2190322 Ontario Ltd. v. Ajilon Canada Inc., 2014 ONSC 21

• Judge: Himel, J.
• Court: Superior Court of Justice of Ontario (Canada)
• Case Date: December 17, 2013
• Jurisdiction: Ontario
• Citations: 2014 ONSC 21;(2014), 317 O.A.C. 226 (DC)

2190322 Ont. v. Ajilon Can. Inc. (2014), 317 O.A.C. 226 (DC)

MLB headnote and full text

Temp. Cite: [2014] O.A.C. TBEd. MR.006

2190322 Ontario Ltd. (plaintiff/respondent) v. Ajilon Consulting, a division of Ajilon Canada Inc. (defendant/appellant)

(301/12; 2014 ONSC 21)

Indexed As: 2190322 Ontario Ltd. v. Ajilon Canada Inc.

Court of Ontario

Superior Court of Justice

Divisional Court

Himel, J.

February 4, 2014.

Summary:

The defendant was a recruiting agency retained by Loblaw to find information technology consultants. The defendant located consultants, had them incorporate, and then sign an independent contractor agreement. Loblaw requested five consultants. Langley expressed interest to the defendant. An offer was made to her. Langley signed the defendant's standard independent contractor agreement, which then had to be signed by Loblaw. The defendant did not tell Langley that her job was not guaranteed. It was subject to approval by senior Loblaw officials. Langley turned down another offer for a three month contract by another company because she believed that she had secure employment with Loblaw. After Langley expressed concern over several delays in her start date, she was advised by the defendant that approval was a certainty and was forthcoming. Loblaw made no such promise to the defendant. Loblaw did not sign off on the new hires. There was no job. The defendant terminated Langley. Langley, through her company, brought a small claims court action against the defendant for negligent misrepresentation.

The Ontario Small Claims Court found the defendant liable for negligently misrepresenting that Langley's job at Loblaw was a certainty, when it knew that the job was contingent on the Loblaw officials signing off on the hire. Langley reasonably relied on the misrepresentation to her detriment by declining another offer of employment. The defendant was not entitled to rely on the "entire agreement" clause in its signed standard independent contractor agreement because (1) it was enforceable only where both parties were "sophisticated commercial parties" (which Langley was not) and (2) the clause was not specifically brought to Langley's attention. The defendant appealed.

The Ontario Divisional Court, per Himel, J., dismissed the appeal.

Contracts - Topic 2116

Terms - Express terms - "Entire agreement" or "four corners" clause - A defendant was sued for negligent misrepresentation - The defendant argued that liability was precluded by an "entire agreement clause", which precluded the plaintiff from relying on any prior "understandings" - The Small Claims Court judge held that "understandings" included "misrepresentations" - However, the clause was unenforceable because (1) it was enforceable only where both parties were "sophisticated commercial parties" (which the plaintiff was not) and (2) the clause was not specifically brought to the plaintiff's attention - The Ontario Divisional Court, per Himel, J., dismissed the defendant's appeal - The court stated that "entire agreement clauses found in contracts induced by a negligent misrepresentation have generally been found to be unenforceable in the context of an unsophisticated party unless notice of the clause, or even notice of the clause's intended effect, was brought home to the unsophisticated party during bargaining ... [the defendant] did not notify [the plaintiff] of the entire agreement clause and that there could not have been any realistic expectation that she would have understood its importance without it being brought home to her. ... [the defendant] used its stronger informational position in the circumstances to obtain [the plaintiff's] supposed consent to an improvident clause. ... it may well be that the clause is also unenforceable on the public policy ground that recruitment companies should be prevented from leading potential recruits to believe they have secured work when they have not. ... [the trial judge] did not err in determining that the sophistication of the parties and the lack of specific notice are relevant considerations in the case law on entire agreement clauses." - See paragraphs 48 to 69.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - Negligent misrepresentation - The defendant was a recruiting agency retained by Loblaw to find information technology consultants - The defendant located consultants, had them incorporate, and then sign an independent contractor agreement - Loblaw requested five consultants - Langley expressed interest to the defendant - An offer was made to her - Langley signed the defendant's standard independent contractor agreement, which then had to be signed by Loblaw - The defendant did not tell Langley that her job was not guaranteed - It was subject to final approval by more senior Loblaw officials - Langley turned down another offer for a three month contract by another company because she believed that she had secure employment with Loblaw - After Langley expressed concern over several delays in her start date, she was advised by the defendant that approval was a certainty and was forthcoming - Loblaw made no such promise to the defendant - Loblaw did not approve the new hires - There was no job - The defendant terminated Langley's agreement (through her company) - Langley brought a small claims court action against the defendant for negligent misrepresentation - The Small Claims Court judge found the defendant liable for negligently misrepresenting to Langley that her job at Loblaw was a certainty, when it knew that the job was contingent on final approval, which was not assured - Langley reasonably relied on the misrepresentation to her detriment by declining another offer of employment, which the defendant was aware of - The Ontario Divisional Court, per Himel, J., dismissed the defendant's appeal - There was no error in finding that the defendant owed Langley a duty of care, the defendant made an untrue, inaccurate or misleading representation, the misrepresentation was made negligently and that Langley reasonably relied on the misrepresentation to her detriment - See paragraphs 31 to 47.

