SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Abid Chaudry v. Bank of Montreal

BEFORE: Associate Justice Graham

HEARD: July 28, 2022

APPEARANCES:

Robert Colson and Malcolm Woodside for the plaintiff (moving party)

Aoife Quinn for the defendant

REASONS FOR DECISION

(Re: Plaintiff’s motion to amend the statement of claim)

[1] The plaintiff Abid Chaudry worked for the defendant Bank of Montreal (“BMO”) from 2002 until his employment was terminated without notice and without cause on May 8, 2019. At the time of his termination, Mr. Chaudry held the position of Managing Director, Head of Global Structured Products and sat on BMO’s Capital Markets Executive Committee.

[2] In this action, Mr. Chaudry pleads that his compensation at BMO included a base salary and participation in BMO’s short-term and long-term incentive programs, and BMO’s Employee Share Ownership Program and Restricted Share Unit programs. He claims damages for unpaid incentive compensation, compensation in lieu of notice over the course of the reasonable notice period, the value of all benefits that he would have received during the reasonable notice period, and the diminished value of his future income arising from the loss of pension credits during the reasonable notice period. He pleads that his total direct compensation in each of the three fiscal years prior to his termination was between $4.75 Million and $4.9 Million.

[3] Mr. Chaudry now moves to amend his statement of claim to include a claim for unjust enrichment based on the investment income earned by BMO on all funds ultimately determined to be payable to him during the notice period. He also seeks to plead in the alternative a claim for disgorgement of BMO’s profits realized on its investment of the funds that he claims are owing to him. BMO opposes the motion on the grounds that the proposed amendments disclose no reasonable cause of action.

The current pleading and the proposed amendments

[4] Mr. Chaudry’s current statement of claim includes unjust enrichment as a category of damages in paragraph 1(b). Mr. Chaudry particularizes this claim for unjust enrichment in paragraph 32:

32 BMO has become unjustly enriched by taking the benefit of Chaudry’s work during the Stub Period [i.e. the period of his employment during BMO’s fiscal year immediately preceding the May 8, 2019 termination date] without fully paying him for the work that he performed in that time frame. BMO’s failure to make payment for the Stub Period is particularly egregious given that the unpaid amount represents approximately 95% of his earnings for the period.

[5] The proposed amendments to the statement of claim include removing unjust enrichment as one of the heads of damages claimed in paragraph 1(b) and adding paragraph 1(c) in which Mr. Chaudry claims:

1(c) Damages for unjust enrichment in the sum of $10,000.000.00 or such other amount as may be proven at trial representing the monies earned by the defendant, BMO, on the monies owed to Chaudry from the date those monies ought to have been paid to Chaudry to the date of payment or judgment (the “Delay Period”) in an amount equal to the return on equity earned by BMO on those funds during the Delay Period or, in the alternative, an order requiring that BMO disgorge and pay to Chaudry all profits that BMO earned, realized or secured as a result of its refusal to make payment of the monies owing to Chaudry over the course of the Delay Period.

[6] The other proposed amendments are paragraphs 33 and 34 of the draft amended pleading:

33 In addition, by refusing to pay Chaudry the amounts owing to him as and when those funds became due, BMO:

(a) improperly deprived Chaudry of the monies owing to him over the course of the Stub Period and the reasonable notice period and, at the same time and for the same reason,

(b) BMO benefitted by doing so at Chaudry’s expense in an amount equal to the return on equity that BMO received on those monies as set out in paragraph 1(c) hereof.

34 As a result, BMO was unjustly enriched by improperly withholding monies that were properly due to Chaudry. BMO’s conduct was intentional, and it would be unjust and inequitable to allow BMO to retain the benefit of having acted in this improper manner. In fact, by acting as it did in withholding the monies owing to Chaudry, BMO earned a return on those funds which is a substantial portion of the value of the monies that BMO owes Chaudry on account of his wrongful dismissal. Chaudry is accordingly entitled to an award of damages for unjust enrichment equal to the benefit that BMO received by withholding monies properly due to him over the course of the Delay Period and pleads that, in the alternative, he is entitled to an order requiring that BMO disgorge and pay to Chaudry all profits that it earned, realized or secured as a result of its refusal to make payment of the monies owing to him over the course of the Delay Period.

