WRONGFUL DISMISSAL DEVEL.OPMENTSPartII

Transcription

1 WRONGFUL DISMISSAL DEVEL.OPMENTSPartII NeilR.Mcl..eqd Woloshjnf,fattlson 200~111-2ndAve.$. Saskatoon,Sask.$ll< 11<6 Ph: Fax:652~ :-.'.-:.- " - -::- ->--, -- -> ", :-~-- - -,.. -; - ' Neilreceived a B.A. (Hon.) fromtheuniversity~f Saskatchewan in 1970 and hj~ LL.B. in 1981;. HeW.a,S admitted to the bar in 1982~Neil's areas of practice include Labour Law, Administrative Law and Civil. Litigation... He has appeared frequently before'the Saskatchewan Labour Relations' Board,ai'bitration. boards>andother administrative tribunals. Neil has also lectured extensively in administrative arid labour law.. he is Past-President of Public Legal Education Association of Sas~tchewail andpast~presidentof the Canadian Bar Association Labour/Administrative Law Section (Saskatchewan). Neil practices with,woloshyn Mattison in S~skatoon~.....,..

2 TABLE OF CONTENTS I. WRONGFUL DISMISSAL AND THE UNIONIZED EMPLOYEE..... Page No. 1 A. WEBER V..=:O~NT-==A=R=I.=:O_-=Hc=.Y=D=R=O 95 C. L. L. C (S.C.C.) 2 (s.c.c.) 5 C. ZAKERSON V. JUBILEE RESIDENCES INC. (1987), 52 S.R. 198 (QB) 6 II. STATUTORY NOTICE PROVISIONS. 7 A. MACHTINGER V. H.O.J. INDUSTRIES LTD. 1. S'UIIlDlary Facts 8 3 I s sue 8 4. Analysis B. RASANEN V. ROSEMOUNT INSTRUMENTS LTD. (1994), 1 C.C.E.L (2d) III. NEGLIGENT MISREPRESENTATIONS IN HIRING A. QUEEN S.C.R. V. COGNOS INCORPORATED [1993] S'UIIlDlary Facts I s sues Analysis a) Duty of Care 19 b} Breach of the Duty of Care c} Effect of Employment Agreement d) Conclusion

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4 WRONGFUL DISMISSAL DEVELOPMENTS PART II I. WRONGFUL DISMISSAL AND THE UNIONIZED ENPLOYEE Where there is a collective agreement, with a grievance arbitration procedure available to an employee, there now seems very little question that the right of a discharged employee to sue for wrongful dismissal is nonexistent. Simply framing an action in tort will not have the effect of preserving the right of action in the civil courts. Deference to the pursuit of remedies through an arbitration (or ) statutory tribunal) scheme was affirmed in the recent Saskatchewan Court of Appeal case of Moldowan v. Saskatchewan Government Employees Union, et al (July 21, 1995). Although this was a case involving the denial of a promotion not termination, and involved an allegation of and negligence in the nature of a breach of the duty of fair representation by the union, it does constitute a clear statement by this court that it will defer to alternative regimes for the resolution of disputes within the collective bargaining relationship. Moldowan sued her union and the union representative for negligent representation, negligence at common law, and a breach of s of The Trade Union Act. At the Court of Queen's Bench the union sought a declaration that the dispute was within the

5 - 2 - exclusive jurisdiction of the Labour Relations Board. The lower court was influenced in its conclusion by the argument that the Labour Relations Board did not have the power to award damages in the circumstances, and therefore it was appropriate that there be a right of civil action. Further.more, the Learned Chambers Judge accepted the view, for which there was some Ontario case authority, that there remained a residual jurisdiction in the Court to deal with the simple negligence of unions which had not been entirely assumed by statutory provisions. The Court of Appeal analyzes at some length the duty of fair representation and the development of that principle as part of labour relations statutes, as recognized by the Supreme Court of Canada. In the end the Court decided that the case did not represent one where jurisdiction should be shared. Jackson J.A. states, at 15: In my opinion, in the circumstances where The Trade Union Act applies, having regard for St. Anne, the nature of the regime established to deal with complaints of this nature, the remedies provided, the ability of the Board to enforce its orders and the privative clause, the legislature intended the Board to have exclusive jurisdiction to hear and deter.mine claims based on breaches of the statutory duty. A. WEBER V. ONTARIO HYDRO 95 C.L.L.C (S.C.C.) This decision of our highest Court, rendered on June 19, 1995,

