Headley v. City of Toronto, 2019 ONSC 4496

COURT FILE NO.: CV-12-468777

DATE: 20190827

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MARK HEADLEY

Plaintiff

– and –

CITY OF TORONTO

Defendant

Weston Powell and David Windrim, for the Plaintiff

Robert Fredericks, for the Defendant

HEARD: April 15-18, 23-26, 29, 30, 2019 and May 2, 2019

M.A. SANDERSON J.

reasons for decision

Introduction

[1] This is a wrongful dismissal action brought by the Plaintiff, Mr. Mark Headley (“Headley”), a long term employee of Seaton House, Toronto’s largest shelter for homeless men, against the Defendant, the City of To7ronto (“the City”), after the City terminated his employment at Seaton House (“SH”) on the basis that he had stolen about $5,000 from a number of Seaton House residents (“the clients”) and also that he had grossly neglected his employment duties so as to irreparably sever the employment relationship. Headley was alleged to have stolen cash that was paid to him in the shift leaders’ office by SH clients for their maintenance fees – a monthly fee in lieu of rent. Headley was also alleged to have given receipts to clients for amounts of money that were never deposited into SH’s accounting system.

[2] Headley vehemently denies that he ever stole any clients’ money, or that he otherwise breached his duties to Seaton House clients or to the City.

[3] This Court must decide; (1) Whether the City of Toronto has proved that it had just cause to terminate Headley's employment; (2) If it has not proved just cause, what is the appropriate notice period and the quantum of damages to be awarded in lieu of notice? (3) Should the City be ordered to pay Wallace damages, punitive or aggravated damages in addition, and if so, in what amount?

[4] In the event that no just cause is proved, the parties have agreed on the quantum of Headley’s monthly loss, $5,639.88. To arrive at a figure for wrongful dismissal damages, counsel have agreed that this Court should simply multiply that monthly loss by the number of months of reasonable notice.

Preliminary Comments

[5] Many of the participants in this trial have served homeless men in Toronto for most of their careers and have exhibited a dedication to service for which they all deserve great credit in my view.

[6] Protecting the homeless in a large city such as Toronto poses enormous challenges for the City and for its employees. It is an understatement to say that employment at SH brings challenges that most employers and employees will never be required to meet.

[7] At the material time between 2010 and 2012, SH had over 700 beds and ran a number of programmes, including an emergency hostel offering short term shelter, a harm reduction programme for alcoholic and drug-addicted men, and a Long Term Programme (“LTP”) where Headley and witnesses O’Brien, Lovi, Callender, Okbara, Premji and Anstett worked.

[8] Many SH clients have serious physical and/or mental illnesses and/or addictions to drugs and/or alcohol.

[9] Seaton House is a “sink or swim” environment “where you are thrown in and you swim if you can.” At SH, many unusual things happen. Robbery and theft are regular occurrences. “You don’t want to get robbed…There’s addicts in the place…. You’d lose your shoes while you sleep [if they were] not tied up….”

[10] Shift Leader Lovi gave evidence that during his 34-year career at Seaton House, he has seen men lit on fire; throats slit; “tons” of physical altercations, fights, medical emergencies; people stabbed; “thousands of seizures”; “about everything you possibly don’t want to see.”

[11] “On the sidewalk [on George Street] in front of SH the drug dealers used to fight for square footage … and when we went outside it [was] sort of one stop shopping. You have to see it to believe it but it’s true.”

[12] Headley gave evidence that for addicted SH clients, walking up George Street is “like climbing Mount Everest”: “There [are] so [many]…triggers and …things that can cause you not to make it up the street with your money in your hand…. There [are] guys using in the corner …guys shooting up over here … guys drinking over here… so [many]…triggers. There is so much robbery …on that street.”

[13] Despite SH conditions inside and out, for some men, life in the LTP there offered stability and safety over living on the street. Being turned away from Seaton House was the ultimate threat that could be made to those LTP clients.

[14] The Programme Director of the LTP, Mr. Daniel Anstett, and other witnesses gave evidence that for some clients, SH was a shelter of last resort. If it evicted men who were already vulnerable, addicted and seriously mentally and physically ill, they might literally be unable to survive on their own.

Comments on Credibility

[15] While the witnesses agreed on some of the factual matters that this Court must resolve, unfortunately there were significant discrepancies in the evidence on important points, (including on how easy or difficult it would have been for someone other than Headley to have accessed and stolen the money in question).

[16] A major issue was whether Headley was a credible and reliable witness. Counsel for the City submitted he was not and that his evidence “did not pass the smell test”.

[17] For reasons specified later in these Reasons I have found Headley generally to have been a credible witness.

[18] Generally speaking, where the evidence differed, having seen and listened to all of the witnesses, having considered the similarities and differences in the evidence and borne in mind the content of the contemporaneous documents, I have preferred the evidence of Carla O’Brien and Eugene Lovi, the two permanent shift workers in the LTP with whom Headley worked most closely, and to a lesser extent that of Scott Callender, (another LTP permanent shift leader) and of Peace Okbara and Alice Premji (other co-workers) over the evidence of Anstett (their and Headley’s immediate supervisor at Seaton House and the individual responsible for conducting the investigation in respect of the allegedly missing funds.)

[19] In reaching my overall conclusions on whether the City has proved just cause to terminate Headley’s employment, and in deciding the weight to be given to Headley’s evidence, I have given particular weight to the evidence of Carla O’Brien, whom I considered to be a very strong and very credible witness.

[20] I have accepted her evidence on the almost open access to the shift leaders’ office from which the monies allegedly disappeared, lack of uniform practices in the safekeeping procedures for client monies, as well as on Headley’s strengths and weaknesses, as detailed later in these Reasons.

[21] Generally speaking, I also consider Lovi, another LTP permanent shift leader, to be a credible and reliable witness.

[22] Shift leader Callender generally worked night shifts in the LTP, so he could not be of much assistance to this Court on procedures and practices followed during SH day shifts. However, he did corroborate, for instance, Headley’s, Lovi’s and O’Brien’s evidence that many others did have access to the shift leaders’ office from which the monies in question went missing.

[23] Counsel for the City urged this Court to conclude that Headley was lying because “his story kept changing”, because he allegedly said something different on June 25, July 19, 2012 and at trial about the circumstances under which he admittedly issued receipts for maintenance fees to a client named John Hinks. I have not accepted that submission. As detailed later in these Reasons, on all three dates Headley referred consistently to Hinks having lost his money/been robbed. He repeatedly mentioned robbery and a head injury. He consistently said he had issued two receipts to calm Hinks down. I do not consider the differences upon which the City relies to be as significant as submitted.

[24] Counsel for the City urged this Court to find that Headley’s evidence was exaggerated and unreliable. While I accept that Headley’s evidence at times might be characterized as emotional, I have found it generally to be credible. When he said, for instance, that following policy and procedure could put “half of Seaton House residents on the street” and when he gave an example of the SH policy that provides that clients will be evicted if they make homophobic or racist remarks or “tell you what they are going to do with your mother”, I took his point to be that if SH staff were to strictly enforce those policies many clients could be dramatically adversely affected. Rather than blindly enforcing these policies, SH staff had “to be bigger than that” for the benefit of the clients. Similarly, when he said that the safe was “always” broken he went on to say it often needed to be fixed. When he said “90 per cent” of receipts written by the shift leaders were missing, he went on to say that many receipts had been discarded. My impression was that he did not expect this Court to take him completely literally when he said these things. Rather he was seeking to emphasize the points he was trying to make.

[25] In considering Headley’s credibility, I find it significant that Anstett, who by 2012 had worked with Headley for approximately 10 years, initially accepted Headley’s word that he had issued receipts without receiving maintenance fees to calm Hinks down. Anstett did not initially suspend or send Headley home. Anstett’s initial reaction, documented shortly after June 25, 2012 was that although strange, Headley’s explanation sounded plausible.

[26] Nor do I accept the submission of Counsel for the City on the significance of the failure of the witness Premji to remember a specific incident involving Hinks.

[27] I do not accept the submission of Counsel for the City that Premji’s lack of recollection signifies that the incident in question did not occur as Headley said it did. While Premji could not specifically remember an occasion when she was present when Headley gave Hinks a receipt to calm Hinks down, when she was asked at trial about Hinks’ behaviour, demeanour, physical aggression, lack of control and frustration about missing money, her evidence was generally consistent with Headley’s. I find that for Premji, the day on which Headley allegedly provided a receipt to calm Hinks down was a day like many others and the incident was an incident like many others.

[28] Having seen and heard the evidence of those who worked daily for many years with Headley in the LTP of Seaton House, as well as the lengthy evidence of Anstett and his supervisor Smith, I am generally of the view that the former knew what was happening in the LTP better than did either Anstett or Smith.

[29] On operational matters, in my view, the shift leaders of the LTP generally gave more credible and reliable accounts of events as they occurred in the LTP during the material period than did Anstett. I have accepted the evidence of the shift leaders that Anstett left much of the day to day running of the LTP to the shift leaders and that he delegated many disciplinary and other matters to them.

[30] Anstett’s lack of specific knowledge about certain operational aspects of the LTP operations was evident during his evidence. For instance, he thought, in 2012, that the SMIS accounting system had been used for “5-6 years at least” [this estimate was out by several years].

[31] His answers were often vague and/or non-responsive. For instance, when asked whether he communicated with staff about discretion to waive maintenance fees, his answer was “It’s in the policy binder”.

[32] His answers were sometimes contradictory. I shall give examples later in these Reasons.

[33] Anstett maintained at trial that at the material time, staff members other than the LTP shift leaders did not have access to the shift leaders’ office from which the money in question disappeared. For reasons detailed later, I have rejected Anstett’s evidence in that regard. I note that Anstett refused to investigate the issue of access to the shift leaders’ office in 2012 even after Headley raised the matter on July 19, 2012. Anstett attempted to maintain that position in cross examination, even after the conclusions reached in Exhibit 1 Tab 87, a document created after an internal audit in late 2013 or early 2014, identifying widespread access to the shift leaders’ office as late as 2013-2014 were pointed out to him.

[34] Smith, Anstett’s immediate supervisor, acknowledged in cross examination that it was fair to say that during the 2012 Headley investigation into the missing money she was not concerned about alternative possibilities or explanations. She said she didn’t want to know about “any number of ways money could go missing”. Throughout her evidence at trial, Smith was dismissive of Headley’s attempt to bring matters such as widespread access to the shift leaders’ office to her attention so that possibilities other than theft of the money by Headley would be considered/made the subject of further investigation. Smith refused to acknowledge that someone should have directed further follow-up on those matters.

[35] Part of the City’s case against Headley was based on breach of City policies.

[36] For reasons outlined later herein, I have also preferred the evidence of the permanent shift leaders over the evidence of Smith as to the specifics of policies and procedures for administration of maintenance fees known to shift leaders in the LTP at the material time. I have also concluded that Smith overstated the extent of dissemination to staff and training provided on specified written City policies and procedures that she said shift leaders were required to follow in fulfilling their shift leader duties at SH. I have found that SH’s policy on the safekeeping of maintenance fees in effect at the material time contained no reference to duties of shift leaders in this regard, let alone set out a detailed procedure for fulfilling those duties.

[37] I have found that while they had a general understanding of their duty, for instance, to keep clients’ money safe, the shift leaders had not been given or instructed to uniformly follow any prescribed procedure for receiving, tracking, or safeguarding maintenance fees received from clients and had not been uniformly trained in that regard. Practices and procedures followed varied from shift leader to shift leader. There was no prescribed requirement to log amounts of maintenance fees at the end of each shift. Some shift leaders did. Some did not.

[38] While long on emphasis on written policies and procedures she said should have been known to the shift leaders and followed by them, I have concluded that Smith was short on attention to what needed to be pursued in Anstett’s investigation before the decision was made to terminate Headley’s employment.

[39] Flor Ardon and Sally Wilbur from the Seaton House administration office were called to give evidence by Counsel for the City.

[40] While I found Ardon to be a credible and reliable witness, her evidence was of limited assistance in resolving the issues here.

[41] Smith and those who instructed Sally Wilbur on behalf of the City and who made the ultimate decision to terminate Headley’s employment, in concluding that Headley likely stole maintenance fees from clients, relied heavily on Wilbur’s conclusions, including her conclusion that although other shift leaders had issued receipts, all maintenance fee monies for which they had given receipts had made it into SH administration coffers and had been recorded in SMIS or HUS.

[42] In his opening, Counsel for the City submitted that Wilbur had “in depth knowledge of SH’s financial entry system and procedures. She was primarily responsible for investigating and matching the receipts to the electronic entries.” This was correct. However, Wilbur’s evidence was of mixed use to the City and in several respects was helpful to Headley.

[43] Wilbur’s involvement was initially limited to a review of four receipts: the three receipts, each for $415 that came to light in late June 2012 that Headley gave to Hinks dated March 1, April 30 and May 31, 2012 (that formed the impetus for the initial Headley investigation) and one for $410 to Foremsky dated April 2, 2012. She initially checked the SMIS accounting system and advised that none of the four maintenance payments had been received and recorded in SMIS (See tab 72 Foremsky, tab 69, tab 29, Headley, tabs 52-65).

[44] In giving her evidence, she seemed unsure about the accuracy of some of her conclusions. Wilbur acknowledged in cross examination that some of her initial conclusions about missing money had ultimately proven to be incorrect. Wilbur also acknowledged when she searched for payments she had to make assumptions about when money had been received in administration. If maintenance fees were deposited earlier or later than she had assumed she could have missed them.] By the end of her cross examination, I was of the view that she could not be of definitive assistance even on these four receipts.

