SUSAN VAN IDERSTINE Claimant - v. -, 2017 NSSM 48
Opinion
IN THE SMALL CLAIMS COURT OF NOVA SCOTIA Cite as: Van Iderstine v.
Nova Scotia Liquor Corporation, 2017 NSSM 48 2016 Claim No. 453000 BETWEEN: SUSAN VAN IDERSTINE Claimant - and - NOVA SCOTIA LIQUOR CORPORATION Defendant Hearing Date: September 21, 2016 Written submissions: Claimant – September 20, October 13, 2016, February 22, 2017 Defendant – September 20, October 6, 2016, January 30, 2017 Appearances: Claimant – Susan Van Iderstine Defendant – Daniel Watt, Barrister and Solicitor DECISION and ORDER [ 1 ] This is a claim for the balance allegedly due under Minutes of Settlement between the Claimant and the Defendant which related to the termination of the Claimant’s employment with the Defendant.
The basic facts are as follows. [ 2 ] The Claimant’s employment with the Nova Scotia Liquor Corporation (“NSLC”) was terminated on February 11, 2016. The Claimant retained legal counsel on her behalf. As well, the Defendant retained outside legal counsel to represent itself. A settlement was negotiated between counsel which was memorialized in a document called “Minutes of Settlement.” The Minutes of Settlement were prepared by counsel for the Defendant and sent to counsel for the Claimant. Both counsel signed them on behalf of their clients under date of April 1, 2016.
A Release was signed by the Claimant under date of April 4, 2016, and both documents were sent by counsel for the Claimant to counsel for the Defendant. I will quote the operative part of the Minutes of Settlement which is
Article 1 as follows: 1. The NSLC shall provide Ms. Van Iderstine with pay-in-lieu of notice equivalent to fourteen (14) months’ salary plus an amount to compensate her for the loss of the NSLC’s group insurance and pension contributions over the 14 month period. This amount is $134,638.00, subject to payment and applicable deductions as set out below: (
a) Pursuant to satisfactory confirmation that Ms. Van Iderstine has sufficient RRSP eligibility, the NSLC shall deposit $25,000.00 of the above-referenced amount directly to Ms. Van Iderstine’s RRSP account as follows:
[Redacted] (
b) Subject to Ms. Van Iderstine providing satisfactory confirmation that she has no Employment Insurance (“EI”) repaymentobligation, the remaining balance of $109,638.00 will be paid out as follows: (
i) A withholding tax of 30%, representing $32,891.40 to the Canada Revenue Agency; (ii) The balance being $76,746.60 shall be paid by way of direct deposit to Ms. Van I Iderstine’s bank account currently on file with theNSLC for NSLC payroll purposes. (iii) Upon satisfactory proof of expense, The NSLC shall reimburse Ms.
Van Iserstine for a maximum of $500.00 for legal advice,without deduction. [3] The Defendant processed the cheques in early May and in an email dated May 10, 2016, from Roddy Macdonald, VP HumanResources for the Defendant, to the Claimant he advised that the $25,000 RRSP deposit was ready to go and apparently was sent by theDefendant at or around this time. His email then goes on and states: 3. The remaining amount (based on salary continuance to May 7th) reflects the total settlement less RRSP deposit, less amount paid bysalary continuance.
The remainder is $86,319.19, less 30% tax, equals $60,423.43, and will be paid to you by cheque which I understandwill be sent out today (not sure if by courier or mail). [4] The Defendant, as indicated, paid the sum of $60,423.43 to the Claimant and, it would appear, paid the amount of $25,895.78 toCanada Revenue Agency representing 30% withholding tax on the amount of $86,319.19, This amount of $25,895.78 paid to theCanada Revenue Agency is to be contrasted with the amount stated to be paid to CRA in the Minutes of Settlement of $32,891.40.
