the Added Claims struck was dismissed by Master Schulz. [ 35 ] Although an application to strike pleadings and an application for

summary dismissal both serve the same broader purpose of weeding out unmeritorious claims at an early stage, they are not equivalent applications. The analysis underlying the two remedies is significantly different: PricewaterhouseCoopers Inc v Perpetual Energy Inc , 2021 ABCA 16 at para 71 ( PricewaterhouseCoopers ). The analysis and the test for

summary dismissal are different from the test for striking pleadings. The fact that Master Schultz dismissed the application to strike the Added Claims is irrelevant to the Defendant’s application for

summary dismissal. [ 36 ] An application to amend pleadings is a procedural step and not an adjudication on the merits of the amendments sought. An application to amend pleadings is procedural and is a relatively easy bar to meet. The proposed amendments are viewed in isolation and the question asked is whether the proposed additional claim has arguable merit. There is a presumption in favour of a liberal application to amend pleadings. As long as there is some foundation and unless there is significant prejudice or injustice, the order to allow amendments should be freely given: Kent at para 14 . [ 37 ] The test for

summary dismissal requires the Court to undertake a review of the entirety of the claim. A more robust evidentiary record is required for

summary dismissal. [ 38 ] The Rules permit

summary dismissal to be brought at any stage in the proceedings. The plain wording of this Rule indicates that it is not precluded from being brought after a judicial officer has permitted an amendment to the claim, even where that amendment was vigorously opposed. [ 39 ] The Defendant’s

summary dismissal application is not a collateral attack on the decision by Master Smart to permit the Added Claims, and thus, Master Schlosser’s decision was not a collateral attack on Master Schulz’s Order. The Schulz Order dismissed the Defendant’s application to strike the Added Claims and adjourned the application for

summary dismissal to the hearing before Master Schlosser. There was no application or cross-application before Master Schlosser on striking the Added Claims. The Court has the jurisdiction to entertain the

summary dismissal application in relation to the Added Claims. The preliminary argument is without merit. [ 40 ] The Plaintiffs argue further that the Court has no jurisdiction to consider

summary dismissal of the Added Claims because, in granting the application to amend the pleadings, the issue has already been determined by the Court. I disagree. [ 41 ] It is true that in resisting the application to amend the pleadings to include the Added Claims, the Defendant presented similar

arguments as were before Master Schlosser on the

summary dismissal application. However, in permitting the Added Claims, the Courtcould not, and did not, foreclose the possibility of a

summary dismissal application, which application can only be brought after thepleadings have closed, and at any stage in the process thereafter. [42] An application to strike out a pleading under Rule 3.68(2)(

b) for failure to disclose a cause of action is dealt with based on thepleadings. The facts as pled are assumed to be true, and no evidence is permitted on the motion: PricewaterhouseCoopers at para 70. Incontrast,

summary dismissal applications are generally brought after the pleadings are closed, and are based on affidavit evidencedemonstrating that there is no merit to the claim: PricewaterhouseCoopers at para 69. [43] In declining the Defendant’s application to strike the added claims, Master Schulz made no adjudication relevant to asummary dismissal claim. Accordingly, the Defendant’s request for

summary dismissal is not a collateral attack on her decision not tostrike the Added Claims. [44] Overall, the Plaintiffs submit that the Added Claims raise triable issues; they say that the Added Claims are triable becauseMaster Smart allowed them as amendments. The Plaintiffs say that this fact defeats all of K-Jay’s estoppel arguments, and that suchestoppel arguments should have been made during the amendment application. I disagree.

In essence the Plaintiffs argue that in allowingthe Added Claims by amendment, the Court is forever constrained from considering any other application, absent a full trial, in relationto those claims. This logic would remove resort to Rules that govern the litigation process, Rules that are designed to streamline actions,efficiently allocate judicial resources, and advance litigation. [45] The Plaintiffs argue that, in this application, K-Jay continues to attack the basis of the claims, which has already been decidedby Master Smart. The Plaintiffs note that

summary dismissal is based on the lack of merits of a claim, not on the underlying basis of aclaim. [46] In contrast, K-Jay argues that there is no merit to the Added Claims and they ought to be dismissed. [47] Alberta Rules of Court, Rule 7.3 sets out the requirements for

summary dismissal: 7.3(1) A party may apply to the Court for

summary judgment in respect of all or part of a claim on one or more of the following grounds: (

a) there is no defence to a claim or part of it; (

b) there is no merit to a claim or part of it; (

c) the only real issue is the amount to be awarded. [48]

Summary judgment or dismissal should be granted when it is just and fair to do so on the basis of the law and evidence beforethe Court: Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49. [49] In Hryniak v Mauldin, 2014 SCC 7, the Supreme Court of Canada set out a three-part test for determining if

summaryjudgment or dismissal is the appropriate procedure in a given situation, at para 49: There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion forsummary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows thejudge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. [50] In addition to the above test from Hryniak, the Court of Appeal in Weir-Jones (at para 47) provided the following principlesfor Courts to apply:

a) Having regard to the state of the record and the issues, is it possible to fairly resolve the dispute on a

summary basis, or douncertainties in the facts, the record or the law reveal a genuine issue requiring a trial?

b) Has the moving party met the burden on it to show that there is either “no merit” or “no defence” and that there is no genuineissue requiring a trial? At a threshold level the facts of the case must be proven on a balance of probabilities or the application will fail,but mere establishment of the facts to that standard is not a proxy for

summary adjudication.

c) If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record thatthere is a genuine issue requiring a trial. This can occur by challenging the moving party’s case, by identifying a positive defence, byshowing that a fair and just

summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring atrial. If there is a genuine issue requiring a trial,

summary disposition is not available.

d) In any event, the presiding judge must be left with sufficient confidence in the state of the record such that he or she is preparedto exercise the judicial discretion to summarily resolve the dispute. [51] A collateral attack occurs when a party seeks to relitigate a matter that has already been finally determined.

