Cain v. Clarica Life,

• Judge: C,Paperny,Sulyma
• Neutral Citation: 2005 ABCA 437
• Court: Court of Appeal (Alberta)
• Date: 15 December 2005
• Citation: (2005), 384 A.R. 11 (CA),2005 ABCA 437,263 DLR (4th) 368,[2006] 7 WWR 111,384 AR 11,54 Alta LR (4th) 146,47 CCEL (3d) 70,(2005), 384 AR 11 (CA),384 A.R. 11,263 D.L.R. (4th) 368

Cain v. Clarica Life (2005), 384 A.R. 11 (CA);

    367 W.A.C. 11

MLB headnote and full text

Temp. Cite: [2006] A.R. TBEd. MY.081

Edward Cain (also known as Ted Cain) (respondent/appellant by cross-appeal/plaintiff) v. Clarica Life Insurance Company, formerly known as The Mutual Life Assurance Company of Canada (appellant/respondent by cross-appeal/defendant)

(0403-0295-AC; 2005 ABCA 437)

Indexed As: Cain v. Clarica Life Insurance Co.

Alberta Court of Appeal

Côté and Paperny, JJ.A., and Sulyma, J.(ad hoc)

December 15, 2005.

Summary:

A constructively dismissed employee negotiated a lump sum severance package equivalent to nine months' salary in exchange for his resignation. The employee deposited the monies, never repudiated the severance package and did not offer to return the monies. The employee then sued for additional damages for wrongful dismissal. The employer pleaded the severance package.

The Alberta Court of Queen's Bench, in a judgment reported (2005), 364 A.R. 218, allowed the action and awarded the employee $98,000 in addition to the $88,000 provided for by the severance package. The employer appealed. The employee cross-appealed.

The Alberta Court of Appeal allowed the appeal and dismissed the employee's action. The cross-appeal was dismissed. There were no grounds to set aside or invalidate the severance package. The voluntary resignation was tantamount to a release. The settlement contract (severance package) was valid and binding and precluded the wrongful dismissal claim.

Courts - Topic 562

Judges - Powers - To grant relief notwithstanding pleadings - [See Master and Servant - Topic 7607 ].

Master and Servant - Topic 7607

Dismissal of employees - Defences - Release - Accord and satisfaction - A constructively dismissed employee negotiated a lump sum severance package equal to nine months' salary, then resigned - The employee was confident of quickly obtaining new employment, with earnings during the notice period not being deductible from the lump sum - The employee subsequently sued the employer for additional money - The trial judge, in awarding $98,000 in addition to the severance amount ($88,000), determined that the severance agreement was unfairly negotiated (unconscionable), even though such relief was not pleaded by the employee - The Alberta Court of Appeal held that the settlement contract (severance package) was valid and binding, precluding the subsequent claim - First, an issue not pleaded should not have been the basis for the judge's decision - In any event, there was no unconscionability or unfairness in the severance package for an employee having over 30 years of service - The judge opined that 22 months' notice was reasonable - However, he failed to consider that if the employee obtained employment during the notice period, that income would reduce the damage award - Further, there were uncertainties in litigation and a successful litigant would not recoup his full legal costs - Armed with legal advice that he could expect approximately 30 months' pay in lieu of notice, the employee compromised by accepting the certainty of nine months' pay in the belief that he would obtain new employment quickly - The settlement was not grossly improvident, the benefit to the employee was within the proper range, there was no power imbalance, no knowingly taking advantage of the employee, and no lack of good faith.

Practice - Topic 1335

Pleadings - The issues - Issues to be raised must be pleaded - [See Master and Servant - Topic 7607 ].

Practice - Topic 9857

Settlements - Setting aside - Grounds - [See Master and Servant - Topic 7607 ].

Cases Noticed:

Wilder v. Wolch et al. (2000), 250 A.R. 258; 213 W.A.C. 258; 2000 ABCA 26, refd to. [para. 20].

