Court File and Parties

Court File No.: CV-12-466-00 Date: 2017-07-21 Ontario Superior Court of Justice

Between: ESTATE TRUSTEES OF THE ESTATE OF CLIFFORD HOYLE, KATHRYN GREIG and MARGARET HOYLE Plaintiffs – and – MELISSA GIBSON-HEATH, BEN HEATH, DC JAIN & SONS INC., ROBERT REGULAR and CANADIAN IMPERIAL BANK OF COMMERCE Defendants

Counsel: Gregory F. Dobney, for the plaintiffs Sarah J. Clarke, for the defendant, DC Jain & Sons Inc. Melissa Gibson-Heath, noted in default

Heard at Kingston: 24 May 2017

Before: Mew J.

Reasons for Decision (Motion for Default Judgment and Summary Judgment)

[1] Melissa Gibson-Heath commenced employment at the Fairfield Manor East retirement home in Kingston on 28 January 2004. In a letter of reference written in August 2008, the former Administrator of Fairfield Manor East described how, since she started working at the retirement home, Ms. Gibson-Heath had “demonstrated all of the skills and knowledge of an outstanding personal support worker and [had] grown and developed into a fine middle manager with 15 generalist staff under her direct supervision”.

[2] Based upon the recommendation of the previous Administrator, DC Jain & Sons Inc., the owner of Fairfield Manor East from July 2006 to the present day, promoted Ms. Gibson-Heath to the position of full-time Administrator of the retirement home in 2008.

[3] Meanwhile, between 28 May 2008 and 3 March 2010, Ms. Gibson-Heath stole $229,000 from Clifford Hoyle, an elderly resident of the retirement home. She was subsequently charged criminally, pleaded guilty and, upon conviction, was sentenced to 18 months’ imprisonment. The court also made a free-standing restitution order in the amount of $229,000 less any amounts recovered by the Crown.

[4] In January 2008, Clifford Hoyle’s chequing account balance had been in excess of $186,910. His savings account balance was $49,030.

[5] On 2 May 2010, the day that Mr. Hoyle passed away at the age of 93, his chequing account balance was down to $5,408 and there was just $73 in his savings account.

[6] Clifford Hoyle’s estate and his two daughters, Kathryn Greig and Margaret Hoyle, subsequently commenced a civil action against Ms. Gibson-Heath and other parties who they claim share responsibility with her for the theft of Mr. Hoyle’s money. Ms. Gibson-Heath has been noted in default. She appears to have filed an assignment in bankruptcy on 25 February 2014 and was automatically discharged from bankruptcy on 26 November 2014.

[7] The plaintiffs now move for judgment against Ms. Gibson-Heath and for summary judgment against DC Jain & Sons Inc.

[8] The issues to be addressed on this motion are as follows:

a. Are the plaintiffs entitled to obtain a default judgment against Melissa Gibson-Heath, notwithstanding her apparent bankruptcy and discharge, and if so, what are the heads and amounts of damages that should be awarded; and

b. Should there be summary judgment against DC Jain & Sons Inc. on the ground that it is vicariously liable for the actions of Melissa Gibson-Heath?

Default Judgment

[9] $76,531.54 of the $229,000 stolen by Ms. Gibson-Heath has been recovered. The unrecovered balance is therefore $155,468.46. The plaintiffs seek judgment in this amount against Ms. Gibson-Heath together with punitive damages and a declaration that the judgment survives Ms. Gibson-Heath’s discharge from bankruptcy.

[10] Although the restitution order made against Ms. Gibson-Heath at the time that she was sentenced is enforceable against her in the same manner as if it were a judgment rendered against her in civil proceedings (section 741(1) of the Criminal Code), the availability of a civil remedy for an action or omission of an individual is not affected by reason only that a restitution order has been made in respect of that act or omission (section 741.2 of the Criminal Code).

[11] Section 178(1) of the Bankruptcy and Insolvency Act, RSC 1985, c.B-3 (“BIA”) sets out certain debts that are not released upon a bankrupt’s discharge from bankruptcy:

178 (1) An order of discharge does not release the bankrupt from:

(a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;

(d) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others; …

[12] The Ontario Court of Appeal has held that the exceptions contained in section 178(1) of the BIA are based on the overriding social policy that certain claims should be protected against the general discharge obtained by a bankrupt because of the reprehensible nature of the bankrupt’s conduct. Parliament has clearly made a policy decision that a bankrupt should not be allowed to raise the shield of her general discharge against judgment creditors who hold judgments grounded on reprehensible conduct: Dickerson v. 1610396 Ontario Inc., 2013 ONCA 653 at paras. 17-44 and 46-52.

