Citation and Parties
CITATION: Toronto Community Housing Corp. v. C.U.P.E. Local 79 et al, 2018 ONSC 5008
DIVISIONAL COURT FILE NO.: 636/17
DATE: 20180829
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MARROCCO A.C.J.S.C., HARVISON YOUNG and MEW JJ.
BETWEEN:
TORONTO COMMUNITY HOUSING CORPORATION
Applicant
– and –
CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 79 and ARBITRATOR JASBIR PARMAR
Respondents
COUNSEL:
Lisa M. Bolton and Dave Bushuev, for the Applicant
Douglas J. Wray, for the Respondents
HEARD at Toronto: 30 May 2018
REASONS FOR DECISION
(Application for Judicial Review of an award by arbitrator Jasbir Parmar, dated 18 December 2017, reported at 2017 61845 (ON LA))
MEW J.
[1] This application concerns a grievance arbitration award in which the arbitrator upheld a Union’s grievance on behalf of its member asserting that he had been dismissed from his employment with the applicant without cause. The employer was ordered to reinstate the employee and restore all lost compensation, benefits and seniority.
[2] The applicant, a social housing provider for the City of Toronto, seeks judicial review of the award on the basis that the arbitrator breached the rules of natural justice and procedural fairness, made errors of law and fact and, as a consequence, reached an unreasonable result. It asks this court to quash the award or, alternatively, to refer the matter back for a rehearing before a different arbitrator.
[3] The applicants also challenge an order of Horkins J., reported at 2018 ONSC 697 (Div. Ct.) dismissing the applicant’s motion for a stay of the grievance arbitration award pending the determination of its application.
[4] The respondent Union submits that the applicant has failed to establish that the award was unreasonable and that the application must, accordingly be dismissed. Further, the Union argues that the challenge to the order of Horkins J. is now largely moot, and should be dismissed either on that basis or because the stay motion was correctly decided.
Factual Background
[5] Paulinus Ebosele has been employed by the applicant since 2011, and at the time his employment was purportedly terminated, held a position as a Tenant Services Coordinator.
[6] The Union is the bargaining agent for a number of employees of the applicant, including Mr. Ebosele.
[7] The duties of a Tenant Services Coordinator include the following:
a. leasing units in accordance with the applicant’s policies and procedures;
b. performing rent assessments in accordance with legislative guidelines;
c. matching prospective tenants and transfers with vacant units in accordance with placement procedures;
d. making tenancy offers, preparing and presenting lease agreements to tenants;
e. communicating with residents regarding a wide range of tenancy matters including, but not limited to rental accounts, parking, legal matters, transfers, arrears, etc.;
f. collecting and processing rent payments, bank deposits, administering pre-authorized rental payments, maintaining and administering petty cash and performing accounting functions related to accounts receivable and accounts payable;
g. coordinating tenant legal processes including initiating termination notices for tenant arrears/breaches of the Residential Tenancies Act, 2006, S.O. 2006, c 17;
h. maintaining effective relationships with agencies, neighbours, social groups, tenant leaders and elected tenant representatives;
i. negotiating and monitoring repayment agreements in accordance with the applicant's Eviction Prevention Policy; and
j. collecting rent arrears and attending at Tribunals as required.
[8] Mr. Ebosole was also a tenant in a two-storey, three bedroom residential unit owned by the applicant, where he lived initially with a roommate, and then with his family until purchasing and moving into a home outside Toronto in December 2015. The lease signed by Mr. Ebosole and his original roommate required payment of monthly rent, prohibited subletting, did not permit anyone other than the tenants to occupy the unit, and required 60 days written notice to end the tenancy.
[9] In late September and early October 2016, the applicant received written statements from the Children’s Aid Society, from the property manager for Mr. Ebosole’s unit, and from Ms. W who was a mother of four young children in potentially vulnerable circumstances. These statements appeared to indicate that Mr. Ebosole had sublet his unit to Ms. W, collected rent from her, and kept a portion of the rent he received rather than remitting it to the applicant, triggering an eviction proceeding for rent arrears.
[10] The applicant appointed an investigator, Amandeep Malhi, to investigate the matter. He then interviewed Mr. Ebosole. His notes record that Mr. Ebosole admitted he had:
a. purchased a home and moved with his family into his home in December 2015;
b. allowed Ms. W to live in the unit starting in February 2016, after he was no longer living there;
c. collected rent in cash from Ms. W for February 2016 rent and paid the rent to TCH for that month;
d. collected rent in cash from Ms. W for March 2016 rent, but kept the money Ms. W had given him;
e. learned in March that Ms. W had “lied” to him and was not in fact employed; and
f. understood if the rent was not paid, an eviction would take place and that would mean Ms. W would have to move out.
