Court File and Parties

COURT FILE NO.: DC-16-0080 DATE: 20170315

ONTARIO

SUPERIOR COURT OF JUSTICE

(SMALL CLAIMS COURT APPEAL)

B E T W E E N:

DONALD FITZGERALD Respondent

T. Allen, for the Respondent

- and -

APPS CARTAGE INC. Appellant

B.K. Harasym, for the Appellant

HEARD: March 10, 2017, at Brampton

REASONS FOR JUDGMENT

[On appeal from a judgment of Deputy Judge DaSilva of the Small Claims Court at Brampton dated July 6, 2016]

HILL J.

INTRODUCTION

[1] The dispute at trial in this wrongful dismissal action principally related to whether an employee resigned or whether his employment was terminated with cause by his employer.

[2] The trial court concluded that the employee did not resign and that he had been terminated without cause or notice. Damages and costs followed that result.

[3] The employer has appealed to this court.

THE PLEADINGS

[4] In the Small Claims Court, the Plaintiff’s Claim claimed that his wrongful dismissal occurred on or about November 18, 2013 based upon a false allegation of theft. The termination was said to be without notice or pay in lieu of notice.

[5] The Defence filed before the trial court responded that at no point was the plaintiff dismissed from his employment – he unilaterally quit his position. Alternatively, if the evidence were to establish an instance of dismissal, just case existed for the plaintiff’s termination.

FACTUAL OVERVIEW

Background

[6] The respondent, Donald Fitzgerald, commenced employment with Apps Cartage Inc. in June 2007. He had a variety of duties related to handyman functions and building maintenance.

[7] Sometime in 2011, the respondent became responsible for dealing with a pop vending machine in the company premises. His duties included restocking the machine with pop and emptying the currency change from the machine. Ordinarily, the respondent did not count the money – it was emptied into a bank money bag and given to Human Resources. Machine proceeds were also used to buy pop for restocking. Only the respondent had a key to open the pop machine. There were times when the vending machine was out of service on account of mechanical problems.

[8] The respondent, on average, worked about 30 hours a week initially earning $15.00 an hour. Six and half (6 ½) years later, the employee earned $17.50 per hour. The respondent’s last day working at Apps Cartage was November 18, 2013.

The November 18, 2013 Meeting

[9] In November 2013, the company’s vice president of operations, Brent Byers, began to plan for a year-end Christmas party. In past years, the profits from the pop vending machine contributed to the expenses associated with the party.

[10] According to Mr. Byer’s trial testimony, he asked several company employees where the pop money was and how much was available but “[n]o one seemed to know the answer”. Although the witness understood that no records were maintained and the money from the machine was not tracked, he expected a few thousand dollars to have been available at the point of his inquiries.

[11] A meeting was held on November 18, 2013 at the company premises. The evidence at trial was conflicting as to the circumstances of this meeting.

[12] According to the respondent, Mr. Byers called him into an office in the Human Resources (HR) area. The door was shut with Kamini Sewgobind, the HR Manager, also in attendance at what was a “short” meeting. He was immediately asked by Mr. Byers, “Where is the money?” from the pop vending machine which he indicated should be making $1,000 a month. This inquiry was unexpected. Ms. Sewgobind did not say much during the meeting. At the conclusion of the meeting, on the respondent’s testimony, he was asked to turn over his keys and swipe card. Before being escorted to an exit of the building, Mr. Byers said to him, “Call me in three days and tell me the truth”. The respondent believed his employment had been terminated.

[13] Brent Byers testified that he pulled the respondent aside into his office as he suspected “something awry” and wanted to speak to his employee about the vending machine monies. Ms. Sewgobind was not present. Although employee theft is a serious allegation which would typically involve an HR representative being present, Mr. Byers was expecting a plausible explanation for his questions.

[14] On the witness’ evidence, he asked the respondent “where the money was going”. The respondent spoke of funds used to restock the machine and to purchase other necessary supplies for the company. In Mr. Byers’ view, the respondent was not being honest with him. In cross-examination, the witness was asked this question:

Q. Do you mention termination at this meeting? A. I don’t recall.

[15] According to Mr. Byers, by the end of the meeting, although he disbelieved what his employee had told him, he felt that he should still be given the benefit of the doubt. He told the respondent, “You need to go home and think about our discussion … I’d like you to come back tomorrow and we’ll have the discussion again”. Mr. Byers was certain that the respondent was not escorted from the building and he had no recall of the employee turning over any property during the meeting. Mr. Byers undertook no follow-up to the meeting.