[7] In summary, the substance of Mr. Chaudry’s proposed amendments to the statement of claim are unjust enrichment claims arising from the investment benefit that he alleges that BMO derived from withholding payment of his employment compensation and in the alternative, the remedy of disgorgement of all profits earned by BMO resulting from its refusal to pay him the amounts claimed.

Rule and case law applicable to pleadings amendments

[8] The Rules of Civil Procedure applicable to pleadings amendments are well known. Rule 26.01 states:

26.01 On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[9] Under rule 26.02, where pleadings are closed and all parties do not consent to the amendment, the amendment requires leave of the court, hence this motion.

[10] The law with respect to the basis for granting or refusing pleadings amendments was stated in 1588444 Ontario Ltd. v. State Farm Fire and Casualty Co, 2017 ONCA 42 (para. 25):

25 . . . The rule requires the court to grant leave to amend unless the responding party would suffer non-compensable prejudice; the amended pleadings are scandalous, frivolous, vexatious or an abuse of the court’s process; or the pleading discloses no reasonable cause of action: Iroquois Falls Power Corp. v. Jacob Canada Inc., 2009 ONCA 517; and Anderson Consulting Ltd. v. Canada (Attorney General), 2001 CanLII 8587 (ON CA), [2001] O.J. No. 3576 (C.A.) at para. 37. [emphasis added]

[11] The limited ability of a court to refuse to grant an amendment to a pleading was stated by Master McLeod (as he then was) in Chinook Group Limited v. Foamex International Inc., 2004 CanLII 33017 (ON SC), [2004] O.J. No. 4118 (para. 13):

13 It must be remembered that this is a pleadings motion. While I have a limited jurisdiction to review a proposed pleading for legal tenability at this stage . . . I should only refuse a pleading amendment as legally untenable if it is completely impossible of success. . . . [emphasis added]

[12] More recently, in Luh v. DiPietro, 2022 ONSC 2719, Associate Justice McGraw reviewed the statement of the law from 1588444 Ontario Ltd. v. State Farm, supra and commented (para. 13):

13 In determining whether an amended pleading is legally tenable, the only question is whether the amendments disclose a cause of action and they are to be granted unless the claim is clearly impossible of success (Plante v. Industrial Alliance Life Insurance Co., 2003 CanLII 64295 (ON SC), [2003] O.J. No. 3034 (Master) at paras. 19-22). It is unnecessary to consider whether the amending party is able to prove its amended claim and the court must read the amendments generously with allowances for drafting deficiencies assuming that the facts pleaded in the proposed amendment (unless patently ridiculous or incapable of proof) are true (Plante at paras. 19-22). Where an amendment is sought after the expiry of a limitation period, prejudice is presumed and the party seeking the amendment must lead some evidence to explain the delay and rebut the presumption of prejudice (Skrobacky (Litigation Guardian of) v. Frymer, 2014 ONSC 4544 at para. 14). The usual practice is to grant the plaintiff leave to amend unless it is clear that the plaintiff cannot improve its case by any further and proper amendment (Fasteners & Fittings Inc. v. Wang, 2020 ONSC 1649 at para. 63).

Case law on unjust enrichment

[13] Both parties rely on Kerr v. Baranow, 2011 SCC 10, in which the Supreme Court set out the elements of a claim for unjust enrichment (paras. 31-32):

31 At the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit which justice does not permit one to retain: Peel (Regional Municipality) v. Canada, 1992 CanLII 21 (SCC), [1992] 3 S.C.R. 762, at p. 788. For recovery, something must have been given by the plaintiff and received and retained by the defendant without juristic reason. A series of categories developed in which retention of a conferred benefit was considered unjust. These included, for example: benefits conferred under mistakes of fact or law; under compulsion; out of necessity; as a result of ineffective transactions; or at the defendant’s request: see Peel, at p. 789, [other citations omitted].