The Plaintiffsargue that K-Jay was required to bring its whole case forward when the amendment application was heard, including all of its argumentsthat properly belonged to that application: Henderson v Henderson (1843), 67 ER 313 at 319, cited in Las Vegas Strip Ltd v Toronto(City) (1996), 30 OR (3d) 286, (Gen Div) at p 12 (Las Vegas Strip), aff’d (1997), 32 OR (3d) 651, (CA). [52] Collateral attack is prohibited for several important reasons: The law rightly seeks a finality to litigation.

To advance that objective, it requires litigants to put their best foot forward to establish thetruth of their allegations when first called upon to do so. A litigant, to use the vernacular, is only entitled to one bite at the cherry. Theappellant chose the ESA as her forum. She lost. An issue, once decided, should not generally be re-litigated to the benefit of the losing

party and the harassment of the winner. A person should only be vexed once in the same cause. Duplicative litigation, potentialinconsistent results, undue costs, and inconclusive proceedings are to be avoided. (Danyluk v Ainsworth Technologies, 2001 SCC 44 at para 18) [53] The Plaintiffs argue that the previous Masters’ Orders finally determined the issue of the Court’s jurisdiction, and implicitlyheld that the Added Claims are not hopeless and raise a triable issue. The Plaintiffs argue that since K-Jay failed to appeal either MasterSmart’s or Master Schulz’s Orders, K-Jay is now bound by those decisions.

K-Jay is asking this Court to overturn Master Smart’s Orderallowing the Added Claims, as well as Master Schulz’s Order, where she dismissed K-Jay’s request to strike the Added Claims, andspecifically found that any issues of jurisdiction should have been raised at the application to amend. [54] By allowing the amendments, did Master Smart implicitly rule that the Court has jurisdiction over the Added Claims?

ThePlaintiffs submit that K-Jay’s arguments in relation to the three estoppel arguments all go directly to the Court’s jurisdiction and thatthese arguments were necessarily decided when Master Smart allowed the amendments. [55] The Plaintiffs rely on Alberta v Alberta (Public Service Employee Relations Board) (1985), 61 AR 110, (QB) where Miller ACJ discussed the definition of jurisdiction, noting, at para 22, that it is “the authority to decide.” [56] The Plaintiffs also argue that the claim of an abuse of process is a jurisdictional argument as K-Jay is essentially arguing thatthe Court’s jurisdiction is ousted on the basis that taking jurisdiction over the issue would undermine the arbitrator’s decision.

ThePlaintiffs submit that if the Added Claims were an abuse of process, they would not have been allowed by amendment because theywould have been hopeless. [57] In response, K-Jay submits that the only jurisdictional argument it is making relates to the arbitration clauses. Estoppel is notjurisdictional and not barred by Master Schulz’s comments on jurisdiction, in particular estoppel by convention, which is based on thePlaintiffs’ conduct and representations.

Thus, if the Plaintiffs are successful in their preliminary argument on jurisdiction, K-Jay says thisonly affects the jurisdictional arguments. [58] Further, before Master Schlosser, K-Jay also argued that the Plaintiffs’ preliminary argument, before him, that K-Jay wasbringing a collateral attack on the Orders of Master Smart and Master Schulz, was itself a collateral attack on Master Schulz’s Order,since Master Schulz held that, while K-Jay could not bring its application to strike the Added Claims, the application for

summarydismissal could proceed to a Special Chambers hearing. [59] On the preliminary issues raised by the Plaintiffs, I find that the Defendant’s

summary dismissal application is not a collateralattack on the previous Orders of Master Smart and Master Schulz. Even though many of the same arguments were made by theDefendant in resisting the application before Master Smart to amend the pleadings, K-Jay is not precluded, once the pleadings haveclosed, from bringing a

summary dismissal application. Accordingly, both Master Schlosser, and this Court, have the jurisdiction toentertain the Defendant’s

summary dismissal application. [60] Next, I will review each of K-Jay’s bases for

summary dismissal and discuss whether K-Jay has shown the required elementsfor each. VII. Analysis -

Summary Dismissal A. Defendant’s Arguments [61] K-Jay argues that several doctrines apply to prevent the Plaintiffs from advancing the Added Claims: estoppel by conventionand res judicata, which includes the doctrines of issue estoppel, cause of action estoppel, abuse of process, and collateral attack. Thesearguments relate to 997’s claims. [62] The Plaintiffs argue that K-Jay cannot rely on any of these doctrines to seek

summary dismissal because they have allnecessarily been determined by Master Smart, in allowing the Added Claims as amendments. As discussed above, I do not agree. [63] The Plaintiffs further argue that

summary dismissal of the Added Claims is not available or appropriate because the AddedClaims are not barred by estoppel or abuse of process. As well, the Plaintiffs argue that the Added Claims are not covered by the USA orits arbitration clause, and are properly to be determined in the wrongful dismissal claim. i.