[16] Kamini Sewgobind recalled that Mr. Byers made inquiries of her as to whether she had received any vending machine monies.

[17] Ms. Sewgobind typically attended employee discipline meetings or had a designate do so. This would certainly be the case in the instance of a serious allegation like theft.

[18] At trial, Ms. Sewgobind testified that she did not attend any meeting with the respondent and Mr. Byers. To the witness’ recall, Mr. Byers came to her and related that he had sent the respondent home “to think about the missing funds from the vending machine, and to come back and explain to him what happened”. Mr. Byers said nothing about termination. She did not understand the meeting with the respondent to have been a termination meeting. In Ms. Sewgobind’s view, although it seemed that Mr. Byers had not viewed his meeting with the respondent to be a discipline meeting, sending an employee home after discussions with the employee, even with pay, did amount to a discipline meeting being held.

[19] Ms. Sewgobind informed the trial judge that when employee discipline is undertaken, including questioning of an employee, two company representatives would ordinarily be present. The result might involve preparation of a form and a warning letter being placed in the employee’s personnel file.

The Respondent/Sewgobind Phonecall

[20] At trial, although the witnesses’ evidence was consistent on the point that Mr. Fitzgerald did not return to the premises of Apps Cartage Inc. after the day he met with Mr. Byers, their testimony differed as to what transpired in the next few days.

[21] Ms. Sewgobind testified that although the respondent did not come back to the company the day after his meeting with the vice president, he did telephone her the following day. Although the witness had no exact recall of the respondent’s exact words, in a “general sense” she understood him to say that, “he was resigning because that was in his best interest”. No mention of “termination” was made in the phonecall. After the call, the witness had no further contact with the respondent. Ms. Sewgobind concluded that the respondent did not want to be terminated for cause. She did not require any additional follow-up with the employee to process the end of his employment with Apps Cartage. Had the respondent not resigned, further investigation would have been necessary regarding the disappearance of the vending machine funds.

[22] With reference to a copy of an email from herself to one of her HR employees (Jessica Njoki), Ms. Sewgobind was able to say that, during the afternoon of November 19, 2013, she authored a direction stating, “Spoken with Don today approx. 2:50 p.m., he asked if we can state on the R.O.E. “Resigned” as reason for termination. Can you please complete the Termination Check List and R.O.E. for Thurs.”

[23] An R.O.E. is a Service Canada Record of Employment document which, on its face, states that it is an offence for an employer issuer to make any false statement therein. An R.O.E. form relating to the respondent, dated November 20, 2013, identified Kamini Sewgobind as the “Issuer” for the Employer Apps Cartage Inc., and recorded the “Reason For Issuing This ROE”, as “Quit”.

[24] Mr. Byers testified that a day or two after his meeting with the respondent, he learned from his HR Manager that the respondent had phoned and resigned.

[25] The respondent provided a different account. According to the respondent, three days after being escorted out of the Apps Cartage premises, he phoned Mr. Byers and told him he didn’t “know what happened”. The reply he received, before Mr. Byers hung up on him, was, “There’s no contest”.

[26] A couple of days later, on the respondent’s evidence, he received the R.O.E. in the mail stating that he had “quit” his employment. At this point, continuing to be of the view that he had been terminated, he telephoned Ms. Sewgobind. He was upset. He told the HR Manager that he had not quit. The only aspect of Ms. Sewgobind’s part of the conversation testified to by the respondent was that she thought that they would have waited a couple of months “until it was investigated”.