[13] Ms. Gibson-Heath was convicted of fraud contrary to section 380(1) of the Criminal Code as a result of her dealings with Mr. Hoyle’s bank accounts.

[14] The restitution order made by the Ontario Court of Justice as part of Ms. Gibson-Heath’s sentence clearly survives her bankruptcy: section 178(1)(a) of the BIA. Counsel advises that no formal steps have been taken to enforce the restitution order as a civil judgment.

[15] In the circumstances, I see no reason, in principle or practice, why a civil judgment should not now go against Ms. Gibson-Heath for the amount still outstanding under the restitution order.

[16] If I am incorrect about my jurisdiction to make such an order, the plaintiffs argue that they should nevertheless be entitled to a judgment which survives Ms. Gibson-Heath’s bankruptcy because she acted in a fiduciary capacity vis-à-vis Mr. Hoyle. This argument is grounded upon the deemed admission by Ms. Gibson-Heath, upon being noted in default, of the following allegations of fact made in the statement of claim:

a. That upon her introduction to Mr. Hoyle, she began a campaign to insert herself into his life and to gain his trust; b. That she assisted in the daily care of Mr. Hoyle; c. That Mr. Hoyle was dependant on the care provided by her; d. That Mr. Hoyle’s age, infirmity and trust he placed in her established great reliance on her; and e. That she used her position of trust and authority at Fairfield Manor East to misappropriate funds and other property.

[17] Ms. Gibson-Heath’s role was to look after Mr. Hoyle. To act in his best interests. As an elderly gentleman, who was already in the early stages of dementia when he started to reside at Fairfield Manor East at the end of 2006, Mr. Hoyle was undoubtedly vulnerable to any abuse of the trust that he placed in those who cared for him.

[18] As LaForest J. noted in Hodgkinson v. Simms, [1994] 3 S.C.R. 377 at para. 36:

... the most significant characteristic of a fiduciary relationship is the vulnerability of the beneficiary arising most often out of the authority with the fiduciary actually has or acquires over the property or opportunities of the former.

[19] Fiduciary relationships have been found to exist between a School Board and a student (A.R. v. Abel, 2011 ONSC 4350 (Master)), and parent and child (M. (K.) v. M. (H.), [1992] 3 S.C.R. 6). In appropriate circumstances, I conclude that the relationship between an elderly resident of a retirement home and a personal support worker can also be a fiduciary one, and that the circumstances deemed to have been acknowledged by Ms. Gibson-Heath evidence the existence and breach of a fiduciary duty.

[20] The plaintiffs are therefore entitled to judgment against Ms. Gibson-Heath for the amount of $155,468.46. I also hold that they are entitled to pre-judgment interest pursuant to the Courts of Justice Act and costs in relation to that amount and, by virtue of section 178(1) of the Bankruptcy and Insolvency Act, such judgment survives Ms. Gibson-Heath’s bankruptcy. Interest should run from the mid-point during the twenty-two months covered by the conviction (so, from 1 April 2009).

[21] The plaintiffs also invite me to award punitive damages against Ms. Gibson-Heath. Punitive damages are imposed only in circumstances where there has been high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour. Significantly, however, one of the factors to be considered when deciding whether to award punitive damages is whether the defendant has already been subjected to punishment by a criminal court for an offence arising out of substantially the same facts. Although the imposition of a criminal punishment on a defendant will not act as an absolute bar to punitive damages, it is a factor to be taken into account, indeed, a factor of “potentially great importance”: Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595 at para. 69; Jefflin Investments Limited v. Charendoff at para. 21.

[22] In Londoe Estate v. Ingram, 2010 CarswellOnt 595, an award of punitive damages was made against a lawyer found to have been misappropriated approximately $131,000 from an elderly client. The motion judge found that the lawyer had robbed an elderly, vulnerable man of his life savings in the guise of helping the client as his trustee and the fiduciary. Critically, however, the police had taken the view that it was a “civil” matter and, consequently, there was no criminal sanction.

[23] I am not persuaded, given that Ms. Gibson-Heath received, and has presumably now served, a custodial sentence as a result of her actions, that an award of punitive damages is warranted.

Is DC Jain & Sons Inc. Vicariously Liable?

[24] DC Jain objected to summary judgment, arguing that the record does not include all of the facts necessary to dispose of the action against DC Jain & Sons, nor does it enable the court to apply the relevant law to those facts.

[25] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada broadened and liberalised the availability of summary judgment under rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and encouraged judges to resolve disputes in that fashion when they can justly do so.