Estoppel by Convention [64] To establish estoppel by convention a party must show the following: 1) The parties’ dealings were based on a shared assumption of facts or law arising from a representation by statement or conduct(including implication or silence); 2) One party must have conducted itself (for example, acted) in reliance on the shared assumption, and its actions resulted in a change ofits legal position; and 3) It would be unjust or unfair to allow one of the parties to resile or depart from the shared assumption, because the other party wouldsuffer detriment by the departure. (Ryan v Moore, 2005 SCC 38 at para 59)

[ 65 ] In Wagman v Obrigewitsch , 2010 SKQB 84 ( Wagman ), the Court succinctly set out the test, at para 67: “Estoppel by convention has three elements, common understanding, reliance and detriment.” [ 66 ] The shared assumption between the parties can be formed before or at the time of contracting, or it can arise after the contract has been made, for example where a representation has been made about how the contractual rights will be performed: Wagman at paras 64 and 66 . [ 67 ] Post-contract shared assumptions were described in Le Soleil Hotel & Suites Ltd v Le Soleil Management Inc , 2009 BCSC 1303 at para 358 : In a breach of contract claim another, quite different, possible form of estoppel is estoppel by convention.

An estoppel by convention is established by post-contractual conduct. Where the parties have based their dealings on a shared assumption as to the contract’s proper

interpretation and one has relied on that

interpretation to its detriment, the other will not be permitted to resile and assert a different

interpretation... [ 68 ] K-Jay argues that the Plaintiffs and K-Jay shared assumptions, as well as actual agreements, about certain facts throughout the share valuation process under the USA, the arbitration, and the repurchase of 997’s shares. These assumptions and agreements arose from representations between the parties. [ 69 ] According to K-Jay, the parties agreed to the USA’s terms, including: a) 997’s shares would be repurchased upon termination of Lischuk’s employment;

b) the value of 997’s shares would be determined using a particular valuation process, concluding with a Final Valuation;

c) the Final Valuation would be binding upon the parties; and,

d) the provisions in the USA were the entire agreement between the parties as regards the valuation of shares. [ 70 ] K-Jay also argues that the record is clear that, from Lischuk’s termination on November 22, 2013, until approximately the end of 2017, the parties consistently agreed that the appropriate date to use for calculating the value of 997’s shares would be November 30, 2013.

Lischuk agreed that this date is the appropriate one to use during his Questioning. [ 71 ] In the valuation process, both parties gave their respective valuators November 30, 2013, as the date to use for the valuation of 997’s shares. The parties then jointly instructed the final valuator to use November 30, 2013 for the Final Valuation. [ 72 ] The Plaintiffs initiated arbitration to contest the Final Valuation.

K-Jay says the Plaintiffs expressly agreed, in the Agreed Statement of Facts provided to the arbitrator, that November 30, 2013, was the appropriate date for valuation. [ 73 ] The arbitrator held that the Final Valuation was final and binding.

The Plaintiffs did not seek judicial review of that decision and instead sought payment of the Final Valuator’s share value of $944,000 from K-Jay, which paid the money to 997. [ 74 ] K-Jay argues that it has established the first element of the test for estoppel by convention because, for the four years following Lischuk’s termination, the parties’ entire dealings were based on shared assumptions of fact and law – that is, that the appropriate valuation date for 997’s shares was November 30, 2013. [ 75 ] I agree.

Throughout the four-year period from November 2013 to 2017 when the Added Claims application was brought, the parties operated on the mutual understanding that the valuation date for 997’s shares was November 30, 2013. No complaint was raised by the Plaintiffs throughout the valuation process, and the arbitration (and appeal) process that followed.

The first indication that the valuation date was disputed was the 2017 application to amend the pleadings. [ 76 ] In respect of the second element, K-Jay submits that it took a particular approach to the valuation and pay-out steps based on the shared agreement and representations by the Plaintiffs.

For example: • K-Jay agreed to use, and paid for, the valuation process provided in the USA using the November 30, 2013 date; • K-Jay proceeded with and paid for lawyers and an arbitrator to determine whether the Final Valuation under the USA was “final and binding”; • K-Jay relied on the arbitrator’s ruling as to the appropriate date for valuation of 997’s shares for purposes of the buy out; and • K-Jay believed the Plaintiffs’ request for payment for the shares was made in good faith on the basis of the above steps, and paid out almost one million dollars. [ 77 ] Again, I agree the Defendant conducted itself throughout the years-long dispute on the basis of the shared assumption between the parties as to the valuation date.

The Plaintiffs argue that they can now resile from that valuation date, however, the Defendant conducted itself in a manner that maintained its legal obligations based on that shared assumption. [ 78 ] With respect to the third element of the test for estoppel by convention, K-Jay submits that it relied on the Plaintiffs’ representations and the mutual conduct of the parties, reasonably and in good faith, in undertaking the above process, including the costs and time involved.

