Feldstein v. 364 Northern Development Corporation
2016 BCSC 108
Mr. Feldstein claimed for damages against his former employer 364 Northern Development Corp. for negligent misrepresentations made by a representative of 364 during pre-employment discussions.
Mr. Feldstein was a software engineer. He suffered from cystic fibrosis. He was terminated from his employment with MDA 1 March 2012 and given 6 months working notice. On 30 April 2012, he commenced employment with 364. Shortly after – in November 2012 – his health deteriorated and was approved for LTD benefits, but only the minimum and not 2/3 of his salary as he had expected. Ultimately, 364 terminated his employment in November 2013. At that time, his LTD benefits had vested.
Mr. Feldstein sued for negligent misrepresentation, which related to the limitations and attributes of the long-term disability (“LTD”) benefits plan.
The Court relied on the test for negligent misrepresentation in Queen v. Cognos Inc., [1993] 1 S.C.R. 87.
1) Is there a duty of care based on a “special relationship” between the representor and representee?
2) Is the representation in question inaccurate, untrue, or misleading?
The alleged misrepresentation was the statement that “Proof of Good Health is related to the three month waiting period needed in order to have the plan in effect.”
3) Did the representor act negligently in making that representation?
The person in charge of hiring took no steps to verify the accuracy of the information he provided to Mr. Feldstein regarding 364’s LTD benefits. The Court found that “reasonable inference to be drawn from the impugned statement is that LTD coverage is contingent merely upon completion of the three-month probationary period.”
4) Did the representee rely, in a reasonable manner, on that representation?
Mr. Feldstein said he entered into the working relationship based on the representation, made by the person in charge of the hiring for 364. The Court accepted that.
5) Did the representee incur damages as a result of that reliance?
The Court found that Mr. Feldstein was “entitled to recover the amount of LTD benefits coverage he would have received, at the MDA LTD benefits rate, for a period of forty months, less CPP benefits.” The Court found that it was a reasonably foreseeable consequence of the misrepresentation that Mr. Feldstein would suffer mental distress.
The Court awarded Mr. Feldstein $83,336.80 for the loss of LTD benefits, for a period of forty months, occasioned by his reasonable reliance on the impugned statement of Mr. Nizker, and $10,000 for the mental distress this caused Mr. Feldstein, for a total of $93,336.80.