A Second Record of Employment

[27] During the trial, counsel for the respondent (then plaintiff) sought to refer to further documentation from Service Canada in the form of:

1. an unsigned letter, dated December 16, 2015, from the Employment Insurance Commission addressed to the respondent stating:

   We are writing to inform you about your Employment Insurance benefits. The above mentioned individual filed a claim for employment insurance regular benefits on November 26, 2013. Part of the process of approving a claim for benefits is to determine that all paperwork is correct and factual. His former employer at the time was contacted and it was determined that the reason for separation should be reflected as a shortage of work due to restructuring. Block number sixteen on the record of employment was changed to reflect this information for what was previously shown there. Trusting this is the information you require.

2. a letter dated January 20, 2016, with an illegible signature of a Client Service Officer, referred to in the trial evidence as a second or amended R.O.E., stating in part:

   To Whom it May Concern: This letter has been provided to the above named client at his/her request. It serves to provide you with written confirmation that: ☒ Other situation as described below. The Reason for Separation indicated on the Record of Employment with Serial Number W30572061 has been changed from E-Quit to A-Shortage of Work/End of Contract Season as per phone conversation with former employer.

3. a letter of February 19, 2016 addressed to the respondent from Jelena Jenko, an ATIP Officer with Employment and Social Development Canada, with an enclosure/attachment edited in accordance with the federal Privacy Act
4. the enclosure/attachment to the letter described at subpara. (3) above was composed of a copy of the November 20, 2013 R.O.E. relating to the respondent and what purports to be a second R.O.E.

[28] Counsel for the appellant objected to admission of this documentation for the truth of its contents as the author of the paperwork was unknown and no witness was present “to speak to this document as to its authenticity, as to what it is”. When objecting counsel stated, “while I don’t necessarily object to its admission for the fact that it exists”, an apparent reference to a second version of the R.O.E., while submitting that it should not be admitted “for the truth of its contents”, the documentation was marked as trial Exhibit #2. The transcript filed in this appeal contains no discreet ruling as to the scope of admissibility of this exhibit.

[29] The respondent claimed and received 5 ½ months of E. I . (Employment Insurance) benefits. He was of the view that, had he quit his employment, he would have been ineligible for such compensation. While the trial transcript is not entirely clear as to how the respondent obtained the Exhibit #2 documentation, it appears that he sought it out to see if his R.O.E. had been changed.

[30] At trial, Mr. Byers was not specifically questioned about changes to the November 2013 R.O.E. beyond being asked whether at that point in time employees were being laid off to which he responded that that was unlikely to have been the case.

[31] Ms. Sewgobind testified that it was possible for an R.O.E. to be changed on-line with communication between an employer and Service Canada. Any such transaction involving Human Resources at Apps Cartage would have to involve her. As to Exhibit #2, the witness testified that she did not recognize or ever receive that documentation relating to a change to the reason for the conclusion of the respondent’s employment. She at no point authorized a change and did not direct anyone else to make such a change.

Reasons for Judgment at Trial

[32] At trial, after hearing the evidence and submissions of counsel, an afternoon recess was taken, after which the Deputy Judge delivered an oral judgment. The reasons were brief. The majority of the six pages was denoted to summary of the evidence, rejection of any support for punitive damages, a finding of no case supporting dismissal for cause, a finding that the termination clause in the employment contract was unenforceable, and finally a calculation of the respondent’s damages and a costs award.

[33] On the core issue as to whether Mr. Fitzgerald resigned or was terminated by his employer, the court said the following:

It [Exhibit #2] contains at Tab one and two, a letter he said he received from Service Canada at Tab one, and at Tab two a printout of a change in their records showing not that he quit, but that he was no longer employed due to a shortage of work. Clearly it was in his best interests for future employment prospects to have the record of employment show that it was due to a shortage of work, and not a ‘quit’ or ‘terminated’.

As a result of this, the Court does not understand why this was in issue in the trial.

There was a great deal of dispute on the issue of termination versus resignation. The plaintiff felt he was terminated as he was walked out. He did not understand he had the right to return to work, especially since he was denying the allegation of theft. On the other hand, because he did not return to work, the defendant thought he had resigned. This is also in evidence from Ms. Sewgobind regarding a phone call. However, the content of this call is denied by Mr. Fitzgerald. In order to resolve this issue, I find that evidence in Exhibit two is the only independent evidence before the Court. The records of Service Canada in Tab one and two indicate that the reason for the end of employment is that there was a shortage of work. I do not see how the plaintiff could have affected this evidence so it was a faked document.