[45] Wilbur was of little assistance to this Court on Foremsky. She originally said no money was deposited in SMIS with respect to the Foremsky receipt in question. Wilbur seemed unsure as to whether the missing Foremsky money had ultimately been found.

[46] For reasons detailed later, I have not accepted her conclusions on Foremsky as I have preferred Lovi’s evidence that the money was not missing when she concluded it was and I have rejected her conclusion that the money went missing on a shift where Lovi and Headley were on duty.

[47] I have accepted Wilbur’s evidence that she was asked only to have a limited role in the investigation. She said it was “not my role to investigate why receipts do not line up.” Nevertheless, in Tab 69 she purported to comment on shift log entries in Tab 67, despite saying that she had not been asked to review shift log books. As detailed later in these reasons, I have rejected some of her conclusions based on her incorrect assumptions and understanding of shift leaders’ logging requirements. Similarly, as Wilbur had no personal knowledge of the circumstances surrounding Headley’s giving of receipts to Hinks on March 1 and May 31, 2012, or of whether Hinks paid money to Headley on those days [as the City alleges and Headley denies] she could not be of assistance on those matters.

[48] With respect to whether the City received the $415 from Hicks, receipted by Headley on April 30, Wilbur ultimately could not be of much assistance. I have accepted Headley’s evidence that at the July 19, 2012 meeting, Headley, Anstett and Smith discussed $415 that had been paid to administration by an unidentified payor and that Anstett acknowledged at that meeting that that $415 could have been the missing $415 Hinks payment that Headley had receipted on April 30, 2012. Wilbur gave evidence that she assumed any unidentified amount of $415 “would have been for someone’s maintenance payment.”

[49] In late August or early September of 2012, Wilbur was asked to review additional receipts, including a number of other receipts signed by Headley. In September 2012, she prepared Exhibit 1 Tab 68, a summary document showing the Headley receipts she had reviewed and showing her conclusions as to whether the monies shown on those receipts had been received and recorded in the SMIS or HUS accounting systems used by SH at the relevant times. She highlighted on Tab 68 the Headley receipts on which she had concluded there were no SMIS or HUS receipts. She reviewed receipt books included in Exhibit 4, containing receipts issued between October 2010 and March 2011 and between December 23, 2011 and June 28, 2012. Tab 68 lists 30 receipts written only by Headley between October 2010 and June 28, 2012. It does not consistently identify to whom the receipt was written. Tab 69 provides details. Later in these Reasons I have set out further specifics. Wilbur thought she had found ten receipts (including the three Hinks receipts identified in June) where maintenance fee money receipted by Headley had appeared to have gone missing. This total included two receipts issued to a Mr. Dalip for $300 on January 13, 2012. She counted $600 as being missing for Dalip for these two receipts. During her evidence, Wilbur said she had found a $300 deposit in SMIS. I have accepted Headley’s evidence that one of the Dalip receipts on January 13 had been written in error and he wrote another with respect to the same $300 received. I have found no Dalip money went missing and that Wilbur’s conclusion that $600 was still missing for Dalip at Tab 68 was incorrect.

[50] On Exhibit 1 Tab 70, p. 304, Wilbur wrote that a January 5, 2012 deposit of $400 from a client named Kokanovic was “missing” in SMIS. However, after initially giving evidence that that money was still missing, she eventually admitted during her evidence that she had later located those monies.

[51] In Tab 68, Wilbur referred to two receipts for $701 given by Headley to Hodgins, one dated November 1, 2010 and one January 1, 2011, and another for $700 given to Turner dated March 30, 2011.

[52] In Tab 69, she wrote that the $701 deposit from November 1, 2010 “seemed to have gone missing” on a November 1 shift that Headley worked doing programming, “as the amount no longer appeared in the SL [shift leader] log in subsequent shifts”. For reasons set out in detail later in these Reasons I have rejected Wilbur’s conclusion.

[53] Of Turner, Wilbur wrote in Tab 69 that on March 30, 2011 a $700 receipt was issued by Mark Headley. The log book is missing for this period, but no deposit was made. Mark Headley was the shift leader on duty. Later in these Reasons I have set out my Reasons for holding that any inference that the money went missing when Headley was staff leader was unsubstantiated.

[54] In late August or early September 2012, Wilbur was asked to investigate whether the funds for which other shift leaders had provided receipts had been paid into SH coffers/received by SH administration and recorded in the formal SH accounting records (SMIS and earlier, HUS).

[55] She said she checked “a few receipts in July 2012, some in August 2012 and again this year”.

[56] Wilbur made no notes as to which receipts exactly she checked or when she checked them. She prepared no document similar to Tab 68 in respect of her review of receipts written by other shift leaders. She concluded from her review that no money had gone missing from the other shift leaders.

[57] Wilbur was apparently not asked to consider the total number of receipts that should have been available for her review, i.e. the total number of receipts that shift leaders would have been expected to write for maintenance fees during the material period. I shall deal with this aspect of the investigation later in these Reasons.

[58] In short, given her limited knowledge of safekeeping practices and procedures by the LTP shift leaders, instructions limiting the scope of her review, the dearth of records on what she actually reviewed, the failure to consider the number of receipts that should have been available for her review for maintenance fees during the relevant period, apart from her evidence about whether receipt of certain funds had been recorded in the administrative office of Seaton House, Wilbur could not be of much assistance to this Court, and even on that score, Wilbur was tentative and admitted that several of her initial conclusions that maintenance fees had not been received by the City ultimately turned out to be erroneous.

[59] In summary, on most of the crucial contested facts, the gist of Headley’s evidence was corroborated by other evidence that I have accepted, and I have found Headley’s evidence overall to be credible. Where Headley’s or the other shift leaders’ evidence differs from Anstett’s, I generally prefer their evidence over Anstett’s. Because Wilbur’s evidence was based on limited information and contained unwarranted assumptions, some of her conclusions based on those assumptions were, in my view, unreliable. Later in these Reasons, I have identified in more detail which of Wilbur’s conclusions that I have accepted and which of her conclusions I have rejected.

THE LONG TERM PROGRAMME

[60] At the material time between June 2010 and June 2012, there were about 220-240 (O’Brien said 234) beds in the LTP. Clients received accommodation, meals, counselling, medical care and other services including music and recreational programmes. Besides room, board and other services, LTP clients sometimes were given spending money.

[61] Generally, clients in the LTP were men over 50 years old. Sometimes they were younger, for example if they were seriously mentally or physically ill. LTP clients included men who should have been placed elsewhere in long term care but who were in SH as a “shelter of last resort” because other shelters did not have the capacity to deal with them. “If not with us they would end up on the street. You just can’t put people [like this] out.” I accept the evidence of O’Brien that “Our clients were the clients nobody else wanted.” Anstett gave evidence that some of the men with severe mental illnesses would have been picked on if left in the SH hostel. George Street can be dangerous for the old and vulnerable.

[62] Despite conditions inside and out, for some men, life in the LTP at SH offered more stability and safety than living in the street. Being turned away from Seaton House was the ultimate threat that could be made to those LTP clients.

LTP OPERATIONS AND PROCEDURES

[63] Headley was alleged to have stolen cash he received for maintenance fees from clients in the shift leaders’ office but never delivered to SH administration to be recorded in the SH accounting system, SMIS.

[64] At the material time (but not now), clients in the LTP who had income were expected to contribute to their upkeep, through the payment of maintenance fees. The amounts paid by clients in the LTP for rent, meals and services provided by way of maintenance fees was not uniform but depended on a number of factors, for instance whether they were receiving regular monthly income like Old Age Security or Ontario Disability Support Program (“ODSP”) payments. Generally, clients with regular income were expected to pay maintenance fees of $415 per month (for ODSP recipients) and $701 per month (for those with full income as defined in Exhibit 5).

[65] The procedures used by the LTP shift leaders for receiving and tracking payment of those monies are relevant.

Payment and Receipt of Maintenance Fees in the LTP

[66] The LTP was operated in three shifts. The busiest was the 7 am-3 pm day shift. On that shift there were usually two shift leaders on duty who shared supervisory and administrative duties.

[67] On the 3-11 pm and 11 pm-7 am shifts there was usually one shift leader on duty.

[68] Headley and Lovi worked mostly days.

[69] Seaton House staff conducted pay out lines at which most clients with regular income endorsed their monthly government cheques over to Seaton House. The balance would then be doled out to them or held it in safekeeping for them.

[70] O’Brien said “maybe 20 guys” had their own bank accounts and would make cash payments for their maintenance fees to Seaton House. Rarely, they would make them to the administrative personnel in pay out lines, but most often they would make them to the LTP shift leaders in the LTP shift leaders’ office.

PROCEDURES FOR PAYMENT WHERE CLIENT HAD HIS OWN BANK ACCOUNT

[71] When one of the about 20 clients in the LTP with his own outside bank account came to the LTP shift leaders’ office to pay his monthly maintenance fees, the shift leaders would receive the cash unofficially, i.e. it would not be officially receipted by SH administrative staff until after the shift leaders had delivered it to the administration office. When shift leaders received cash initially, they were not required to keep a separate log of monies received. The shift leaders would usually accept the cash payment, count it, give the client a hand-written receipt (such as in Exhibit 4), put the cash in an envelope, write the name of the client and the amount received on the envelope, and put it in the lockbox in the safe in the LTP shift leaders’ office until it could be delivered to administration. There was evidence that the safe was old and often did not work. If the safe wasn’t working, the shift leader would put the cash in a drawer in the shift leaders’ desk or in filing cabinets in the shift leaders’ office. On shift transfers at the end of each shift, the shift leaders would often count and record the amount of money being held in the shift leaders’ office and make an entry in the shift leaders’ log. However, I have accepted the evidence of the shift leaders that there was no requirement that that be done, and that it was not always done.

[72] Depending on whatever else was happening during the shift, shift leaders on the day shift would try to take the money they had received to the administration office of SH for official recording. However, it was only open during regular office hours and sometimes the money would be left in the shift leaders’ office for several days before it was taken to administration to be logged on SMIS, the Seaton House electronic accounting system (or, previously, HUS).

Waiver or reduction of Maintenance Fees

[73] Although every LTP client with regular income was expected to pay maintenance fees, some would not be able to pay every month. Clients might go on binges or have their money stolen.

[74] When that happened, the counsellors/shift leaders/Anstett would have to decide the repercussions of non-payment, including whether they would be ejected from SH.

[75] Headley said if a client went out and smoked his money and couldn’t pay his maintenance fees “we would take whatever he has”. Headley said he was unaware of any policy that mandated that he could not do that. No approval was needed from Anstett. O’Brien said generally when clients could not pay there was not a big push back from SH administration.

MONEY MISSING FROM SEATON HOUSE BEFORE JUNE 2012

[76] In considering what had happened to the client cash alleged to be missing, including whether Headley had stolen it, counsel for the plaintiff submitted that this Court should consider not only the environment of rampant theft and robbery at Seaton House but also the history of other money going missing, both before and after Headley’s termination.

[77] Headley said $500 had gone missing at Birchmount, another SH program, in 2005.

[78] Over $8,000 had gone missing from the Annex, another SH program, when Art Manuael had been managing it.

[79] Before that, Frank Noltal had done an investigation when over $24,000 had gone missing from the Annex crime reduction programme.

[80] Headley said that in a supervisor meeting in May 2011, Headley, Lovi and O’Brien had reported to Anstett that money had gone missing in the LTP but Anstett had done nothing except require the shift leaders to cover that amount. Anstett gave evidence in chief that he could not remember that incident.

[81] I accept the evidence of O’Brien on that point that money did go missing from the LTP shift leaders’ office and I find that Anstett required the shift leaders to make up the deficiency.

[82] I find that money had disappeared from SH repeatedly in the past.

EVENTS LEADING TO HEADLEY’S TERMINATION

[83] In June 2012, it came to light that Headley had given receipts for maintenance fees to an LTP client named John Hinks for which administration personnel at Seaton House could find no record of corresponding payment/deposit into SMS or HUS. This prompted an investigation.

[84] At that point, Headley had been employed at Seaton House for 15 years.

[85] I pause here to review Headley’s personal and employment history to that point in time.

Headley’s Personal History and Experience at Seaton House Before June 2012

Employment at Seaton House

[86] In June of 2012, Headley was a permanent shift leader in the LTP. He said he loved his job.

[87] Headley had started working at Seaton House in 1998 as a client service worker. Between 2000 and 2002, he had worked there as a counsellor. He had been promoted in 2002 to the shift leader position and had worked in that capacity until his employment was terminated in 2012 (with the exception of 2007-2008, when he was on a one-year secondment acting as Programme Supervisor of the SH LTP and Birchmount Residence, replacing Anstett, and then as temporary manager of O’Neil House, a crack cocaine harm reduction programme).

[88] Headley said whether he had been a client service worker, shift leader or programme supervisor, he would treat men with bed bugs and lice. “I put my hands in it. I don’t sit around…I don’t believe that treating guys with dignity and respect involves sitting in the office.”

Reputation Among Co-workers

[89] By all accounts, Headley was well respected both by clients and the SH staff.

[90] Everyone, including Anstett, gave evidence about his exceptional commitment to the men he served.

[91] Anstett said Headley was passionate about relating to clients. He led by example and worked with some of the most difficult clients, showered them and rid them of lice and scabies. He did more on the floor than the other shift leaders. Headley was a valued employee, part of the management inner circle, and “an active member of our team”. He could depend on Headley. When Headley had replaced Anstett when he had been on secondment, Headley ran the LTP well.

