Court File and Parties

COURT FILE NO.: CV-14-504321 DATE: 20170601 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Keith Cordeiro, Plaintiff – and – Pinnacle Caterers Ltd., Defendant

BEFORE: E.M. Morgan J.

COUNSEL: Stephen Gillman and Jennifer Corbett, for the Plaintiff Jonathan Dye and Megan Beal, for the Defendant

HEARD: May 16-17, 19, 23-25, 2017

AMENDED reasons for judgment

I. Scope of the trial

[1] This wrongful dismissal trial raises one question: did the Plaintiff steal money from the Defendant?

[2] In April 2014, the Plaintiff, a system supervisor for the Defendant, was terminated without notice and was given no pay in lieu of notice. The Defendant alleges that he was fired for cause, having stolen cash paid by a customer of the Defendant’s on April 12, 2014. After investigating the matter, the Defendant alleged that the Plaintiff stole a substantial amount of funds on other occasions as well.

[3] The Plaintiff claims compensation for wrongful dismissal, and the Defendant counterclaims for recovery of misappropriated funds.

[4] To their credit, the parties, through their respective counsel, have come to an agreement in respect of this trial that neatly circumscribes the issues. The Litigation Agreement dated May 4, 2017 provides, in its salient parts, as follows:

(a) Just Cause and Counter-Claim Damages: (i) If the Defendant meets the onus of establishing that the Plaintiff stole money from it, the Plaintiff hereby concedes that just cause has been established. (ii) In that event, the parties agree that the Defendant’s counter-claim will also have been substantiated. The Defendant’s recoverable damages under the counter-claim are agreed to be $15,000.

(b) Notice Period and Related Damages: (i) If the Defendant fails to establish that the Plaintiff stole, the agreed upon notice period will be nine (9) months. The Plaintiff’s recoverable damages in that event are agreed to be $29,827.53.

(c) Additional Damages: (i) The Plaintiff hereby agrees not to pursue the claim for moral damages at trial. (ii) The Defendant hereby agrees not to pursue the defence that the Plaintiff has failed to mitigate his damages at trial.

[5] Accordingly, the entire trial has been devoted to the question of whether the Plaintiff did, in fact, steal money from the Defendant.

[6] In particular, the case turns on a payment of $412.39 in cash, which the Defendant says was missing from an envelope containing payments collected from a customer of the Defendant’s and passed on to the Plaintiff in the course of his employment on April 12, 2014. As indicated, the Defendant alleges that the Plaintiff also stole more than this amount from other customers and on other occasions, but it was the initial suspicions about this particular missing payment that triggered its investigation into the matter.

[7] Given the terms of the Litigation Agreement, if the Defendant has established that the Plaintiff stole the $412.39, it was justified in terminating the Plaintiff without cause and it can collect the balance of the $15,000.00 in agreed-upon damages. On the other hand, if the Defendant has not established that the Plaintiff was responsible for the theft of $412.39 on April 12, 2014, the Plaintiff is entitled to the agreed-upon amount of $29,827.53 in compensation for having been terminated without cause.

II. The Defendant’s business and the Plaintiff’s job

[8] The Defendant is a catering company. Its primary business is to supply food and beverages to the private guest suites at the Air Canada Centre (“ACC”). It has offices in the ACC and operates out of two different kitchens in the building – the South Kitchen, where the Plaintiff’s desk was located during the relevant period, and the North Kitchen, where the other system supervisor, Kirk Fournier, had his desk.

[9] Generally speaking, the guests in the suites would be served by a suite attendant. The food would be either pre-ordered or ordered during the event along with alcoholic and non-alcoholic drinks. The orders would be taken care of, and bills prepared by, the maître’d for the given suite. The suite attendants would present the guests with the bill at the end of the evening’s event at the ACC, and would collect the payment from the guests and pass the cash and credit card slips to the maître’d for the suite. The maître’d’s would then ensure that the bill had been fully paid, place the cash and credit card slips into an envelope which would typically combine the payment from all of the suites that the maître’d serviced.

[10] Each maître’d could be responsible for several suites on any given evening when there was an event at the ACC. Above the maître’d’s in the Defendant’s workplace hierarchy were the section supervisors, who were responsible for overseeing up to 30 suites on any given evening. Over all of that staff were the two system supervisors, Mr. Fournier and the Plaintiff, who were responsible for, among other things, collecting the envelopes from the maître’d’s at the end of each night. The system supervisors were also trained for more complicated transactions on the Defendant’s computerized point of sale (“POS”) system. If a bill had to be corrected, or voided, the maître’d’s would have to call one of the two system supervisors to void an item off a guest check or to void the check entirely.