32 Canadian law, however does not limit unjust enrichment claims to these categories. It permits recovery whenever the plaintiff can establish three elements: an enrichment of or benefit to the defendant, a corresponding deprivation of the plaintiff, and the absence of a juristic reason for the enrichment: Pettkus v. Becker, 1980 CanLII 22 (SCC), [1980] 2 S.C.R. 834; Peel, at p. 788. [emphasis added]

[14] The Supreme Court addressed the issue of what constitutes a “corresponding” deprivation of the plaintiff in PIPSC v. Canada(Attorney General), 2012 SCC 71, [2012] 3 S.C.R. 660 (paras 151-152):

151 [T]he enrichment must correspond with a deprivation from the plaintiff. While the test for unjust enrichment is typically articulated as having three elements, it is important to recognize that the enrichment and detriment elements are the same thing from different perspectives. As Dickson C.J. suggested in Sorochan v. Sorochan, 1986 CanLII 23 (SCC), [1986] 2 S.C.R. 38, cited by Cory J. in his concurring reasons in Peter v. Beblow, at p. 1012, the enrichment and the detriment are “essentially two sides of the same coin”. [emphasis added]

152 The “straightforward economic approach”, as described in Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75, to enrichment and detriment, is properly understood to connote a transfer of wealth from the plaintiff to the defendant. As the purpose of the doctrine is to reverse unjust transfers, it must first be determined whether wealth has moved from the plaintiff to the defendant. . . .

Case law on disgorgement

[15] The Supreme Court of Canada addressed the law relating to the remedy of disgorgement in Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19. The plaintiffs in that case sought to certify a class action against the defendant Atlantic Lottery Corporation Inc. (“ALC”) based on various allegations, including that ALC breached its contract with the members of the public who used their video lottery terminal games (“VLTs”) by supplying games that were inherently dangerous and deceptive. The plaintiffs also claimed that ALC was unjustly enriched at their expense. The plaintiffs claimed disgorgement of ALC’s profits from its VLTs as a remedy.

[16] In conjunction with the plaintiffs’ certification application, ALC applied to strike the plaintiffs’ claim on the basis that it disclosed no reasonable cause of action. The Supreme Court granted ALC’s appeal of the lower courts’ decisions dismissing its application to strike, with the majority holding that each of the plaintiffs’ claims was bound to fail because they disclosed no reasonable cause of action.

[17] Brown J., writing for the majority, addressed both the nature of disgorgement as a remedy, particularly in contrast to restitution, and when the remedy of disgorgement would be appropriately granted. The following passages are relevant to Mr. Chaudry’s motion to add a claim for disgorgement:

23 . . . [R]estitution is the law’s remedial answer to circumstances in which a benefit moves from the plaintiff to the defendant, and the defendant is compelled to restore that benefit. Further, restitution stands in contrast to another measure of relief, disgorgement which refers to awards that are calculated exclusively by reference to the defendant’s wrongful gain, irrespective of whether it corresponds to damage suffered by the plaintiff and, indeed, irrespective of whether the plaintiff suffered damage at all.”

24 In sum, then, restitution for unjust enrichment and disgorgement for wrongdoing are two types of gain-based remedies [citations omitted]. Each is distinct from the other: disgorgement requires only that the defendant gained a benefit (with no proof of deprivation to the plaintiff required), while restitution is awarded in response to the causative event of unjust enrichment (most recently discussed by this Court in Moore v. Sweet, 2018 SCC 52), where there is correspondence between the defendant’s gain and the plaintiff’s deprivation. . . .

27 . . . [D]isgorgement should be viewed as an alternative remedy for certain forms of wrongful conduct, not as an independent cause of action. This view follows naturally from the historical origins of unjust enrichment and gain-based remedies more generally. . . . [emphasis added] . . .