[92] O’Brien said Headley managed conflict well and ensured that clients were safe. Headley was exceptionally client-centred, very empathetic, sympathetic, not afraid to get his hands dirty for their benefit and vigilant to maintain clients’ dignity. He was working on the floor 90 per cent of the time, not sitting in the shift leaders’ office. A lot of clients asked for him because he saw each of them as a person. He tried to maintain clients’ dignity. When he was cutting their hair he would play music, make it fun. O’Brien remembered that Headley had seen a t-shirt that he thought would bring a smile to Hinks’ face because it represented boxing or Newfoundland. She said Hinks was excited about the t-shirt. O’Brien said she ranked Headley’s integrity as very high. She said he did not condone people taking things from clients. She remembered an incident where a staff member had taken clothing from a client and Headley had been upset, considered people taking clothing from the guys “a sin”, saying “These guys didn’t have much”. She said she was very surprised when she heard what had happened to Headley.

[93] Callender said Headley would see the clients first and foremost. He was a great colleague, a wonderful guy, very helpful with clients.

[94] Okpara said Headley was very respectful and compassionate, a very good shift leader, leading by example. He had a very good knowledge of individual clients. Knowing how he worked as a shift leader and his level of commitment, she thought if Headley could be terminated it could happen to anyone. His termination made her feel unsafe.

[95] Callender, O’Brien, Lovi and Okpara all strongly vouched for Headley’s trustworthiness. They were of the view that it was unlikely he would steal from those whose lice he treated, whose hair he cut, to whom he was so respectful.

[96] Lovi said he would trust his life with Headley. He would never believe Headley took money from Hinks.

[97] In her report to the Auditor General dated October 25, 2012 at Tab 86, Smith wrote: Mr Headley has worked with the City of Toronto for over 15 years, most of his time in management. He has been an above average employee in terms of his performance who shows a great deal of empathy for our client population. He normally makes decisions independently and requires minimal supervision.

Headley’s Personal History (Apart from at Seaton House)

[98] Headley gave evidence that he grew up in a troubled area.

[99] Basketball was an affordable activity when he was young, and he was good at it. He “played national”, so a lot of kids in his community knew him. He used basketball to help kids with backgrounds similar to his own.

Education and Training

[100] Headley obtained a community leadership diploma from Algonquin College in Ottawa, then a degree from Acadia University in recreation management specializing in people at risk such as seniors and youth in trouble.

[101] He has specialized training in suicide prevention, de-escalation, and cognitive behavior.

[102] Though he was not able to pursue a professional career in basketball, he has coached a provincial basketball team, an Ontario Basketball Association basketball team called the Marksmen that repeatedly made the provincial finals. Ten of his players have received basketball scholarships.

[103] He has operated basketball programmes/camps for low income youth and has encouraged them to do well and to stay in school. At times, he and others, including a church, have rented gyms and he has volunteered and run basketball camps.

[104] While at Seaton House, in addition to his basketball coaching and mentoring activities, he also worked part time on weekends at COTA INSPIRES, an agency that works with men with diabetes and mental health issues.

[105] Starting in 1999 and for many years, he worked in the African Canadian Youth Substance Abuse Programme, trying to help young black men who were having difficulties in school and to encourage them not to drop out.

John Hinks

[106] Since the impetus for the investigation leading to the termination of Headley’s employment related to a client named John Hinks, and since the investigation centred, at least initially, on Headley’s interactions with Hinks, information about Hinks is relevant, in my view, to an understanding of the issues that must be resolved here.

[107] Hinks was an LTP client of Seaton House. Hinks was an ex-boxer, very stubborn, “like a pit bull.” He would fight anyone. He didn’t have the ability, but he thought he could still fight. He often got into altercations with other clients.

[108] O’Brien said he was vulnerable yet aggressive. He did not understand his own vulnerability.

[109] He had spent a lot of time in jail. He often had lice. He smoked a lot of marijuana. He drank a lot of alcohol.

[110] Headley said if Hinks wanted to have his room cleaned, or to pay his rent, he wouldn’t deal with the other shift leaders. He would generally wait for Headley. He would always ask for “the coloured guy.”

[111] Headley said: “I’m the only one that could treat him for lice or give him a haircut or most of the time get him to take a shower. I would dress him up, so he looks good. So, he could go out and look presentable, get him clean, wash feces off him, whatever it took… He kept doing things over and over… a very stubborn guy. Often, he would get out of hand, so I would have to get involved. John and I had a pretty good relationship.”

[112] Lovi said Hinks trusted and was fond of Headley.

[113] When Hinks needed help, Headley worked with him, even with cleaning and when he drank and was incontinent.

[114] Barry Singh, Hinks’ counsellor, made an entry dated October 5, 2011 – “clothes and body infested with lice, shift leader Carla [O’Brien] indicated that Headley would clean up man as he has a good relationship with client enabling cooperation for cleanup.” An entry dated December 7, 2011 read “Mark [Headley] called nurses and MD to check on Hinks for lice and bites.”

[115] Hinks was frequently assaulted and robbed. His money would be stolen both inside and outside SH. Theft happened often enough that it was a staff concern. Premji said Hinks would claim that his money was missing and would say somebody had stolen it. Multiple witnesses referred to Hinks flashing cash around and having his money stolen.

[116] I accept that Hinks regularly had money stolen inside and outside Seaton House on George Street.

[117] Exhibit 1, Tab 66 records at least three occasions when Hinks had money stolen: $50 on December 13, 2011; $90 on October 15, 2011; and $200 on November 20, 2010. Anstett agreed there could have been other unrecorded instances.

[118] In 2012, the year Headley’s employment was terminated, Hinks was 75, with serious memory problems. Headley and others said he suffered from dementia and was very absent-minded. He would come two times to meals, forgetting he had already eaten. He would lose his locker key sometimes twice a day. He could not recognize his own coat. O’Brien said they would tell him one thing today and he would not remember it tomorrow. Hinks would not remember if he had paid his maintenance fees. He might not have paid but might think he had.

[119] Lovi said Hinks would come in and ask for something. Five minutes later, sometimes even sooner than that, he would ask the same question over and over again.

[120] Hinks could get violent.

[121] Premji gave evidence that Hinks could be aggressive, with a lot of cursing and raw anger. Occasionally, if he were frustrated he would be “using the f word” and he would be “using his body.”

[122] Exhibit 1 Tab 43, the Hinks SMIS case summary, records what I find are only some of many occurrences involving Hinks’ violence. For example, Dan Arsenault recorded on December 3, 2011 that Hinks threw a cup of hot coffee and food. On October 15, 2011, after having $90 stolen, Hinks said, “I will kill someone - they do not know who they are messing with” and then he threw some cups. Esmira Danislova recorded on May 9, 2011 that Hinks threw a bin towards the door and his coffee mug, shattering the glass. On March 14, 2011, Hinks picked up a garbage can and motioned to hit Dan Arsenault with it before it was grabbed from his hand. Hinks raised his fists to strike Arsenault, who moved away. Then Hinks shoved a table up against a client service worker (a “CSW”) and tipped the table over. He later picked up a chair to throw it. On March 8, 2011, Hinks tried to kick shift leader Callender, threw a carton of milk at a CSW, and cold water at another.

[123] Okbara said Hinks was catfighting, swinging, kicking when he was upset.

[124] Okbara said when frustrated, when residents such as Hinks attempted to hit her, shift leaders would provide support and “make sure things didn’t escalate out of control.”

[125] I have already alluded to the fact that despite the relative chaos inside and out of Seaton House, some residents viewed it as home and did not ever want to be forced to leave. Hinks was one such client.

[126] I accept the evidence of Headley that Hinks was so attached to Seaton House that on one occasion he jumped from a moving car when he thought he was being transferred to another facility/was being taken away from his home.

[127] Hinks was one of the approximately 20 clients in the LTP who had his own bank account. In his case, he was expected to pay SH maintenance fees of $415 per month. Hinks’ brother would take him to the bank once a month. They would return to Seaton House with cash, some of which was intended to be used to pay his maintenance fees.

[128] O’Brien said they had to collect maintenance fees and to tell guys if they didn’t pay, they might not be able to stay at SH. While not many clients were evicted for non–payment, the fear was there.

[129] I accept Premji’s evidence that when Hinks was without funds to pay his maintenance fees he could become very agitated and could be violent. I accept he was fearful about being ejected from Seaton House because for him it was home.

[130] Headley said Hinks always had ongoing concerns about money: “There was a pattern of him coming in and coming in and coming in to the shift leaders’ office for receipts.”

[131] O’Brien said if Hinks had not paid they would try to say it’s not a big deal. If he used money for something else, it was not a big deal. They would just let it go. If it looked like his money had been taken, or he had not paid but he thought he had paid, they would let it go this month.

[132] Anstett said if Hinks did not pay, he did not pay. If Hinks had been healthier, the real issue at that juncture would have been whether he could stay on at SH given the non-payment. In Hinks’ case, if Hinks did not pay there was no question about what would happen. He would not be evicted. He had been at Seaton House for ten years. He could not survive at any other shelter in the City.

[133] Tab 51 is a printout taken in 2012 of monies received from Hinks by Seaton House between April 2011 and June 2012. Someone from SH administration has written on it that in 2011, maintenance fees had not been received from Hinks for June, August, September, October and November (five months in 2011), or in 2012, for January, February, April, May and June.

[134] Tabs 52-63 are other SMIS documents showing Hinks’ data.

June 25 or 29, 2012

INCIDENT THAT WAS IMPETUS FOR INVESTIGATION OF HEADLEY AND HIS ULTIMATE TERMINATION

[135] On June 25 or 29, 2012, Flor Ardon and Esmira Danilova were running a payout line. Hinks was in line to pay maintenance fees of $415 for July of 2012. (I have noted earlier this was unusual. As the SH logs and Anstett’s notes reflect, usually, clients with their own bank accounts paid maintenance fees in cash to the shift leaders in the shift leaders’ office). Headley thought the incident was on June 25, 2012 and that is the date Anstett used in his memos, but Flor Ardon and Esmira Danilova thought that the payout line was on June 29, 2012. I shall use the dates in the Anstett memos.

[136] When Hinks paid the $415 in the payout line, Ardon gave him a receipt that looked different from the ones he had been receiving from the shift leaders. Ardon said Hinks liked the way the official-looking receipt she gave him looked, and so he requested similar receipts for maintenance fees he said he had paid in previous months.

[137] Ardon could not find SMIS entries for Hinks maintenance payments for January, February, April, May or June of 2012. When she advised Hinks that she could not find any record of payment for those months, he became upset. He went to his locker and retrieved three handwritten receipts dated March 1, April 30 and May 31, 2012 and showed them to Ardon and Danilova. Copies are at Tab 29.

[138] Obviously, Ardon and Danilova became concerned when they learned that Hinks had receipts for which they could locate no corresponding SMIS record of payment.

[139] Danilova went to speak about this concern to Shawn Yoder, who worked in SH administration. Danilova told Yoder that Hinks had been asking for receipts, that they had not been able to locate payments made in the SMIS system, but that Hinks had produced handwritten receipts. Headley happened to be in Yoder’s office at that time.

[140] When Headley heard of Danilova’s concern, he immediately said he had written two receipts for Hinks for which there would be no record in SMIS of money received. Even though Hinks had not actually paid the maintenance fees, Headley said he had provided receipts to Hinks both times to calm him down (because he had been in crisis, afraid that because he had no money to pay his fees he would be evicted from SH).

[141] Tab 43 is Yoder’s memo to Smith, dated July 16, 2012 about his conversation with Headley on June 25, containing the following:

Esmira [Danilova]: I’m looking for you because Sally [Wilbur] doesn’t have a record in SMIS of the rent deposited for Mr Hinks.

Mark [Headley]: I’ll talk to Sally when I’m done here. We won’t have a receipt because Hinks didn’t actually pay his rent. I gave him a hand-written receipt because he got robbed and was really worried about getting kicked out. He was obsessed about it, coming to the office every 10 minutes so I hand wrote a receipt to help calm him down.

Shawn [Yoder]: You gave a client a receipt without taking the money? Probably not a good idea.

Esmira: This client gets really confused. He forgets what you just told him.

Mark: And he gets robbed by other clients all the time, he sits on the floor and counts $50 bills constantly over and over.

Esmira: Anyway, he wants an official receipt.

Shawn: We can’t give receipts to clients unless we actually accept money from them. Mark you know that.

Mark: I’ll speak with the client and sort it out.

Mark and Esmira then left my office.

A short time later Dan Anstett, programme supervisor, came to my office.

Dan: Hi, I was just talking to Mark and Esmira and I’m going to have to investigate this issue. Mark explained he reported the issue to you.

Shawn: No, not really. Mark was in my office and Esmira came in and asked him a couple of questions regarding why it was not recorded in SMIS. He didn’t bring it up. Esmira did.

Dan: That’s weird, he made it sound like he reported it to you.

Shawn: Nope, he didn’t. It’s very strange though. Why would he give a receipt saying he has received money from a client if he didn’t receive the money?

Dan: I’m not sure, I’ll have to investigate it.

[142] Headley gave evidence that after he spoke to Yoder he then alerted Anstett: “So, I went upstairs. Dan, this is what happened.” On June 25 (or 29), Headley said to Anstett: “I gave him a receipt because he was robbed. I was cleaning him, and he was in crisis.” “I did it twice. I told him on the spot I did it two times.”

[143] Headley said he asked Anstett whether he wanted Headley to put this in writing for him and Anstett said “No Mark, it’s okay. No Mark, everything is okay. Enjoy your vacation.”

