No collateral contract

Employer’s expressed expectation of continuing employment did not constitute a guarantee

In 1989 Dr. Ewa Lipczynska moved from Poland to Canada. Dr. Lipczynska is a highly qualified and distinguished scientist with post-doctoral degrees specializing in environmental chemistry and new technologies for water treatment.

Dr. Lipczynska and her husband, Jan Kochany, came to Canada in 1989 as senior visiting scientists to the University of Western Ontario. They also undertook some consulting work for the National Water Research Institute. During this time, both Dr. Lipczynska and her husband were employed by institutes in Poland.

Near the end of her initial stay, she and her family obtained landed immigrant status in Canada. This presented a dilemma as both Dr. Lipczynska and her husband had secure jobs in Poland and their families were in Poland. However Poland was undergoing sweeping political changes. Because of the political uncertainty, Dr. Lipczynska and her husband were concerned about their prospects in academia in Poland. Dr. Lipczynska made a trip to the University of Waterloo with the hopes of securing a position there.

In 1992 Dr. Lipczynska had several meetings with Dr. Robert Gillham, then director of the Waterloo Centre for Ground Water Research, an institute closely affiliated and funded by the University of Waterloo. Dr. Lipczynska was offered a position as a research associate professor in the Department of Earth Sciences, Faculty of Science at the University of Waterloo. The letter of offer provided for a two-year term of employment. The letter clearly indicated that the term appointment did not imply or guarantee further appointment at the completion of the term.

Dr. Lipczynska accepted the offer of employment and commenced working in fall 1992. Over the course of the two years of her employment, Dr. Lipczynska had problems with her co-workers to the point that Dr. Gillham informed the executive committee of the center that he could no longer work with her. A subsequent decision was made by the committee to stop funding her salary.

In March 1994 Dr. Lipczynska met with Dr. Gillham who informed her that her contract would not be renewed. When asked why, Dr. Gillham informed her that the committee was not happy with her research projects at the University. Dr. Lipczynska subsequently sought to make a presentation to the committee about her work but her requests were ignored. At a meeting with Dr. Thompson to discuss her formal evaluation in April 1994, she was provided with a letter of termination.

Dr. Lipczynska tried to grieve the decision but was informed that given the nature of her employment the grievance procedure was not open to her. Dr. Lipczynska eventually opted to bring an action against the University for breach of contract and negligent misrepresentation.

Dr. Lipczynska argued that through Dr. Gillham’s representations she was promised a minimum of a five-year contract, despite the fact that the letter of employment only indicated that it was for a two-year term. She alleged that the guarantee of, at minimum, employment for a period of five years was given orally by Dr. Gillham during her initial meetings with him.

Dr. Lipczynska alleges that Dr. Gillham indicated that the centre had just received a very good grant for five years and that there would be no problem sponsoring her position for this time. He also indicated that the centre had received a large budget from the province and that there would be no problem covering her salary for five years.

The Court held that the onus was on Dr. Lipczynska to prove that she had received such a representation and guarantee from Dr. Gillham. Even if Dr. Gillham had made such representations to her, she would either have to prove that this constituted a collateral contract or that the representations altered the terms of the written contract.

The law in Canada provides that where a contract has been reduced to writing, extrinsic evidence is inadmissible to modify the writing. This is known as the “parol evidence rule.” The Court held that the employment contract was reduced to written form and the terms of the contract were clear and explicit. Therefore the parol evidence rule applied to exclude any other evidence from being admitted to challenge the validity of the contract. She could not argue that the oral representations altered the terms of the written contract.

With respect to the argument that the representations constituted a collateral contract, this argument also failed because it violated the rules concerning collateral contracts. The law provides that evidence of a collateral contract is not admissible unless it was consistent with the main contract. If Dr. Gillham had made a representation to Dr. Lipczynska that her employment was for a minimum five-year term, these representations would be completely at odds with the written contract. Such a collateral contract is not valid.

With respect to the argument for negligent misrepresentation, Dr. Lipczynska did not meet the test for negligent misrepresentation. She did not establish that there was a duty of care between her, Dr. Gillham and the university, nor did she prove that the representation was made.

Although both Dr. Lipczynska and Dr. Gillham had an expectation that the contract would be at a minimum for a five-year period, this expectation was not a guarantee. The Court held that there was no breach of contract and no negligent misrepresentation. The case was therefore dismissed.

For more information:

Lipczynska-Kochany v. Gillham, Ontario Superior Court of Justice, Docket Nos. 96-CU-98682, 96-CU-98683, Sept. 4/01.

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