A-C-H International Inc. v. Royal Bank of Canada et al. (2005), 197 O.A.C. 227 (C.A.), refd to. [para. 20].

Morrison v. Coast Finance Ltd. (1965), 54 W.W.R.(N.S.) 257 (B.C.C.A.), refd to. [para. 31].

Norberg v. Wynrib, [1992] 2 S.C.R. 226; 138 N.R. 81; 9 B.C.A.C. 1; 19 W.A.C. 1; 92 D.L.R.(4th) 449, refd to. [para. 31].

Canadian Imperial Bank of Commerce v. Ohlson (1997), 209 A.R. 140; 160 W.A.C. 140 (C.A.), refd to. [para. 31].

Calgary (City) v. Northern Construction Co., [1986] 2 W.W.R. 426; 67 A.R. 95 (C.A.), refd to. [para. 31].

Brewery, Beverage and Soft Drink Workers, Local 250 et al. v. Labatt's Alberta Brewery (1996), 184 A.R. 162; 122 W.A.C. 162 (C.A.), refd to. [para. 31].

Black v. Blair Athol Farms Ltd., [1996] 5 W.W.R. 516; 110 Man.R.(2d) 84; 118 W.A.C. 84 (C.A.), refd to. [para. 35].

Radhakrishnan v. University of Calgary (2002), 312 A.R. 143; 281 W.A.C. 143; 2002 ABCA 182, refd to. [para. 52].

British Columbia (Attorney General) v. Deeks Sand & Gravel Co., [1956] S.C.R. 336, refd to. [para. 54].

Robertson v. Walwyn Stodgell Cochrane Murray Ltd., [1988] 4 W.W.R. 283; 24 B.C.L.R.(2d) 385 (B.C.C.A.), refd to. [para. 54].

Lister (Ronald Elwyn) Ltd. et al. v. Dunlop Canada Ltd., [1982] 1 S.C.R. 726; 42 N.R. 181, refd to. [para. 54].

Hrycoy Estate v. Hrycoy Estate et al. (2004), 357 A.R. 329; 334 W.A.C. 329; 2004 ABCA 320, refd to. [para. 54].

Ma v. MIV Therapeutics Inc. et al. (2004), 203 B.C.A.C. 117; 332 W.A.C. 117; 2004 BCCA 483, refd to. [para. 55].

Boustany v. Pigott (1993), 69 P. & C.R. 298 (P.C.), refd to. [para. 56].

Century 21 Campbell Munro v. S & G Estates Ltd. (1992), 54 O.A.C. 315 (Div. Ct.), refd to. [para. 71].

Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701; 219 N.R. 161; 123 Man.R.(2d) 1; 159 W.A.C. 1, refd to. [para. 75].

Authors and Works Noticed:

Chitty on Contracts (27th Ed. 1994), vol. 1, paras. 7-044, 7-045 [para. 56].

Chitty on Contracts (29th Ed. 2004), vol. 1, para. 7-119 [para. 56].

Halsbury's Laws of England (2003) (4th Ed. - Reissue), vol. 31, para. 854 [para. 31]; footnote 7 [para. 55].

Stevenson, William A., and Côté, Jean E., Alberta Civil Procedure Handbook, rules 104, 109, 110(2) 115, 123 [para. 20].

Stevenson, William A., and Côté, Jean E., Civil Procedure Encyclopedia (2003), c. 11, Part B.7, c. 12, Part D.2, c. 13, Part E.3, Part E.5, Part H, c. 14, Part B [para. 20].

Counsel:

C.J. Schultz, for the respondent/appellant by cross-appeal/plaintiff;

A.J. Kotkas and K.J. Clayton, for the appellant/respondent by cross-appeal/defendant.

This appeal was heard on October 31, 2005, before Côté and Paperny, JJ.A., and Sulyma, J.(ad hoc), of the Alberta Court of Appeal.

On December 15, 2005, Côté, J.A., delivered the following judgment for the Court of Appeal.