[144] Anstett said that he then called Hinks’ brother, who commented that Hinks was very difficult and “keeps losing his money”. The brother said that Hinks is getting progressively more forgetful. He is also extremely stubborn and refuses to listen to any of his brother’s suggestions around money… Anstett said his brother was not opposed to getting the Public Guardian and Trustee involved.

July 3, 2012

[145] On July 3, Anstett spoke to Lovi. Anstett said Lovi said it was obvious that Hinks had some form of dementia or head injury, probably caused by his past profession, which was boxing. Lovi told him that although Headley had not advised him that he had issued receipts to pacify Hinks, Hinks always had ongoing concerns about money and due to his confused state, he often repeated himself. Lovi said he had been on shift when Hinks had come to the office “every two minutes” asking if his rent had been paid or if a receipt he was holding meant he had paid the rent, etc. He said he had felt like issuing Hinks a receipt in the past himself, just to keep him from coming to the office so frequently. He said Hinks is always, always, getting his money taken, as he often holds it in his hand while having a cigarette in the smoking area. He explained that Headley was the only staff member Hinks ever spoke with. He refused to talk with anyone else and escalated whenever anyone attempted to speak with him.

July 5, 2012

[146] Anstett met with Hinks’ counsellor, Barry Singh, on July 5, 2012. Singh could not recall whether Hinks had paid maintenance fees in April or May. He said, unlike in the past, despite having requested that information, administration had not been providing regular feedback to him as to who had not paid. He had only been receiving it every three or four months.

[147] Anstett also wrote:

I met with Headley. He admitted to handing out both receipts and said he did so as Mr. Hinks was insisting on getting a receipt even though he had lost his money for the maintenance fee. Mark Headley stated that Mr. Hinks became so agitated that he issued him receipts to calm him down even though he stated no money had been paid.

Note: Mr. Hinks has refused to let staff get involved with his finances and he is routinely losing his money. He often counts his money in open client areas despite staff telling him not to do so. Staff have not been able to get permission from Mr. Hinks for involvement of the PGT.

[148] When speaking to Lovi immediately upon his arrival on the floor, he stated that Hinks had serious problems in paying the maintenance fee and that he was often seen by stuff and residents counting his money and sometimes leaving his money in the library area after counting it.

[149] Anstett noted from Hinks’ record of payment that he had not paid maintenance fees for June 2011 and August to November of 2011, and again January, February and May and June of 2012. While he noted this did happen with other residents, “they are never issued receipts when they do not pay…This issue was raised as a problem and staff tried to reason with Mr. Hinks as he refuses to have anyone touch his money…When I met with Mr. Hinks about the missing money, after I asked one simple question about to whom he paid maintenance fees last month, he stormed out, saying “rent, rent, rent” as he left. He refused to speak about this matter and I will try to approach him in the morning…Mark Headley is one of the few staff who has developed a rapport with Mr. Hinks, who is known to get angry very quickly, suffers from poor hygiene and is normally isolated. He has difficulty in communicating with others and he tends to escalate whenever you try to approach him…Conclusion so far: I will try to meet with Mr. Hinks as he is obviously key to this entire matter. It is believable and known to staff that he is often losing his money yet is very difficult to get him to stay in a room long enough for a capacity assessment. Also, staff stated he gets very upset/agitated quickly so it is plausible although strange that receipts were simply issued to him as a means of calming him down. It was explained to Mark Headley that this should not have been done and that the situation is highly unusual and not in keeping with our procedures for issuing receipts…I will continue to try to get further information from Mr. Hinks. Mark Headley was not sent home as I felt that this particular witness Mr Hinks is not very approachable or reliable…” (Emphasis added). He continued: “This is a complex matter. It may be worthwhile looking at further checks and balances. Historically, the only staff to handle client funds have been shift leaders. While almost all of our residents are able to answer questions concerning their finances, those who cannot are historically referred to the Public Guardian. Mr. Hinks seems to fall through the cracks in the system and challenge us to look at other options to safeguard client finances. It has continually been this gentleman who has not paid regular maintenance fees for the past year and has consistently refused all offers of assistance. Given this situation, I have asked today that the counsellor Barry Singh attempt to get Mr Hicks a capacity assessment to determine his capacity to manage his finances by the Office of the Public Guardian.”

[150] Anstett acknowledged in cross examination that at this stage he did not think Headley had committed fraud.

July 11, 2012

[151] On July 11, 2012, Anstett met with Flor Ardon. Ardon said that the client safekeeping money was often disorganized and handed in late but in her view, there were no major issues, only sloppiness.

JUNE 29-JULY 16

[152] Headley said after June 29, 2012, he was on vacation for two weeks during which he rented a gym to run a full day basketball program for troubled youth.

[153] On the last day of the programme, Anstett left a message on his cell phone: “Mark, this is Dan. Do not come back to Seaton House again. We don’t want to see you here. We don’t want you here anymore.”

[154] Unfortunately, Headley’s spouse, who was ill at the time, became upset when she heard the message. This was upsetting to Headley.

[155] Headley said when he tried to call Anstett back, he would not answer his phone.

[156] He called Karen Smith to ask what was going on. Smith said it was about an incident with Hinks. Headley said Anstett had told him that everything was fine, not to worry about it and there was no need to write it up.

[157] A couple of weeks later, Headley received a call to come in for an interview. Headley said that, as a member of COTAPSA - City of Toronto Administrative Professional Supervisory Organization - he asked to bring a representative with him to that meeting, but Anstett said no. Anstett said that did not happen.

JULY 16, 2012

[158] On July 16, 2012, Anstett, Smith and Wilbur met to discuss the three receipts Headley had given to Hinks and another given to a Mr. Foremsky with no corresponding SMIS entries. Smith wrote out questions to be posed to Headley in an Investigation interview to be held on July 19, 2012.

JULY 19 INVESTIGATION MEETING

[159] Headley said the meeting was about the three Hinks receipts and one more to Foremsky.

[160] Smith made handwritten notes (Tab 44) that she converted into typewritten notes (Tab 31). Except where otherwise noted, I have quoted Smith’s typed notes:

Question 1 – Dan [Anstett]: we observed that there were three receipts issued to John Hinks from March 1, April 30 and May 31. We checked in SMIS and double checked all our records and are confident that Mr. Hinks has no money deposited on all three dates. You issued three receipts. Two bear your signature and the other is in your handwriting. We would like to hear your side of the story. Tell us what happened.

Mark [Headley]: John Hinks loses his money and goes into crisis. I gave him the receipts to get him out of his crisis. It is a known fact that he loses his money all the time. He is in the office every few minutes asking the same questions regarding his rent. He gets really irate. I remember two receipts. I’m not sure if it was three.

Dan: For the receipts issued March 1 and April 3 there was no money in his account. On March 30, he paid his maintenance fees directly to Flor [Ardon]. One receipt was the month before and after. Is there anything you want to add?

Mark: He is absent-minded. He will pull out hundreds of dollars in front of people. We try to deal with it. Eugene [Lovi] and Carla [O’Brien] will know. He refuses to give anyone his money. He has been robbed and has head injuries. He will not give anyone his money. He is a target. He will not deal with any other staff unless I am there.

[161] Headley gave evidence that at the meeting there was a discussion about an unidentified $415 that had shown up in administration with no one’s name on it. Anstett agreed that that could have been the missing Hinks payment for which the receipt Headley had given for $415 on April 30. This discussion was not recorded in Smith’s note of the meeting.

[162] [I note that during her evidence, Wilbur agreed in effect that $415 was an amount that was usually received for a maintenance fee.]

[163] For comparison purposes, I have included Headley’s trial evidence about the giving of the two receipts here. It was as follows:

March 1, 2012 Receipt

[164] Headley said: Hinks was in crisis. He was robbed as he is often. He was bleeding from the head. In crisis again. He got robbed on George Street. They took his money. He’s in crisis. He’s worried about losing his housing, losing his place that he’s staying at. Seaton House was John’s home. He didn’t see it as a shelter…So I issued him the receipt. John, it’s okay man. Don’t worry about your home. Worry about your head. Like “you’re bleeding from the head, rent is your last problem right now”.

May 31, 2012 Receipt

[165] Headley said: I was giving John a haircut. He was infested with lice. So, I was in the barbershop we called it, cutting John’s hair. Treating John. I sent Darlene and Alice Premji to remove his belongings, clean the bed so we could spray the bed for lice and treat all his clothing… I finished cutting John’s hair. I covered his body with NIX for head lice and body lice. I treated him completely. I gave him some new clothes. I let him go. I started to cut another gentleman’s hair and then I heard screaming and yelling in the hallway. When I went out, it was John going at Alice and Darlene because his money, under his pillow or under his bed, wherever he kept his money was missing. I went to John. I tried to calm him down. I told him “Don’t worry about it John.” John came to the office every four minutes or so, saying “I’m going to lose my house and I don’t have any money to pay rent. I’m going to get kicked out”. He kept coming back and forth and back and forth with myself and Alice and I kept telling John “It’s okay, don’t worry about it”. John kept coming back and forth for at least two hours. It is part of his illness… So I said John don’t worry about it. I brought John into the supervisor office. Alice Premji was in the office with me. I wrote John Hinks this receipt. I gave it to John and said "John your rent is paid don’t worry about it. If anyone asks you about it, I gave it to you. Don’t worry about paying your rent. You are okay.”

[166] Smith’s notes of the July meeting continued:

Dan: Did you let anyone know about the receipts for Hinks. You didn’t let me know.

Mark: No, I was dealing with John in crisis…My intention was to calm him down, so he would relax.

Karen [Smith]: Did you make a note in SMIS?

Mark: No, I didn’t. This is an ongoing issue with him. We don’t always put a note of every client that goes into crisis.

Smith’s note continued:

Karen: Were there any witnesses?

Mark: No.

[167] Counsel for the City emphasized that on July 19, 2012, Smith had noted that in that interview Headley had said there were no witnesses. (I note that Smith’s handwritten note of the same meeting (Tab 44) contains nothing recording that this question was asked, or this answer given. I conclude that Smith must have added this question and answer to her typewritten document.)

[168] Headley said he did tell Anstett and Smith that Alice Premji had been present on May 31, 2012 when he gave a receipt to Hinks and that at the July 19 meeting he asked Anstett to interview her as part of the investigation. Headley commented in his evidence: “How can you do an investigation without talking to an eye witness?”

[169] Smith’s typewritten notes continue:

Karen: Do you recognize that this practice of yours with regard to Mr. Hinks is not in keeping with our procedures and can appear to be fraudulent?

Mark: Fraud? My intention was not to be fraudulent but to deal with the crisis.

[170] Headley gave evidence that at the July 19 meeting “I couldn’t believe what was happening to me. I couldn’t believe Dan [Anstett] would come at me like that. I’m a very dedicated worker. I worked hard for those men on the floor. I kept them clean. I kept them safe. I went beyond the call of duty. I showered guys. I cleaned guys, wiped their dirty asses. I did everything to make them dignified… I don’t believe Dan would come at me like I’m a thief. Like I took clients’ money. The same guys I worked hard for that he would flip it around. The same money that I would report was going missing to him who did nothing. Now want to put it back on me. That put me into a dark place…I was so hurt…That job was my heart. That is what I do. I care for people. I did beyond my share…That is why this thing destroyed me…”

[171] When asked about the Foremsky receipt 458857 for $410 dated April 2, 2012, Headley said any money he received he put in safe keeping in the desk, not in the safe because it didn’t work. He put the money in an envelope in the box. He wasn’t sure if it was cash.

[172] As mentioned elsewhere in these Reasons, in Tab 69, Wilbur mentioned Lovi’s question mark in Tab 67, the shift log dated April 2, 2012, “probably due to the fact that there was no money envelope with Foremsky’s name on it. She relied on the underlining and question mark in the shift log to conclude that the money had disappeared on Headley’s watch - see Tab 69.

[173] Anstett said he thought when he reviewed the shift log Tab 67 dated April 2, 2012, he had noted that the Foremsky entry had been underlined. He said that Lovi had told him he had underlined the entry.

[174] At trial, Lovi was referred to the shift log Tab 67, p. 283 dated April 2, 2012 and asked whether he/Lovi had underlined his own $410 entry or put a question mark beside it. Lovi said he did not insert the question mark or underline the $410 entry. He said if the $410 received from Foremsky had not been in the envelope at the time of the shift transfer, he would have ascertained whether it had already been taken to administration. If the $410 had been missing, he would have talked to someone in administration to see if someone had forgotten to document it. He would have talked to the client, checked the receipt book, spoken to the other supervisors, and reported any money missing to Anstett. Since he did not remember doing any of those things he did not think that the Foremsky money had been missing at the time of the shift change on April 2, 2012. Lovi said if money had been missing there was “zero chance” that he would have simply underlined the entry and done nothing.

[175] I accept Lovi’s evidence. When Foremsky paid the $410, Headley gave him a receipt. The receipt was and continued to be in Exhibit 4. Lovi recorded that at the end of the shift when the receipt was given, the $410 was there. Sometime later, someone underlined Lovi’s note that the $410 was there at the end of the shift in question. Someone wrote a question mark beside that note. I find that the Foremsky money was not missing during the shift in question. It is not clear it went missing, but if it did, I find it disappeared sometime after the end of the shift in question.

