Allison v. Noranda Inc., [2001] NBJ No 241 (QL)

• Judge: Ayles, Turnbull and Robertson, JJ.A.
• Court: Court of Appeal (New Brunswick)
• Case Date: January 30, 2001
• Jurisdiction: New Brunswick
• Citations: [2001] NBJ No 241 (QL);2001 NBCA 67;9 CCEL (3d) 280;(2001), 239 N.B.R.(2d) 211 (CA);239 NBR (2d) 211

Allison v. Noranda Inc. (2001), 239 N.B.R.(2d) 211 (CA);

    239 R.N.-B.(2e) 211; 619 A.P.R. 211

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Temp. Cite: [2001] N.B.R.(2d) TBEd. JL.007

Weldon Allison (plaintiff/appellant) v. Noranda Inc. and Noranda Mining and Exploration Inc., doing business as "Heath Steel Division" (defendants/respondents)

(138/2000/CA; 2001 NBCA 67)

Indexed As: Allison v. Noranda Inc. et al.

New Brunswick Court of Appeal

Ayles, Turnbull and Robertson, JJ.A.

June 22, 2001.

Summary:

Allison, aged 53, was terminated without cause. He was asked to elect one of two "separation pay" options. Under both options the total amount of severance monies re­mained constant. The "lump sum option" would see Allison terminated immediately, and in return he would receive a one-time payment. Under the "installment option", Allison's employment would technically continue, without the obligation to continue working, and severance monies would be paid to him in 16 equal monthly installments until he reached age 55. Allison chose the lump sum option. When Allison turned 55, he became entitled to a monthly pension. He then learned that choosing the lump sum option had reduced his monthly pension entitlement from $887 to $302. Allison sued his employer, alleging negligent misrepre­sentation for failing to disclose this informa­tion to him at the time he was terminated.

The New Brunswick Court of Queen's Bench, in a decision reported at [2000] N.B.R.(2d) Uned. 91, dismissed the action. Allison appealed.

The New Brunswick Court of Appeal allowed the appeal.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - General principles - Negligent misrepresentation - [See Fraud and Misrepresentation - Topic 2705 ].

Fraud and Misrepresentation - Topic 2705

Misrepresentation - What constitutes mis­representation - Falsity by omission - Allison, aged 53, was terminated by Nor­anda without cause - Regarding severance pay, he was asked to elect between a "lump sum option" and an "installment option", where his employment would technically continue, and severance monies would be paid to him in 16 equal monthly installments until he reached age 55 - Allison chose the lump sum option - When Allison turned 55, he learned that choosing the lump sum option had reduced his monthly pension entitlement from $887 to $302 - Allison sued Noranda, alleging negligent misrepresentation for failing to disclose this information to him at the time he was terminated - The New Brunswick Court of Appeal held that Noranda was under a duty to disclose the pension conse­quences of the two options - Moreover, failure to do so constituted a misrepresen­tation that misled Allison - See paragraphs 19 to 28.

Fraud and Misrepresentation - Topic 2821

Misrepresentation - Defences - General - Allison, aged 53, was terminated by Nor­anda without cause - Regarding severance pay, he was asked to elect between a "lump sum option" and an "installment option" - Allison chose the lump sum option - When Allison turned 55, he learned that choosing the lump sum option had reduced his monthly pension entitle­ment from $887 to $302 - Allison sued Noranda, alleging negligent misrepresenta­tion for failing to disclose this information to him at the time he was terminated - Noranda countered that it had expressly cautioned Allison to seek independent advice - The New Brunswick Court of Appeal held that "a person who is under an obligation to disclose information to an­other, and fails to do so, cannot avoid liability for negligent misrepresentation simply by arguing that the latter was given the opportunity to seek advice from a third party" - See paragraphs 30 to 33.

Fraud and Misrepresentation - Topic 2824

Misrepresentation - Defences - Agreement excluding liability - Allison, aged 53, was terminated by Noranda without cause - Regarding severance pay, he was asked to elect between a "lump sum option" and an "installment option" - Allison chose the lump sum option - When Allison turned 55, he learned that choosing the lump sum option had reduced his monthly pension entitlement from $887 to $302 - Allison sued Noranda, alleging negligent misrepre­sentation for failing to disclose this infor­mation to him at the time he was ter­minated - Noranda countered that Allison had signed a release - The New Brunswick Court of Appeal stated that "the true pur­pose or import of the release is to limit Noranda's liability in contract for damages flowing from any wrongful dismissal arising from the decision to terminate Mr. Allison's employment by fixing the amount of separation pay to which he is entitled. There is nothing in the release that contradicts or is inconsistent with the tortious claim of negligent misrepresenta­tion" - See paragraphs 34 to 41.

Torts - Topic 8990

Duty of care - Particular relationships - Negligent words - Failure to supply advice - [See Fraud and Misrepresentation - Topic 2705 ].

Cases Noticed:

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, appld. [para. 17].

Gauthier v. Canada (Attorney General) (2000), 225 N.B.R.(2d) 211; 578 A.P.R. 211 (C.A.), refd to. [para. 17].

Spinks v. Canada, [1996] 2 F.C. 563; 195 N.R. 184 (F.C.A.), refd to. [para. 26].

BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12; 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241, refd to. [para. 35].

Kripps et al. v. Touche Ross & Co. et al., [1999] 3 W.W.R. 629 (B.C.S.C.), refd to. [para. 43].

Authors and Works Noticed:

Blom, J., Contract and Tort - Negligent Misstatement Inducing Contract - Con­current Liability - Effect of Contractual Terms (1994), 73 Can. Bar Rev. 243, generally [para. 36].

Feldthusen, Bruce, Economic Negligence (4th Ed. 2000), p. 113 [para. 43].

Counsel:

B. Richard Bell, for the appellant;

David M. Norman, Q.C., for the respon­dents.

This appeal was heard on January 30, 2001, by Ayles, Turnbull and Robertson, JJ.A., of the New Brunswick Court of Ap­peal. Robertson, J.A., delivered the fol­lowing decision for the court on June 22, 2001.