Mr. Ebosole does not dispute that he made these admissions.
[11] The documentary evidence at the arbitration included two receipts provided to Ms. W by Mr. Ebosole. Both receipts were titled "Monthly Rent Receipt" and were prepared by Mr. Ebosole who identified himself on each of the receipts as the "landlord" and signed each receipt as the "landlord". The receipts were respectively dated 2 February 2016 and 3 March 2016 and each recorded an amount of $1,400. The receipts also included options for identifying the purpose of the payment received as "Current Rent", "Rent Arrears", "Rent Deposit" or "Other". Each receipt identified the purpose of the payment as "Current Rent".
[12] Mr. Malhi’s notes disclose additional information provided by Mr. Ebosole, which the latter subsequently claimed to be an inaccurate record of what he said at the interview, including that:
a. Mr. Ebosole had failed to remit the March rent to the applicant in order to trigger eviction proceedings to require Ms. W to leave the unit after he learned that she had lied to him about her employment, was unemployed and applying for Ontario Works;
b. Mr. Ebosole wanted to have Ms. W evicted before anyone in building management found out she was living there.
[13] Mr. Ebosole said that in November 2015, he had advised building management that he intended to move out in January 2016 by putting a written notice under the door of the management office. However when, in January, he spoke to the manager, he learned that she had not received it. He then heard from a neighbour that Ms. W and her children needed a place to stay and says that, as a consequence, he went back to the office manager asked if it was possible for someone to move into his unit while they got their own place. Mr. Ebosole claimed that he told Mr. Malhi that the manager said that was fine and that Ms. W would be listed as an occupant. He says he advised Mr. Malhi that “Hedi”, the property administrator at the time, then gave Ms. W the forms that were required to be submitted to process and document the occupancy. Mr. Ebosole said that the documentation was then completed and submitted to the office.
[14] Ms. W was not, ultimately, listed as an occupant in the units records, a fact Mr. Ebosole claimed was unbeknown to him.
[15] Mr. Ebosole explained at the hearing that he had accepted two rent payments directly from Ms. W, but only remitted one of them to the property management company in payment of rent (for February). This was, he said, because it had been agreed with Ms. W that he would keep the other payment, which amounted to one month’s rent, as reimbursement for the deposit he had paid at the commencement of his tenancy. Ms. W would then pay the rent after February directly to the management office. Mr. Ebosole was asked why he did not mention this reimbursement agreement during the interview with Mr. Malhi. He explained that Mr. Malhi only asked him what he had done with the money. He said he told Mr. Malhi that he had originally put it in his bank account. He claims Mr. Malhi never asked him anything further.
[16] Later in the summer of 2016 – approximately six weeks before he was interviewed by Mr. Malhi – Mr. Ebosole says that he paid the entire amount of the deposit to his former co-tenant. Asked why he would pay his former co-tenant the full amount of the deposit, since each of the tenants was responsible for only 50% of the rent, Mr. Ebosole stated he felt bad that she had had to move and he was just being nice.
[17] Mr. Malhi concluded that Mr. Ebosole had:
a. Entered into an improper arrangement with Ms. W to sublet his unit in violation of his lease agreement;
b. Accepted two $1,400.00 rent payments from Ms. W;
c. Kept one of the $1,400.00 rent payments for himself (the March 2016 rent payment);
d. Not remitted it to the applicant in payment of rent owed for the unit for March 2016 despite:
i. his continued and ongoing failure to pay rent for the unit;
ii. the issuance of an eviction order on 6 June 2016;
iii. entering into a repayment agreement with the applicant requiring the him to pay the arrears in installments in consideration for vacating the eviction order, which installments Mr. Ebosole failed to pay;
iv. the issuance of another eviction order on 15 September 2016; and
v. the accumulation of over $7,000 in unpaid rent arrears for his unit.
[18] It was Mr. Malhi’s opinion that Mr. Ebosole’s actions were in violation of the applicant’s Fraud Prevention Policy, Conflict of Interest Policy, and Code of Conduct; and, that Mr. Ebosole’s conduct had compromised the trust that was required of him given the nature of his employment role. He recommended that Mr. Ebosole’s employment be terminated. His recommendation was accepted, and the applicant terminated Mr. Ebosole’s employment for cause on 11 October 2016.