… I accept that a resignation must be clear and unequivocal … Based on the evidence, that was not the case in the matter before this Court.

SUBMISSIONS OF THE PARTIES

[34] On behalf of the appellant, Mr. Harasym submitted that the trial judge erred in concluding that the respondent had been terminated by his employer.

[35] It was submitted, through a blend of arguments advancing misapprehension of evidence, unreasonable factual findings, insufficient reasons, and reasonable apprehension of bias, that the verdict in favour of the respondent cannot stand.

[36] The appellant’s submissions focused in particular on the respondent/Byers’ meeting (the “meeting”), the respondent/Sewgobind phonecall (the “phonecall”), and the Service Canada documentation entered as Exhibit #2 at trial.

[37] It was submitted that without making necessary factual findings respecting significant conflicting evidence as to the meeting and the phonecall, the trial judge erroneously and unreasonably employed paperwork (Exhibit #2), unsubstantiated by any oral evidence, to reach a conclusion as to the termination v. resignation issue. These palpable and overriding errors in effect resulted in an unreasonably conclusory verdict in the absence of any clear path of reasoning addressing crucial evidence at trial.

[38] On behalf of the respondent, Mr. Allen submitted that the trial court’s verdict is unimpeachable on any legal or factual basis. The court’s determination that the respondent did not resign, but was terminated without just cause, was reasonably available on the whole of the evidence. Deference is owed to the trial judge who heard and saw the witnesses.

[39] Mr. Allen argued that on the evidence it was reasonably open to the trial judge to find that the November 2013 meeting was a termination meeting.

[40] It was further submitted that while the Service Canada records, described as “a letter” and “a printout” regarding a change to its records, did “not make it more or less likely that the November 2013 Meeting was a termination meeting”, the “independent” material was “consistent” with the respondent’s account of his phonecall with Ms. Sewgobind and therefore probative that a termination, not a resignation, had in fact occurred.

ANALYSIS

[41] The principles overarching Small Claims Court trials and the admissibility of evidence were in part, and generally, summarized in Chanachowicz v. Winona Wood Limited, 2016 ONSC 160, at paras. 89 to 92:

[89] Section 25 of the Courts of Justice Act, R.S.O. 1990, Chap. C.43 (as amended) (the Act ) reads:

Summary hearings – The Small Claims Court shall hear and determine in a summary way all questions of law and fact and may make such order as is considered just and agreeable to good conscience.

[90] As a branch of the Superior Court of Justice, the Small Claims Court is a forum for the resolution of relatively minor civil disputes. Litigants are frequently self-represented. The adjudicative processes are meant to be as uncomplicated and streamlined as possible so that costs are modest and cases are not unduly protracted.

[91] Section 27 of the Act provides that:

27. (1) Evidence - Subject to subsections (3) and (4), the Small Claims Court may admit as evidence at a hearing and act upon any oral testimony and any document or other thing so long as the evidence is relevant to the subject-matter of the proceeding, but the court may exclude anything unduly repetitious.

(2) Idem - Subsection (1) applies whether or not the evidence is given or proven under oath or affirmation or admissible as evidence in any other court.

(3) Idem - Nothing is admissible in evidence at a hearing,

(a) that would be inadmissible by reason of any privilege under the law of evidence; or

(b) that is inadmissible by any Act .

(4) Conflicts - Nothing in subsection (1) overrides the provisions of any Act expressly limiting the extent to or purposes for which any oral testimony, documents or things may be admitted or used in evidence in any proceeding.

(5) Copies - A copy of a document or any other thing may be admitted as evidence at a hearing if the presiding judge is satisfied as to its authenticity.

[92] Rule 18.02 (1) to (4) of the Rules of the Small Claims Court (Ont. Reg. 258/98) reads:

Written Statements, Documents and Records

18.02 (1) A document or written statement or an audio or visual record that has been served, at least 30 days before the trial date, on all parties who were served with the notice of trial, shall be received in evidence, unless the trial judge orders otherwise.

(2) Subrule (1) applies to the following written statements and documents:

1. The signed written statement of any witness, including the written report of an expert, to the extent that the statement relates to facts and opinions to which the witness would be permitted to testify in person.