K-Jay says that this reliance resulted in K-Jay making several changes to its legal position, and it is unconscionable and improper for the Plaintiffs to now claim that a different valuation date is appropriate. [ 79 ] It would be manifestly unfair and unjust, on this factual record, to permit 997 to litigate the valuation date of the shares.

[80] The Defendant has established that estoppel by convention is satisfied. Accordingly, the Added Claims as they relate to 997are estopped from proceeding, and

summary dismissal is warranted on this basis. In the circumstances there is no need for the AddedClaims against 997 to go to trial. ii. Res Judicata [81] The doctrine of res judicata includes the doctrines of issue estoppel, cause of action estoppel, abuse of process, and collateralattack. Res judicata is concerned with certainty and finality in litigation. There are six essential estoppel doctrines: a. Issue estoppel bars an issue which has already been decided in the first proceeding. b. Issue estoppel under the rule in Henderson bars an issue which could have been brought in the first proceeding. c.

Cause of action estoppel, the true res judicata, bars a cause which has actually been decided in the first proceeding. d. Cause of action estoppel under the rule in Henderson bars a cause which could have been brought in the first proceeding. e. Abuse of process by relitigation bars a second proceeding when the integrity of the judicial decision-making process in the firstproceeding will be undermined. f.

Collateral attack bars a second proceeding when a party, bound by an order, seeks to avoid compliance with that order by challengingthe order itself and its enforceability, not directly but indirectly in a separate forum. (Donald J.

Lange, The Doctrine of Res Judicata in Canada, 4th ed (LexisNexis: Markham, 2019) at ch 1.3, p 1) [82] The rule in Henderson, which applies to both issue estoppel and cause of action estoppel, was described in Las Vegas Strip atp 12 : ...where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction the Court requiresthe parties to the litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties toopen the same subject of litigation in respect of matters which might have been brought forward as part of the subject in contest, butwhich was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case.

Theplea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to forman opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties,exercising reasonable diligence, might have brought forward at the time. [83] There are two purposes behind the doctrine of res judicata.

First, there is a public interest in having an end in litigation.Second, no one ought to be subjected to proceedings more than once for the same cause: Las Vegas Strip at p 12 . [84] The Defendant’s have established that the doctrine of res judicata also applies to this factual record, in respect of the valuationdate of 997 shares being held to November 30, 2013. The USA established a process for valuing the shares. The parties agreed that anydisputes on the valuation of 997’s shares were to go to arbitration and that the arbitrator’s decision was “final and binding”.

A disputearose, and that dispute went to arbitration. The Plaintiffs challenged the arbitrator’s ruling and he declined any appeal with referenceback to the terms in the USA. [85] A finding of estoppel is subject to limited discretion of the court. Even if a court finds that a doctrine of estoppel applies to agiven situation, the court may refuse to apply the doctrine if it would be inherently unfair to do so: Fortinet Technologies (Canada)ULC v Bell Canada, 2018 BCCA 277 at paras 34-35 (Fortinet); Toronto (City) v CUPE, Local 79, 2003 SCC 63 at paras 51-53(Toronto (City).

This is not a situation whereby it would be inherently unfair to apply the doctrine of res judicata. The parties wererelatively equally matched, the USA was freely entered into by the Plaintiffs, the process for resolving the dispute under the USA wasfaithfully adhered to, the Defendant paid out the share valuation award determined by the impartial valuator and the Plaintiffs received,and processed, the award in their favour. Issue Estoppel [86] In order for the doctrine of issue estoppel to apply, and bar an issue from being litigated in a second proceeding, there arethree prerequisites: 1.

The question being addressed in the new action must be the same question determined in the earlier action; 2. The earlier decision must be final; and, 3. The parties to the proceedings must be the same, or their privies. (Fortinet at para 27) [87] Fortinet involved parties who invoked an arbitration provision in a sublease to determine rental rates in a sublease extension.After the arbitration ruling, Fortinet brought a court proceeding seeking to invalidate the sublease. [88] The Court of Appeal found that issue estoppel barred Fortinet from challenging the validity of the sublease.

Fortinet hadproceeded to arbitration on an issue with the sublease, and could not later make arguments that would undermine the foundation of thearbitration. The Court noted at para 26: The abuse of process in this case can be characterized as extending beyond merely taking contradictory positions in different

proceedings. The validity of the sublease extension was a necessary precondition for the arbitration. Fortinet’s claim that the subleaseextension is invalid is barred by the branch of res judicata known as issue estoppel. [89] The Court of Appeal noted that Fortinet could have challenged the validity of the sublease before the arbitrator, however,Fortinet did not do this. The arbitrator made his decision relying on the shared position of the parties that the sublease was validlyextended.

The Court noted: “The validity of the sublease was ‘necessarily bound up’ with the determination of the rent to be paid on therenewal. It was, therefore, a matter ‘determined’ in the arbitration.

It is now too late for Fortinet to take a contrary position...”: at para33. [90] K-Jay argues that issue estoppel also bars the Added Claims because: • The arbitrator’s decision was final; • The parties and their privies are the same; • The Added Claims were addressed at arbitration. [91] K-Jay adopts the analysis from Fortinet, and argues that the Plaintiffs and K-Jay invoked the steps of the valuation processunder the USA and then agreed to arbitrate the Final Valuation, thus mutually agreeing that the appropriate valuation date to be used wasNovember 30, 2013.