The Arbitrator’s Award
[19] Pursuant to the collective agreement between the Union and the applicant, Mr. Ebosole grieved his dismissal. The grievance dispute was heard by the arbitrator over four days between March and July 2017. She rendered her award on 18 December 2017.
[20] Two witnesses testified at the arbitration hearing: Mr. Malhi and Mr. Ebosole. Some letters from individuals and statements taken by Mr. Malhi in the course of his investigation were marked as exhibits. However, the Union did not agree to the letters and statements being entered into evidence for the truth of their contents. Accordingly, the arbitrator stated in the award that she had not relied on the contents of those documents as evidence.
[21] In determining whether Mr. Ebosole had engaged in misconduct worthy of discipline, and, if so, whether in the circumstances dismissal was the appropriate response, the arbitrator identified as the two allegations relied upon by the applicant:
a. Whether Mr. Ebosole had entered into a subletting agreement in violation of the terms of his lease; and
b. Whether Mr. Ebosole had retained $1,400 that Ms. W had given him in payment for the March rent.
[22] The arbitrator’s findings included the following:
a. Mr. Ebosole was given $1,400 by Ms. W in March 2016 and kept that money;
b. As acknowledged by Mr. Ebosole, deposits are not returned to a tenant who at the end of the tenancy has outstanding unpaid rent;
c. It was conceivable, based upon some confusion over a payment that had been posted in December 2015 but then reversed in February 2016, that in March 2016, when Mr. Ebosole kept the $1,400 given to him by Ms. W and not remitted by him to the applicant or its manager, he was still under the impression he was entitled to a reimbursement of his deposit;
d. Mr. Malhi honestly believed that in the investigation meeting Mr. Ebosole advised he had kept this payment for the purpose of triggering an eviction because he learned Ms. W was not employed;.“…there is no evidence before me indicating that Ms. W paid [Mr. Ebosole] $1400 in March 2016 as rent for that month (as opposed to paying him money which she understood he would keep)” [emphasis in the original];
e. Mr. Malhi’s understanding that Mr. Ebosole had told him that the March payment was intended to be a rent payment is, at its highest, evidence of what was said during that investigation. Mr. Ebosole “…disputes the assertion that he said that to Mr. Malhi during the investigation, and as indicated above there is a basis to conclude that it does not make sense that [Mr. Ebosole] would have made that statement to Mr. Malhi. As such, Mr. Malhi’s evidence is insufficient, in and of itself, to found a conclusion that the [Mr. Ebosole] accepted $1400 from Ms. W in March 2016 as a rent payment but did not remit that to [the applicant]”;
f. All that the March 2014 receipt confirms is the payment of $1,400 by Ms. W to Mr. Ebosole, which he does not dispute; and
g. Other than that, there was only Mr. Ebosole’s evidence that the payment was on the basis of an agreement between him and Ms. W, and that it was agreed he would keep it (in respect of the deposit already paid to the applicant) and that Ms. W would be responsible for paying the March rent to the applicant’s manager.
[23] In para. 53 of the award, the arbitrator made reference to the statements that had been marked as exhibits. Despite having said earlier in the award that she had not relied on the contents of these documents as evidence, she wrote:
I also note that the information the Employer had in its investigation did not challenge the Grievor’s explanation that he had approval. Ms. W’s statement confirms that she filled out paperwork to be added as an occupant, and that it was her understanding she was to be listed as an occupant. Also, the “Briefing Note” provided by Ms. Moza, indicates the Grievor advised her in September 2016 when she first raised this issue with him that that he had given notice to terminate his vacancy in 2015 and that he had been advised by Nicoleta (the former property manager) and Hadi (the former property administrator) that he could rent the unit.
[24] The arbitrator concluded (at para. 78 of the award):
On the basis of this evidence, I cannot conclude, as asserted by the Employer in the discharge letter, that the Grievor accepted a $1400 payment from Ms. W as rent but kept it and did not remit to TCH.
Standard of Review
[25] The general standard of review of labour arbitration awards, with certain limited exceptions, is reasonableness. Reasonableness is a deferential standard that recognises that the legislature has conferred certain authority on certain decision makers by statute and should therefore be given a margin of appreciation in in making its decisions. As the Supreme Court put it in Dunsmuir v. New Brunswick, 2008 SCC 9, at para. 47 ,
Reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.
[26] Applying the reasonableness standard, it is not the function of the court to re-weigh the evidence considered by the arbitrator. An arbitrator’s findings of fact and assessments of credibility are owed the highest level of deference: USW Local 6500 v. Vale Canada Ltd., 2014 ONSC 3346 (Div. Ct.) at para. 21.