[26] There will be no genuine issue requiring a trial where a judge is able to reach a fair and just determination on the merits and where the material filed on the motion: (i) allows the judge to make the necessary findings of fact; (ii) allows the judge to apply the law to the facts; and (iii) is a proportionate, more expeditious and less expensive means to achieve a just result: Hryniak, at paras. 32, 49-51; Fernandes v. Carleton University, 2016 ONCA 719, 34 C.C.E.L. (4th) 180, at para. 28.

[27] A court hearing a summary judgment motion will assume that the parties have placed before it, in some form, all of the evidence that would be available at a trial which relates to the issues submitted for summary determination: Sweda Farms v. Egg Farmers of Ontario, 2014 ONSC 1200 at para. 33.

[28] In the present case, the evidentiary record consists of affidavits from Robert Regular, the sole director, officer and shareholder of DC Jain & Sons Inc. and Margaret Hoyle, one of Clifford Hoyle’s daughters.

[29] Margaret Hoyle, who lives in Halifax, Nova Scotia, and her sister, Kathryn Greig, who lives in the United Kingdom, are the estate trustees of Clifford Hoyle’s estate. However, the family member most closely associated with Clifford Hoyle during his time at Fairfield Manor East was his daughter-in-law, Molly Hoyle, who lives in Ottawa. The admission sheet for Clifford Hoyle shows both Molly Hoyle and Margaret Hoyle as his next-of-kin. The form also discloses that Molly Hoyle had a power of attorney for Clifford Hoyle (the record does not disclose whether the power of attorney was a continuing power of attorney for property, a power of attorney for personal care or both).

[30] Margaret Hoyle deposes that in February 2008, Clifford Hoyle fell and suffered a broken hip. The prognosis for his recovery was poor. His dementia had worsened. His treatment providers recommended that he be moved into a nursing home. However, Mr. Hoyle seemed to be happy at Fairfield Manor East, and inquiries were therefore made as to whether he could stay there. Margaret Hoyle says, in this regard:

I am advised by Molly Hoyle and verily believe that Molly spoke with the then-administrator of Fairfield Manor East and was told that Clifford could stay as long as he was able to travel from his room to the dining room without requesting assistance from another person. I am further advised by Molly Hoyle and verily believe that the then-Administrator also advised her that Fairfield Manor East would be able to provide a caregiver to help Clifford with personal care tasks both in the morning and in the evening. There was to be an additional charge, I believe it was twenty dollars per day, for these additional care services to be provided to my father. …

We agreed to have Fairfield Manor East arrange for the additional care for my father. Fairfield Manor East arranged for Ms. Gibson-Heath to provide this care to Clifford. I had no input in deciding who would be providing the additional care and I am advised by both Molly Hoyle and Kathryn Greig, and verily believe, that they were not involved in selecting the person to provide additional care to Clifford.

[31] Molly Hoyle was married to Margaret’s brother John Hoyle and lived in Ottawa. John Hoyle was experiencing serious health issues of his own at the time and ultimately passed away in late 2008. Margaret Hoyle says “it was a very difficult time for my family. Melissa Gibson-Heath, however, interacted regularly and frequently with my father at Fairfield Manor East. She helped him with bathing, grooming, dressing and also assisted him completing paperwork, including cheques”.

[32] Margaret Hoyle’s affidavit goes on to state that Mr. Hoyle was quite attached to Ms. Gibson-Heath and resisted attempts to move him to a retirement home in Nova Scotia so he could be closer to Margaret Hoyle.

[33] The former administrator at Fairfield Manor East with whom Molly Hoyle spoke was Linda McCallum.

[34] Robert Regular’s affidavit is carefully crafted. He is a lawyer based in St. John’s, Newfoundland. He says that “to the best of my knowledge, information and belief” Mr. Hoyle’s stay at Fairfield Manor East was “ordinary and unremarkable”. He says that he was “never informed” and that he has “no knowledge” of the plaintiffs’ claims that a discussion took place considering whether or not Mr. Hoyle could return to the retirement home after being discharged from hospital following treatment for the broken hip. He goes on, without stating any source for his statement:

Contrary to the Plaintiffs’ claims, the Defendant did not arrange for, nor was it or the undersigned ever involved in selecting Ms. Gibson-Heath to provide additional care to Mr. Hoyle. In accordance with [DC Jain & Sons Inc.’s] policy, it would have been up to Mr. Hoyle or his family to arrange for, provide, and pay for such extra services.

[35] While Mr. Regular’s affidavit does have appended to it the care records relating to Mr. Hoyle maintained by Fairfield Manor East, those records do not make any reference to any arrangements for additional care to be provided to Mr. Hoyle.