[176] Smith’s notes record that at the July 19 investigation meeting when he was asked if there was anything else he would like them to take into consideration, Headley generally raised possible explanations for disappearance of money from the shift leaders’ office [including the Foremsky money]. Headley pointed out at the July 19 meeting that there were no [uniform] procedures in place [regarding the administration of maintenance fees], there was widespread access to the shift leaders’ office, and that all AR shift leaders have shift leader keys and have access to the shift leaders’ office: “While we (shift leaders) are on the floor and they need something from the office they can just go in. The safe was not working. The money was kept in the safekeeping box in the top (unlocked) drawer. The safekeeping box/ clients’ cash could be accessed by all staff. The cash was often kept there under unsecure conditions. The rent money stays in the box and sometimes it doesn’t make it downstairs for weeks. This is a regular practice and we all trust each other.”

[177] In response, Smith recorded in her typewritten note:

Karen: We are not concerned about money going missing from the safekeeping box. We are concerned about receipts issued to Mr. Hinks and no money received. [Her handwritten note reads: Not concerned about money going missing. Smith wrote nothing in her handwritten notes about Hinks receipts.]

Mark: I am not hiding anything. I didn’t take the money. The client is getting worse. He is deteriorating. I am not trying to lose my job I am always helping clients…

[178] Headley gave evidence at trial that Anstett had covered the LTP floor. He knew that the safe in the shift leaders’ office did not work consistently, and that when it was not working, cash was kept in an unlocked box. He also knew that CSW’s and other staff members had access to the shift leaders’ office because another key to the shift leaders’ office was kept in the unlocked CSW office.

[179] At trial, Anstett acknowledged that on July 19, 2012 he knew then the safe wasn’t working. He said that even with a broken safe there would have been sufficient security because the shift leaders’ office door would have been locked and the cash would have been kept in a locked drawer. He thought, (I have found wrongly), that the drawer in the shift leaders’ desk would lock and he also ignored that many staff members in addition to shift leaders had access to the shift leaders’ office and to the unlocked desk drawer. I have rejected Anstett’s evidence that before the period of the Headley investigation, the key to the shift leaders’ office was not left in the CSW office. I have also rejected his evidence that that happened only after one shift leader had started to cover more than one floor at night. I find, as the shift leaders said in evidence and in Exhibit 40/Tab 10, that the key to the shift leaders’ office was available to staff in the generally unlocked CSW office throughout the material time between 2010 and 2012 and continued to be available to them until after maintenance fee money disappeared again from the LTP shift leaders’ office in 2013.

[180] Anstett said in cross examination that it was inappropriate for Headley to raise safekeeping flaws at the July 19, 2012 meeting because that meeting was not to be “a discussion about policy”. He said Headley had had 10 years to give input about how things happen on the floor.

[181] In my view, this was an inappropriate comment. Headley raised these concerns at the July 19, 2012 meeting because he believed he was being unfairly suspected and accused of theft. He was trying to persuade Anstett and Smith to investigate other explanations for the alleged disappearance of client funds. Smith had been suggesting that Headley had received money that had disappeared. As Headley said: “I don’t believe Dan would come at me like I’m a thief”.

[182] I find the matters raised by Headley at that time went to the heart of what should have been considered and fully probed. Had client money indeed gone missing, and if so, was it Headley or someone else who had stolen it?

[183] However, neither Smith nor Anstett were open to addressing the matters Headley had raised, including access to the shift leaders’ office and lack of written uniform procedures governing the receiving and recording of client maintenance fees.

July 25

[184] On July 25, 2012, Anstett requested that the safe be fixed. See Tab 47 invoice from Custom Security Consultants “replace complete safe lock and keypad dated August 31, 2012.”

July 26, 2012

[185] On July 26, Anstett [or Wilbur on Anstett’s behalf] wrote: The safe should be locked at all times when not in use. The safekeeping box will be kept in the safe and never left unsecured in the shift leaders’ office. All shift leaders will now obtain two signatures on receipts for all money received from clients. Use attached client safekeeping forms. The current receipt book will no longer be used. The shift leaders will document all monies received and placed in the safe using the daily safekeeping log…This will replace the envelope system currently in place…The new daily safekeeping log is included in the shift leader handover process at the end/start of each shift. Document as currently in shift leaders log book, any clients’ funds in the safe and review logs for missing signatures. When taking maintenance fees, client savings, signed cheques and any other monies down to the administration department, the client safekeeping binder must also be taken down for verification and sign off. All deposits or withdrawals from administration must have a signature from administration…Client money requested and picked up from administration for clients must be signed off in the log sheet by administration and the LT staff person requesting the funds…Completed logs should be collected and returned to administration in a timely manner for filing. Logs are not to be destroyed or thrown out by programme staff.”

[186] This memo recognizes that the safe was not working, that the shift leaders would now be required to document all moneys received and placed in the safe. It incorrectly assumed that there was already a uniform procedure in place of documenting all monies being held in the shift leaders’ log book. Smith’s handwritten, but not her typewritten notes include the following: Safekeeping box is it part of S/L transfer? Implement safekeeping tracking form/sign off.

[187] A memo directing implementation of these new procedures was circulated to LTP staff.

[188] Before this memo was prepared, neither Wilbur nor Anstett nor Smith interviewed any of the LTP shift leaders or other staff about matters raised by Headley at the July 19 meeting.

July 30, 2012

[189] Wilbur noted “the new procedure will help protect staff and clients alike and ensure Seaton House has a standard procedure.”

[190] Despite acknowledging the need to make changes, management paid no attention to the flaws remaining. They did not investigate or address the issue of access to the shift leaders’ office and other matters that Headley had squarely raised.

August 2, 2012

[191] By August 2, 2012, a capacity assessment for Hinks had been arranged.

August 23, 2012

[192] By August 23, 2012, Hinks had been found incapable of managing his finances and the Public Guardian and Trustee had been appointed to do so. [This should have been done well before August 2012, given Hinks’ obvious dementia]

August 30, 2012

[193] Smith said she met with Legal Services on August 30, 2012 and was directed to further investigate whether any other shift leaders in the LTP had issued receipts for which corresponding entries in the SMIS accounting system could not be found. Anstett and Wilbur were to review all receipts from the LTP and to look for corresponding SMIS entries.

[194] Anstett asked for receipt books kept in the LTP shift leaders’ office. With Lovi’s assistance, two more receipt books were located and given to Wilbur for her review.

Wilbur’s September 5, 2012 Receipt Review

[195] The extant receipts issued by the shift leaders including Headley during the relevant period June 2010 to June 2012 are in Exhibit 4.

[196] In Exhibit 4 there are a total of 3 receipt books covering the relevant period.

[197] In Exhibit 4 there is a small blue receipt book with “40 rent receipts” written on the front. It contains 37 receipts written by the shift leaders, including 7 by Headley between September 1, 2010 and December 31, 2010. There is a small green receipt book “carbonless without stub 50 duplicates” containing 42 receipts written by the shift leaders, including 8 by Headley between June 30, 2010 and April 21, 2011. There is a big black receipt book containing 300 blank receipts of which 63 receipts have been written by the shift leaders, including 19 by Headley between October 5, 2011 and June 28, 2012.

[198] It is not clear how many receipts from Exhibit 4 other than the 3 Hinks receipts at Tab 29 and the Foremsky receipt dated April 2, 2012 that Wilbur reviewed before September 5, 2012.

[199] After her September 5 review, in Exhibit 1 Tab 68 Wilbur listed 31 Headley receipts that she had reviewed.

[200] It is not clear how many receipts issued by other shift leaders she reviewed on September 5, 2012 because she made no list of other shift leaders receipts reviewed similar to the list of Headley receipts (Exhibit 1 tab 68).

[201] Her evidence on the extent of her review was vague. She said she reviewed “some” receipts at that time.

[202] I have attempted to determine how many receipts of other shift leaders that she reviewed, as the thoroughness of that review affects the confidence I can place on her conclusion, reached as a result of that review, that no money went missing from any of the other shift leaders.

[203] Since she made no list of the receipts of other shift leaders that she had reviewed, I reviewed the exhibits and the evidence in an attempt to gauge the thoroughness and extent of her review forming the basis for her conclusion that only money receipted by Headley and not the other shift leaders had gone missing.

[204] On the assumption she made them on September 5, 2012, I looked at the markings Wilbur made in Exhibit 4.

[205] In the blue receipt book in Exhibit 4, it appears that Wilbur placed yellow stickies on 3 Hinks receipts written by other shift leaders and orange arrow stickies on receipts written by Headley to Hodgins dated November 2, 2010 and on another Headley receipt to Hinks dated December 1, 2010. She made no other markings on receipts in that blue receipt book.

[206] In the small green receipt book in Exhibit 4 Wilbur put yellow stickies on two receipts written to Hinks by other shift leaders and three orange arrow stickies on 3 receipts written by Headley, (Headley to Hodgins dated January 1, 2011, by Headley to Turner dated March 31, 2011 and by Headley to Charles de Bono on March 3, 2011)

[207] In the black book in Exhibit 4, apart from receipts written by Headley, Wilbur put a yellow stickie on 2 receipts to Gardner written by other shift leaders, one on a receipt written by a shift leader other than Headley to Kokanovic dated April 12. She also wrote numbers on 27 receipts in the black book written by other shift leaders suggesting that she checked those 27 receipts to see if there were corresponding deposits in SMIS. Wilbur said she did look at receipts in addition to these 27 receipts although again, she did not specify which additional receipts prepared by the other shift leaders that she reviewed.

[208] In addition to the receipts in Exhibit 4, I also looked at the other exhibits. Exhibit 1, Tabs 68-82 contains receipts issued to Kokanovic, including 2 issued by shift leaders other than Headley, Foremsky including 1 receipt issued by a shift leader other than Headley, Turner, including 1 receipt issued by a shift leader other than Headley, Hodgins, including one receipt issued by a shift leader other than Headley, Sharma, including one receipt issued by a shift leader other than Headley, Beaulieu including 2 receipts issued by shift leaders other than Headley. From those documents I assumed that on September 5 Wilbur also looked at, at least 8 additional receipts written by other shift leaders.

[209] I have concluded that Anstett was incorrect in Tab 46 when he wrote that on September 5, 2012 Wilbur reviewed 90 additional receipts (the total number of receipts in the green and blue receipt book). It appears that her review also included the receipts in the black receipt book. As I have already indicated, those 3 receipt books included a total of 142 completed receipts including 34 completed by Headley leaving a maximum of 108 receipts written by other shift leaders that Wilbur could have reviewed.

[210] Not all of the 142 completed receipts in the 3 receipt books in Exhibit 4 were written for maintenance fee payments. In her evidence Wilbur said she looked only at receipts that appeared to have been given for maintenance fees. The receipt books in Exhibit 4 included receipts for birth certificates as well as other receipts irrelevant to payment of maintenance fees, including one to Rice dated October 4, 2010 for $180 for safe keeping, others for $30 dated November 9, 2010 to Tyrell, $65 dated December 1, 2010 to Francis for safekeeping, $200 for entertainment December 18, 2010.

[211] As I have already mentioned, Exhibit 1 Tabs 69-82 contains documents suggestive of a review by Wilbur of a number of receipts issued by the other shift leaders. I have already mentioned her markings in Exhibit 4, also indicative of a review of some other shift leader receipts. I note that the numbers written on the receipts in the black book are only on receipts covering the period between March 5, 2012 and June 28, 2012. They do not indicate a review on September 5, 2012 of all of the other shift leaders’ receipts issued over the two year period.

[212] From my review of Exhibit 4 and Tabs 67-82 and other evidence on Wilbur’s September 5, 2012 review including the information set out above, and assuming Wilbur’s review to which I have referred earlier, was done on September 5, 2012 and not later, it appears that on September 5, 2012, Wilbur reviewed no more than 50 receipts written by shift leaders other than Headley covering the material period between June 2010 and June 28, 2012. [Even if she had reviewed all such receipts in Exhibit 4 receipts in Exhibit 4 for maintenance fees issued by other shift leaders, she could not have reviewed more than 108 such receipts and those 108 receipts would not all have been for maintenance fees].

[213] This is important in my view because Wilbur’s conclusion that no money was missing from any of the other shift leaders was apparently a crucial factor in the City’s decision to terminate Headley’s employment in September 2012.

[214] In considering Wilbur’s conclusion that no money went missing from shift leaders other than Headley I have also attempted to ascertain whether she had enough receipts to form a sufficient basis for the conclusion that she reached. That would logically depend in part on the total number of receipts written by other shift leaders during the relevant period. Did she review all or most of them? I have concluded that she did not.

[215] I considered the evidence available to determine whether the number of receipts of other shift leaders that Wilbur reviewed (43-50 to a maximum of 108) could provide a sufficient basis for her conclusion that no money had gone missing from the other shift leaders.

[216] Anstett advised Wilbur that the only receipts that were missing were receipts issued between April 1, 2011 and October 4, 2011. Headley gave evidence that many receipts including many other receipts issued over the whole period, between June 30, 2010 and June 28, 2012 were missing. O’Brien gave evidence that receipt books had been discarded during infestation.

[217] I have found that many receipts for maintenance fees were missing/not to be found in Exhibit 4. I have also attempted to quantify how many receipts were missing that should have and were not available for Wilbur’s review?

[218] I have accepted O’Brien’s evidence that there were 20 men in the LTP with their own bank accounts who were expected to pay maintenance fees to the shift leaders once per month.

[219] The relevant period was 24 months.

[220] It follows that if every client with his own bank account paid his maintenance fees to the shift leaders every month as expected, and receipts were issued by the shift leaders for those maintenance fees there should have been 24 x 20 = 480 such receipts.

[221] I recognize that not all clients would have paid their maintenance fees every month.

