Employee’s role terminated shortly after relocation from Winnipeg to Ottawa
An Ontario court has ruled that a Loblaw employee's acceptance of a severance offer via email created a binding settlement, even though he tried to renegotiate after his housing purchase collapsed following termination.
Justice Lisa Brownstone of the Ontario Superior Court of Justice dismissed Scott Johnstone's wrongful dismissal claim, finding that once his lawyer confirmed acceptance of settlement terms, the deal was done.
"Buyer's remorse, a change of heart, or even growing concern about his ability to close his house purchase do not entitle him to renege on a settlement."
Relocation from Manitoba to Ontario
The seven-year employee had relocated from Winnipeg to Ottawa in 2022 at Loblaw's request. Shortly after the move, and before closing on his new home, the company terminated Johnstone's employment without cause.
Settlement discussions ensued, with Johnstone's counsel initially demanding that Loblaw guarantee his mortgage payments until he found new work. Loblaw refused but offered an eight-month notice period, $1,500 toward legal fees, and confirmed it would provide relocation benefits and a letter verifying his ongoing salary for mortgage purposes.
On May 28, 2022, Johnstone's lawyer emailed Loblaw: "I can confirm receipt of instructions to accept your most recent proposal, subject to mutual agreement on the supporting documentation."
When Loblaw sent draft settlement documents, Johnstone's lawyer responded with four requested changes, including a demand that "a fundamental term is the successful completion of the house purchase for Mr. Johnstone." Loblaw refused, arguing the housing issue had never been part of their agreement.
Verification letter for mortgage payments
The negotiations had addressed housing throughout. Loblaw's May 5 letter outlined standard relocation entitlements: up to $25,000 for household goods, $20,000 for temporary accommodation, $8,000 for home purchase closing costs, and a mortgage subsidy of $5,910 over five years.
Under the heading "Housing Issue," Loblaw confirmed it would provide an employment verification letter and make an HR contact available to speak with Johnstone's lender.
What Loblaw would not do—and made clear it would not do—was guarantee Johnstone's mortgage payments or make the settlement conditional on his home purchase closing. The company's position remained consistent: it would support his mortgage application through documentation, nothing more.
On May 23, Johnstone's counsel had written that the housing matter would "need to be more specific but is likely acceptable in principal [sic] now." Five days later, he accepted Loblaw's proposal.
Only after receiving draft settlement documents did Johnstone attempt to add the condition that the deal hinged on completing his house purchase.
No takebacks: binding legal agreement
Justice Brownstone found this timing fatal to Johnstone's case. The court noted that the May 28 email created a binding agreement on all essential terms: notice period, legal fees, benefits continuation, relocation expenses, and the provision of employment verification for mortgage purposes.
"Counsel must be able to rely on other counsel's emails advising that a settlement proposal is accepted," she wrote. "They must be able to conclude that counsel's advice that he has instructions to accept an offer evidences an intention to create a binding legal agreement."
The three additional items Johnstone raised after acceptance—making the settlement conditional on his house purchase, extending temporary living expenses, and guaranteeing a specific performance rating—had never been discussed during negotiations.
"These 'changes' are not changes to the supporting documentation," the court found. "Rather, they are attempts to change the essential terms of the agreement."
Housing, relocation central to negotiations
The court emphasized that housing costs and relocation had been central to the negotiations, with Loblaw's position remaining clear and unwavering throughout.
"Mr. Johnstone's re-raising of these issues can only be seen as an attempt to revisit an issue and gain a better deal than the one he had agreed to," Justice Brownstone concluded.
Loblaw had already paid out the settlement amounts, except for legal fees since no invoice was submitted as required. The court dismissed Johnstone's claim, enforcing the original agreement.
