The issue will arise as to whether the plaintiff's new enterprise is an asset of value which should be deducted from the claim.

The B.C. Supreme Court found in a 1981 decision that the plaintiff’s efforts post-termination led to the attainment of a capital asset, the value of which should be deducted from the claim. ¹ In this instance, the plaintiff did not seek out other employment but did spend four months acquiring a real estate licence. This was considered an asset of value notwithstanding that the plaintiff had not earned any income from it within the notice period. The decision did not reflect what evidence was used, if any, to assess the value of this asset. The sum of $3,500 was attributed to the licence and deducted from the claim. The court did note that this valuation bore a “speculative nature”.

This case was reviewed in 1996 by the Ontario Superior Court ² in which this principle of the deduction was not rejected but rather the court concluded that there was no evidence on which it could rely to assess such a value.

In 2002, the Nova Scotia court considered and did not apply this submission based on the conclusion that there was no value to the new business. ³ A similar conclusion was reached by the B.C. Supreme Court in its 2005 decision. ⁴ A further decision from the B.C. Small Claims Court did allow the sum of $600 for such an offset. ⁵

There have been no cases specifically rejecting this principle. As noted, many decisions have turned on the difficulties or lack of evidence in assessing the attributed value.

A similar submission arose in a 1992 Ontario case. ⁶ Following termination, the plaintiff established his own business to distribute equipment which was similar to that of the defendant. To that end, he invested $18,000 and was provided 100 common shares. Within the notice period, he sold 20 of such shares for the sum of $50,000. His capital gain on this transaction was $46,400.

The defence’s plea for credit of this sum did not succeed. The reasoning was that the new company was not profitable and the value attributed to these shares reflected only the buyer’s perspective of future profitability. The Court added, that had a profit been realized within this notice period, a fair reduction in the claim would have followed.

The Ontario Court of Appeal considered a parallel fact situation in 2000. ⁷ Following termination, Gryba staked several new mining claims, then with a view of establishing his own business. However, he was offered new employment which required that, as a term of such, that he would sell his new stakes to the new employer, all of which was within the notice period. The trial judge had applied the above case and declined to deduct the capital value of these new stakes. The Court of Appeal reversed, and held that the sale price of $144,000 should reduce and in this case, eliminate the claim. ⁸

The Saskatchewan Court of Appeal came to the same conclusion in a 1993 decision. ⁹