[11] Mr. Fournier’s and the Plaintiff’s immediate boss was John Corkhill, the General Manager of the Defendant, whose office was on site at the ACC. Above Mr. Corkhill was Tony Palermo, the Operations Manager, whose office was off site. Mr. Corkhill testified that during the relevant period, there were only 6 permanent, full-time employees under him, including Mr. Fournier and the Plaintiff, although there were a large number of suite attendants, maître’d’s, and kitchen staff working on any given night when there was a large scale event taking place at the ACC.

[12] As system supervisors, Mr. Fournier and the Plaintiff accessed the POS system with their own specific log-in codes composed of 5 digits and personal PIN numbers composed of another 4 digits. While each could potentially look up the other’s login number on the system, the other employees under them could not do so. Furthermore, neither of the system supervisors knew the other’s personal PIN number.

[13] That said, the Plaintiff testified that he never bothered programing a PIN number for himself as it was too time consuming to enter each time he needed to access the POS system. He would simply log in each time with his 5-digit log-in number. He also testified that he often gave out his log-in number so that others could complete transactions under his name. In fact, he indicated that he was so ready to give out his log-in number that he once found it written on a bulletin board and another time saw it on a piece of paper in a colleague’s pocket.

[14] With all due respect, it is hard to fathom why anyone would be so lax with their sign-in information. The Plaintiff intimated that almost anyone could log in as him and post things in the POS system. In other workplaces, this might be the equivalent of giving away your email password so that anyone could send messages masquerading as you. I can only ask rhetorically: who would do that? It is literally an invitation for someone to do something impermissible under your name. In my view, there is little credibility to the Plaintiff’s testimony in this regard. It is all too convenient an excuse for anything untoward that might show up under the Plaintiff’s log-in number.

[15] Every computer terminal in the ACC had its own identifier that showed up on each guest check as a terminal number. One can therefore identify at which terminal any given transaction was physically input. The terminal at the Plaintiff’s desk in the South Kitchen was number 522. The Plaintiff testified that the system could be accessed in a way which made it look like the user was at a different terminal than the one that he or she was actually using, but none of the Defendant’s other employees, including Messrs. Palermo, Corkhill, and Fournier – the three other senior employees who would know most about the system – agreed with that description.

[16] Frankly, I find the Plaintiff’s statement about changing the terminal identifier hard to believe; I cannot fathom a reason that a multi-terminal computer system that identifies the specific terminal used for a given transaction would be programmed to allow a person at one terminal to disguise himself as being at an entirely different terminal. The entire purpose of having terminal identifiers is to identify the terminal used for any given transaction, and the Plaintiff’s theory that the identifiers can be manipulated would undermine that purpose. The Plaintiff’s description of being able to do this suggests that he is either imagining a capability that does not exist, or he has knowledge that goes well beyond ordinary business use of the POS system and enters the realm of surreptitious computer hacking.

III. Suite 408 and the refund check

[17] On April 2, 2014, a Toronto Rock lacrosse game took place at the ACC. That night, suite 408 was booked by Kevin Easson, an employee of Maple Leaf Food and Entertainment, the corporate owner of the ACC. Mr. Easson was in charge of leasing suites at the ACC, and in that capacity had a good working relationship with the Defendant’s general manager, John Corkhill. Mr. Easson invited 14-16 guests to share the suite with him that evening.

[18] Mr. Corkhill decided that since Mr. Easson and Maple Leaf Food and Entertainment were an important business relationship for the Defendant, he wanted to ‘comp’ the guests in the suite that night. He left instructions with the suite attendant, Vanessa Kitchen, that the Defendant would pick up the tab for the suite rental and food in suite 408, and that Mr. Easson and the other guests would only have to pay for any alcoholic beverages they ordered.

[19] The maître’d for that suite on the evening of April 12, 2014 was Matt Quinn. Mr. Quinn testified that those instructions were passed on to him and he was aware that the only portion of the bill not to be ‘comped’ to the guest in the suite was the alcohol. He indicated that the guests had paid cash for the alcohol, and that he had received the cash from the suite attendant and placed it in the envelope as is routine. He said that he hand delivered the envelope to the Plaintiff in the South Kitchen just before punching out at the time clock and leaving the building for the night. Mr. Quinn’s time sheet indicates that he clocked out at 9:59 p.m.

