CITATION: Berube v. Schiffer, CPA Professional Corporation, 2023 ONSC 724
COURT FILE NO.: DC-22-00000001-0000
SC-20-00000406-0000
DATE: January 30, 2023
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Diane Berube
Patrick Bernard, for the Plaintiff (Appellant)
Plaintiff
(Appellant)
- and -
Jon Schiffer, CPA Professional Corporation
Elizabeth McLeod, for the Defendant (Respondent on Appeal)
Defendant
(Respondent on Appeal)
HEARD: January 9, 2023, via Zoom
at Thunder Bay, Ontario
Mr. Justice J.S. Fregeau
ENDORSEMENT
BACKGROUND
[1] Diane Berube (“Berube” or the “appellant”) began her employment with Jon Schiffer, CPA Professional Corporation (the “respondent”) on September 12, 2016 and was employed with the respondent for approximately 21 months thereafter.
[2] In May 2018, an employment opportunity became available to Berube with Wataynikaneyap Power LP (“Watay”). On May 24, 2018, Berube submitted her letter of resignation to the respondent.
[3] The respondent accessed Berube’s work computer upon receipt of her notice of resignation and found an invoice dated April 3, 2018 (the “invoice”) for a Nancy O’Neill (“Ms. O’Neill”). Ms. O’Neill was an employee of Watay and the invoice was addressed to her work address at Watay.
[4] This discovery alarmed the respondent as he had no previous knowledge of the invoice or its contents and he had not authorized it. The respondent testified that neither Ms. O’Neill nor Watay were clients of his. However, Ms. O’Neill, in her capacity as an employee of Watay, along with other employees, had received the benefit of an information session that the respondent had conducted for his client, OSLP, which had a close link with Watay.
[5] The invoice was in the amount of $200 for tax advice. The subject line read “invoice for your bank only”. The invoice was not generated through the respondent’s regular office accounting system. It was sent by email on May 19, 2018.
[6] On May 26, 2018, after having discovered the invoice, the respondent terminated Berube for cause, despite her prior resignation. The respondent then obtained advice from his professional governing body which advised him to make Watay and any other entity that had knowledge of the invoice aware of the nature of the invoice.
[7] On May 27, 2018, the respondent sent a letter to Ms. O’Neill and a letter to the CEO and CFO of Watay (the “letters”). The letters were essentially identical. Among other things, the respondent stated to Watay’s CEO and CFO that the invoice “[had] been fraudulently produced”. The letter to Watay did not contain any direct reference to criminality, criminal charges or of reporting any aspect of the matter to the police. Watay subsequently initiated an investigation into the matter and reprimanded Berube approximately one month later.
[8] Ms. O’Neill sent payment of the invoice on or about May 28, 2018, notably only after receipt of the respondent’s letter on May 27, 2018. The respondent voided Ms. O’Neill’s payment when received.
[9] Berube sued the respondent in the Thunder Bay Small Claims Court. She claimed she had been wrongfully dismissed and defamed. She claimed compensatory, punitive and aggravated damages.
[10] The Deputy Judge dismissed the claim for wrongful dismissal. He found that the use of the word “fraudulent” in the letters sent by the respondent to Ms. O’Neill and Watay was defamatory but substantially true and therefore justified and not actionable.
ISSUES
[11] The appellant raises the following issues in this appeal:
Did the Deputy Judge err in his definition of the word “fraudulent” when ruling that the defamatory words used by the respondent were substantially or inherently true?
Did the Deputy Judge err in finding that Ms. O’Neill was not a client of the respondent?
STANDARD OF REVIEW
[12] An appeal court reviews questions of law on the standard of correctness and questions of fact or questions of mixed fact and law on the standard of palpable and overriding error: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235.
ANALYSIS
- Did the Deputy Judge err in his definition of the word “fraudulent” when ruling that the defamatory words used by the respondent were substantially or inherently truthful?
[13] In ruling that the respondent’s use of the words “fraudulently produced” in the letters was defamatory, the Deputy Judge found that these words have “a criminal connotation associated with it. It implies deceit” and that “any person accused of a fraudulent act faces damage…to their reputation”.
[14] When then considering whether the defamatory words were wholly accurate or substantially true and therefore justified, the Deputy Judge stated that, “I have concluded…that the actions of creating this invoice were fraudulent in the narrow sense of involving deception”. He then went on to explain how he came to that conclusion:
Generally speaking, Berube was not authorized to submit invoices to the respondent’s clients;
Berube did not consult with or advise the respondent in advance about the preparation of this invoice;
The invoice was not prepared through the usual accounting software of the respondent, implying a desire on the part of Berube to hide it;
The respondent did not have an engagement with either Ms. O’Neill or Watay. The deputy Judge specifically found that the respondent had the sole responsibility to determine with whom he had an engagement at any given time; and
The email and the invoice attached to the email contained different subject lines. The invoice was being presented to the bank as a valid invoice while the subject line of the email to Ms. O’Neill, which stated “invoice for your bank only”, makes it clear that “it was designed (unbeknownst to the bank representative) for a purpose other than payment for services rendered to Ms. O’Neill”.
[15] The Deputy Judge then went on to quote the Oxford Language Dictionary definition of “deceit” - the action or practice of deceiving someone by concealing or misrepresenting the truth – in finding that “there is deceit involved in this matter on two levels”, in respect to the respondent and to Ms. O’Neill’s bank.
[16] While the Deputy Judge expressly found that “there was no criminal intent involved, nor any basis to conclude that [Berube] was benefitting improperly in any way” he concluded that the actions of Berube were in fact deceitful and therefore “fraudulent in that limited sense” such that the defamatory words used in the letter to Watay “were truthful, or at least, substantially true” and therefore justified.