50 The ordinary form of monetary relief for breach of contract is an award of damages, measured according to the position which the plaintiff would have occupied had the contract been performed. Correspondingly, the orthodox position maintained that disgorgement of the defendant’s profits was not an available remedy for breach of contract. [all citations omitted] . . .

51 More recently, courts have accepted that disgorgement may be available for breach of contract in certain exceptional circumstances (Attorney General v. Blake (2000), [2001] 1 A.C. 268 (U.K.H.L.); Bank of America Canada v. Mutual Trust Co., 2002 SCC 43). In Blake, the defendant was a former member of the British secret intelligence service who had defected to become an agent for the Soviet Union. He was discovered and sentenced to 42 years’ imprisonment, but escaped prison and fled the country. Blake later entered into a contract to publish his memoirs, in contravention of the confidentiality undertaking in his employment agreement with the intelligence service. The information in his memoirs was, however, “no longer confidential, nor was its disclosure damaging to the public interest” (p. 275). Further, Blake’s fiduciary obligations ceased to exist when he was dismissed from his post. The sole question was, therefore, whether the Crown could pursue disgorgement for his breach of contract.

52 Lord Nicholls, for a majority of the House, held that disgorgement for breach of contract may be appropriate in exceptional circumstances, but only where, at a minimum, the remedies of damages, specific performance, and injunction are inadequate (Blake, at p. 285, other citations omitted). As to the types of circumstances that should be considered exceptional, Lord Nicholls concluded:

No fixed rules can be prescribed. The court will have regard to all the circumstances, including the subject matter of the contract, the purpose of the contractual provision which has been breached, the circumstances in which the breach occurred, the consequences of the breach and the circumstances in which the relief is being sought. A useful general guide, although not exhaustive, is whether the plaintiff had a legitimate interest in preventing the defendant’s profit-making activity and hence, in depriving him of his profit. [emphasis in original SCC decision]

53 Nothing in the law of Canada contradicts the “exceptional” standard articulated by Lord Nicholls in Blake. Indeed, this Court’s statement in Bank of America Canada, at para. 31 – that “[c]ourts generally avoid [the restitution] measure of damage” – affirms this Court’s view, like that expressed by the House of Lords in Blake, that disgorgement awards are not generally available. In particular, and again as was held in Blake, disgorgement for breach of contract is available only where other remedies are inadequate and only where the circumstances warrant such an award. As to those circumstances, courts should in particular consider whether the plaintiff had a legitimate interest in preventing the defendant’s profit-making activity. . . . [emphasis added]

59 Returning to the present case, and applying the standard articulated in Blake, the plaintiff’s claim for disgorgement is plainly doomed to fail. I say this, first, because disgorgement is available for breach of contract only where, at a minimum, other remedies are inadequate. Circumstances of inadequacy arise when the nature of the claimant’s interest is such that it cannot be vindicated by other forms of relief. This may arise where, for example, the plaintiff’s loss is “impossible to calculate” or where the plaintiff’s interest in performance is not reflected by a purely economic measure [citations omitted]. Where, as here, the argument is that the quantum of loss is equal to the defendant’s gain, but the plaintiff would simply rather pursue disgorgement, a gain-based remedy is not appropriate. [emphasis added]

Submissions of the plaintiff

[18] The plaintiff submits that under rule 26.01, the court shall grant leave to amend unless prejudice will result that could not be compensated by costs or an adjournment. However, the defendant’s opposition to the motion is that the proposed amendments are not tenable at law, so prejudice is not an issue.

[19] The plaintiff submits that BMO withheld payment of the funds that he claims were payable to him during the period of reasonable notice, including incentive compensation which represented 95% of his total compensation package, and retained those funds in a pool of capital on which it earned a return. Thus, BMO gained a benefit using funds that should have been paid to him, which is the benefit that the plaintiff says constitutes BMO’s unjust enrichment.

[20] Plaintiff’s counsel refers to the components of a claim for unjust enrichment, as stated by the Supreme Court of Canada in Kerr v. Baranow, supra, at para. 32:

32 Canadian law . . . permits recovery whenever the plaintiff can establish three elements: an enrichment of or benefit to the defendant, a corresponding deprivation of the plaintiff, and the absence of a juristic reason for the enrichment.