And,the amount of $60,423.43 actually paid to the Claimant, is to be contrasted with the amount of $76,746.60 which, according to theMinutes of Settlement was to be paid to the Claimant. [5] The amount withheld of $16,323.17 represents the net salary received by the Claimant in the interim period between February 11,2016, and May 7, 2016. It is that sum of $16,323.17 which the Claimant is seeking in this proceeding. [6] The Claimant’s position is essentially that the Minutes of Settlement constitute a very clear and detailed agreement with exactfigures which were to be paid out.
Simply put, the Defendant has not complied with those clear requirements of payments set out in theMinutes of Settlement. In her evidence she indicated that she did ask Mr. Macdonald, VP Human Resources, on February 11, 2016, whatwould happen on her next pay day, and subsequent pay days, while this matter was outstanding. He told her that she would receive herpay as usual until a signed Release was received by the Defendant. [7] The Defendant makes three principal arguments.
First, that in interpreting the Minutes of Settlement, the literal meaning shouldbe rejected as being not consonant with the parties’ intentions, objectively viewed. Reference was made to the Supreme Court of Canadacase of Consolidated Bathurst v. Mutual Boiler, (SCC), [1980] 1 S.C.R. 888, as authority for this proposition. [8] Secondly, the Defendant argues, in the alternative, that the Minutes of Settlement should be rectified by adding a clause to theMinutes of Settlement as follows: 3. The above amount shall be reduced by the amount of any amounts, payments or benefits received by Ms.
Van Iderstine from NSLCby way of salary continuation following notice of termination on February 11, 2016. [9] Thirdly, it is argued by the Defendant that the amount paid to the Claimant after the effective date of the Minutes of Settlement – April 1, 2016, should be deducted. In effect, the Defendant is saying that the aggregate of the bi-weekly payments made after April 1st up to May 7th, should be considered as part of the agreed to $76,746.60 amount referenced in the Minutes of Settlement.
Thecalculations of that figure are included in the submission of the Defendant dated October 6, 2016, after the hearing. [10] I will deal with each of the Defendant’s arguments in turn and, as well, the issue of unjust enrichment which is an issue I raisedand requested submissions on.
Interpretation of Contract - Surrounding Circumstances [11] The Defendant argues that the literal meaning of the contract should be rejected. With respect, I do not think the ConsolidatedBathurst case stands for the proposition advanced by the Defendant. By its own wording as quoted, the rejection of literal meaning setout in that case only occurs where the words within the document themselves “…may bear two constructions.” In other words, wherethere is an ambiguity within the contractual document itself and which was the case in Consolidated Bathurst. In a later decision, theNovapharm Limited v.
Eli Lilly. (SCC), [1998], 2 S.C.R. 129 decision, the Supreme Court of Canada clarified andreinforced this in the following language: 54 The trial judge appeared to take Consolidated-Bathurst to stand for the proposition that the ultimate goal of contractualinterpretation should be to ascertain the true intent of the parties at the time of entry into the contract, and that, in undertaking thisinquiry, it is open to the trier of fact to admit extrinsic evidence as to the subjective intentions of the parties at that time. In my view, this
approach is not quite accurate. The contractual intent of the parties is to be determined by reference to the words they used in draftingthe document, possibly read in light of the surrounding circumstances which were prevalent at the time. Evidence of one party’ssubjective intention has no independent place in this determination. 55 Indeed, it is unnecessary to consider any extrinsic evidence at all when the document is clear and unambiguous on its face. Inthe words of Lord Atkinson in Lampson v.
City of Quebec (1920), (UK JCPC), 54 D.L.R. 344 (P.C.), at p. 350: . . . the intention by which the deed is to be construed is that of the parties as revealed by the language they have chosen to use in thedeed itself .... [I]f the meaning of the deed, reading its words in their ordinary sense, be plain and unambiguous it is not permissible forthe parties to it, while it stands unreformed, to come into a Court of justice and say: “Our intention was wholly different from that whichthe language of our deed expresses. . . .” 56 When there is no ambiguity in the wording of the document, the notion in Consolidated-Bathurst that the
interpretation whichproduces a “fair result” or a “sensible commercial result” should be adopted is not determinative. Admittedly, it would be absurd toadopt an
interpretation which is clearly inconsistent with the commercial interests of the parties, if the goal is to ascertain their truecontractual intent. However, to interpret a plainly worded document in accordance with the true contractual intent of the parties is notdifficult, if it is presumed that the parties intended the legal consequences of their words. This is consistent with the following dictum ofthis Court, in Joy Oil Co. v. The King, (SCC), [1951] S.C.R. 624, at p. 641: [12] Here, there is no ambiguity within the document itself.
