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The equitable doctrine of unjust enrichment cannot be a remedial source in a case of ordinary wrongful dismissal

Ontario

,

Canada

Unjust Enrichment Unavailable in Wrongful Dismissal In ExxonMobil Business Support Centre Canada ULC v. Birmingham, 2021 NBCA 58, the respondent was employed by the appellant, Exxon Mobile Business Support Centre Canada ULC (“Exxon”), in a facilities management role from the spring of April 2002 until December 31, 2016. In August 2016, Exxon announced that it was transferring the facilities management to another company, CB Richard Ellis (“CBRE”). Therefore, the respondent’s employment was to be terminated and he would be offered continuing employment on similar terms with CBRE. The respondent accepted this position in September 2016 and began his new role with CBRE in January 2017. Upon his termination, Exxon offered the respondent a severance package that was contingent on him providing Exxon with a release of any further claims. He declined the offer and sued, claiming damages for wrongful dismissal and “any further unspecified relief deemed just by the court”.Following a one-day trial, the judge found that the notice period provided by Exxon was reasonable and provided modest damages estimated to be the potential differential losses during the notice period. No additional entitlements were established and the respondent’s claims for aggravated/punitive damages were dismissed. However, the trial judge awarded $50,000 for restitutionary damages for unjust enrichment despite the fact that unjust enrichment had not been pleaded and was only advanced during closing submissions. The damages were to compensate the respondent for “unfairness in the termination process or unjust enrichment.” Trial Judge Erred by Granting an Equitable Remedy That Was Not Pleaded Though the trial judge had awarded the respondent damages for unjust enrichment, the respondent had never actually pleaded for such relief. LeBlond J.A. pointed out that pleadings govern the issue in a claim and that courts have ruled that disposing of a case through an equitable remedy not pleaded constitutes an error in law (para 21 -23).Pleadings prevent a “free-ranging general inquiry” in a civil trial. The respondent pleaded only for “relief for breach of the Employment Contract”; unjust enrichment was not argued until closing arguments (the respondent had argued that the remedy was capture by his request for “such further or other relief as this Honourable Court deems just”) and then the parties submitted briefs on unjust enrichment at the trial judge’s request. The trial judge misapplied precedent to rule that “such further or other relief” afforded him discretion to fashion an equitable remedy (para 24-26).LeBlond J.A. stated the claims were not submitted to the adversarial process and it was not open for the judge to consider them (para 28). Based on the pleadings, Exxon would not reasonably have anticipated a claim of unjust enrichment which was “irrelevant in the context of the law of wrongful dismissal” (para 31). An Employment Contract Is a Clear Juristic Reason That Prevents a Claim for Unjust Enrichment LeBlond J.A (Drapeau J.A. and French J.A. concurring) accepted that the trial judge had correctly set out the test for unjust enrichment (a) that the defendant was enriched; (b) that the respondent suffered a corresponding deprivation; and (c) that the defendant’s enrichment and the respondent’s corresponding deprivation occurred in the absence of a juristic reason.However, the trial judge erred in his conclusions regarding the first two stages of the test. He had concluded that Exxon was enriched by the operational benefits of entering into an agreement with CBRE and the terms of this transaction were more favourable/CBRE accepted the deal since the respondent’s division would continue as part of CBRE. The corresponding deprivation was the fact that the respondent was precluded from applying for other positions with Exxon by the transaction and thereby lost the benefits and job security he had while employed with Exxon (para 39).LeBlond J.A. pointed out several errors in the trial judge’s conclusions. First, the contract between CBRE and Exxon was not before the judge since the contract, and any negotiations, were irrelevant to a claim of wrongful dismissal which is based on the terms of the respondent’s employment contract with Exxon. Second, none of the “benefits” identified by the trial judge flowed from the respondent to Exxon. Third, there was no evidence to support the trial judge’s inference that CBRE offering employment to Exxon’s employees had improved the terms of Exxon’s deal. The trial judge had no way of knowing whether Exxon had benefit in the transaction. LeBlond J.A. emphasized that a finding grounded in conjecture or speculation was an error in law (para 40-44). Finally, there was no deprivation to the respondent, whose losses had occurred because his employment had ended. The CBRE/Exxon transaction was separate from any agreement between CBRE and the respondent.Even if the first two elements of the test had been met, LeBlond J.A. stated that the claim would have failed at the third stage, the absence of a juristic reason. The well-established categories of juristic reasons that have been identified by the courts include a governing contract. Here the respondent’s work was always governed by a contract and he was paid for his services. The trial judge failed to consider the respondent’s employment contract, which LeBlond J.A. ruled was “a clear juristic reason that would prevent a claim for unjust enrichment if such a claim could be proven in the first place” (para 48).

April 14, 2022
ExxonMobil Business Support Centre Canada ULC v Birmingham, 2021 NBCA 58