[21] Plaintiff’s counsel submits that, despite the use of the word “corresponding”, the deprivation to the plaintiff does not have to be equal to the benefit to the defendant. A “corresponding” deprivation is simply one arising from the benefit gained by the defendant.

[22] A “corresponding” deprivation means a “comparable” or “equivalent” deprivation, which turns on the use of the funds. The transfer of wealth in this case occurred through the retention of the funds by BMO, depriving Mr. Chaudry of the use of the funds that he says should have been paid to him.

[23] With respect to the third prong of the test for unjust enrichment, being the absence of a juristic reason for the enrichment, the plaintiff submits that it is at least an open question as to whether there is a juristic reason for the enrichment, which is to be determined at trial.

[24] Plaintiff’s counsel relies on Anderson Consulting, para. 37 (cited in 1588444 Ontario Ltd. v. State Farm, supra), in which the Court of Appeal stated: “Amendments like those sought in the present case should be presumptively approved unless . . . they disclose no reasonable cause of action.” Counsel submits that the presumption is therefore that the proposed amendment is tenable, and the onus to show otherwise is on the defendant. Mr. Chaudry should not be precluded from being able to argue at trial that he should be compensated for being deprived of the use of the funds allegedly owing.

[25] With respect to the claim for disgorgement, the plaintiff accepts that disgorgement is not a cause of action but rather, is a remedy which can be ordered for BMO’s alleged wrongful conduct. The issue of whether Mr. Chaudry can recover based on disgorgement is not so clear that he should be deprived from advancing the proposed claim. The fact of a claim’s novelty should not be a bar to advancing it. If disgorgement is not ordered, BMO may continue to conduct itself in the same manner with other terminated employees.

Submissions of the defendant

[26] The only issue on the motion is whether the proposed amendments disclose a reasonable cause of action. BMO submits that the amendments fail to disclose a reasonable cause of action because (1) they do not plead the constituent elements of a claim in unjust enrichment and it is clear that those elements could not be pleaded in the circumstances of this case, and (2) they do not plead any basis for a disgorgement remedy.

[27] BMO’s counsel refers to the claim for unjust enrichment in the plaintiff’s current statement of claim. This original claim for unjust enrichment was in relation to the failure of BMO to pay amounts owing for the “stub period” as set out in para. 32. This is a different claim from the one that Mr. Chaudry is now trying to advance, which is to recover BMO’s investment profit on the funds that he alleges are owing to him as a result of his termination.

[28] The defendant submits that although the pleading in amended paragraph 33(a) is that BMO “improperly deprived Chaudry of the monies owing to him”, there is no corresponding deprivation of Mr. Chaudry arising from the benefit gained by BMO as required by PIPSC v. Canada, supra, and therefore no tenable claim for unjust enrichment. If Mr. Chaudry was deprived of the investment value of the funds that he claims are owed to him by BMO, this is not a deprivation that corresponds to the benefit gained by BMO.

[29] Similarly, the defendant submits that the circumstances of this case do not entitle the plaintiff to the remedy of disgorgement. As stated by the Supreme Court in Atlantic Lottery Corp. Inc. v. Babstock, supra, at paras. 50-53, the remedy of disgorgement for breach of contract is available only where other remedies are inadequate.

[30] Here, Mr. Chaudry brings a contractual claim for wrongful dismissal, and his right of recovery is for damages in lieu of reasonable notice and possible compensatory or punitive damages. The established case law does not allow for recovery of damages for wrongful termination of employment by way of a claim for unjust enrichment. Novel claims that disclose no reasonable cause of action and are clearly untenable should not be permitted.

Analysis and decision

[31] The issue on the motion is whether the plaintiff’s proposed amended pleadings of unjust enrichment and the remedy of disgorgement of funds in paragraphs 1(c), 33 and 34 of the amended statement of claim disclose a reasonable cause of action.