[36] Also produced is a copy of the Rental Agreement and Information Package which was sent to Mr. Hoyle just before he moved into Fairfield Manor East. These disclose that the rental of a room at the retirement home included the cost of a furnished room, food services, housekeeping services and activity programmes and basic personal care services. The document states that if a resident required nursing care over and above the basic personal care services provided, it was up to the resident or his/her family to provide, organise for those extra services. In his affidavit, Mr. Regular says that DC Jain & Sons does not purport to offer or provide assistance with the management of a resident’s property or assets, or offer or provide services with handling the banking or bank accounts of residents. He speculates whether, after she had been appointed as full-time administrator of Fairfield Manor, Ms. Gibson-Heath would have had a great deal of opportunity to provide any kind of care to Mr. Hoyle, given that her job had become the full-time administration of the retirement home, not the provision of care to individual residents. But he does not know that and does not describe any steps he may have taken to find out. Be that as it may, and unbeknown to Mr. Regular or his company, “Ms. Gibson-Heath apparently developed a close personal relationship with the late Mr. Hoyle and through that relationship, engineered and executed a plan to steal a large sum of money from him”.

[37] Mr. Regular states that prior to the discovery and subsequent investigation of Ms. Gibson-Heath’s dishonesty, there was no indication of her fraudulent activities, theft or conversion. “Notwithstanding the systems of checks and balances [DC Jain & Sons Inc.] had in place to facilitate exposure of unauthorized, improper and/or illegal activities of staff members.”

[38] I observe that Mr. Regular does not describe what that system of checks and balances consisted of. Mr. Regular continues:

It was not reasonably foreseeable that Ms. Gibson-Heath would commit these criminal acts given that it was not within the scope of her or any other staff member’s duties to handle or manage the finances of the residents, and, the Defendant had no way to monitor or oversee how residents handled or spent their money, because, it had no access to their personal information including bank accounts, credit cards, savings, etc.

[39] Neither Ms. Hoyle nor Mr. Regular were cross-examined on their affidavits.

[40] The only basis upon which the plaintiffs seek to have DC Jain & Sons Inc. found liable to them is vicarious liability for the actions of Melissa Gibson-Heath.

[41] The leading case on vicarious liability for intentional torts is Bazley v. Curry, [1999] 2 SCR 534. The case involved the liability of a non-profit organisation which operated two residential care facilities for the treatment of emotionally troubled children, for the sexual abuse by one of its employees of a former resident of one of its facilities. After an extensive review of previous situations in which courts had held employers vicariously liable for the unauthorised torts of employees and of the policy considerations underlying vicarious liability, McLachlin J., for the court concluded, at para. 41:

41 …in determining whether an employer is vicariously liable for an employee's unauthorized, intentional wrong in cases where precedent is inconclusive, courts should be guided by the following principles:

(1) They should openly confront the question of whether liability should lie against the employer, rather than obscuring the decision beneath semantic discussions of "scope of employment" and "mode of conduct".

(2) The fundamental question is whether the wrongful act is sufficiently related to conduct authorized by the employer to justify the imposition of vicarious liability. Vicarious liability is generally appropriate where there is a significant connection between the creation or enhancement of a risk and the wrong that accrues therefrom, even if unrelated to the employer's desires. Where this is so, vicarious liability will serve the policy considerations of provision of an adequate and just remedy and deterrence. Incidental connections to the employment enterprise, like time and place (without more), will not suffice. Once engaged in a particular business, it is fair that an employer be made to pay the generally foreseeable costs of that business. In contrast, to impose liability for costs unrelated to the risk would effectively make the employer an involuntary insurer.

(3) In determining the sufficiency of the connection between the employer's creation or enhancement of the risk and the wrong complained of, subsidiary factors may be considered. These may vary with the nature of the case. When related to intentional torts, the relevant factors may include, but are not limited to, the following:

(a) the opportunity that the enterprise afforded the employee to abuse his or her power;

(b) the extent to which the wrongful act may have furthered the employer's aims (and hence be more likely to have been committed by the employee);

(c) the extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the employer's enterprise;

(d) the extent of power conferred on the employee in relation to the victim;

(e) the vulnerability of potential victims to wrongful exercise of the employee's power.

[42] Counsel were unable to point to any authorities which addressed the vicarious liability of a retirement home, or a similar facility, for acts of theft or fraud committed by an employee against an elderly resident.

[43] Not surprisingly, DC Jain & Sons Inc. argues that holding it vicariously liable for the dishonest acts of Ms. Gibson-Heath in circumstances where neither she, nor any other employee had any responsibilities or duties that would involve dealing with a resident’s finances, would represent a significant development in the application of vicarious liability.