The parties submitted an Agreed Statement of Facts to the arbitrator.

K-Jay says that the shared acknowledgementby the parties that the valuation date was appropriate formed a necessary foundation for the arbitrator to then decide whether the FinalValuation could be challenged, and if so, how the Plaintiffs should have specifically challenged the valuation date with the arbitrator. [92] K-Jay then says that since neither party contended that the valuation date was invalid (and in fact, the arbitrator inquiredwhether there was a dispute about the date, and was told there was not) the arbitrator did not have to address the issue of the valuationdate.

The valuation date was necessarily bound up with the determination of the arbitrator, the arbitrator made his award relying on theshared position of the parties on that issue, and that meant the matter was determined in the arbitration. [93] K-Jay also argues that Lischuk is clearly a privy to 997 and it cannot be suggested that Lischuk can avoid the application ofissue estoppel because he is not 997. [94] Overall, K-Jay submits that all elements of issue estoppel are present and the Added Claims may be dismissed on that basis. [95] The doctrine of issue estoppel precludes 997 from litigating the amount and the timing of the share valuation.

In this respect,the Master was correct to grant

summary dismissal of this part of the Added Claims. The Defendant and 997 were the signatories to theUSA, which agreement set the terms for resolving disputes, which terms were applied to the dispute over the timing and the amount ofthe share valuation, and which agreement established unambiguously that the arbitrator’s decision was final. 997 is therefore estoppedfrom re-litigating this claim. [96] 997 was created for the sole purpose of receiving and holding shares in the Defendant corporation.

Lischuk was the soleshareholder in 997. 997’s entitlement to receive and hold the Defendant shares arose exclusively and entirely as a result of Lischuk’semployment with the Defendant company. The USA held that once Lischuk’s employment ended, for any reason, 997’s entitlement toacquire and hold shares was immediately extinguished. [97] However, the Master also decided that Lischuk, as the individual Plaintiff, was not estopped from challenging the timing andamount of the valuation of 997’s ownership of shares in the Defendant’s corporation.

The Master relied upon the decision of Hawkes vLevelton Holdings Ltd, 2013 BCCA 306 (Hawkes), where the British Columbia Court of Appeal held that an entitlement toshareholdings can be a benefit of employment and any loss of that entitlement can be subject to damages relating to any notice period forwrongful dismissal. [98] 997 and Lischuk are not privies across the Added Claims, since 997 has no standing on the wrongful termination claim.Lischuk’s damages for wrongful termination, under the Hawkes analysis, may include the payment of dividends, any bonus, and anyincrease in share value.

The Master was correct in denying

summary dismissal of this part of the Added Claims. Cause of Action Estoppel [99] The key principles governing cause of action estoppel relevant to this case are: a. The plaintiff must bring forward the subject matter of the whole case relating to the cause of action at one time, once and for all,and every remedy flowing from the cause of action based on the subject matter. b. All subject matter germane to the claim or defence which could have been brought forward in the first action by the exercise ofreasonable diligence, but was not, is estopped in a second action. c.

A separate and distinct cause of action is not governed by cause of action estoppel and need not be brought in the same action,either as a claim by the plaintiff or as a counterclaim by the defendant. d.

Cause of action estoppel applies to the same parties, and their privies, in the second action and in any second proceeding which isnot an action. (Lange, The Doctrine of Res Judicata in Canada at ch 3.1, p 1) [100] In Bjarnarson v Manitoba (1987), 38 DLR (4th) 32, (MBQB), aff’d (1987), 45 DLR (4th) 766, (MBCA), Chief Justice Hewak summarized the four criteria, identified by the Supreme Court of Canada in Town of Grandview v

Doering, (SCC), [1976] 2 SCR 621, required for cause of action estoppel to apply, at para 6: 1. There must be a final decision of a court of competent jurisdiction in the prior action; 2. The parties to the subsequent litigation must have been parties to or in privy with the parties to the prior action (mutuality); 3. The cause of action in the prior action must not be separate and distinct; and 4.

The basis of the cause of action and the subsequent action was argued or could have been argued in the prior action if the partieshad exercised reasonable diligence. [101] Cause of action estoppel bars subsequent claims or defences specifically decided previously, as well as each claim or defence that could properly have been raised in those earlier proceedings: 420093 BC Ltd v Bank of Montreal (1995), 128 DLR (4th) 488, (ABCA) at para 36. [102] Cause of action estoppel does not compare the specific legal claims that a party has previously brought forward with the newclaim.

Rather, “cause of action” means the set of facts relied on by a party in the previous action.

A claim that was not previouslybrought, but that is based on the same set of facts as in the previous action, will also be barred by cause of action estoppel: Las VegasStrip at pp 13-15 . [103] Further, cause of action estoppel may still apply when a previous action was before an arbitrator or other decision-maker, asopposed to a judge: Fortinet at paras 23-24. [104] K-Jay argues the Added Claims meet the test for cause of action estoppel because: • The arbitrator’s decision was a final decision dealing with the appropriate valuation of 997’s shares. • The parties and their privies are the same. • The cause of action leading to the share valuation and the arbitration involved the same set of facts as those underlying the AddedClaims.