6 - 3 - endorses the principle of the exclusive jurisdiction of labour tribunals and arbitrators. The majority determined that the jurisdiction of superior courts over tort claims of an employee have been ousted by binding arbitration. It should be noted that binding arbitration to deal with collective agreement disputes is now mandated in Saskatchewan legislation. Furthermore, most collective agreements contain provisions whereby the parties agree that disputes will be resolved through arbitration and the decision of the arbitrator shall be final and binding on the parties. In Weber the employee plaintiff took an extended leave of absence as a result of back problems. It was suspected that he was malingering and so his employer, Ontario Hydro, hired an investigator. The investigator gained access to Weber's home by pretending to be someone else. Weber and his family felt that they had suffered damages for mental anguish arising out of the entry and intrusive surveillance. The union agreed and took the matter to arbitration, in the course of which the case was settled. The employee then commenced a court action in tort claiming damages for trespass, nuisance, deceit and invasion of privacy. He also claimed that his rights under s. 7 and 8 of the Canadian Charter of Rights and Freedoms had been violated. Through the Ontario courts the tort claims were dismissed but the Charter complaint was allowed to stand. Weber further appealed

7 - 4 - to the Supreme Court of Canada arguing that his tort action should be restored. Ontario Hydro in turn appealed the decision of the Ontario Court of Appeal to leave intact the allegations of a Charter violation. The Supreme Court split on the question of the status of the Charter claims. The majority concluded that the language in the collective agreement was capable of an application to the Charter violations as alleged. Further.more, the they deter.mined that the arbitrator could grant the Charter remedies sought. In a dissent written by Iacobucci J., the minority took issue with the power of a tribunal to grant remedies pursuant to the Charter. It was the view of this minority that the arbitrator is not a court of IIcompetent jurisdiction ll and would not have the necessary remedial range. While the question of whether there is a requisite and residual jurisdiction in the courts to deal with Charter matters in the context of collective bargaining may be open to argue another day, the Supreme Court was clear that the arbitrator had exclusive jurisdiction over all aspects of the dispute in ter.ms of the. alleged tortious conduct. It should be noted that the court stated that the jurisdiction of the superior courts may survive in the situation where the required remedy is outside the powers of the arbitrator. After a reading of the facts of this case it is difficult to identify a situation where this exception

8 - 5 - might be open. It also seems that the court IIsaw through II an attempt here to get around the exclusive jurisdiction of the arbitration board through the characterization of conduct as tortious. The issue is not the application of our traditional concepts of tort, the issue is whether the dispute is one that is capable by resolution by an arbitrator exercising the broad mandatory powers incumbent within that role. B. O'LEARY V. THE QUEEN 95 C.L.L.C (S.C.C.) In a companion case before the Supreme Court an employer had commenced an action against an employee. 0' Leary worked for the New Brunswick government and was alleged to have driven a leased vehicle with a flat tire resulting in a cost for significant repairs. O'Leary sought to strike the claim arguing that exclusive jurisdiction lay in the collective agreement remedies, which were governed by the arbitration provisions of the Public Service Labour Relations Act, R.S.N.B. 1973, c. P-25. Interestingly, the New Brunswick Court of Appeal decided that the action could be maintained as being outside of the collective bargaining relationship. However, the Supreme Court of Canada disagreed following its reasoning in the Weber case. As stated by McLachlin J., at 141,244:

9 - 6 - The Province's principle argument is that the collective agreement does not expressly deal with employee negligence to employer property and its consequences. However, as noted in Weber, a dispute will be held to arise out of the collective agreement if it falls under the agreement either expressly or inferentially. Here the agreement does not expressly refer to employee negligence in the course of work. However, such n~gligence impliedly falls under the collective agreement. Again, it must be underscored that it is the essential character of the difference between the parties, not the legal framework in which the dispute is cast, which will be determinative of the appropriate forum for settlement of the issue. C. ZAKERSON v. JUBILEE RESIDENCES INC. (1987), 52 S.R. 198 (QB) The Plaintiff, Zakerson, after having been on Workers Compensation benefits had her employment terminated. an action against her employer for wrongful dismissal. She brought There was a collective agreement which covered the terms and conditions of employment of the Plaintiff. The Plaintiff argued that the language referring to grievance/arbitration in the collective agreement, and in The Trade Union Act of that time, was permissive only, allowing the employee to pursue an alternative remedy through grievance/arbitration. It was argued that the employee has a choice and that civil action was not ousted. Barclay J. ruled that the grievance procedures in the collective bargaining agreement were the exclusive recourse of the employee