[222] There was evidence that some clients had their money stolen or went on binges and did not pay every month.

[223] Hinks was one example.

[224] Had Hinks been a typical client, the total number of expected maintenance fee payments could have been significantly less than 480. Obviously, Hinks had been delinquent numerous times during the 24 month period but on the evidence, this was not typical. Hinks was particularly vulnerable to theft and was not financially competent. A client such as Hinks should not have had his own bank account. The Public Trustee should have been involved much earlier.

[225] According to Anstett, most LTP clients with their own bank accounts were financially competent. I assume from that evidence that they could be expected to pay their maintenance fees each month. Obviously, even financially competent clients could have had their money stolen or could have gone on binges, but even during those months, as Headley said, the shift leaders would accept what they had [and would have issued receipts for whatever they paid]. If they were unable to pay their maintenance fees clients healthier than Hinks could be evicted from Seaton House.

[226] Therefore, it appears that the number of receipts written by the shift leaders for maintenance fees during the 24 month period Wilbur was asked to review should have far exceeded the number of receipts in Exhibit 4 and should have approached 480. It is obvious that the number of receipts in Exhibit 4 falls far short of 480, and that the number of receipts in Exhibit 4 issued by all shift leaders other than Headley that Wilbur likely reviewed (43-50) falls even farther short of 480.

[227] I have found Wilbur reviewed around 10% of the total number of expected receipts issued by the shift leaders other than Headley during the relevant period. The total number of receipts in Exhibit 4 (all of which Wilbur did not claim to have reviewed) represent less than 1/3 of the number of receipts that the shift leaders would have been expected to issue.

[228] There is other evidence suggestive of many missing receipts, including Exhibit 1, Tab 67 containing the few excerpts from the shift leader logs in evidence.

[229] While I have found no written policy requiring shift leaders to follow a uniform practice of logging maintenance fees being held in the shift leaders’ office at every shift change, nevertheless, because some shift leaders did so, it is possible to compare the amounts recorded for maintenance fees with the amounts shown on receipts in Exhibit 4.

[230] From the few excerpts of shift leader logs in evidence it is obvious that shift leaders were holding and recording many maintenance fees amounts for which there are no corresponding receipts in Exhibit 4. I give here only a few examples. In Exhibit 1 Tab 67, the log for January 7, 2012 there is an entry for $701 for a client named Ranby for which there is no receipt in Exhibit 4. Similarly there is a $550 entry for Brosseau for which there is no receipt in Exhibit 4. On January 14, 2012 in Tab 67 N Blair recorded holding $590 for a client named Allen for which there is no corresponding receipt in Exhibit 4. These entries are obviously indicative that many receipts are missing.

[231] From a comparison of the entries in few excerpts of the shift leader logs in evidence and receipts in Exhibit 4, I have concluded that it should have been obvious to Wilbur and management relying on Wilbur’s conclusion, that despite Wilbur’s instructions to review receipts issued by the shift leaders other than Headley, many such receipts had not been in Wilbur’s review.

[232] If she was supposed to review all receipts of shift leaders other than Headley over the relevant period, it should have been obvious to management relying on Wilbur’s review that she had not done so, that her conclusions had been based on an incomplete information and that they should have concerns about how that affected their reliability.

[233] The large number of missing receipts has caused me to doubt the reliability of Wilbur’s conclusions and together with my other concerns about Wilbur’s evidence has affected adversely the weight I have given to them.

[234] Wilbur’s note in Exhibit 1 Tab 69 following her September 5 receipt review continues:

Mr. Hodgins: Nov. 1, 2010 – A $701 deposit was received by E Lovi but no money was deposited in SMIS and the amount seemed to have gone missing on that shift as the amount no longer appeared in the shift leader log on subsequent shifts. Mark Headley worked that shift doing programming. [The November 1, 2010 shift leader log is at Tab 67. The November 1, 2010 receipt is not in evidence. I cannot tell whether Lovi or Headley wrote the receipt to Hodgins. What does appear from Lovi’s note in the shift leader log for the shift that Headley and Lovi worked together is that at the end of that shift, Lovi did record holding the $701. The next shift was headed by O’Brien. On the shift transfer at the end of O’Brien’s shift, there was no mention of $701 being held for Hodgins. Thus, Wilbur’s note in Tab 69 suggesting that the $701 disappeared during the shift on November 1, 2010 that Headley worked is probably incorrect.]

[235] The note continues:

January 11, 2011 - A $701 deposit (Hodgins) was not recorded by Mark Headley. Mark Headley was the shift leader on duty. In subsequent shifts no amount of $701 was listed by any shift leaders for Mr. Hodgins. [I see no shift log in evidence for January 11, 2011 and following days. Even if there was no note of $701 being held at the end of the shift, for reasons already given, I have not accepted that that alone warranted Wilbur’s conclusion that the $701 was missing at that time]

[236] The note continues:

Mr Hinks

December 1, 2010 – Mark Headley was the shift leader on days. He wrote a receipt out for John Hinks with no deposit made nor any mention of the deposit in the shift leaders log or on subsequent shifts. [There was no shift log in evidence for these dates to provide any indication with respect to when or who was on shift when the money might have gone missing. All we know is that Headley issued a receipt on December 1, 2010.]

[237] The note continues: On March 1, 2012, a $415 receipt was issued to John Hinks. No record in SL log. Mark Headley was the shift leader on duty. [For reasons set out elsewhere, I have accepted Headley’s evidence that Hinks did not pay $415 on March 1, 2012, $415 did not go missing, and Headley did not steal $415 from Hinks at that time.]

[238] The note continues: On April 30, 2012, there was a receipt issued by Mark Headley for $415. No money was deposited nor was there an account of the money in the SL’s log. Mark Headley was the SL on duty. [With respect to whether the City received the $415 from Hinks receipted by Headley on April 30, Wilbur ultimately could not be sure. I have accepted Headley’s evidence that there was a discussion among Headley, Anstett and Smith at the July 19, 2012 meeting about an unidentified $415 paid to administration and that Anstett acknowledged at that meeting that that could have been the missing $415 Hinks payment that Headley had receipted on April 30, 2012. Wilbur said she assumed that $415 “would have been for someone’s maintenance payment.” It appears that that “missing” $415 may not in fact have been missing at all.

[239] The note continues: On May 31, 2012, there was a receipt issued by Mark Headley for $415. No money was deposited nor was there any note from this entire shift in the SL’s log. Mark Headley was the shift leader on duty. [I have already found as a fact that Hinks paid no money to Headley on May 31, 2012.

[240] The note continues:

Mr Dalip

Two receipts were issued, each for $300 on January 13, 2012. (One receipt had Mr. Dalip’s name and bed number on it, the other had only Mr. Dalip’s bed number on it. No deposit noted on the SL log by Mark Headley, the SL on duty. Note: Mr. Dalip normally paid $300 in maintenance fees per month. [Wilbur counted 2x$300=$600 as being missing for two receipts Headley issued to Dalip on January 13. Wilbur said she was later able to find a corresponding $300 deposit in SMIS. Ultimately, I have found that $300 was received by Headley and $300 was accounted for. No Dalip money was missing and Tab 68 was wrong. Wilbur incorrectly counted two Dalip receipts for $600 in missing money.]

[241] The note continued:

Mr. Foremsky

April 2, 2012 – Receipt recorded by E Lovi with a question mark beside it. Mark Headley had written the receipt and there was no further record of this receipt in subsequent log entries, probably due to the fact that there was no money/envelope with Mr. Foremsky’s name on it. E Lovi was the shift leader on duty. Mark Headley was also working the programme shift. [I have already mentioned Wilbur’s unwarranted conclusion in this regard. Wilbur said no money was deposited in SMIS with respect to the Foremsky receipt in question. I have held that even if she correctly recorded $410 initially receipted by Headley as missing later, Lovi recorded the $410 at the end of the same shift and there was insufficient proof upon which Wilbur could fairly conclude that the $410 went missing on the shift when the receipt was initially issued.]

[242] Wilbur’s note in Tab 69 continued:

Mr. Turner

On March 30, 2011, a $700 receipt was issued by Mark Headley. The log book is missing for this period, but no deposit was made. Mark Headley was the shift leader on duty. [Again, in the absence of mandated uniform logging procedures for the shift leaders to follow, since shift leaders used differing procedures, even if shift logs had been available an absence of a record in the shift leaders’ log showing amounts of cash being held at the time of shift transfer could not have provided definitive evidence on whether cash was being held at the end of any particular shift. Without any log book, there was even less evidence from which to attempt to glean when or on whose watch the money might have disappeared. Wilbur jumped to an unsubstantiated conclusion here.]

September 6, 2012

[243] Tab 46 is a memo from Dan Anstett to Anne Longair dated September 6, 2012. “Two weeks ago I was asked to locate the other receipt books in the LTP. I waited for Eugene Lovi to return and both he and I could not find them. We looked in the areas where we store the old SL’s and CSW logbooks. Later, I was able to locate two receipt books both in the SL’s desk. The books were given to Sally Wilbur who unfortunately was then off on vacation. She returned back yesterday and was able to complete her review of all receipts by today. The two receipt books cover the period from June 30, 2010 to March 31, 2011 and represent 90 receipts. [This is confusing I have already commented that in September 2012 Wilbur likely reviewed 3 receipt books not 2 and that even for the periods covered by those receipt books many receipts are likely missing]

[244] The September 6 memo continues: Please note that one of the receipt books is still missing. The information we now have represents three out of four receipt books. We are missing the receipt book for the period covering April 1, 2011 –October 4, 2011. [Anstett and Wilbur assumed the extant receipt books contained all receipts issued by the shift leaders. I have found that based on the evidence of Headley and O’Brien, my review of Exhibit 4 and Exhibit 1, Tab 67 that this assumption was incorrect. It should have been obvious to Wilbur and Anstett at that time that many receipts were missing, even for the periods for which some receipt books were available.]

[245] The memo continued: “We will obviously need to bring back Mark Headley to ask him about the information we uncovered. I suggest we can begin by asking him to confirm the statement he made that there were three instances with John Hinks in which he issued receipts without taking in any maintenance fees. [Headley never said there were three instances.] And for each we can ask if he contacted anyone or left any notes about each incident, asking separately for each date as per our legal opinion. He will then either agree or have to explain any other incidents/actions on his part. Then we can proceed to ask questions about the December receipt issued to John Hinks and the other receipts that do not have matching deposits that were uncovered today. It is important that in that regard to these new receipts to check in the log book and make sure Mark did not record any of the above receipts as being received and accounted for. Should there be no entries in the log we should ask why he didn’t make any such entries in the log if he claims he had received money…Note: When a shift leader receives a maintenance fee and does not deposit it on the same day (which is often the case) the money must be recorded in the shift leader’s log book at the end of each shift. [This was incorrect - I have already noted my acceptance of the evidence of the shift leaders that there was no formal requirement that the shift leaders count and record maintenance fee amounts held at the end of each shift. This was not always done and a failure to record in the shift log an amount held at the end of a shift cannot fairly be deemed to signify that any unrecorded amount had gone missing.]

[246] Anstett wrote that a second investigation meeting with Headley was required.

[247] In preparation for the meeting, Smith prepared Tab 33, a typewritten list of questions.

September 19, 2012

[248] Smith, Anstett and Headley met on September 19, 2012.

[249] Tab 32 contains Headley’s answers as recorded by Smith at the September 19, 2012 meeting and my comments on Smith’s notes again in square brackets.

[250] Headley said by that time he was really frightened. Smith and Anstett presented additional receipts for which they were then alleging money to be missing. They had not told him in advance that the investigation had been widened to include a review of other receipts. They had not identified the receipts for which maintenance fees had allegedly gone missing. They had not told him what they wanted to discuss. They had not given him an opportunity to prepare and explain, to review the receipts Wilbur had identified as being suspicious to look for logs and other records, to speak to other staff, clients etc. Again, they had not invited him to bring a representative of COTAPSA to the meeting.

[251] At that meeting, they asked him about two receipts for $701 he had issued to a Mr. Hodgins on November 1, 2010 and January 11, 2011 [by then, more than a year earlier] for which they said there were no corresponding deposits. When asked to explain what happened to the $1,402, Headley replied “any receipts I wrote I would have put the money in the box and would have brought it downstairs.”

[252] They asked him about the two Dalip receipts for $300 he had issued on January 13, 2012. They said [incorrectly] that no deposit had been made to Seaton House administration. [Wilbur acknowledged in her evidence that $300 had been received.] He pointed to the first receipt and said it must have been a mistake and that it looked like the receipt had been rewritten. He said the $300 had been put in the safekeeping box and it had been sent downstairs.

Karen: So why didn’t you cross it out if it was a mistake?

Mark: I don’t know

Karen: Why were there no notes made in the log concerning this?

Mark: I don’t normally write receipts in the log…

[253] They asked him again about the April 2, 2012 receipt for $410 that he had issued to Mr. Foremsky. They told him again that the $410 had not been deposited with the City of Toronto. He said he would have deposited any money he received. [He had not had access to shift logs, had not been alerted to the underlining or question mark on the Foremsky entry in the shift log, not had the opportunity to speak to Lovi about it.]

[254] They asked him about a March 30, 2011, $700 receipt he had issued to Mr. Turner. They said again there had been no deposit of the $700 with the City of Toronto. Smith and Anstett said he did not explain this receipt. [Again, they had given Headley no advance notice that he would be asked about it. They had not given him any opportunity to refresh his memory in advance of the meeting as to the relevant circumstances.]