[20] The suite attendant, Ms. Kitchen, did not testify at trial. One of the section supervisors, James Hutchinson, testified that she is no longer employed by the Defendant and that she has moved to Vancouver. Mr. Easson, however, did testify, and stated without any doubt that he and his guests had paid between $400 and $500 cash on April 12, 2014 for their drinks. Since Mr. Easson stated that the guests handed the cash over to the suite attendant, and Mr. Quinn stated that he had received the cash from the suite attendant, there is little that the suite attendant could have added even if she were available in Toronto to testify. I therefore draw no inference of any sort from the fact that the Defendant did not bring the suite attendant from Vancouver to testify.

[21] Mr. Corkhill testified that the following morning, Sunday, April 13, 2014, he came to his office to do some paperwork for the week, as was his habit on Sundays. He indicated that having comped Mr. Easson and his party for food and non-alcoholic beverages, he was curious to know how much alcohol the party in suite 408 had consumed. At some point during the course of the day he took a break from his other paper work and looked up the check from the previous night for suite 408. He was surprised to find that the party had apparently not consumed any alcoholic drinks whatsoever; when he checked the computer system to look at the bill from suite 408, it appeared that there had initially been a check for some $412.39 but that this amount had been refunded.

[22] Mr. Corkhill stated that he could see on the screen for suite 408 that there had been a check paid in cash, followed by a voiding of that check. The transactions were logged into the POS system shortly after 10:00 p.m. In order to reconfirm that the information he was seeing was correct, he looked up the Void Report for the previous evening which should have verified that a check in the amount of $412.39 had been voided. To his surprise, this did not show up on the Void Report as a voided customer check.

[23] The next morning, April 14, 2014, Mr. Corkhill asked Matt Quinn whether he had collected money from suite 408 on Saturday night. Mr. Quinn indicated that the guests had paid cash, which had been passed on to him by the suite attendant and which he had put in the envelope and delivered to the Plaintiff in the usual course.

[24] Mr. Corkhill then asked the bookkeeping clerk, Ingrid Atlee, if there was cash in the envelope since she is the one who verifies that all the money has been turned in. Ms. Atlee testified that she retrieved Mr. Quinn’s envelope from the safe where all the envelopes had been deposited at the end of the night on Saturday. She said that it was sealed, and that she opened it with a letter opener across the top. She found no cash in the envelope.

[25] At Mr. Corkhill’s request, Ms. Atlee brought the envelope to Mr. Corkhill in his office. Mr. Corkhill testified that when he examined it he could see Ms. Atlee’s straight opening with the letter opener. He also said that it appeared to him that the seal on the envelope had been tampered with – i.e. opened and re-sealed. In her testimony, Ms. Atlee confirmed Mr. Corkhill’s observations about the envelope, indicating that the seal of the envelope as she found it in the safe looked as if it had been sealed, re-opened and sealed again.

[26] Having spoken with Mr. Quinn and Ms. Atlee, Mr. Corkhill then called his own immediate boss, Tony Palermo, and reported the missing cash. Mr. Corkhill and Mr. Palermo then called the Plaintiff into Mr. Corkhill’s office and together asked him what had happened to the checks and the cash payment on April 12, 2014.

[27] According to the Plaintiff, Mr. Palermo was rather angry and belligerent in his conversation with him. According to Mr. Palermo, the Plaintiff was uncooperative and refused to provide them with any explanation of the voided cash receipt that had gone unreported on the Void Report. In my assessment, both of these witnesses were accurate in describing the other. I have little doubt that Mr. Palermo was upset at the suspicion that some $412 in cash had gone astray, and that the Plaintiff was upset at having been confronted with this fact.

[28] What is clear from both the Plaintiff and Mr. Palermo, however, is that the Plaintiff did little more than deny that he took anything from the envelope. When asked for an explanation about the voiding of the check, he responded to the effect of ‘I don’t have your money.’

[29] When the short meeting ended, Mr. Palermo walked the Plaintiff to the elevator, took his pass to the building, and told him that he would call him in about a week. Mr. Palermo testified that he was suspending the Plaintiff in order to give himself and Mr. Corkhill some time to investigate and more fully understand the situation. This suspension, however, was not well communicated to the Plaintiff, who testified that he understood that he was being terminated then and there.

[30] Mr. Palermo did call the Plaintiff several times the following week, but the Plaintiff did not respond to the calls. The Plaintiff stated that he could see on his cell phone that Mr. Palermo was calling, but was not inclined to answer as he felt he had been mistreated by being summarily dismissed.