10 - 7 - and accordingly found there was no valid cause of action. He was persuaded by the proposition that where the parties have agreed to an arbitration process then it must be utilized, and in effect becomes exclusive. The arguments raised in this case in 1987 may only be of historical interest now because with the amendment to s. 25(1) of The Trade Union Act there is mandatory arbitration in Saskatchewan. The arguments that were made by Zakerson were largely predicated on the "hole" in Saskatchewan labour legislation wherein strikes and lock-outs during the term of the collective agreement were prohibited but arbitration was only permissive. Nonetheless, despite the significance of the amendment the case represents a clear statement with respect to the fundamental principle here that a complainant employee, whether it be a matter of tort or wrongful dismissal, or even some other instance of breach of contract, has no traditional cause of action in the superior courts. II. STATUTORY NOTICE PROVISIONS A. MACBTINGER v. B.O.J. INDUSTRIES LTD. [1992] 1 S.C.R Summary An employee dismissed without cause must be given reasonable notice of termination when his or her employment contract has

11 - 8 - failed to comply with the minimum notice periods of the Employment Standards Act in Ontario. While unanimous in the result, judgments were delivered by Iacobucci and McLachlin, J.J. The comments following are from the judgment delivered by Iacobucci, J., concurred with by La Forest, L' Heureux-Dube, Sopinka, Gonthier and Cory, J.J. 2. Facts The two Appellants worked as managers for a car dealership for over seven years, and at the time of commencing employment, signed a contract of hiring for an indefinite period. The contract contained clauses that allowed for termination. In one employee's case, it was zero weeks notice, and in the other employee's case, it was two weeks notice. The Employment Standards Act, R.S.O c.137, prescribes minimum notice periods for both these employees, based on their length of service, as four weeks. Upon dismissal, the employer paid to each of these employees four weeks salary in lieu of notice. 3. Issue The issue on appeal was stated at page 996: "If an employment contract stipulates a period of notice less than that required by the Employment

12 " 'i Standards Act, R.S.O., 1980, c. 137, is an employee who is dismissed without cause entitled to reasonable notice of termination, or to the minimum period of notice required by the Act?" 4. Analysis The Court stated that contracts of an indefinite period require the employer to give reasonable notice of a termination when the dismissal is without just cause and if there is no express contractual language to the contrary {Carter v. Bell and Sons (Canada) Ltd., [1936] O.R. 290 (C.A.». The Court stated that this common law principle of reasonable notice is a presumption which may only be rebutted if the contract specifies some other period of notice. At page 999, the Court adopts the factors outlined in the Bardal case, supra to determine what would constitute reasonable notice: the character of the employment; the length of service of the servant; the age of the servant; and the availability of similar employment, having regard to the experience, training and qualifications of the servant (Bardal, supra, at page 145). Having determined that the reasonable notice period may be changed by express contractual language, it is also necessary to understand how the notice periods in the Act affect the reasonable notice period at common law. The Court stated that Sections 4 and 6 of the Act lido not operate displace the presumption at common law of reasonable notice" (at page 999).

13 The common law of reasonable notice is a civil remedy still available to the plaintiff and the presumption of reasonable notice is a "benefit" which could be considered greater than the employment standards required by the Act. The Court observed that the contracts in this case attempt to contract out the minimum notice period and thus they are null and void pursuant to Section 3 of the Act. The Court concluded that these clauses can then not be used to determine the party's intention and rebut the presumption at common law of a reasonable period of notice. It is stated at page 1001: "In this case weare not faced with an entirely void contract, but a contract of which one clause is null and void by operation of statute. I would nontheless apply the reasoning of Kerr, L. J. [Rover International Ltd. v. Canam Film Sales Ltd., [1989] 1 W.L.R. 912]: If a term is null and void then it is null and void for all purposes, and cannot be used as evidence of the parties' intention. If the intention of the parties is to make an unlawful contract, no lawful contractual term can be derived from their intention". Once the clauses were declared null and void, there was no evidence that could rebut the presumption at common law of reasonable notice and therefore the parties are entitled to that period of reasonable notice. The Court also considered several policy considerations at pages 1002 to In coming to the conclusion that it did, it stated

14 at page : "Accordingly, an interpretation of the Act which encourages employers to comply with the minimum requirements of the Act, and so extends its protections to as many employees as possible, is to be favored over one that does not. In this regard, the fact that many individual employees may be unaware of their statutory and common law rights in the employment context, is of fundamental importance.. If the only sanction which employers potentially face for failure to comply with the minimum notice periods prescribed by the Act, is an order that they minimumly comply with the Act, employers will have little incentive to make contracts with their employees that comply with the Act... In my view, an approach more consistent with the objects of the Act is that, if an employment contract fails to comply with the minimum statutory notice provisions of the Act, then the presumption of reasonable notice will not have been rebutted. Employers will have incentive to comply with the Act to avoid potentially longer notice periods required by the common law, and in consequence more employees are more likely to receive the benefit of the minimum notice requirement. Such an approach is also more consistent with the legislative intention expressed by s.6 of the Act, which expressly preserves the civil remedies otherwise available to an employee against his or her employer." The Labour Standards Act, R.S.S c. L-1, as amended, contains provisions similar to that under consideration in this case: 45 Nothing in s. 43 or 43.1 affects any provision in a contract of service, or any recognized custom, by virtue of which an employee is entitled to a longer notice of termination of employment or layoff or to more favourable

15 compensation in resepct of the period of any such notice than is provided for by that section. 72(1) Each requirement imposed by this Act is a minimum requirement only, and every employee is entitled to the benefit of each requirement, regardless of any other term and condition of the employee's employment that may exceed a minimum requirement imposed by this Act. (2) A right, benefit, term or condition of employment pursuant to a custom or contract, whether oral or written, express or implied, or pursuant to any other Act or regulations may pursuant to any other Act that provides an employee with higher wages or a greater right or benefit or requires fewer hours of work to be entitled to a right or benefit, than is required by this Act or the regulations shall prevail over the provision of this Act or the regulations that imposes the lesser requirement. 73 Except as may be otherwise permitted by this Act and subject to s. 68, nothing in this Act curtails, abridges or defeats any civil or other remedy for the recovery of wages by an employee from his employer. 75(1) No agreement, whether heretofore or hereafter entered into, has any force or effect if it deprives any employee of any right, power, privilege or other benefit provided by this Act. (2) This Act applies to agreements made in or out of Saskatchewan with respect to service or labour performed in Saskatchewan. B. RASANEN V. ROSEMOUNT INSTRUMENTS LTD. (1994), 1 C.C.E.L (2D) 16 The job of the plaintiff employee became redundant and he was offered two alternatives. When he did not accept either one the employer deemed him to have resigned. In response Rasanen made a claim under the Ontario Employment Standards Act for termination pay, and he also commenced a civil action for wrongful dismissal

16 claiming constructive dismissal. The Referee under the Employment Standards Act found in favour of the employer and thereby refused the employee's claim for termination pay. Later when the case got to trial the judge determined that the doctrine of issue estoppel applied and dismissed the action. The three members of the Ontario Court of Appeal were all of the same mind in terms of dismissing the appeal, but for different reasons. Two judges upheld the application of the principle of issue estoppel. They concluded that the questions before the Referee were the same as those to be brought before civil court, and had already been answered. Abell J. stated, at 174: As along as the hearing process in the tribunal provides parties with an opportunity to know and meet the case against them, and so long as the decision is within the tribunal's jurisdiction, then regardless of how closely the process mirrors a trial or its procedural antecedants, I can see no principled basis for exempting issues adjudicated by tribunals for the operation of issue estoppel in a subsequent action.. In the contrary, the policy objectives underlying issue estoppel, such as avoiding duplicative litigation inconsistent results, undue costs, and inconclusive proceedings are enhanced in appropriate circumstances by acknowledging as binding the integrity of tribunal decisions. Judge Carthy disagreed with the majority on the question of the

17 ) application of issue estoppel. Carthy J. emphasized the importance of common law rights and distinguished the full hearing on all issues that might be available in the court from the purpose of this tribunal - to provide limited relief pursuant to the minimum standards of this type of employment legislation. On the other hand Judge Carthy agreed with the trial judge that there had been no constructive dismissal and would dismiss the appeal on that basis. Leave to appeal to the Supreme Court of Canada was denied. This case seems to represent a rather harsh instance of the for e c losureo f c 0 mm 0 n I a w righ t s. Ce r t a i n I y i tis distinguishable from the situation where there is a broad statutory or consensual arbitration scheme which has been negotiated between the parties to afford a full determination on all matters in dispute arising out of the employment relationship. III. NEGLIGENT MISREPRESENTATIONS IN HIRING A. QUEEN v. COGNOS INCORPORATED [1993] 1 S.C.R Summary "In negotitating a contract of employment, a prospective employer is bound by the same standard of care which applies to the making