Therefore I would conclude under the authority of the Eli Lilly case that itis unnecessary to consider any “extrinsic evidence” at all since the document itself is clear and unambiguous on its face (see para. 55 ofEli Lilly). [13] The most recent pronouncement on this general subject came from the Supreme Court of Canada in the Sattva Capital Corp. v.Creston Moly Corp., 2014 SCC 53 , [2014] 2 SCR 633, where the court stated: [47] Regarding the first development, the
interpretation of contracts has evolved towards a practical, common-sense approach notdominated by technical rules of construction. The overriding concern is to determine “the intent of the parties and the scope of theirunderstanding” (Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21 , [2006] 1 S.C.R. 744, atpara. 27, per LeBel J.; see also Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC4 , [2010] 1 S.C.R. 69, at paras. 64-65, per Cromwell J.).
To do so, a decision-maker must read the contract as a whole, givingthe words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the timeof formation of the contract. Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can bedifficult when looking at words on their own, because words alone do not have an immutable or absolute meaning: No contracts are made in a vacuum: there is always a setting in which they have to be placed. . . .
In a commercial contract it is certainlyright that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of thetransaction, the background, the context, the market in which the parties are operating. (Reardon Smith Line, at p. 574, per Lord Wilberforce) [48] The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and the natureof the relationship created by the agreement (see Moore Realty Inc. v. Manitoba Motor League, 2003 MBCA 71 , 173 Man.
R.(2d) 300, at para. 15, perHamilton J.A.; see also Hall, at p. 22; and McCamus, at pp. 749-50). As stated by Lord Hoffmann in InvestorsCompensation Scheme Ltd. v. West Bromwich Building Society, [1998] 1 All E.R. 98 (H.L.): The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of itswords.
The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using thosewords against the relevant background would reasonably have been understood to mean. [p. 115] [14] Further on in Sattva, the court discusses how to consider the surrounding circumstances: [56] I now turn to the role of the surrounding circumstances in contractual
interpretation and the nature of the evidence that can beconsidered. The discussion here is limited to the common law approach to contractual
interpretation; it does not seek to apply to or alterthe law of contractual
interpretation governed by the Civil Code of Québec. [57] While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed tooverwhelm the words of that agreement (Hayes Forest Services, at para. 14; and Hall, at p. 30). The goal of examining such evidence isto deepen a decision-maker’s understanding of the mutual and objective intentions of the parties as expressed in the words of thecontract. The
interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract(Hall, at pp. 15 and 30-32). While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them todeviate from the text such that the court effectively creates a new agreement (Glaswegian Enterprises Inc. v. B.C. Tel Mobility CellularInc. (1997), (BC CA), 101 B.C.A.C. 62).
[58] The nature of the evidence that can be relied upon under the rubric of “surrounding circumstances” will necessarily vary fromcase to case. It does, however, have its limits. It should consist only of objective evidence of the background facts at the time of theexecution of the contract (King, at paras. 66 and 70), that is, knowledge that was or reasonably ought to have been within the knowledgeof both parties at or before the date of contracting.
Subject to these requirements and the parol evidence rule discussed below, thisincludes, in the words of Lord Hoffmann, “absolutely anything which would have affected the way in which the language of thedocument would have been understood by a reasonable man” (Investors Compensation Scheme, at p. 114). Whether something was orreasonably ought to have been within the common knowledge of the parties at the time of execution of the contract is a question of fact. [15] In the case of Halifax Regional Municipality v.