[31] Whether the Plaintiff was terminated at the April 14, 2014 meeting or not, he was formally terminated by the Defendant the following week. His record of employment establishes this. At this point, it is not particularly material as to the precise date on which the Plaintiff was terminated; one week this way or that does not make a difference in the respective parties’ rights.

IV. The investigation

[32] Counsel for the Plaintiffs spent a substantial amount of time at trial attempting to establish that the Defendant’s investigation of this matter was inadequate. They claim that the Plaintiff was terminated from his employment precipitously, and that Messrs Palermo and Corkhill unfairly targeted the Plaintiff in their investigation without casting a similarly suspicious eye on other potentially relevant employees such as the maître’d, Matt Quinn, the bookkeeper, Ingrid Atlee, the suite attendant, Vanessa Kitchen, or the other system supervisor, Kirk Fournier.

[33] In my view, there is nothing to this allegation but an attempt to distract attention from the obvious point that the Plaintiff was the most likely one to know what happened to the missing cash from suite 408. In the first place, Mr. Corkhill spoke with Mr. Easson, who confirmed that the guests had paid cash for the alcohol they consumed on April 12, 2014 and that the cash was given to the suite attendant. As indicated, Ms. Kitchen has moved to Vancouver, and, more importantly, it is obvious that she did not keep the cash since Matt Quinn has stated without hesitation that she handed him the cash as she was supposed to do.

[34] As for Matt Quinn, it is possible that he pocketed the cash since he had possession of it before placing it in the envelope for the night and delivering it to the Plaintiff. However, all of the evidence indicates that Mr. Quinn, as a maître’d, did not know how to do the re-open and transfer transaction in the POS system that was used to cover the tracks of the cash. If Mr. Quinn had taken the cash, it would have been obvious as his envelope would have contained a check that was closed to cash without the corresponding cash; or, had he simply not passed on the check that was closed to cash, it would have showed up on the POS system when Mr. Corkhill checked it the next day.

[35] Mr. Fournier, of course, did have the ability to do the same transactions on the POS system as the Plaintiff. However, he was in Ottawa on April 12, 2017 and so could not have been responsible for the disappearance of the suite 408 cash.

[36] Finally, Ingrid Atlee could potentially have removed the cash from the envelope before passing the envelope on to Mr. Corkhill when he requested it on April 14, 2017, but that would have been so foolish on her part that it is difficult to take the possibility seriously. Mr. Corkhill called her with a unique request, and it was apparent that he was looking into something. Of all the envelopes from which one could remove a quantity of cash, the one that was being investigated by the general manager of the company is not the one to which a thief would likely gravitate. Even if Ms. Atlee had already opened the envelope and removed the cash before Mr. Corkhill called, one would assume that she would be wise enough to replace it once she was alerted to the fact that inquiries were being made about the payments in that very suite.

[37] Perhaps most importantly, Mr. Palermo testified that he specifically went to the Plaintiff for an explanation not because he wanted to accuse him, but because he genuinely wanted an explanation. It was obvious that if anyone could explain the void, re-open, transfer transaction, the Plaintiff could; after all, the transactions were all done under the Plaintiff’s log-in number and were performed at the Plaintiff’s computer station. Who better to ask, and if no answer is forthcoming, who better to suspect? As already indicated, the Plaintiff had no answer for Mr. Palermo.

[38] There is, of course, a reason that the Plaintiff could not explain the voided transaction: he had voided and re-opened the check after it was closed to cash, and then somehow transferred it to a ‘test check’ used to check if the printers are working. There is no good answer to why he did that. Counsel for the Plaintiffs accuse Mr. Palermo and Mr. Corkhill of being too quick to jump to a conclusion and not giving the Plaintiff sufficient time to explain why the voided check for alcoholic beverages in suite 408 might show up on a test check. However, even at trial, some 3 years later, the Plaintiff still could not adequately explain this.

[39] There really is no valid reason for anything to be transferred from a customer check to a test check. And while the Plaintiff insisted in his testimony said that this type of transfer is done all the time, the evidence before me established that it was indeed done on many occasions but only by the Plaintiff himself. No one else appears to transfer items from a guest check to a test check that is made to look like something only used to test out a printer. Likewise, no one else could think of any reason to do this other than to hide a voided transaction and make it appear that it had never occurred at all.

[40] In other words, the Defendant’s investigation into the cash missing from the suite 408 envelope may not have been a protracted one, but it was an effective and accurate one. They quickly found the only likely culprit.

