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Tort Law Saves the Day: Supreme Court of British Columbia Rules in Favour of Employee in Negligent Misrepresentation Action

THE FACTS

In a recent case, the Supreme Court of British Columbia was charged with the task of deciding a negligent misrepresentation action. Negligent misrepresentation is a cause of action in tort, which allows the receiver of false or misleading information to seek recourse through the courts for losses incurred as a result of that misrepresentation. The cause of action arises often in the context of employment, specifically where employers make inaccurate representations to prospective candidates regarding the terms of the employment contract.
 
In this case, the plaintiff—Mr. Feldstein—was a software engineer with cystic fibrosis. Cystic fibrosis is a degenerative disease that affects, among other things, the individual’s lung functioning and often results in premature death. Mr. Feldstein interviewed and eventually entered into an employment contract with 364 Northern Development Corp (“364”). Upon the deterioration of his health, Mr. Feldstein applied for Long Term Disability. Under his plan, Mr. Feldstein was entitled to $1,000 per month, which was offset by a $936.44 income he received from his Canada Pension Plan benefits. In effect, Mr. Feldstein was given $37 a month under his LTD plan. Mr. Feldstein brought an action against 364 for negligent misrepresentation, alleging that 364 had lead him to believe that he would be entitled to much more than $1,000 per month in LTD payments if he made it through the probationary period.

The decision in this case relied largely on the relevant weight given to the parties’ testimonies, which were inconsistent on more than one central issue. Mr. Feldstein claimed that two agents of 364, a Mr. Nizker and Mr. Dykman, informed him that his pre-existing condition would not preclude his access to LTD benefits. Upon applying for LTD benefits, however, Mr. Feldstein was told by Sun Life that he was not eligible for coverage in excess of $1,000 because he failed to fill out a health questionnaire when initially enrolling in the program. The court found that Mr. Feldstein’s testimony was more consistent with the circumstances surrounding the case and was therefore more credible, leading the court to find in his favour.

OUR THOUGHTS

What’s most interesting about this case is the weight given by the court to the parties and their respective testimonies, and the role this analysis has on the overall outcome of the case. The task of trial judges and motion judges in assessing evidence is a delicate and uncertain matter. When weighing evidence, judges are provided only with general guidance and must make decisions on a case-by-case basis. Nevertheless, courts must remain neutral and maintain consistency in their decision making to foster predictability in the law. That being said, courts are imperfect. Judges are people, and like with anyone else, their decisions are not completely devoid of emotion. Sometimes, sympathy goes a long way to building a case.

The analysis in this case rested largely on the ‘correct’ version of events taken by the Court. The Court gave more weight to Mr. Feldstein’s version of events and he won the case. The Court found it more believable that, given the importance of a suitable LTD plan for Mr. Feldstein, it made more sense that he would inquire about it before entering into an employment contract. The defendants almost wholly rejected any discussions between themselves and Mr. Feldstein on the topic of LTD benefits. Their blanket denial in this instance actually likely operated against their favour, as the judge found it skeptical that Mr. Feldstein would have failed to discuss this topic at all with the defendants. Nevertheless, it is interesting to note the weight given to Mr. Feldstein’s testimony in relation to the written employment contract. Courts will typically be very cautious when accepting parol evidence—or verbal evidence—to inform the terms of a written contract. In a cause of action in tort, however, the parol evidence rule is avoided. Based on these facts, if Mr. Feldstein brought an action for breach of contract, his action would likely fail in large part due to the parol evidence rule. The terms of the employment contract are in writing and it would be unfair to allow Mr. Feldstein to rely on terms outside of that contract. This case highlights the importance of considering the challenges presented by a given set of circumstances and shaping your cause(s) of action accordingly.

See: Feldstein v 364 Northern Development Corp., 2016 CarswellBC 159 (B.C.S.C.)

The above article is for general information purposes only and does not constitute legal advice. If you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere.