Cain v. Clarica Life Insurance Co., 263 D.L.R. (4th) 368 (Alta. C.A. December 15, 2005)

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Clarica Life Insurance Co.

December 2005
Represented Clarica Life Insurance Co. in a wrongful dismissal action. The Respondent was employed for about thirty years by MS, which was ultimately purchased by Clarica. The Respondent had obtained a position with Clarica similar to the position that he had previously held and was eventually demoted. The Respondent considered himself constructively dismissed and Clarica entered into a settlement with the Respondent whereby he received a severance package. The Respondent was unhappy with his settlement agreement and brought the action. At the Queen's Bench level, the Court found none of the contracts were binding on the Respondents and awarded the Respondent an additional $98,000. Clarica appealed.

In allowing the appeal, the Court of Appeal held that the facts clearly established the negotiation and formation of a contract and its terms and that there was no evidentiary basis to support a conclusion that the offer from Clarica was unconscionable. The Court held that the conclusion and the trial reasons that this was unfair negotiations suggested and implied finding that this settlement was unconscionable, which was an error in law. The facts found in the trial reasons about the severance package settlement contract did not satisfy the test for any of the elements of unconscionably or undo imbalance of bargaining power. Accordingly, the Court of Appeal held that the settlement contract was valid and binding and had been performed by Clarica. The Respondent was not entitled to any additional money and had bargained away all of his earlier claims.