[32] Paragraph 32 of the current statement of claim includes a claim for unjust enrichment based on the benefit or the value of Mr. Chaudry’s work during the “Stub Period”, being the period of his employment during BMO’s fiscal year immediately preceding the May 8, 2019 termination date. This is a different claim from that advanced in the proposed amendments, which is for damages for unjust enrichment based on BMO’s return on equity earned on the funds that Mr. Chaudry alleges were owing to him arising from his termination. Therefore, the existing claim for unjust enrichment in paragraph 32 does not help to determine whether the proposed amendments disclose reasonable causes of action.

[33] In the amendments in paragraph 1(c), Mr. Chaudry claims “damages for unjust enrichment . . . representing “the monies earned by the defendant, BMO, on the monies owed to Chaudry . . . in an amount equal to the return on equity earned by BMO on those funds. In the alternative, Chaudry claims “an order requiring that BMO disgorge and pay to Chaudry all profits that BMO earned, realized or secured as a result of its refusal to make payment of the monies owing to Chaudry.”

[34] In the amendments in paragraph 33, Mr. Chaudry pleads that in refusing to pay the amounts owing to him when they came due, BMO:

“(a) improperly deprived Chaudry of the monies owing to him over the course of the Stub Period and the reasonable notice period, and at the same time and for the same reason,

(b) BMO benefitted by doing so at Chaudry’s expense in an amount equal to the return on equity that it received on those monies as set out in paragraph 1(c) hereof.”

[35] In the amendments in paragraph 34, Mr. Chaudry pleads that as a result of BMO’s conduct as described, “Chaudry is accordingly entitled to an award of damages for unjust enrichment equal to the benefit that BMO received by withholding monies properly due to him” and in the alternative, “an order requiring that BMO disgorge and pay to Chaudry all profits that it earned, realized or secured as a result of its refusal to make payment of the monies owing to him.”

[36] As stated in Kerr v. Baranow, supra, a tenable claim for unjust enrichment requires “an enrichment of or benefit to the defendant, a corresponding deprivation of the plaintiff, and the absence of a juristic reason for the enrichment.” BMO opposes the proposed amendments in part because Mr. Chaudry’s proposed claim for unjust enrichment is based solely on the alleged benefit derived by BMO from its investment of the funds owned to him on termination, with no loss to him that corresponds to that benefit.

[37] The decision in PIPSC v. Canada, supra requires that “the enrichment must correspond with a deprivation from the plaintiff”, connoting “a transfer of wealth from the plaintiff to the defendant” which the plaintiff seeks to reverse. The Supreme Court’s comment in PIPSC v. Canada that “the enrichment and detriment elements are the same thing from different perspectives” requires a congruence between the benefit to the defendant and the plaintiff’s alleged corresponding deprivation.

[38] So, reading Kerr v. Baranow and PIPSC v. Canada together, a tenable claim for unjust enrichment requires that there be a transfer of wealth to the defendant from the plaintiff resulting in an enrichment of the defendant and a similar deprivation of the plaintiff to the extent of the same bundle of wealth.

[39] Mr. Chaudry’s existing claim is for payment of various amounts owing at the time of his termination and during the reasonable notice period but there is no transfer of wealth alleged. The proposed amendments to the statement of claim are all in support of a claim for “the monies earned by the defendant, BMO, on the monies owed to Chaudry . . . in an amount equal to the return on equity earned by BMO on those funds.”

[40] However, these monies allegedly earned through BMO’s investment of the funds that Mr. Chaudry says he was entitled to on termination of his employment were never “transferred” by him to BMO, and therefore do not “correspond” to any loss that he might have sustained. Accordingly, any benefit to BMO could not possibly flow from a corresponding deprivation to Mr. Chaudry. In the absence of any alleged facts that the benefit to BMO flows from an equivalent deprivation to Mr. Chaudry, no claim for unjust enrichment could possibly succeed and the proposed amendment must be refused.