2. Any other document, including but not limited to a hospital record or medical report made in the course of care and treatment, a financial record, a receipt, a bill, documentary evidence of loss of income or property damage, and a repair estimate.

Details about Witness or Author

(3) A party who serves on another party a written statement or document described in subrule (2) shall append to or include in the statement or document,

(a) the name, telephone number and address for service of the witness or author; and

(b) if the witness or author is to give expert evidence, a summary of his or her qualifications.

(4) A party who has been served with a written statement or document described in subrule (2) and wishes to cross-examine the witness or author may summon him or her as a witness under subrule 18.03 (1).

[42] Also relevant, if only by implication as to document reliability given the flexability of Rule 18.02 above, is s. 31(2) of the Evidence Act, R.S.O. 1990, Ch. E. 23:

(2) A copy of an entry in a book of account kept by a municipality or in a department of the Government of Canada or of Ontario shall be received as proof in the absence of evidence to the contrary of such entry and of the matters, transactions and accounts recorded therein, if it is proved by the oath, affirmation or affidavit of an officer of the municipality or of the department,

(a) that the book was, at the time of the making of the entry, one of the ordinary books kept by the municipality or in the department;

(b) that the entry was apparently, and as the deponent believes, made in the usual and ordinary course of business of the municipality or department; and

(c) that such copy is a true copy thereof.

[43] Without doubt, a trial judge, as the trier of fact, with the clear advantage of seeing and hearing witnesses, should generally be extended appellate deference as to his or her findings of fact and credibility. Such findings must, of course, be reasonably supported by the evidence, and, the trial court’s reasoning to its conclusions must be responsive to the live issues at trial and apparent in the record under review.

[44] It is agreed between the parties that, at trial, there were clear issues of credibility given the conflicting evidence among the three witnesses. In particular, this related to the circumstances of:

1. the November 18, 2013 meeting at the Apps Cartage premises attend by the respondent
2. any phonecall between the respondent and Mr. Byers shortly afterward
3. the phonecall between the respondent and Ms. Sewgobind
4. a purported change to the R.O.E. of the respondent.

[45] Regrettably, the trial court either declined to make specific credibility findings respecting matters (1) to (3), or alternatively, failed to articulate what those findings were.

[46] Turning first to the November meeting at the appellant’s premises, characterized by the respondent as a termination meeting, and by the appellant as a preliminary investigation discussion, a number of matters were the subject of contradictory evidence between the parties including:

1. who was present – specifically was Ms. Sewgobind in attendance?
2. was the meeting held in Mr. Byer’s office or the Human Resources offices?
3. at the conclusion of the meeting what was the set arrangement for further communication with the respondent?
4. was the discussion in the meeting investigatory in nature or effectively a dismissal for unexplained breach of trust relating to the vending machine monies?
5. did the respondent surrender his keys and swipe card and was he escorted from the building?

[47] The trial judge’s reasons disclose no specific credibility determinations respecting the conflicting evidence on these points.

[48] As to the second matter of whether a phonecall transpired between the respondent and Mr. Byers, a communication denied by Byers and described by the respondent as confirmatory of his termination, the trial court made no findings one way or the other as to whether this call took place.

[49] As to the third matter, the phonecall between the respondent and Ms. Sewgobind, matters of conflicting evidence stood to be sorted out including:

1. when did the call take place – before or after the November 2013 R.O.E. was prepared?
2. what was said in the phonecall – did the respondent communicate that he was quitting?

[50] Again, the trial judge, before turning to Service Canada documentation, made no credibility determinations respecting the phonecall. The appellant’s witness, Sewgobind, was clear in her evidence that the respondent expressed to her that he felt it would be in his best interests to quit. Aided by her November 19, 2013 email direction to a subordinate, Ms. Sewgobind testified that she thereafter instructed that an R.O.E. relating to the respondent be prepared identifying the reason for issuance as “Quit”. The witness, as a human resources official, would be well familiar with the text on the face of the R.O.E. form stating that it is an offence to make any false entry in the form. She was certain that she, at no point, engaged in a revision of the November 20, 2013 R.O.E. Ms. Sewgobind was not cross-examined to suggest that she was mistaken in her recall of events or that she had any motive to misrepresent the circumstances of the respondent’s employment with Apps Cartage.