[41] Following the investigation into suite 408, Mr. Corkhill turned his attention to looking into whether there might be other instances of similar cash transactions that were voided, re-opened, and transferred to a test check. Since he knew that Mr. Fournier had been out of town on April 12, 2014, he could be certain that Mr. Fournier was not responsible for the missing cash. It therefore made sense for him to ask Mr. Fournier – who, after all, was the only other employee other than Mr. Corkhill himself that could do a void transaction – to look into other envelopes collected by the Plaintiff that night.

[42] He discovered one other similar transaction – in suite 518 – in which a guest check for $313.89 had been closed to cash, voided, re-opened, and then transferred to a test check. As with the checks from suite 408, these checks from suite 518 were done from the Plaintiff’s computer station and were under the Plaintiff’s log-in number. Upon requesting Ms. Atlee to inspect the envelope for that suite, it transpired that the cash was likewise missing.

[43] Upon learning that the missing cash from suite 408 might not be a unique occurrence, Mr. Corkhill asked Mr. Fournier to keep digging into the POS computer records to see if there were other instances. Mr. Fournier testified that he went through the records from April 2014 back 3 months to January 1, 2014, and found 81 separate occurrences in which cash checks were voided, re-opened, and transferred to a test check. All were done under the Plaintiff’s log-in number and from the computer station by the Plaintiff’s desk in the South Kitchen.

[44] The extended investigation done by Mr. Fournier under Mr. Corkhill’s direction took many months. The reason for this, as Mr. Fournier testified, is that he had to examine every check from each of the several hundred suites in the ACC for each night that there was an event in the building. It was meticulous work to root out the voided checks that did not show up on a Void Report for the night because they had been re-opened and transferred to a test check. This method of avoiding the usual record keeping for voided checks made the forensic exercise a long and tedious one.

[45] It is always prudent for an employer to carefully assess the validity of any allegations of misconduct against an employee, and to give the employee an opportunity to explain the situation: Lidchen v. Stelcrete Industries Ltd., 2013 ONSC 7495, at para 68. That said, “Despite an employer’s duties to investigate allegations and to warn employees prior to dismissal, as Echlin and Certosimo observe, at 1-6 of Just Cause: ‘It has been a well-established rule at common law that an employer does not have a duty to give reasons for dismissal at the time of dismissal, nor does the employer have an obligation to grant the employee a hearing, before making the decision to dismiss”: Geluch v. Rosedale Golf Association, [2004] OJ No 2740 (SCJ) at paras 102-104.

[46] The onus in a civil case, including one in which an employer alleges theft by an employee, is on a balance of probabilities: FH v McDougall, 2008 SCC 53, [2008] 3 SCR 41, at para 40. The Defendant has satisfied this onus in establishing that the Plaintiff took the cash that disappeared from the suite 408 payment on April 12, 2014, and covered the tracks of this theft of funds by voiding the cash bill, re-opening it, and sending it to what he doubtless hoped would be an obscure location on a test check.

[47] Although it would appear that the Plaintiff did this on numerous occasions in the past, his misfortune was that Mr. Corkhill personally knew the guest in suite 408 on the relevant date and so made a specific inquiry into his check. After that, the Plaintiff’s well covered tracks became exposed.

[48] The fact that the balance of the investigation took many months is immaterial to the termination for cause in April 2014, since theft of over $400 from one suite would be enough justification for the employer to act. The fact that the Defendant later uncovered 81 other instances during the 3 months prior to the one in issue has increased the damages sought by the Defendant in its Counterclaim (and, indeed, has raised the question as to whether the Plaintiff engaged in similar transactions prior to that 3 month period in 2014), but this extended investigation was unnecessary after the initial theft became evident.

[49] Having correctly determined that the Plaintiff wrongfully took the $412.39 in cash on April 12, 2014, the Defendant was within its rights to terminate the Plaintiff for cause.

V. Disposition

[50] The Plaintiff’s claim is dismissed.

[51] The Plaintiff shall pay the Defendant $15,000 in damages under the Counterclaim and pursuant to the Litigation Agreement.

[52] Counsel for the Defendant shall provide me with its position on costs within one week of the date of this judgment. That communication shall consist of a Bill of Costs and written submissions of no more than 3 pages in length.

[53] Counsel for the Plaintiff shall provide me with its responding submissions on costs within one week of the date of the Defendant’s submissions on costs. Likewise, this shall be no more than 3 pages in length.

Morgan J. Date: June 1, 2017