[44] As already alluded to, the function of a motion judge hearing a motion for summary judgment is to consider whether the evidentiary record is sufficient to enable him or her to fairly and justly adjudicate the dispute in a timely, affordable and proportionate procedure under rule 20.04(2)(a)(ii): Linten v. Tholos Restaurant Inc., 2016 ONSC 4167 at para. 47.

[45] Although a motion judge is required to assume that the parties have placed before the court all of the evidence necessary for the judge to be able to confidently resolve the dispute, particular caution should be exercised by the court where the court is being asked to apply a legal principle in circumstances where the legal precedents are inconclusive in terms of the guidance they provide to the court. In such circumstances, courts are justified in being extra-vigilant for gaps or deficiencies in the evidence which might have a bearing on the application of the law.

[46] In the present case, there is an evidentiary conflict between Mr. Regular and Ms. Hoyle as to how Ms. Gibson-Heath came to provide additional personal care worker services to Clifford Hoyle. Margaret Hoyle says that Molly Hoyle spoke to Linda McCallum and that it was Linda McCallum who advised Molly Hoyle that Fairfield Manor East would be able to provide a caregiver to help Mr. Hoyle with personal care tasks, both in the morning and in the evening. Mr. Regular denies having any knowledge of this, but does not disclose what, if any, inquires he made to determine what actually happened.

[47] Other than observing that Mr. Hoyle’s care records disclose that Ms. Gibson-Heath had very little involvement in providing personal care or nursing services during his stay at the home, Mr. Regular is not even able to say what services Ms. Gibson-Heath was supposed to provide or, indeed, even confirm whether she did provide additional services to Mr. Hoyle.

[48] Just as there is no indication that Mr. Hoyle paid anything extra to Fairfield Manor East for such services as Ms. Gibson-Heath may have provided, nor is there any evidence of payment by Mr. Hoyle or his family to Ms. Gibson-Heath or any other third party for those services.

[49] While there is a temptation to prefer the evidence of Margaret Hoyle concerning how Ms. Gibson-Heath came to provide additional care services to Clifford Hoyle on the basis that the defendant has failed to adduce any evidence as to what, if any, inquiries Mr. Regular made, it is clear to me that Molly Hoyle and/or Linda McCallum could be in a position to provide evidence which would assist the court in resolving the evidentiary conflict between Margaret Hoyle and Robert Regular. In such circumstances, it would not serve the best interests of justice for me to make a definitive finding on the present record.

[50] Further, an important consideration when determining whether DC Jain & Sons Inc. should be vicariously liable for Ms. Gibson-Heath’s actions will be whether the additional care services she provided to Mr. Hoyle were an extension of, or associated with, her employment by DC Jain or whether what she was providing was, to use the language of the rental agreement, “extra nursing care” which would have been the responsibility of Mr. Hoyle or his family to obtain, organise and pay for. Such evidence would assist the court in determining the extent to which the employer created or enhanced the risk of the wrong complained of and, hence, the application of the subsidiary factors described by McLachlin J. in Bazley v. Curry.

[51] Ultimately, I am not confident that, on the present evidentiary record, I can make a finding on the question of whether Ms. Gibson-Heath’s work with Mr. Hoyle was arranged by Fairfield Manor East or by Mr. Hoyle’s family. Nor do I know as much as I could and perhaps should, about what she was supposed to be doing for Mr. Hoyle. As a result, I am not able to resolve at this time the issue of DC Jain & Sons Inc.’s vicarious liability, and the potentially far-reaching implications of such a decision.

[52] That having been said, it seems to me that it should be possible to sufficiently develop the evidentiary record, either through adducing additional oral evidence (rule 20.04(2.2)) or through a tailored trial conducted in the manner contemplated by rule 20.05.

[53] I will therefore convene a case conference to discuss the appropriate procedure going forward. At that time, I will also provide counsel with the opportunity to make submissions on the issue of costs of this motion.

Mew J. Released: 21 July 2017

COURT FILE NO.: CV-12-466-00 DATE: 20170721 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: ESTATE TRUSTEES OF THE ESTATE OF CLIFFORD HOYLE, KATHRYN GREIG and MARGARET HOYLE Plaintiffs – and – MELISSA GIBSON-HEATH, BEN HEATH, DC JAIN & SONS INC., ROBERT REGULAR and CANADIAN IMPERIAL BANK OF COMMERCE Defendants

REASONS FOR DECISION (Motion for Summary Judgment)

Mew J. Released: 21 July 2017