THE APPELLANT’S POSITION
[17] The appellant submits that the Deputy Judge erred in finding that the words “fraudulently produced” were substantially true. The appellant contends that the Deputy Judge utilized a broad definition of “fraudulent”, including a criminal connotation, when concluding that the words “fraudulently produced” would be damaging to a person’s reputation and therefore defamatory. However, the Deputy Judge erred in then using a narrow definition of the term, focused on deception and absent associated criminal connotations, when concluding that the words were substantially true and therefore justified, according to the appellant.
THE RESPONDENT’S POSITION
[18] The respondent submits that there is no single correct definition of the word “fraudulent” to which the Deputy Judge was constrained in his consideration of whether the term “fraudulently produced” was substantially true in the context of justification, after having found that the term was in fact defamatory. The respondent submits that a trier of fact tasked with determining the meaning of impugned words in a defamation case is required to consider the “natural and ordinary” meaning of the words and avoid putting the “worst possible meaning” on the words.
[19] The respondent submits that the Deputy Judge correctly did not confine his interpretation of the word “fraudulent” to its worst possible meaning, that being criminal in nature. The respondent contends that the Deputy Judge correctly and reasonably applied the plain and ordinary meaning of the words “fraudulently produced” in the context of the defence of justification, rather than the strict criminal, legal definition. The respondent further submits that the use of the term was tempered by the balance of the content of the letters, which contained no reference to criminality.
ANALYSIS
[20] I would not give effect to this ground of appeal.
[21] The consideration of whether the defence of justification is met involves the definition of the word “fraudulent” and the interpretation of the term “fraudulently produced” in the context in which it was used. In my view, this a question of mixed law and fact, reviewable on the standard of palpable and overriding error. The application of this standard of review attracts a high level of deference to the Deputy Judge’s findings.
[22] The Deputy judge’s reasons must be read as a whole. The definition of the word “fraudulent” falls along a spectrum. There is no single correct definition of the word and no authority to suggest that the same definition must be employed at both stages of a defamation analysis.
[23] The definition of the word “fraudulent” and the term “fraudulently produced”, when considered for the purposes of initially determining if their use is defamatory is, to a large extent, in the abstract. However, when considering if the same words are true or substantially true and therefore defensible, the entire context in which they are used must be considered.
[24] The respondent did not include the appellant’s name in the letters. He never stated that the person who created the invoice broke the law. Further, the respondent truthfully explained to the recipients of the letters why he believed the document was fraudulently produced. This allowed the recipients to draw their own conclusions about the nature of the appellant’s conduct.
[25] Given the context in which the term “fraudulently produced” was used, the appellant has failed to establish that the deputy judge committed a palpable and overriding error in defining the term and in concluding that the use of the term was substantially correct.
- Did the Deputy Judge err in finding that Ms. O’Neill was not a client of the respondent?
The Appellant’s Position
[26] The appellant submits that the Deputy Judge ignored evidence in coming to this conclusion, including Ms. O’Neill’s testimony that she believed herself to be a client of the respondent. The appellant further submits that the Deputy Judge should have taken judicial notice of the Chartered Professional Accountants’ (“CPA”) Code of Professional Conduct in deciding if Ms. O’Neill was a client of the respondent.
[27] The appellant contends that if the Deputy Judge had correctly identified Ms. O’Neill as a client of the respondent, no fraudulent purpose could have been attributed to the invoice. This error of the Deputy Judge is therefore palpable and overriding, according to the appellant.
The Respondent’s Position
[28] The respondent submits that the evidence which the appellant directs the court to on this issue does not support a conclusion that Ms. O’Neill was a client of the respondent. The respondent also contends that the appellant’s submission as to the CPA Code of Professional Conduct was not made at trial and should therefore not be heard on appeal.
ANALYSIS
[29] I would not give effect to this ground of appeal.
[30] The parties agree that this is a question of fact reviewable on the standard of palpable and overriding error.
[31] The Deputy Judge did not ignore Ms. O’Neill’s evidence on this issue. He carefully reviewed Ms. O’Neill’s evidence, including that she had been expecting an invoice for work performed on her behalf by the respondent and that she paid the invoice promptly upon receipt. Notably, the evidence also confirmed that Ms. O’Neill paid the invoice only after her receipt of the letter and that the respondent voided her payment immediately upon receipt.
[32] After his review of the evidence, the Deputy Judge, who saw and heard Ms. O’Neill and the respondent testify, expressly found that the respondent “had the sole responsibility to determine with whom he had an engagement with at any given time”. The Deputy Judge preferred the evidence of the respondent over that of Ms. O’Neill on this issue and concluded that the respondent did not have an engagement with either Ms. O’Neill or Watay at the relevant time. This factual finding is entitled to deference according to the applicable standard of review.
CONCLUSION
[33] The appeal is dismissed. The respondent is presumptively entitled to costs of the appeal on a partial indemnity basis. If costs cannot be resolved, the parties shall file written Submissions on Costs, not to exceed three pages, exclusive of their respective Bills of Costs and Costs Outlines. The respondent’s Submissions on Costs shall be filed within 14 days of the release of this endorsement; the appellant’s within 7 days thereafter.
[34] If Submissions on Costs are not received within this timeframe, costs shall be deemed to be resolved.
______________ “Original signed by”__
The Honourable Mr. Justice J.S. Fregeau
Released: January 30, 2023
CITATION: Berube v. Schiffer, CPA Professional Corporation, 2023 ONSC 724
COURT FILE NO.: DC-22-00000001-0000
SC-00000406-0000
DATE: January 30, 2023
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Diane Berube
Plaintiff
(Appellant)
- and –
Jon Schiffer, CPA Professional Corporation
Defendant
(Respondent on Appeal)
ENDORSEMENT
Fregeau J.
Released: January 30, 2023
/dg