Canadian National Railway Company, 2014 NSCA 104 , 2014 N.S.C.A.104, the Court of Appeal discusses all of these cases in its reasons. At paragraph 47, Fichaud, J.A. for the court states: [47] This leads to a consideration of the surrounding circumstances, as discussed in Sattva. The parol evidence rule does not barthe admission of evidence showing the surrounding circumstances. That evidence was admitted here. Once admitted, the evidence isavailable for use by counsel and the court. The critical point is how that evidence is used.
The surrounding circumstances shouldfunction to “deepen a decision-maker’s understanding of the mutual and objective intentions of the parties as expressed in the words ofthe contract”.
The surrounding circumstances should not “overwhelm the words of that agreement”, “deviate from the text such that thecourt effectively creates a new agreement”, “add to, subtract from, vary, or contradict a contract that has been wholly reduced towriting”, or “change or overrule the meaning of those words”. (Sattva, paras 57-60). [Emphasis supplied] [16] As I have already stated above, I find there was no ambiguity in the wording of this present contract. Yet, the Defendant urges meto reject the plain and literal meaning of the contract (in this case the Minutes of Settlement).
The submission goes on to argue that if thecourt accepts the literal meaning asserted by the Claimant, the court would be effectively ignoring certain background facts or makingfindings that are inconsistent with the history of the negotiation between the parties, including the number of months of negotiated“notice” agreed to, and the effective date. The difficulty with this argument is that if I were to accede to that view and consider thebackground negotiation, I would be doing exactly what the court in the various cases above extolls me to not do.
That is, to not apply theplain, literal, and unambiguous meaning in the contractual document at hand.
I repeat the words of Fichaud, J.A. in the HRM case atparagraph 47: “…the surrounding circumstances should not “overwhelm the words of that agreement”, “deviate from the text such that the courteffectively creates a new agreement”, “add to, subtract from, vary, or contradict a contract that has been wholly reduced to writing”, or“change or overrule the meaning of those words” [17] In this present case the Minutes of Settlement very clearly state the Defendant would make the following payments: RRSP $ 25,000 CRA $ 32,891 Ms.
Van Iderstine $ 76,746 Total $134.638 [18] Its contractual obligations as enunciated in this document could hardly be clearer. As is frequently said and for which I need notcite any authority, courts do not write or rewrite a contract for the parties. And they certainly do not do so under the guise of seeking thetrue intent through the negotiations history. [19] I conclude that it would be a legal error to consider the background circumstances in interpreting and applying the language of thisvery clear contract/Minutes of Settlement. I reject this argument.
Rectification [20] Under this alternative argument, the Defendant submits that the doctrine of rectification should be applied here to correct the errorby adding a clause as 1(b)(iii) to the Minutes of Settlement, worded as follows: 1(b)(iii) The above amounts payable to Ms. Van Iderstine shall be further reduced by any amounts, payments, or benefits received byMs. Van Iderstine from NSLC by way of salary continuation following notice of termination on February 11, 2016. [21] The leading case on rectification was Performance Industries v. v.
Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19 ,[2002] 1 S.C.R. 678 At paragraph 31 et sec the court describes the remedy: A. Rectification of the Contract
31 Rectification is an equitable remedy whose purpose is to prevent a written document from being used as an engine of fraud ormisconduct “equivalent to fraud”. The traditional rule was to permit rectification only for mutual mistake, but rectification is nowavailable for unilateral mistake (as here), provided certain demanding preconditions are met. Insofar as they are relevant to thisappeal, these preconditions can be summarized as follows. Rectification is predicated on the existence of a prior oral contract whoseterms are definite and ascertainable.
The plaintiff must establish that the terms agreed to orally were not written down properly. Theerror may be fraudulent, or it may be innocent. What is essential is that at the time of execution of the written document the defendantknew or ought to have known of the error and the plaintiff did not. Moreover, the attempt of the defendant to rely on the erroneouswritten document must amount to “fraud or the equivalent of fraud”. The court’s task in a rectification case is corrective, notspeculative.