[255] They asked him about a receipt he had issued on January 5, 2012 to Mr. Kokanovic for $400. They told him [ incorrectly] that the $400 had not been deposited with Seaton House. They asked him to explain what happened. He said he did not know. [By then, Wilbur had determined that the $400 was not in fact missing - see Tabs 68 and 69 and Wilbur’s evidence at trial.]

[256] When they asked Headley whether there was anything else he wished to add or would like them to take into consideration, he asked if money was missing for all these receipts with his name on them. Anstett said yes. [incorrectly]

[257] Headley said he told Anstett and Smith that if he received any money from anyone he put it in the safekeeping box or sent it downstairs. He told them he was not the type of person who would steal from clients.

[258] Smith gave evidence that Headley’s demeanour was “very quiet”. She said he had his head down and made no eye contact.

Decision to terminate

[259] Smith gave evidence that after the meeting with Headley, and consultation with Legal Services and Labour Relations, a decision was made to terminate Headley’s employment.

September 28, 2012

[260] The City’s termination letter, Exhibit 1 Tab 23, dated September 28, 2012 included a number of allegations and conclusions that I have set out below, together with my comments on their accuracy in square brackets:

When our assessment of all the receipts we had in our possession was completed, it was found that ten receipts issued by you did not correspond with SMIS entries of money deposited. [I have found this statement was incorrect for reasons specified earlier.]

Our investigation indicated that all other receipts, written by other shift leaders in the Long-term Program had corresponding deposits of money in SMIS. [I have found this statement was made without any interviews of these other shift leaders and after only a limited review of receipts issued by other shift leaders and without any consideration of the fact that the data available for review was incomplete.]

Despite the opportunities given to you, you failed to provide a reasonable explanation for your actions. [I have found he did provide answers to their questions to the best of his ability given the lack of advance notice as to what they wanted to discuss with him at the meeting.]

…nor have you shown any remorse or responsibility for your actions… [Headley maintained throughout he had done nothing about which he should have been remorseful.]

Given the above, it was found that you have engaged in a concerted, repeated course of conduct with regards to maintenance fees over several years, [This was incorrect] grossly neglecting your duties as a shift leader of Seaton House [The basis for this was not specified]. You have violated our Division’s Shelter Standards and Guidelines that state: “Staff will carry out professional duties and obligations with integrity, objectivity and equity.” [No specifics were given – the letter appears to be alleging dishonesty, an allegation that I have rejected.] You are also in violation of the City’s Conflict of Interest Policy as well as the Toronto Fraud Prevention Policy that defines fraud as “obtaining city funds or compensation through dishonesty.” [Fraud is being alleged. I have found no fraud has been proved.] Such willful misconduct in complete disregard of the trust and confidence bestowed upon you in your fundamental role as a shift leader working with vulnerable clientele and a public servant of the city of Toronto, and such breach of trust has irreparably severed the employment relationship. [Wilful misconduct being alleged - please see below my conclusion that the City has not met the onus of proving fraud, willful misconduct or breach of trust on a balance of probabilities.]

The letter also, I have found, incorrectly referred to money missing for Dalip and Kokanovic, criticized him for saying he would have left the Foremsky, Turner and Hodgins money in the shift leaders’ office and noted that “he had no explanation for why there were no corresponding funds in SMIS” [he tried to suggest someone else could have taken the unsecured cash from the shift leaders’ office.]

[261] Smith said in her evidence in chief that Headley’s employment was terminated for two reasons: because they thought he had stolen the money and he had failed to follow City policies and procedures. During cross examination, Smith was asked about the content of Tab 86, the Auditor General’s form at p. 370 as follows: “We cannot prove definitively that this money was stolen, however there are enough circumstances and a previous incident that suggests fraud may well have occurred. At a minimum the employee failed to follow appropriate procedures in relation to handing of funds.” [I have concluded elsewhere that the City has failed to prove that Headley failed to follow prescribed procedures in relation to handling of maintenance fees. I have found the City provided no written direction to LTP shift leaders on the receipting, safeguarding and recording of maintenance funds yet used Headley’s failure to follow a non-existent written policy as grounds for concluding he had stolen money and for terminating his employment.]

[262] On the face of the termination letter, the City purported to terminate Headley’s employment for fraud, wilful misconduct and breach of City policy.

October 25, 2012

[263] Tab 86 is an Auditor General’s form, Fraud and Waste Hotline Program, setting out a disposition of Complaint # 2012-00447, prepared by Smith on October 25, 2012. It referred to an internal investigation at SH in which it was found that Headley had issued 11 receipts to clients for maintenance fees where no funds were deposited in the administration department. [This was incorrect.]

[264] The report referred to two “similarly signed” receipts for a Mr. Dalip for $300 written on January 13, 2012 for which “there was no deposit in SMIS”. [This was incorrect for reasons already cited.]

[265] The report mentioned a receipt for $400 issued to Mr. Kokanovic on January 5, 2012 “and again there was no deposit recorded in SMIS”. [This was incorrect for reasons already specified.]

[266] It mentioned that “there were no other shift leaders out of the 11 other shift leaders in the programme [who] had written receipts without corresponding deposits to the City of Toronto.” [I have already mentioned the frailties of this conclusion.]

[267] In the letter to the Auditor General’s office, Smith did note that Headley had worked with the City for over 15 years, most of this time in management, that he had been an above average employee in terms of his performance who had shown a great deal of empathy for our client population, made decisions independently and required minimal supervision.

[268] The same letter contained the following: “We cannot prove definitively that this money was stolen, however, there are enough circumstances … that suggests fraud may well have occurred. At a minimum, the employee failed to follow appropriate procedures in relation to the handling of funds. Given the investigation it was concluded that this employee had failed to follow proper procedures and had fraudulently issued receipts when no funds were deposited and failed to acknowledge that this was inappropriate putting the employer at risk. His employment with the City was terminated on September 21, 2012”. [The date of termination given was incorrect. The conclusion that he had fraudulently issued receipts was unsubstantiated and I have held incorrect.]

[269] The report identified internal control weakness and measures taken, including requiring two signatures on receipts of client funds, a new ledger for receipt of maintenance funds, periodic audits of ledger and client savings program money, and deposit of maintenance fee payments on the same or the next business day. [Significantly in my view, Tab 86 made no mention of glaring flaws in security in the LTP that gave many others besides Headley access to client money kept in the LTP shift leaders’ office and the opportunity to steal it.]

[270] What management did not do in 2012 was recognize what Headley in the investigation meetings had been trying to communicate about access to the shift leaders’ office that would permit any staff member to take cash stored there. Management did not address the lack of uniform policies and procedures governing receiving, keeping and recording of maintenance fee payments or the keeping of LTP shift logs.

The LTP Shift Leaders Attempt to Provide Input

[271] The decision to terminate Headley’s employment led to a rift between Anstett on the one hand, and the other shift leaders on the other. Anstett said their bond had been broken.

[272] When Headley’s employment was terminated, the other permanent shift leaders, were strongly of the view that Headley had been and was being unfairly treated.

[273] At trial, despite the passage of almost seven years and their own continuing employment with the City, their disagreement with the decision to terminate Headley’s employment was palpable.

[274] While the shift leaders acknowledged that not all of the findings in the investigation had been shared with them, i.e. they did not know exactly the basis on which Headley’s employment was terminated, they were nevertheless seemingly eager to strongly vouch for the quality of Headley’s work, his respect for the men he served and his personal integrity.

[275] Although the timing is not entirely clear, I find that the shift leaders met around the time that Headley’s employment was terminated and together prepared the document that became Exhibit 1 Tab 10. O’Brien typed it on behalf of the group. In Tab 10, they reiterated many of the same matters Headley had unsuccessfully tried to raise at the July 19 meeting.

[276] When the shift leaders were asked about the contents of Tab 10 at trial, despite the fact that they are still employed by the City, they generally vouched for its accuracy and in so doing, directly contradicted other evidence called by Counsel for the City. They clearly remained upset at the time of the trial that they had had so little input into the Headley investigation, and decision to terminate.

[277] Okbara said the termination made her feel unsafe. If Headley could be terminated, any of them could be terminated.

[278] In my view, a comparison is in order of the defects identified by Headley at the investigation meetings in Exhibit 1 at Tabs 83, 84 and 87, those highlighted by the shift leaders in Tab 10, and those identified by another investigator and auditor after the more extensive investigation in 2013-2014, after clients’ money had again gone missing from the SH LTP shift leaders’ office.

[279] The major points (set out in detail in Tab 10) are as follows:

No Uniform System for Receiving, Recording and Storing Maintenance Fee Cash

[280] The shift leaders wrote that the process for collecting, holding and recording cash for maintenance fees and safekeeping client funds at Seaton House during the relevant timeframe 2010 to the date of Headley’s termination was not uniform. All shift leaders had their own system. Shift leaders had been given no written procedure to follow when dealing with maintenance fees. O’Brien would do her receipts and log them one way, Lovi another, Headley another. At shift transfer time, some of the shift leaders would record the cash being held in the shift log. Often, on shift transfer the money was not counted and recorded. Callender said at the end of the shift, he would enter the total amount being held in the shift log but not identify the individual clients who had paid. Okpara said the method of documenting the money being held varied from person to person. Some wrote a lot. Some did not write much.

[281] One staff member gave evidence that when Anstett was acting as shift leader and received money “he just fold[ed] it and put it in the log book in the desk instead of in the safe”.

[282] I find it significant that during the trial, the policy put forward by the City as the operative one in respect of maintenance fees at the material time was Exhibit 1, Tab 19- Collection of Service Fees dated February 21, 2006. Service fees are defined in that document as funds collected from residents in the shelter program for wine, locks, laundry and key replacement. During the evidence, Counsel for the City referred Wilbur and some of the shift leaders to Tab 19 and questioned them about duties of shift leaders mentioned in that document. Lovi was shown Tab 19 and did not remember seeing it. Other SH staff who worked in the LTP who were questioned about it, including Callender, seemed to have difficulty remembering if they had ever seen Tab 19.

[283] In cross examination, and in argument, Counsel for the Plaintiff referred to Exhibit 5, a City policy dated September 4, 2007 headed Collection of Maintenance Fees, written particularly for use at SH. It seems clear that Exhibit 5 has more application to collection of SH maintenance fees than Exhibit 1 Tab 19; Tab 19 deals with service fees not maintenance fees.

[284] Since the City placed such great reliance in argument on Headley’s failure to religiously adhere to City policies and procedures in relation to maintenance fees, I find it significant that in cross examining Headley and the other shift leaders, the City did not identify or refer them to Exhibit 5.

[285] Exhibit 5 does not specify the roles and responsibilities of shift leaders in connection with the collection of maintenance fees.

[286] The City’s reliance on Tab 19 and its failure to initially rely on Exhibit 5 is supportive of Headley’s and the other shift leaders’ evidence that the City never provided them with clear specific guidance on the collection of maintenance fees. In my view, the shift leaders’, including Headley’s, evidence on that point was more credible than Smith’s and Anstett’s.

[287] I reject Smith’s evidence that the shift leaders all knew precisely what procedures they were required to follow in collecting, recording, and safeguarding clients’ maintenance fees.

[288] It is apparent from viewing the extant shift leaders’ log book excerpts in Exhibit 1 Tab 37 that the shift leaders did not always count maintenance fee cash being held in the LTP shift leaders’ office or record the amounts thereof on every shift change.

[289] If they did record in the shift log the amounts of cash being held, if those amounts were different from the amounts that might have been recorded by the previous shift leader, the current shift leaders would not automatically know that cash had gone missing. They could logically assume that the reason for the difference was that another shift leader had taken whatever cash had earlier been in the shift leaders’ office to the SH administration office. There was no separate log of cash amounts being held or any routine check to see whether money had been taken to administration. Once maintenance fees were taken to administration, the administration office did not provide a daily or even a weekly or monthly tally of amounts received for each client.

Wide Access to Shift Leaders’ Office

[290] The LTP shift leaders wrote in Tab 10 and reiterated at trial that they were not the only SH staff members with key access to the LTP shift leaders’ office in which the money was kept. They wrote that all staff had access to the LTP shift leaders’ office and that a key that opened the shift leaders’ office was accessible to virtually all Seaton House staff, in part, because a spare key to that office was kept in an unlocked drawer of a desk in the CSW office. All staff had access to the CSW office. The staff washrooms used by all shift leaders, client service workers, sport service workers and other staff were in the CSW office. If a cleaner wanted to enter the shift leader office to clean, he or she could get the key from the CSW office.

[291] The shift leaders gave evidence that on occasion Anstett covered the LTP, acting as a shift leader. He knew the safe was not always working. He knew money was kept in envelopes in an unlocked box. They said he should have known that many staff members had access to the shift leaders’ office.

Cash box does not have a working lock

[292] The shift leaders wrote in Tab 10 that generally, cash in envelopes was put in a cash box that was always unlocked.

[293] The cash box would be placed in the safe in the shift leaders’ office if the safe was working.

Faulty Safe in Shift Leaders’ Office

[294] The safe in the shift leaders’ office should have been a safe place to keep the cash. However, I accept the evidence of Headley and O’Brien that the safe was old and that it was not working during much of the material period.

[295] I accept Headley’s evidence that after the safe was fixed it would break again.

[296] I accept the evidence of O’Brien and Headley that Anstett had been advised about the problems with the safe. Anstett acknowledged in cross examination that he had been aware at the end of June 2012 that the safe had been broken for “a few months” (three to four months). He said when the safe was broken, his expectation was that the money would be locked in the drawer in the desk. Anstett apparently was unaware that the desk drawer would not lock.