Fraud and Misrepresentation - Topic 2535

Misrepresentation - Elements - Reliance - [See Fraud and Misrepresentation - Topic 2508 ].

Cases Noticed:

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 Q.A.C. 1, refd to. [para. 14].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352, refd to. [para. 14].

Schreibner Brothers Ltd. v. Currie Products Ltd. and Gulf Oil Canada Ltd., [1980] 2 S.C.R. 78; 31 N.R. 335, refd to. [para. 23].

Apelowicz Management Inc. v. Griffiths, [2010] O.A.C. Uned. 207; 2010 ONSC 1410 (Div. Ct.), refd to. [para. 23].

Remo Valente Real Estate Ltd. v. Beauchamp, [1996] O.J. No. 2040 (Sup. Ct.), refd to. [para. 24].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 28].

H.L. v. Canada (Attorney General) et al., [2005] 1 S.C.R. 401; 333 N.R. 1; 262 Sask.R. 1; 347 W.A.C. 1; 2005 SCC 25, refd to. [para. 28].

Lesage v. Canadian Forest Products Ltd., [2009] B.C.T.C. Uned. 1427; 2009 BCSC 1427, affd. (2011), 307 B.C.A.C. 19; 519 W.A.C. 19; 2011 BCCA 259, refd to. [para. 36].

Corfax Benefit Systems Ltd. v. Fiducie Desjardins Inc. (1997), 54 O.T.C. 295; 37 O.R.(3d) 50 (Gen. Div.), refd to. [para. 49].

McNeely v. Herbal Magic Inc. et al., [2011] O.T.C. Uned. 4237; 2011 ONSC 4237, refd to. [para. 49].

Intrawest Corp. v. No. 2002 Taurus Ventures Ltd. et al. (2007), 240 B.C.A.C. 112; 398 W.A.C. 112; 2007 BCCA 228, refd to. [para. 49].

Shelanu Inc. v. Print Three Franchising Corp. (2003), 172 O.A.C. 78; 64 O.R.(3d) 533 (C.A.), refd to. [para. 55].

Tercon Contractors Ltd. v. British Columbia (Minister of Transportation and Highways), [2010] 1 S.C.R. 69; 397 N.R. 331; 281 B.C.A.C. 245; 475 W.A.C. 245, refd to. [para. 56].

Syncrude Canada Ltd. et al. v. Hunter Engineering Co. and Allis-Chalmers Canada Ltd. et al., [1989] 1 S.C.R. 426; 92 N.R. 1, refd to. [para. 59].

Beer v. Townsgate (1997), 104 O.A.C. 161; 152 D.L.R.(4th) 671 (C.A.), refd to. [para. 62].

Zippy Print Enterprises Ltd. v. Pawliuk (1994), 100 B.C.L.R.(2d) 55 (C.A.), refd to. [para. 62].

Roberts v. Montex Development Corp. (1979), 100 D.L.R.(3d) 660 (B.C.S.C.), refd to. [para. 62].

Mundinger v. Mundinger, [1969] 1 O.R. 606 (C.A.), refd to. [para. 67].

Domtar Inc. v. ABB Inc. et al., [2007] 3 S.C.R. 461; 369 N.R. 152; 2007 SCC 50, refd to. [para. 67].

Authors and Works Noticed:

McCamus, John D., The Law of Contracts (2nd Ed. 2012), p. 372 [para. 55]; ch. 11, s. D(6) [para. 58].

Ogilvie, M.H., Entire Agreement Clauses: Neither Riddle nor Enigma (2008), 87 Can. Bar Rev. 625, p. 632 [para. 61].

Counsel:

Robert J. Drake, for the plaintiff/respondent;

John-Paul Alexandrowicz, for the defendant/appellant.

This appeal was heard on December 17, 2013, by Himel, J., of the Ontario Divisional Court, who delivered the following judgment on February 4, 2014.