[27] The sufficiency of reasons is, since the Supreme Court of Canada decision in Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708 paras 14ff, part of the reasonableness analysis.
[28] Administrative tribunals are, however, subject to an overarching requirement of procedural fairness (the requirements of which will vary with the type of decision maker and the type of decision under review).
Issues and Analysis
[29] There is considerable overlap between the applicant’s submissions on procedural fairness and its assertion that the decision was, having regard to both the reasoning of the tribunal and the outcome, unreasonable.
[30] My approach has therefore been to consider the particular complaints raised by the applicant deferring consideration of the procedural fairness issue until, and then only if, necessary.
The Parties’ Positions
[31] The applicant challenges the sufficiency of the arbitrator’s reasons, arguing that she failed to sufficiently explain how she had used the evidence or why she rejected evidence that was before her.
[32] In the alternative, the applicant argues that the arbitrator’s decision was unreasonable, having particular regard to:
a. A lack of clarity about the applicable standard of proof;
b. A failure to asses credibility;
c. Rejection of Mr. Ebosole’s admissions against interest;
d. Rejection of the written statements; and
e. The absence of an explanation for declining to find that the March 2016 payment was for rent, despite the existence of a receipt describing the payment as such.
[33] Overall, the applicant contends that the arbitrator unreasonably diminished, ignored, or made inconsistent findings with respect to highly probative and reliable evidence which was not disputed and documents that were contemporaneously made.
[34] The Union characterises all of the applicant’s grounds as challenges to the arbitrator’s fact-finding and her conclusions based upon her assessment and analysis of the evidence. It asserts that a re-examination of the evidence considered by the arbitrator, including her assessment of Mr. Ebosole’s credibility, lies outside the court’s jurisdiction on an application for judicial review.
[35] Furthermore, the respondents submit that the applicant cannot establish that the arbitrator’s disposition falls outside the range of reasonable and acceptable outcomes.
Discussion
[36] The applicable standard of proof is the balance of probabilities.
[37] However, in assessing whether the applicant had established misconduct on the part of Mr. Ebosole, and, in particular, Mr. Ebosole’s explanation that he was under the impression that he was still entitled to a reimbursement when he kept the March payment, the arbitrator’s finding was that it was “conceivable”.
[38] It would clearly be an error to require the applicant to establish that Mr. Ebosole’s explanation was “inconceivable” in order for it to be rejected by the arbitrator. But that is the effect of the arbitrator’s reasoning on the issue of the March payment.
[39] As to other evidence of Mr. Ebosole’s misconduct, the arbitrator unequivocally concluded that all that the monthly rent receipt for March confirmed was “the payment of the money”. She does not explain why she ignored the words “Current Rent” underlined on the “Monthly Rent Receipt” completed in Mr. Ebosole’s hand, signed by him and given by him to Ms. W.
[40] Rather, the arbitrator found that there was no evidence indicating that Ms. W paid Mr. Ebosole $1,400 as rent for that month (as opposed to paying him money which she understood he would keep). (Emphasis added).
[41] This cannot be right. Clearly there was evidence that the payment was for rent. In fact, earlier in her award the arbitrator had described the receipt including the “Current Rent” notation – yet the decision offers no reasons for preferring other evidence. Indeed the arbitrator proceeded as if the evidence simply no longer existed.
[42] As to the arbitrator’s treatment of the letters and statements tendered by the applicant, it is clealry open to a labour arbitrator to admit oral or written testimony, whether admissible in a court of law or not: Labour Relations Act, 1995, S.O. 1995, c 1, Sch. A, s. 48(12).
[43] The arbitrator did not rule that the letters and written statements tendered by the applicant were inadmissible. Rather, she admitted the evidence, but then said she had not relied on the contents of the written statements “as evidence” in the face of the union’s objection to the documents being entered for the truth of their contents. (Emphasis added)
[44] An objective of labour arbitration is to provide an expeditious and fair method of settling disputes for employers and unions. As the Court of Appeal noted in Re City of Toronto and Canadian Union of Public Employees, Local 79 (1982), 35 O.R. (2d) 545, 133 D.L.R. (3d) 94, 1982 2229 (ON CA), at para. 35:
… the Legislature … wisely decided that grievances under collective agreements should not be adjudicated upon by the courts. It is obvious that the rigidities and technical rules of court procedure would interfere with the necessarily broad inquiry required.
[45] The tendering of written statements and hearsay evidence in arbitration proceedings is, as a matter of common practice, ubiquitous. It follows that while an arbitrator has discretion to not admit such evidence, or to accord it little or no weight, the arbitrator should provide some reasons for so deciding.