It is to restore the parties to their original bargain, not to rectify a belatedly recognized error of judgment by one party orthe other: Hart v. Boutilier (1916), (SCC), 56 D.L.R. 620 (S.C.C.), at p. 630; Ship M. F. Whalen v. Pointe AnneQuarries Ltd. (1921), (SCC), 63 S.C.R. 109, at pp. 126-27; Downtown King West Development Corp. v. MasseyFerguson Industries Ltd. (1996), (ON CA), 133 D.L.R. (4th) 550 (Ont. C.A.), at p. 558; G. H. L. Fridman, The Law ofContract in Canada (4th ed. 1999), at p. 867; S. M. Waddams, The Law of Contracts (4th ed. 1999), at para. 336.
In Hart, supra, atp. 630, Duff J. (as he then was) stressed that “[t]he power of rectification must be used with great caution”. Apart from everything else,a relaxed approach to rectification as a substitute for due diligence at the time a document is signed would undermine the confidence ofthe commercial world in written contracts. . . . C.
The Conditions Precedent to Rectification 35 As stated, high hurdles are placed in the way of a businessperson who relies on his or her own unilateral mistake to resile from thewritten terms of a document which he or she has signed and which, on its face, seems perfectly clear. The law is determined not to openthe proverbial floodgates to dissatisfied contract makers who want to extricate themselves from a poor bargain. . . . 37 The first of the traditional hurdles is that Sylvan (Bell) must show the existence and content of the inconsistent prior oralagreement.
Rectification is “[t]he most venerable breach in the parol evidence rule” (Waddams, supra, at para. 336). The requirementof a prior oral agreement closes the “floodgate” to unhappy contract makers who simply failed to read the contractual documents, orwho now have misgivings about the merits of what they have signed. 38 The second hurdle is that not only must Sylvan (Bell) show that the written document does not correspond with the prior oralagreement, but that O’Connor either knew or ought to have known of the mistake in reducing the oral terms to writing.
It is only wherepermitting O’Connor to take advantage of the error would amount to “fraud or the equivalent of fraud” that rectification is available. This requirement closes the “floodgate” to unhappy contract makers who simply made a mistake. Equity acts on the conscience of adefendant who seeks to take advantage of an error which he or she either knew or ought reasonably to have known about at the time thedocument was signed.
Mere unilateral mistake alone is not sufficient to support rectification but if permitting the non-mistaken party totake advantage of the document would be fraud or equivalent to fraud, rectification may be available: Hart, supra, at p. 630; Ship M. F.Whalen, supra, at pp. 126-27. 39 What amounts to “fraud or the equivalent of fraud” is, of course, a crucial question. In First City Capital Ltd. v.
British ColumbiaBuilding Corp. (1989), (BC SC), 43 B.L.R. 29 (B.C.S.C.), McLachlin C.J.S.C. (as she then was) observed that “in thiscontext ‘fraud or the equivalent of fraud’ refers not to the tort of deceit or strict fraud in the legal sense, but rather to the broadercategory of equitable fraud or constructive fraud. . . . Fraud in this wider sense refers to transactions falling short of deceit but wherethe Court is of the opinion that it is unconscientious for a person to avail himself of the advantage obtained” (p. 37).
Fraud in the“wider sense” of a ground for equitable relief “is so infinite in its varieties that the Courts have not attempted to define it”, but “allkinds of unfair dealing and unconscionable conduct in matters of contract come within its ken”: McMaster University v. WilcharConstruction Ltd. (1971), (ON SC), 22 D.L.R. (3d) 9 (Ont. H.C.), at p. 19. See also Montreal Trust Co. v.Maley(1992), (SK CA), 99 D.L.R. (4th) 257 (Sask. C.A.), per Wakeling J.A.; Alampi v. Swartz (1964), (ON CA), 43 D.L.R. (2d) 11 (Ont. C.A.); Stepps Investments Ltd. v. Security Capital Corp. (1976), (ON SC), 73D.L.R. (3d) 351 (Ont.
