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Dear Colleagues,

For an interesting application of the Supreme Court of Canada's decision in Garland, see Canadian-Automatic Data Processing Services Ltd. v. Bentley. The court's summary is as follows:

The plaintiff appealed from an order dismissing its action in unjust enrichment. Plaintiff made payroll payment to employees of Syntecor. Syntecor did not have funds to cover payment. Plaintiff sought to recover from Bentley, corporate officer of Syntecor, arguing that the plaintiff discharged Bentley's liability under the Employment Standards Act, s. 96.

HELD: Appeal dismissed. Plaintiff's payment did not confer an "incontrovertible benefit" on Bentley. Under the facts and scheme of the Act, Bentley's liability was not inevitable. The plaintiff can not circumvent the enforcement mechanisms of the Act.

The parties' reasonable expectations and public policy provide juristic reason for any benefit to Bentley. The plaintiff could have relied on contractual protections against this kind of loss. Officer liability is an exception to separate corporate personality that must be limited to protecting employees; the rule is not intended to protect commercial creditors.

Huddart J.A. (dissenting): The plaintiff's payment relieved Bentley of his liability under s. 96. Neither considerations of public policy nor the reasonable expectations of the parties provided any juristic reason for the enrichment.