[41] The third component of a cause of action for unjust enrichment as stated in Kerr v. Baranow is “the absence of a juristic reason for the enrichment.” Although there is no specific pleading to this effect, BMO did not argue that this omission should be fatal to the amendment, either in its factum or in oral argument. In any event, the proposed amendment would still fail on the basis that there is no pleading of facts that could support a conclusion that BMO received a benefit through a corresponding deprivation to Mr. Chaudry.

[42] The second issue is whether the plaintiff’s proposed amended statement of claim includes a tenable claim for the remedy of disgorgement.

[43] In both paragraphs 1(c) and 34 of the proposed amended pleading, the plaintiff claims, in the alternative to claims for damages for unjust enrichment, “an order requiring that BMO disgorge and pay to Chaudry all profits that BMO earned, realized or secured as a result of its refusal to make payment of the monies owing to Chaudry over the course of the Delay Period.” Once again, the “profits that BMO earned, realized or secured” refers to BMO’s return on the funds that Chaudry alleges are payable with respect to the termination of his employment.

[44] Disgorgement is a remedy but not an independent cause of action (see: Atlantic Lottery, supra at para. 27). Mr. Chaudry is attempting to claim disgorgement as a remedy for unjust enrichment, in the alternative to his claim for damages. I have concluded that the proposed amended statement of claim does not disclose a reasonable cause of action based on unjust enrichment, so the claim for disgorgement as an alternative remedy to damages for unjust enrichment must also fail.

[45] As the amended pleading must be read “generously with allowances for drafting deficiencies” (see: Liu v. DiPietro, supra at para. 13), I will consider whether the plaintiff could claim disgorgement as a remedy for the breach of contract that he alleges as the basis for his wrongful termination.

[46] I reiterate the following statements from the majority opinion in Atlantic Lottery with respect to the availability of disgorgement as a remedy for breach of contract:

• Disgorgement for breach of contract is available only where other remedies are inadequate and only where the circumstances warrant such an award. (para. 53)

• Circumstances of inadequacy arise when the nature of the claimant’s interest is such that it cannot be vindicated by other forms of relief. This may arise where, for example, the plaintiff’s loss is “impossible to calculate” or where the plaintiff’s interest in performance is not reflected by a purely economic measure. (para. 59)

[47] The issue is whether the usual remedy of damages for breach of contract would be inadequate to compensate the plaintiff for the termination of his employment. Mr. Chaudry claims compensation in lieu of notice for the reasonable notice period for salary, unpaid incentive compensation and benefits, and diminished future income arising from the loss of pension credits during the reasonable notice period. All these claims can be adequately compensated by payment of monetary damages so disgorgement is not warranted.

[48] The majority decision in Atlantic Lottery contemplates the possibility of disgorgement as a remedy where the plaintiff’s loss is “impossible to calculate”. In this case, Mr. Chaudry attempted to claim as an additional loss the amount earned by BMO in investment income on the amount that he claims arising from the termination of his employment.

[49] The problem with the manner in which the plaintiff advanced this additional claim in his proposed amended pleading was that he tried to characterize BMO’s gain as his loss, where there was no clear “correspondence” between what BMO may have earned on investing the amount owed to him and what he would have earned had he been paid the funds that he says BMO owed him. The fact that the plaintiff did not see fit to claim the loss of opportunity to invest those funds as damages does not enable him to seek relief by way of disgorgement.

[50] For these reasons, I conclude that the plaintiff’s proposed amendments to the statement of claim do not disclose a reasonable cause of action in unjust enrichment or a tenable claim for disgorgement. The plaintiff’s motion to amend the statement of claim is dismissed.

Costs

[51] Following the hearing, plaintiff’s counsel Mr. Colson informed the court that he and counsel for BMO agreed that costs of $14,000.00 should be awarded to the successful party on the motion. As the defendant BMO successfully opposed the motion, the plaintiff shall pay the costs of the motion fixed at $14,000.00. Unless counsel agreed otherwise or wish to speak to the issue of timing, these costs shall be paid within 60 days from the parties’ receipt of these Reasons.

ASSOCIATE JUSTICE GRAHAM

August 12, 2022