H.C.), per Grange J. (as he then was), at pp. 362-63; and Waddams, supra, at para. 342. 40 The third hurdle is that Sylvan (Bell) must show “the precise form” in which the written instrument can be made to express the priorintention (Hart, supra, per Duff J., at p. 630). This requirement closes the “floodgates” to those who would invite the court to speculateabout the parties’ unexpressed intentions, or impose what in hindsight seems to be a sensible arrangement that the parties might havemade but did not.
The court’s equitable jurisdiction is limited to putting into words that — and only that — which the parties hadalready orally agreed to. 41 The fourth hurdle is that all of the foregoing must be established by proof which this Court has variously described as “beyondreasonable doubt” (Ship M. F. Whalen, supra, at p. 127), or “evidence which leaves no ‘fair and reasonable doubt’” (Hart, supra, atp. 630), or “convincing proof” or “more than sufficient evidence” (Augdome Corp. v. Gray, (SCC), [1975] 2 S.C.R.
354, at pp. 371-72).
The modern approach, I think, is captured by the expression “convincing proof”, i.e., proof that may fall well shortof the criminal standard, but which goes beyond the sort of proof that only reluctantly and with hesitation scrapes over the low end of thecivil “more probable than not” standard. 42 Some critics argue that anything more demanding than the ordinary civil standard of proof is unnecessary (e.g., Waddams, supra, atpara. 343), but, again, the objective is to promote the utility of written agreements by closing the “floodgate” against marginal casesthat dilute what are rightly seen to be demanding preconditions to rectification. 43 It was formerly held that it was not sufficient if the evidence merely comes from the party seeking rectification.
In Ship M. F.Whalen, supra, Duff J. (as he then was) said, at p. 127, “[s]uch parol evidence must be adequately supported by documentary evidenceand by considerations arising from the conduct of the parties”. Modern practice has moved away from insistence on documentarycorroboration (Waddams, supra, at para. 337; Fridman, supra, at p. 879).
In some situations, documentary corroboration is simply notavailable, but if the parol evidence is corroborated by the conduct of the parties or other proof, rectification may, in the discretion of thecourt, be available. [22] As I will develop, in my view, and based on the above principles, the evidence here does not support the granting of rectification. [23] First, I do not think the Defendant here can show the existence or contents of an inconsistent prior agreement.
In its writtensubmission of October 6, 2016, the Defendant refers to various correspondence between NSLC, NSLC’s counsel and counsel for theClaimant and states that these clearly ascertain the parties’ prior bargain, i.e. a 14 month settlement. I agree that the 14 months’ notice isclear. Indeed, the Minutes of Settlement is consistent with this. [24] The reality here is that there was no agreement on how to treat the intervening pay amounts because it simply was not raised ordiscussed by either counsel in their discussions or in the original termination letter of the NSLC itself.
Perhaps it was just an oversight innot including it in the Minutes of Settlement. That being said, the absence of an item from a final contract is quite a different thing thansaying there was agreement on that item. There was no manifested agreement on that point because it was not discussed. [25] The Defendant’s position seems to be premised on the theory that salary continuation payments are necessarily to be deductedfrom an agreed-to lump sum payment. I reject that proposition and counter it by rhetorically asking why should that necessarily be thecase?
Generally speaking, parties are free to enter into any agreement they wish to do so. And, objectively viewed, I see nothing herethat would put the Claimant on notice that the continuing payments were to be deducted from the lump sum amount expressly agreed toin the Minutes of Settlement. If anything, the reason that Minutes of Settlement were prepared was to expressly communicate to theClaimant what exactly she was going to be paid if she agreed.
It is somewhat ironic that the party which prepared the Minutes ofSettlement presumably to make it clear what payments would be made to the other party, is now arguing that those amounts set out in theMinutes of Settlement are not the amounts to be paid. [26] It should also be mentioned here and noted that it is of some considerable relevance that when the Claimant initially asked therepresentative for the Defendant, Mr. Macdonald, about whether her pay would be continued, he responded that it would indeed becontinued exactly as had been the case until there was a settlement and she signed a release.