There are no distinct and separate causes of action. Specifically, Lischuk’s dismissal triggered a share buy-back process underthe USA. This process led to the Final Valuation, which Lischuk challenged in arbitration. The arbitrator held that the Final Valuationwas final and binding. The Plaintiffs are now trying to use a slightly different argument in saying the valuation date used was improper. • The Plaintiffs’ slightly different argument could and should have been argued at arbitration.

The arbitrator invited the Plaintiffs toconsider the issue of the valuation date and the Plaintiffs specifically opted not to. [105] I agree that cause of action estoppel applies to the 997’s Added Claim relating to the timing and amount of the share valuation,thus the Master was correct to summarily dismiss this part of the Added Claims. [106] I also agree that the Master was correct to permit Lischuk’s Added Claim to determine any other shareholding entitlements (i.e.dividends, bonuses) related to his employment.

The wrongful termination claim is based on the individual Plaintiff’s employment, andunrelated to the share valuation regime established under the USA. Abuse of Process by Litigation [107] Abuse of process by litigation is a separate doctrine that may be used to prevent claims in situations where the elements ofestoppel are not present.

Abuse of process is a flexible doctrine that: ...engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to thelitigation before it or would in some other way bring the administration of justice into disrepute. (Toronto (City) at para 37, citing Canam Enterprises Inc v Coles (2000), (ON CA), 51 OR (3d) 481 (CA) at para 55,aff’d 2002 SCC 63) [108] One example of an abuse of process is when a latter proceeding appears to be a collateral attack on the earlier decision: Toronto(City) at para 40. [109] In Fortinet, the British Columbia Court of Appeal found an abuse of process, as well as issue estoppel.

The Court noted at paras22-24: When it filed its notice to arbitrate, Fortinet asserted that Bell had the right to extend the sublease, and that it had exercised that right.Such an assertion was necessary, because the arbitration was based on the premise that the sublease was to be extended. Fortinetmaintained the position that the sublease was to be extended throughout the arbitration. It did not resile from that position until afterreceiving an arbitration award that was not to its liking.

The taking of inconsistent positions in legal proceedings, can, in certain circumstances, constitute an abuse of process: see Pepper'sProduce Ltd v Medallion Realty Ltd, 2012 BCCA 247 (BC CA); First Majestic Silver Corp v Davila, 2012 BCCA 5 (BC CA); Chapmanv Canada, 2003 BCCA 665 (BC CA); Glover v Leakey, 2018 BCCA 56 (BC CA). Parties must not be allowed to hold back arguments,then use them to undermine the results of the proceeding.

This principle is as applicable to arbitrations as to litigation before the courts.In VIH Aviation Group Ltd v CHC Helicopter LLC, 2012 BCCA 125 (BC CA), at para 5, this Court commented: Where parties have chosen arbitration as the method for resolving disputes under a contract, they are expected to present their cases fullybefore the arbitration panel. Allowing a party to change its position on appeal can be subversive of the arbitration process.

While the Court in VIH Aviation was speaking in the context of an application for leave to appeal from an arbitration award, the sameprinciple applies to a case such as this one. Fortinet is now advancing a claim that is inconsistent with the position it took on thearbitration, and that would undermine the finality and integrity of the arbitration process.

Advancing such a claim constitutes an abuse ofprocess. [110] K-Jay argues that the Plaintiffs are now taking the position that the valuation date for purchasing 997’s shares is the end of Mr.Lischuk’s notice period, and this position is inconsistent with their earlier position, which was that the valuation date is November 30,2013. [111] K-Jay submits that this inconsistency cannot be allowed because it subjects K-Jay to litigation by installments and causes it toface the same cause multiple times in different forums, which brings the integrity of the administration of justice into jeopardy. [112] K-Jay notes that the arbitrator held that the Final Valuation, which used November 30, 2013, as the valuation date, was finaland binding according to the USA, and was not subject to further litigation.

This decision was not judicially reviewed. They say that ifthis Court now found that the Final Valuation should be reconsidered using a different valuation date this would undermine the integrityof the arbitration process as well as the legal system. [113] As a result of the conclusions on the estoppel arguments, a finding on the abuse of process by litigation argument is notrequired. However, I will note that nothing in the Added Claims was information unavailable to the Plaintiffs when the valuation processpursuant to the USA was undertaken, and they specifically agreed to the November 30, 2013 valuation date.

Lischuk had beenterminated. The Hawkes decision, at the appellate level, had already been released. The Plaintiffs, having filed a Statement of Claim forwrongful dismissal in 2015, seek to unravel the share valuation process and their unequivocal agreement to setting November 30, 2013as the share valuation date. To put the Defendant to the expense and litigation risk of revisiting that previous agreement wouldcompromise the integrity of the arbitration process and the administration of justice. iii.

Jurisdiction [114] K-Jay argues that, in any event, the Added Claims ought to be summarily dismissed because they are not within the properjurisdiction of the Court. [115] First, the contract between the parties, the USA, provides for the process to determine valuation timing and pricing upon Mr.Lischuk’s termination. The USA provides that the Final Valuation that arises from the process is “final and binding”.

There can be nofurther litigation of the matter; neither the amount nor the considerations leading to the amount, can be impugned. [116] K-Jay says that this argument is fully captured in the arbitrator’s decision. At arbitration, the Plaintiffs asked for the FinalValuation to be voided on several bases, including because the valuation did not properly consider certain information that arose afterNovember 30, 2013. The arbitrator noted that the parties’ contract and the surrounding facts made it clear that there was no jurisdictionfor review or variation of the Final Valuation.