18 ) of contracts generally, ie. the objective standard required of a resonable person. When it is clear that the employer's representative has, in procuring the agreement by the employee, negligently misrepresented facts respecting the nature, duties and duration of the position under consideration, and the employee acts upon such misrepresentations in accepting the position to his/her detriment, it follows that the employee is entitled to damages for wrongful dismissal when the employer seeks to terminate the employee's services in accord with the provisions of the employment contract thus improperly procured. II ([1993] S.C.C. D , Quicklaw at p. 1-2) All Judges of the Supreme Court of Canada were unanimous in the result. The following comments relate to the judgment of Sopinka and Iacobucci, JJ., delivered by Iacobucci, J. 2. Facts The Respondent, Cognos Incorporated, is a company carrying on business in Ottawa, dealing primarily with the development and marketing of computer programs. The Appellant is a chartered accountant who had been living in Calgary with his wife and children and was employed as an accountant for approximately eight and one-half years. At the time of interviewing with the Respondent company, he had a secure managerial position and was quite well paid. He was seeking

19 ) employment outside Calgary, and was interested in the high-tech industry and a more challenging position. Mr. Johnston, a manager of the Respondent company who was in charge of developing a product line for accounting software known as "Multiview", received instructions to develop further modules for Multiview. He presented his plan to develop these modules to other senior executives and indicated that an accountant would be required to assist in writing and maintaining the software. Eventually Mr. Johnston interviewed six applicants, one of whom was the Appellant. At the interview, which lasted approximately one and one-half hours, Mr. Johnston made a number of representations to the Appellant about the Multiview project and about the successful candidate's role in its development. The representations included statements to the effect that it was a major project which would be developed over two years with enhancements and maintenance following that time period and that the person being interviewed would be needed throughout that time. It was understood that the company was committed to the development of additional modules and that the successful candidate would play an important role on the Multiview project advising on accounting standards. The trial judge found that this implicitly meant that there was a reasonable plan in existence for additional modules and that the company had made a financial committment for the development of these modules. At the time of the interview,

20 there ~s evidence that Mr. Johnston was aware that he still needed funding for the project as it had not yet been completely approved. Upon being offered the job in March, 1983, the Appellant accepted immediately and signed a written contract of employment. The written contract of employment contained two important clauses: one clause which permitted the Respondent to terminate the Appellant's employment without cause upon one month's notice or pay in lieu of notice, and another clause allowing the Respondent to reassign the Appellant to another position within the company upon one month's notice. Two weeks after the Appellant commenced employment, Mr. Johnston's funding proposal for the development of further modules for Multiview was rejected. Approximately six months later, the Appellant received a first written notice of termination, which notice was eventually rescinded and the Appellant was assigned a different position within the company, however, on July 31, 1984, he received a second written notice of his termination effective October 25, Issues Did the company or Mr. Johnston owe a duty of care to the Appellant during the hiring interview with respect to

21 representations made about the company and the "nature and existence of the employment opportunity being offered"? If a duty of cared was owed, did the Company or Mr. Johnston breach that duty? If there was a breach of the duty of care, was the liability of the Company changed because the Appellant signed an employment contract after the negligent misrepresentations occurred, which contract included a termination provision as well as a re-assignment provision? 4. Analysis This case involves the application of the doctrine first recognized by the House of Lords in the Hedley Byrne case, supra. The five general requirements for such a successful claim, set out at p. 110 of this judgment, are as follows: (i) there must be a duty of care based on a relationship" between the representor representee; IIspecial and the (ii) the representation in question must be untrue, inaccurate or misleading; (iii) the representor must have acted negligently in making the said misrepresentation; (iv) the representee must have relied, in a reasonable manner, on said negligent misrepresentation; (v) the reliance must have been detrimental to the

22 representee in the sense that damages resulted. The Supreme Court of Canada concluded that the second, fourth and fifth requirements were not in issue before this Court and the only issues were with respect to the duty of care owed to the Appellant in these circumstances and the alleged breach of this duty. While conceding-that a special relationship existed giving rise to a duty of care, the Respondent argued that the duty is negated by a disclaimer in the employment contract. The Respondent also suggested that the misrepresentations made during the hiring interview were not made in a negligent manner. a) Duty of Care As stated at p. 116, lithe Respondent and Mr. Johnston were under an obligation to exercise due diligence throughout the hiring interview with respect to the representations made to the Appellant about Cognos and the nature and existence of the employment opportunity." b) Breach of the Duty of Care In order to determine whether the misrepresentations of Mr. Johnston during the interview were negligently made, one must determine the nature and extent of the duty of care, also referred to as the "standard of care". In