[46] Unfortunately, the award contains no analysis of the reliability and probative value of the letters and statements tendered by the applicant and the weight, if any, to be attached to this evidence.
[47] Simply referring to what appears to have been a hearsay objection on the Union’s part is not, in my view, enough; yet no other explanation was offered.
[48] This is despite the fact that the written statements in question were:
a. signed by the authors (electronically or in writing);
b. provided to the applicant and formed part of the investigation of Mr. Ebosole’s conduct; and
c. authenticated by Mr. Malhi, who testified at the hearing regarding the steps he took as a result of receiving the written statements to verify the information contained in them, including by interviewing Mr. Ebosole and by examining various documents such as the Monthly Rent Receipts.
[49] As already referenced, the arbitrator then compounded her rejection of the statements “as evidence” by seemingly relying on some portions of the statements that she found to support the respondents (see paragraph 53 of the award).
[50] Related to the manner in which the arbitrator treated the statements generally, was her rejection of the evidence recorded by Mr. Malhi as admissions against interest made by Mr. Ebosole. This was done on the basis that such evidence was at the “highest” only “evidence of what was said during that investigation”, the arbitrator having previously found that Mr. Malhi “has no direct knowledge of the events which are alleged to form the misconduct”.
[51] It seems to follow from the manner in which the evidence relied upon by the applicant was either discounted or ignored, that the arbitrator did not perceive the necessity to undertake a credibility analysis of the divergent accounts put forward by the parties at the arbitration hearing.
[52] Also lacking, if not altogether missing, from the award, is a recognition of the quality of trust as forming an important part of the employment relationship, having regard to the responsibilities and duties of a Tenant Services Coordinator.
[53] Ultimately, while some or even all of the problems we have identified in the award might not, individually, justify this court’s interference, cumulatively they raise concerns that exceed the margin of appreciation that the award should attract.
[54] As a result, I conclude that the award is unreasonable. It lacks transparency, intelligibility and justification for the outcome it arrives at. It does not fall within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. It cannot stand.
Decision on the Application
[55] As a result of my conclusion on the other grounds raised by the applicant, I have not gone on to analyse the award through the lens of procedural fairness.
[56] We were invited to conclude that the evidence of Mr. Ebosole’s conduct demonstrates sufficient cause to uphold his dismissal by the applicant without referring the matter back for rehearing by a different arbitrator.
[57] In my view, we should not substitute our own views for those of the arbitrator. There is likely a credibility assessment to be undertaken. Fairness between the parties would, in the circumstances presented, be better achieved by referring the matter back for a hearing de novo before a different arbitrator.
[58] Accordingly, the arbitrator’s award should be set aside and the grievance presented by the union should be remitted for a rehearing before another arbitrator.
The Motion to Stay
[59] Horkins J. concluded that the applicant had not made out a strong prima facie case for judicial review. On that basis, she dismissed the applicant’s motion for a stay of the arbitrator’s award and ordered the applicant to pay the respondents’ costs fixed in the amount of $4,000.
[60] The applicant argues that Horkins J. erred in applying a “strong prima facie case” test, rather than a “serious issue to be tried” test.
[61] I observe that the Union has undertaken not to enforce the arbitrator’s award until the determination of the application. Given the outcome of the application, the issue of whether there should be a stay becomes moot. I therefore consider it unnecessary to determine the applicant’s motion.
[62] I would however, with the benefit of knowing the outcome of the application, vary the costs awarded by Horkins J. so that they become costs payable in the eventual cause as between the applicant and the Union, rather than to the Union in any event.
[63] The parties agree that the costs of the successful party on the application should be fixed in the all-inclusive amount of $5,000, and the respondents are, accordingly, ordered to pay the applicant’s costs in that amount.
Mew J.
I agree.
___________________________ MARROCCO A.C.J.S.C.
I agree.
___________________________ HARVISON YOUNG J.
Released: 20180829
CITATION: Toronto Community Housing Corp. v. C.U.P.E. Local 79 et al, 2018 ONSC 5008
DIVISIONAL COURT FILE NO.: 636/17
DATE: 20180829
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MARROCCO A.C.J.S.C., HARVISON YOUNG and MEW JJ.
BETWEEN:
TORONTO COMMUNITY HOUSING CORPORATION
Applicant
– and –
CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 79 and ARBITRATOR JASBIR PARMAR
Respondents
REASONS FOR JUDGMENT
(Application for Judicial Review)
Mew J.
Released: 29 August 2018