K-Jay argues that the arbitrator’s reasons and conclusions are equally applicable to thisaction before this Court. [117] K-Jay argues that it is clear from the wording of

Article 16.1 of the USA that the parties intended that the Final Valuationwould be “final and binding” and conclusive.

Thus, there is no jurisdiction for either an arbitrator or a court to determine a dispute aboutthe valuation. [118] There are numerous cases involving courts refusing jurisdiction over disputes where the parties separately contracted for otherprocesses to be final and binding: Solutia SDO Ltd v Cummings, (Ont Sup Ct J); Labourers’ International Unionof North America, Local 183 v Carpenters and Allied Workers Local 27 (1997), 34 OR (3d) 472, (CA); Mathieu etal v JR Stephenson Mfg Ltd et al, 2013 MBQB 64. [119] K-Jay argues that if the Added Claims were allowed to proceed to trial, this would essentially amount to some kind of judicialreview of the arbitrator’s decision, which is problematic because the Plaintiffs did not seek judicial review of that decision. [120] Second, even if the Court does not accept that the Final Valuation is final and binding, K-Jay argues that, pursuant to the USA,the appropriate forum for determination of the value of 997’s shares is arbitration.

The USA has a strict arbitration clause whichprovides: 18.1 Arbitration – In the event that any disagreement arises between the Parties hereto with reference to this Agreement or any matterarising hereunder and upon which the Parties cannot agree, then any such dispute shall be referred to arbitration in accordance with theprovisions of The Arbitration Act (Alberta) or other similar legislation in force in the Province of Alberta from time to time. [121] I agree with the jurisdictional argument that it would be problematic to permit the Added Claims in relation to the timing andamount of the share valuation to proceed to trial in circumstances where the parties contracted to utilize a parallel process, agreed toengage that process, freely participated in that process, and both considered that process, at the time, to be a conclusive determination ofthe dispute. [122] In the circumstances of this case, the parties ceded jurisdiction of the share valuation to the valuator and the arbitrator.

Whilenot seeking judicial review of the arbitrator’s decision, the Plaintiffs cannot now ask the court to assume jurisdiction of the same dispute. B. Plaintiffs’ Arguments [123] In response to K-Jay’s arguments, the Plaintiffs argue that there is an issue that requires a trial and

summary dismissal is notappropriate in the circumstances.

[ 124 ] The Plaintiffs focus their arguments on the fact that the Added Claims relate to the wrongful termination claim. The essential piece of the Plaintiffs’ argument is their view that the claim for damages from wrongful termination on the one hand, and the arbitration to deal with a process under the USA on the other hand, are two distinct issues that deal with fundamentally different facts, arguments, parties, and processes. [ 125 ] The Plaintiffs further submit that this Court should reverse Master Schlosser’s decision to dismiss 997’s claim.

They say that the issue of whether 997 is entitled to benefit under Lischuk’s employment contract, despite 997 being a stranger to the employment contract, should go to trial. [ 126 ] In this respect, I agree with the Plaintiffs. For the reasons set out above, 997’s challenge to the share valuation process cannot proceed and the Master’s decision to summarily dispose of that claim was correct.

Additionally, 997 is a stranger to the employment contract and 997’s relationship to the Defendant was fully encompassed by the USA. [ 127 ] That leaves the Plaintiffs’ argument that the main triable issue related to the Added Claims is whether Lischuk is entitled to the share valuation after reasonable notice. The Plaintiffs claim such entitlement based on the case of Hawkes . [ 128 ] Hawkes involved an engineer who was employed by a company (or its predecessors) for 18 years. Professional employees of the company were entitled to purchase shares in the company and, as such, Hawkes became a shareholder.

At trial, the judge found Hawkes had been wrongfully dismissed. Hawkes was awarded damages, including the value of his shares in the company at the end of his reasonable period of notice for dismissal without cause. The company appealed the award of damages related to Hawkes’ shareholder benefits. [ 129 ] The company had a Shareholders Buy/Sell Agreement which provided that Hawkes, like other employees, could only maintain his status as a shareholder so long as he continued to be an employee with the company.

The Agreement provided that the company’s right to buy back a shareholder’s shares was triggered if he or she ceased to be an employee. Approximately one month after dismissal, the company provided a notice of triggering event under the Agreement to Hawkes. [ 130 ] At trial, Hawkes claimed for loss of increased share value, along with the loss of an annual bonus paid to shareholder- employees.

The trial judge found that these categories of damages were conceptually similar because they both raise issues as to whether certain benefits Hawkes enjoyed as a shareholder would have continued during the period of reasonable notice of dismissal. The judge concluded that there was an implied term in Hawkes’ employment contract that he would be entitled to both his bonus and any increases in share value during the period of reasonable notice.

She based her conclusion on the “intertwined nature of the employment and shareholder relationship, and... an analysis of the written shareholders agreement itself”: Hawkes at para 28 . [ 131 ] In addition to the implied term found, the trial judge also had to determine whether an express term in the Agreement overrode the implied term of the employment contract. The Agreement held that if a shareholder ceased to be an employee for any reason other than cause, that was a triggering event for the company to buy back the shares.