23 deter.mining that the standard of care is more than one of truthfulness or honesty, the Court notes that it is an objective standard and described it at p. 121 as follows: "It is a duty to exercise such reasonable care as the circumstances require to ensure that representations made are accurate and not misleading." The Supreme Court of Canada agreed with the trial judge's view that in the circumstances, Mr. Johnston breached the duty to exercise reasonable care by not providing highly relevant information to the Appellant about the uncertainty of the company's financial committment to the project or the "nature and existence of the employment opportunity" (at p ). The findings of fact concerning Mr. Johnston's expertise and the surrounding circumstances, referred to earlier, were also important in reaching this conclusion. It should also be noted that the Court rejected the Respondent's position that these representations were not actionable because they were inferences or implications relating to a future expectation. The Court concluded that the representations did not relate to a future event but related to the very existence of the job which had been applied for. As well, the Court held that in appropriate circumstances, an implied misrepresentation

24 can give rise to an action in negligence. c) Effect of Employment Agreement The Court stated that it is clear that there may be an action in tort for negligent misrepresentation even though the parties also have a contractual relationship. It also does not matter that the representations may have been made during pre-contractual negotiations. However, the contract that is entered into may assist in determining whether the claim for negligent misrepresentation will succeed or to what extent it will succeed. The following are three potential effects that a contract can have on the action in tort: (i) The contract can negate the action in tort leaving the plaintiff with remedies only under contract; (ii) The liability of the defendant may be limited or excluded as a result of the term in the subsequent contract that diminishes or extinguishes the plaintiff's tort remedy; (iii) The contract may have no effect on the plaintiff's claim in tort. A plaintiff cannot bring an action in tort for negligent misrepresentation if a pre-contractual representation has become an express term of the contract. It is said that the actions are then concurrent and only the contractual remedies are available. The question to be answered is

25 whether there is an express contractual obligation co-extensive with the duty of care. In the case under consideration, the Court held that there was no such concurrency. The clauses regarding termination and reassignment are different contractual duties than the duty of care the Appellant alleges. Mr. Johnston did not negligently misrepresent the length of time or the conditions under which the Appellant's employment could be terminated (the IIsecurity of employment ll ) but, as stated at p. 114, II rather, the Appellant argued that Mr. Johnston negligently misrepresented the nature and existence of the employment opportunity being offered ll This case does not fall within the second category of the liability being limited or excluded by the clauses in the contract. At p. 138 the Court states as follows: II Clauses 13 and 14 of the employment agreement are far from being statements, express or implied, that the Respondent and its representative are not assuming responsibility for the representations made to the Appellant during the hiring interview about the nature and existence of the Multiview project.... Something more than Clauses 13 and 14 is definitely required. These provisions relate to the right and obligations of the parties in the event of the appellant's termination or transfer. They have nothing to do with representations made during preor postcontractual negotiations, let alone disclaimers for said representations. 1I /

26 ., ) The Court also commented that there was no inconsistency between the contract and the representations as those representations were not warranties of job security but were representations that a "particular job would exist and it would have certain features" (at p ). The Court concluded that the employment agreement in these circumstances was irrelevant to the action for negligent misrepresentation, falling in the third category described above. The duty of care is independent of the contract. d) Conclusion The Court concluded at pages that the Respondent Mr. Johnston owed a duty of care to the appellant at the interview to "exercise such reasonable care as the circumstances required to ensure that the representations made were accurate and not misleading. II The implied and express representations made were negligent and the appellant had relied on them to his detriment, thus causing him damages. In this case, the contract made subsequent to the pre-contractual representations is irrelevant to this claim in that the clauses referred to were not valid disclaimers of the Respondent's liability ) for representations made.

27 The case of B.G. Checo International Ltd. v. British Columbia Hydro and Power Authority, S.C.C., Nos and 21955, January 21, 1993, is discussed at length in this case. That case also dealt with a claim based on negligent misrepresentations made during pre-contractual negotiations. The Court distinguished that case on the basis that there, the pre-contractual misrepresentations were incorporated verbatim as terms in the contract subsequently signed. Therefore, the duty of care and the tort action were co-extensive with the duties in contract and the plaintiff was barred from bringing concurrent actions in tort and contract. The plaintiff should have proceeded only in contract. )