Based on that advice from Mr. Macdonald,it seems to me that it was very reasonable for the Claimant to conclude that NSLC would continue to pay her her regular salary withregular deductions until a global settlement was reached. This last comment effectively answers the issue of “fraud” or the equivalent offraud referred to in the Performance Industries case. [27] Since this case was argued, the Supreme Court of Canada has issued its decision in Canada (Attorney General) v. FairmountHotels Inc. 2016 SCC 56 , 2016, S.C.C. 56 , which deals with the doctrine of rectification.
If anything, that casenarrows the circumstances in which rectification may be granted. It only supports the conclusion I have already reached. Payments Made [28] Under this argument is said that the payments after April 1st constituted payments in accordance with and pursuant to the Minutesof Settlement.
Therefore, it is said, these should be deducted from the ultimate lump sum payments made by the Defendant. [29] I have some difficulty with this argument. [30] The Minutes of Settlement obliged the Defendant employer to make three payments – one for $25,000 to the financial institutionin respect of the RRSP payment; one for $32,891 to CRA for withholding tax; and the remainder to the Claimant in the amount of$76,746. What was objectively contemplated is that these three payments would be made in the amounts specified.
I do note that therewas no timeframe specified for the payments and I would suggest that, objectively viewed, they were to be made in a relatively shortorder – perhaps one to two months at most. [31] It would not be a reasonable construction in my view to allow for payments under this Agreement to be made in “dribs and drabs,”to use the phraseology employed by the Claimant in her written submission. To accept such a proposition would equally mean that theDefendant could make the payments in any partial amount it wished and in any timeframe it determined.
That was not what wasintended as manifested in this document known as the Minutes of Settlement. [32] What was intended was a series of three lump sum payments, to be made by the Defendant in a reasonable time period which, as Ihave already said, would have been something in the timeframe of a month and perhaps two months at most. Unjust Enrichment [33] As a result of my January 11th request to the parties, supplementary submissions were made by each as to whether the doctrine ofunjust enrichment might apply to the situation here. As will be seen, I believe the doctrine has application.
Also, I take the opportunity
to sincerely thank each of the parties for these further submissions which, I recognize has extended the timeframe to deliver the decision.
As previously indicated, I thought this was a necessary request to make. [ 34 ] Counsel for the Defendant argues (as a further alternative to the other submissions), that the continuing payments made to the Claimant fit the doctrine of unjust enrichment – they constituted a benefit, a detriment to the Defendant and were made without any juristic reason for the retention. [ 35 ] In the Claimant’s response dated February 22, 2017, she acknowledges the application of the doctrine of unjust enrichment with respect to the payments made after the release was signed.
As a result she has in her letter relinquished the claim to the portion of money paid between the signing of the release and the settlement payout. She maintains her claim for the portion of the money that relates to the time between the date of termination and the date of signing the release.
Her letter also includes the calculation of the pro-rating of the amounts. [ 36 ] As I will further explain, the position now taken by the Claimant accords with my view of the proper application of unjust enrichment. [ 37 ] The three requirements of unjust enrichment are well know, and are cited by defence counsel: (1) a benefit; (2) a detriment; (3) no juristic reason for the enrichment. [ 38 ] The continuing payments made to the Claimant were a benefit.
While this items overlaps somewhat with the third element, I consider the payments to be a benefit because they were in addition to and not contemplated by the settlement embodied in the Minutes of Settlement, and related to a time period after the cessation or termination of employment which, as agreed, was February 11, 2016. This amount was, in gross, $ 23,318. She received the net amount after deductions for income tax, EI, and CPP, all of which are the normal deductions taken from an employee. [ 39 ] The amounts in question were paid by the Defendant.
It follows therefore that there was a corresponding deprivation. [ 40 ] The third requirement is whether there be no juristic reason for the enrichment. In my view there was a juristic reason for the retention up to the date of the signing of the release on April 4, 2016 - the Claimant was told that her regular pay would continue up to the time of the signing of the release.