The company took the position that Hawkes was dismissed for cause and did not provide a notice of triggering event pursuant to the above-mentioned provisions. The trial judge found that the Agreement did not override the implied term and that Hawkes was entitled to compensation for the loss of opportunity to share in the benefits of the company’s shareholders during his reasonable notice period. The trial judge found that if he had been given reasonable notice of dismissal he would have continued as an employee and shareholder until the end of his reasonable notice period.

His employment and all related benefits, including the benefits of owning shares, would only end at the conclusion of the reasonable notice period. [ 132 ] On appeal, the Court found that the trial judge erred in finding the employment contract included an implied term that Hawkes would be entitled to the employee benefits, including the increase in share value, during the reasonable notice period, however, the Court did not believe the error affected the correct disposition of the case. [ 133 ] The Court of Appeal noted at para 65: The appellants contend that according to the terms of the BSA, the respondent's shares had to be sold to other shareholders or back to Holdings within 60 days of his termination and he had no right to participate in any of the benefits of a shareholder after that date.

It is my opinion that the appellants are correct in this contention. However, this does not affect the respondent's entitlement to the benefits he would have received had he continued as an employee during the 18 month notice period. [ 134 ] And at paras 72-73, 75-77: The trial judge found that the respondent's salary, entitlement to shareholdings and bonuses were the benefits of his employment. At para 219 of her reasons she stated that: ... damages in a wrongful dismissal case are measured by what the employee would have earned had his employment continued to the end of the reasonable notice period.

In my opinion, she was correct in reaching this conclusion. Having reached that conclusion, her error in implying a term in the employment agreement that the respondent would be entitled to share in the benefits accruing to shareholders, both bonuses and any increases in share value, during a period of reasonable notice of termination of employment was of no material consequence. ... ...

Other than its effect upon the respondent's ability to continue to hold shares in Holdings, once his employment with Consultants was terminated, I am unable to accept that the BSA was a relevant consideration in the assessment of the respondent's damages for his wrongful dismissal. Had the respondent been given the reasonable notice of his termination determined by the trial judge, he would have received his salary,

and retained his shares for 18 months, and received bonuses as a shareholder of Holdings during that period. He would also have been able to retain his shares in Holdings until the end of the 18 month period, at which time he would have been obliged to sell them in accordance with the BSA for the then effective price of $431.13 per share.

In the result, it is my opinion that the trial judge was correct in valuing the respondent's shares at $431.13 per share, and in awarding him damages to include his salary, his lost bonuses and the value of his shares, calculated at $431.13 per share as his compensation for his dismissal without cause. [ 135 ] With respect to K-Jay’s arguments about estoppel, the Plaintiffs take the position that the Added Claims are about sufficiently different issues and subject matter; the claim is for damages resulting from wrongful dismissal, while the arbitration only dealt with the USA.

The Plaintiffs also say that Lischuk and 997 are not the same party or privies; they each have separate claims, rights, and entitlements. [ 136 ] Following this logic, 997’s claim was properly summarily dismissed: it is a stranger to the employment contract. The share valuation was governed by the contracted process established by the USA and that process was followed. [ 137 ] The Plaintiffs say that

Article 15.1 of the USA, which provides that if a shareholder “ceases to be an employee of the Corporation... voluntarily or otherwise ... the Corporation shall have the obligation, to purchase all” of the shareholder’s interest, must be interpreted and determined at trial. ( Emphasis added ) [ 138 ] Lischuk claims any benefits as a result of the termination of his employment, including any share valuation, have not been determined.

Under the Hawkes decision there is an arguable issue that his employment benefits included the increase in value of shares in the Defendant corporation. [ 139 ] I find that the Master’s decision was correct. 997 is estopped from bringing the Added Claims to revisit the share valuation process and amount. The process was determined by the USA, a contract that bound 997 and the Defendant corporation. Both parties participated in the process mandated by the USA. The Plaintiffs appealed the valuation to an arbitrator, who declined jurisdiction citing the terms of the USA to the effect that “share valuation is final”.

The USA also contained a clause that there was no appeal from a decision of the arbitrator. [ 140 ] While the Plaintiffs argue that the claim itself is a “simple wrongful termination” one, in fact, 997’s claim is unrelated to the wrongful termination claim. Instead it was a claim borne out of a contractual dispute. On the clear and unambiguous terms of the contract, the dispute is not litigable. The Master was correct in law to summarily dismiss this claim. [ 141 ] The individual Plaintiff, Lischuk, has made a claim for wrongful termination.

His Added Claim relates to any compensation he may have been entitled to flowing from his employee/shareholder status over any notice period that may be determined. He is correct that the Hawkes decision, which has been applied in some Alberta trial decisions, may result in any award for wrongful termination including shareholder benefits. These Added Claims, that were not summarily dismissed by the Master, are litigable and directly related to the wrongful termination claim. VIII. Conclusion [ 142 ] The Master’s decision was correct. The appeal and the cross-appeal are dismissed.

Heard on the 10 th day of September, 2020 Dated at the City of Edmonton, Alberta this 12 th day of April, 2021. S.E. Richardson J.C.Q.B.A. Appearances (by Webex): Philip J. Prowse Prowse Chowne LLP for the Plaintiffs

Geoffrey Hope Field Law for the Defendant