[51] Lastly, as to the fourth matter upon which the evidence was disputed, the circumstances of more than one reason recorded in Service Canada records for the issuance of an R.O.E., at the risk of repetition, the trial court stated the following:

It [Exhibit #2] contains at Tab one and two, a letter he said he received from Service Canada at Tab one, and at Tab two a printout of a change in their records showing not that he quit, but that he was no longer employed due to a shortage of work. Clearly it was in his best interests for future employment prospects to have the record of employment show that it was due to a shortage of work, and not a ‘quit’ or ‘terminated’.

As a result of this, the Court does not understand why this was in issue in the trial.

In order to resolve this issue, I find that evidence in Exhibit two is the only independent evidence before the Court. The records of Service Canada in Tab one and two indicate that the reason for the end of employment is that there was a shortage of work. I do not see how the plaintiff could have affected this evidence so it was a faked document.

[52] It is apparent from his reasons that the trial judge considered the R.O.E. produced at trial by the respondent, stating “Shortage of Work”, to “resolve” the terminated/quit issue. Does this mean that, apart from this documentation, the court was unable, on balance, to make any credibility findings as to the believability of the witnesses on the other matters described in para. 44 above?

[53] Despite objection by appellant’s counsel at trial to the scope of admissibility of the second R.O.E. at the point at which it was introduced, there is no discreet ruling in the record filed here which addressed the limiting objection by appellant’s counsel.

[54] Having regard to Rule 18.02(3)(a), it appears that the respondent is claiming that Ms. Sewgobind is the “author” of the second version of the R.O.E. However, in her evidence, Ms. Sewgobind expressly stated that she did not authorize any change to the November 20, 2013 R.O.E. and that no one else could do so on behalf of the employer without her knowledge.

[55] Although Rule 18.02 is more liberal in terms of admissibility requirements than s. 31 of the Ontario Evidence Act respecting the admission of documents, nevertheless, in considering whether the second R.O.E. should be accepted as reliable for the truth of its contents, it is important to bear in mind that the document was not proved by the oath/affirmation/affidavit of a government department official. While the second R.O.E. may have been a government record kept in the usual and ordinary course of business by Service Canada, none of the associated correspondence described at para. 27 above fell into that category. There was no testimonial evidence from any official as to when the record was changed or by what agent of the employer. The “Date Modified” on the second R.O.E. is stated as June 4, 2015 – more than a year and a half after the respondent’s employment concluded.

[56] The reasons for judgment do not articulate why such documentation ought to be preferred to the weight of the sworn evidence at trial (the testimony of Byers and Sewgobind) contradicting its probative value.

[57] As problematic, is the court’s use of the documents as, in effect, a default tie-breaker on the joined issue at trial – termination for breach of trust/theft versus voluntary resignation. None of the witnesses at trial, in describing the events and discussions of November 2013, suggested that employees were being laid off as a result of work shortage. To conclude termination as a matter of fact, on a basis differing from the focus of the pleadings and the breach of trust/theft examinations conducted at trial is simply not responsive to the live issue at trial. There is no evidentiary basis in the record for the trial judge’s comment that it was in the respondent’s best interests to have an R.O.E. record “Shortage of Work” rather than “Quit” or “Terminated” – the observation is not helpful in deciding what the evidence establishes actually occurred in November 2013.

[58] In the reasons for judgment, the trial judge failed to articulate intelligible credibility findings relating to the live issue as framed at trial or to provide a discernible path of reasoning permitting this court to determine whether his conclusion was supportable by relevant and reliable evidence.

[59] The trial record does not exhibit any reasonable apprehension of bias on the part of the trial judge.

CONCLUSION

[60] The appeal is allowed. The verdict of the trial court is set aside and a new trial is ordered before a differently constituted Small Claims Court.

[61] It is expected that the parties will be able to reach agreement on the issue of costs. Failing agreement, costs submissions not exceeding 2 pages shall be exchanged and filed with the court on or before April 18, 2017.

Hill J.

Released: March 15, 2017