This was confirmed by the evidence from both sides. [ 41 ] In light of this, I consider that the Claimant was legally entitled to retain the enrichment up to the date of signing the release - April 4, 2016. [ 42 ] However, with respect to the payments after that date, I see no basis which would entitle the Claimant to retain the amount in question. She was unjustly enriched to that extent and owes that amount to the Defendant.
The calculation of the amount, which is to be an offset against what the Defendant owes to the Claimant, is as follows. [ 43 ] I start with gross amount of what was paid to the Claimant for the period February 11, 2016 to May 7, 2016. Based on the figures in the May 10 th email for Roddy Macdonald, I calculate this to be $23,318.81. [ 44 ] The portion of this attributable to the period April 4 – May 7 is owed by the Claimant to the Defendant.
I calculate the gross amount to be the number of calendar days for that period April 4 – May 7 (33 days) as a percentage of the total number of days from February 11 to May 7 (86 days). The percentage is 38.37%. Thus, the amount of unjust enrichment is $8947.43 (.3837 x $23,318.81). [ 45 ] This figure of $8947.43 is the gross amount so it is to be deducted before the tax calculation. [ 46 ] The following calculations show the figures according to the Minutes of Settlement, the Actual payments (see May 10, 2016, email from R. Macdonald), and the Revised amounts, being the amounts according to this decision.
According to Minutes of Settlement Actual Total $ 134,638.00 Total $ 134,638.00 RRSP $ 25,000.00 RRSP $ 25,000.00 "Salary Continuance" $ 23,318.81 CRA $ 32,891.40 CRA $ 25,895.76 Ms. Van Iderstine $ 76,746.60 Ms. Van Iderstine $ 60,423.43 Revised Total $ 134,638.00 RRSP $ 25,000.00 Differences "Salary Continuance" $ 8,947.43 CRA $ 30,207.17 $ 4,311.41 Ms.
Van Iderstine $ 70,483.40 $ 10,059.97 [ 47 ] After applying the “counterclaim” amount, the sum of $10,059.97 remains outstanding by the Defendant to the Claimant and, as well, the sum of $4311.41 is to be remitted by the Defendant to the CRA in respect of the 30% of the gross amount. The gross amount owing to the Claimant is $14,371.38 which represents the difference between the $23,318.81 deducted by Mr. Macdonald in May, 2016,
and what, in my view, ought properly have been deducted, $8947.43. [ 48 ] This amount of $14,371.38 will be considered a “retiring allowance” as it represents the balance of what is outstanding under the Minutes of Settlement. It will be subject to a 30% withholding and remittance obligation on the part of the Defendant of $4,311.41. This is a statutory obligation under the Income Tax Act and my order does not need to address that. My order will relate only to the portion payable to the Claimant of $10,059.97.
Summary and Conclusion [ 49 ] As will be seen, my analysis under unjust enrichment arrives at the same ultimate position as the Defendant does under its third argument. I, however, take a different route to that conclusion. The reasons for that have largely to do with the importance of written contracts and
interpretation and enforcement thereof. [ 50 ] In this present case, a very clearly worded contract was negotiated by experienced counsel. Parties to such contracts are entitled to assume that they will be interpreted as written. I believe this is a fundamental principle that should not be deviated from except in very narrow cases which is not met here. As I have said earlier, there was no ambiguity in the wording of the Minutes of Settlement. Having said that, I do conclude that the Claimant was unjustly enriched.
That sum, as calculated above, is to be deducted or set off from what is still owed to her under the Minutes of Settlement. [ 51 ] I will allow costs of the filing fee. [ 52 ] I will also allow prejudgment interest at 4% from May 15, 2016, to March 15, 2017 (10 months). ORDER [ 53 ] It is hereby ordered that the Defendant pay to the Claimant as follows: Claim Amount $ 10,055.07 Interest 335.17 Costs 199.35 Total $ 10,589.59 DATED at Halifax, Nova Scotia, this 14 day of March, 2017. ___________________________ MICHAEL J. O’HARA ADJUDICATOR
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