[297] Even when the safe was functional, multiple parties had access to the codes for the safe. Lovi said more than ten people had the combination. I accept the evidence that code changes were frequently communicated to staff electronically. Anstett acknowledged that sometimes when the combination was changed, the new combination was emailed.

No Uniform Alternative to Locking Cash in Safe

[298] O’Brien said when the safe was not working maintenance fee cash in the shift leaders’ office was often kept in a drawer in the shift leaders’ desk that did not lock. Okpara and Headley said they kept the cash in the unlocked desk drawer. O’Brien and Lovi said they may have locked it in their own filing cabinets.

No Safekeeping Log

[299] There was no separate safekeeping log to record when money was taken to administration.

Receipt Books

[300] I accept the evidence of the shift leaders that SH administration did not consider receipts provided by the shift leaders in the LTP shift leaders’ to be important. I accept the evidence that “no one worried” about receipt books kept by the shift leaders. “I don’t think anyone else looked at them”. Receipt books kept by the shift leaders had never been requested by the SH administrative office and receipt books kept in the shift leaders’ office were not systematically or methodically kept. At times, receipts that should have been given to clients would be left in the receipt book. Several receipt books could be in use at the same time. One might be started before the first was finished. The type of receipt books used varied.

[301] Anstett gave evidence that receipt books in the LTP shift leaders’ office were not scanned before they were thrown out. There was no written policy. There were no clearly understood rules about receipt book retention. The shift leaders would keep them for a time. They would pile up. O’Brien said during infestations they would be sprayed and thrown out. Infestation control was done as needed throughout the year. If a supervisor had been bitten by bed bugs the office would be shut down and cleaned as needed.

[302] For reasons specified earlier, after a review of Exhibit 4 and Exhibit 1 Tabs 67-82, I have accepted Headley’s evidence that the receipt books that were extant and reviewed [Exhibit 4] during Anstett’s investigation were not all the receipts that shift leaders had written in the material period. Many receipts issued by the LTP shift leaders in the material period the two years before Headley’s employment was terminated had been discarded.

GENERAL FINDINGS ON TAB 10

[303] Anstett said he did not receive Exhibit 10 until well after the litigation was started.

[304] I generally reject Anstett’s evidence to the effect that Tab 10 was largely inaccurate. I find it was largely accurate.

[305] I generally find that in Tab 10 the shift leaders accurately identified flaws in the SH system that created opportunities for someone other than Headley to steal cash from the shift leaders’ office during the material period.

[306] The deficiencies I have found existed at the time of the Headley dismissal identified by the shift leaders in Tab 10 were highlighted again in Tab 87, the report of the internal auditor written after money disappeared from the LTP again in 2013.

MONEY MISSING FROM SEATON HOUSE LTP AFTER HEADLEY’S EMPLOYMENT WAS TERMINATED

[307] Despite the changes implemented in July 2012 set out in Tab 3, after Headley’s employment was terminated, money went missing from the LTP shift leaders’ office again.

[308] SH management again concluded that the LTP shift leader on duty was primarily responsible, but decided, instead of terminating her employment to take away her AR shift leader status for a three-month period. Anstett said in that case, unlike Headley’s, there was no “pattern of behaviour”.

[309] Anstett gave evidence that he was not the investigator in 2013.

[310] Tab 84, a document headed “Investigation”, sets out details of the 2013 investigation. It was more extensive than the Headley investigation in 2012. In 2013, the AR shift leader and CSWs were interviewed. The investigator reported that many staff had shared that it was common practice for the shift leader keys to be passed to CSWs or stored in the CSW office. [No CSWs or shift leaders were interviewed in 2012. If they had been interviewed Anstett would have learned the same thing.] In 2013, the investigator reported that some had mentioned keys were left in the CSW office or otherwise passed around a lot. [A more complete investigation in 2012 would have revealed the same information.] Some mentioned too many people having access to the safe and code. The code can be changed and then (allegedly) someone emails the new code to everyone who may ever need it. [A more complete investigation in 2012 would have revealed the same information.] The investigation attempted to determine exactly when and in whose custody the money went missing [this was not consistently done in 2012 and when it was I have found incorrect assumptions were made].

[311] In Tab 84 it was reported that in response to the question “did you receive/witness a client deposit for safekeeping from any clients”, a number of employees had mentioned that they try to avoid this process, as they do not want to be associated with monies and the possibility of them going missing. Some commented they try to stay out of the shift leaders’ office as much as possible. [emphasis added]

[312] The same document reported staff answers consistent with a perception that there were no consistent policies on deposit procedures to be followed. In answer to the question, “were you aware at the time of the deposit of the policies/procedures regarding safekeeping and shift exchanges at Seaton House?” and “did you follow this policy?”, staff answered that everyone followed policies as they understood them - though what they understood as policy differed.

[313] The 2013 investigator revealed continuing flaws in the LTP procedure that were in my view consistent with the flaws identified by the LTP shift leaders in 2012 in Tab 10.

[314] After the 2013 investigation, recommendations were made for improvement, including that Seaton House should have consistent policy, procedure and practice; clarify the process of shift changes; purchase a drop box; clarify the process to access the safe; not proactively share the safe code; clarify the process surrounding shift leader keys; not leave shift leader keys in the CSW office; and implement new client Safekeeping Procedures, including keeping safekeeping logs.

[315] Tab 83, p350 mentioned an SH Annex shift leader named Wesley Ramparsad who was said to have had access to the LTP shift leaders’ office but who was thought not to have had the combination to the safe. At Exhibit 1, Tab 12, on May 1, 2014, after a long investigation, Peel Regional Police announced Ramparsad’s arrest for breach of trust of a public official and theft of over $170,000. Callender gave evidence that since the early 2000s, Ramparsad had worked at Seaton House, including as an Annex shift leader between 2010 and 2014. There was no evidence directly linking Ramparsad to the client funds Headley’s employment was terminated for stealing. I only mention Tab 83 and Tab 12 given the evidence that many had access to the LTP shift leaders’ office between 2010 and 2014, given the evidence that the safe was often not working between 2010 and 2012 and that even when it was, many had access to the combination, and given that money disappeared from the shift leaders’ office before 2012 in 2013 at a time when Headley could not possibly have been the culprit, as Headley was no longer employed by Seaton House and could not be implicated in the theft of those client funds from the LTP shift leaders’ office.

[316] On March 19, 2014, Glenn Morgan, Director Programme Support at Seaton House, wrote Tab 87, a letter to the Director of the Forensic Unit at the Auditor General’s Office containing the following: “Unfortunately it was not the first time an incident involving petty cash had occurred at Seaton House…The current controls did help to detect the missing funds but obviously fell short of outright prevention…Given reoccurrence of a petty cash incident, management felt it would be best to enlist the help of internal audit to assess the current controls and recommend improvements….New procedure and processes were implemented.”

[317] It was noted that the safe had to be secured at all times. It was again noted that access to the CSW AR key was not restricted. Controlling access was mandated to act as a deterrent for staff who may know the combination to the safe. Management was to take on the responsibility of documenting the new processes, incorporating the new controls into the processes and training all pertinent staff. Evidence of training was to be maintained on file. Documenting the process would provide staff with reference material to consult when needed.

ANALYSIS AND LAW

Just Cause

[318] The onus of proof of just cause rests on City.

[319] This Court must apply the mandated legal test and decide whether the City has met its onus of proof and demonstrated just cause on a balance of probabilities here.

[320] In McKinley v. BC Tel, 2001 SCC 38, [2001] 2 S.C.R. 161, the Supreme Court of Canada considered the circumstances under which an employer may dismiss an employee on the ground of dishonesty. Iacobucci J. for the Court held at paragraph 47 that the question requires an assessment of the context of the alleged misconduct. More specifically, the test is whether the employee’s dishonesty gives rise to a breakdown in the employment relationship. This test can be expressed in different ways. One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligation to his or her employer.

[321] The trial judge must instruct the jury to determine (1) whether the evidence established the employee’s deceitful conduct on a balance of probabilities and (2) if so, whether the nature and degree of the dishonesty warranted dismissal. It is a factual inquiry.

[322] Iacobucci J. wrote at paras. 51-57:

A contextual approach to assessing whether an employee’s dishonesty provides just cause for dismissal emerges from the case law on point…

Underlying the approach is the principle of proportionality. An effective balance must be struck between the severity of an employee’s misconduct and the sanction imposed. The importance of this balance is better understood by considering the sense of identity and self-worth individuals frequently derive from their employment…Given this recognition of the integral nature of work to the lives and identities of individuals in our society, care must be taken in fashioning rules and principles of law that would enable the employment relationship to be terminated without notice. The importance of this is underscored by the power imbalance that this Court has recognized is ingrained in most facets of the employment relationship.

I favour an analytical framework that examines each case on its own particular facts and circumstances, and considers the nature and seriousness of the dishonesty in order to assess whether it is reconcilable with sustaining the employment relationship.

[323] For many years it was thought that in civil fraud cases the employer had a higher onus of proof: see Nagy v Metropolitan Toronto Convention Centre Corp. (1998), 55 O.T.C. 321 (Gen. Div.).

[324] However, in F.H. v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41 at para. 49, the Court wrote:

In the result, I would reaffirm that in civil cases there is only one standard of proof and that is on a balance of probabilities. In all civil cases, the trial judge must scrutinize the relevant evidence with care to determine whether it is more likely than not that the alleged event occurred.

[325] Has the City met the onus of proving just cause on a balance of probabilities here in relation to its allegation of theft?

[326] In his opening statement, Counsel for the City fairly acknowledged that the City does not have direct evidence that Headley stole clients’ money and it relies on circumstantial evidence.

[327] Counsel for the City relies on Anstett’s investigation, documented by Anstett’s notes of interviews with Headley and a few witnesses on receipts issued both in the shift leaders’ office and through SMIS and HUS on some other SH documentation detailed below, as well as on Wilbur’s conclusions reached after an initial review of four receipts and SMIS entries, followed by a one day review of some additional receipts and SMIS entries on September 5, 2012.

[328] Anstett admitted that he did not interview Lovi after the first week in July when he spoke to him twice as summarized earlier. He never spoke to shift leaders O’Brien, Callender, or staff members Okpara, Premji, or others with knowledge of the matters under investigation. He acknowledged that he did not ask them any questions about matters raised by Headley at the July 19 investigation meeting. After he spoke to Hinks on June 25, he never spoke to Hinks again, despite writing “will continue to try to meet with Hinks as he is obviously key to this entire matter”. Despite writing “almost all of our residents are able to answer questions about financial matters”, he did not meet with Foremsky, Turner, Kokanovic, or Dalip. He did meet briefly with Hodgins but decided not to pursue it. Anstett prepared no final investigation report.

[329] I have not accepted Anstett’s assertion that it was not necessary for him to further investigate Headley’s suggestion that others could have stolen the money because he “knew” that the shift leaders’ office and safekeeping box could not be accessed by staff, as Headley suggested.

[330] I have accepted the evidence of the shift leaders that the LTP shift leaders’ office was accessible to all staff because a spare key to that office was kept in the generally unlocked CSW office in an unlocked desk drawer.

[331] I have already given reasons why I have concluded that Wilbur’s evidence was of limited assistance to this Court.

[332] In his final submissions, in connection with Wilbur’s conclusion that money had not gone missing from other shift leaders, Counsel for the City wrote: “Headley fails to provide any plausible explanation as to why he was the only shift leader to have his cash receipts go missing over the lengthy time that was investigated. There were about ten other shift leaders who worked in the LTP during the relevant time and most of them issued receipts and received cash payments. They presumably followed the same procedures as Headley in terms of safekeeping the cash received and were subject to the same safekeeping flaws asserted by Headley. But for some reason only Headley’s money went missing. The statistical likelihood of having random theft occur on at least eight occasions but affecting only Headley’s receipts are extremely low. In this regard there is no evidence that there was a concerted effort by a third party to somehow target Headley’s cash receipts.”

[333] I do not accept that submission and disagree with it for a number of reasons.

[334] I have already outlined deficiencies in Wilbur’s review of receipts and SMIS and HUS entries. I have concluded that her primary focus was on Headley receipts. I have held she made false assumptions and reached incorrect conclusions based on those false assumptions. I have held that her review of other shift leaders’ receipts was incomplete. I have found she did not factor into her conclusions the many receipts that were obviously missing and unavailable for her review. In large measure these deficiencies were as a result of incorrect or incomplete information provided to her by representatives of the City. While I do not doubt that her instructions may have caused the errors she made and while I do not fault Wilbur for those errors the fact remains that I have concluded that I do not have confidence in her conclusions and I give them little weight.

[335] There was no expert evidence supporting the reliability of Wilbur’s conclusion that money had not gone missing from the other shift leaders.

[336] In earlier sections of these Reasons, I have commented on the limited effectiveness/usefulness of Wilbur’s evidence in resolving the disputed issues here. In addition, since I have found she erred in respect of the Foremsky and Dalip receipts and jumped to unwarranted conclusions in her review of the Headley receipts, I have not accepted her conclusion that all other shift leaders who received maintenance fees in the LTP had no money go missing.

[337] There was no evidence at all to support Counsel for the City’s submission that “presumably the other shift leaders followed the same procedures as Headley”. I do not accept that presumption. There was evidence to the contrary from Headley, O’Brien, Lovi and Okpara that when the safe was not working, as during much of the material time, different shift leaders had different practices. Some shift leaders, including Headley and Okpara, kept money in the desk drawer that did not lock. Others, including Lovi and O’Brien mentioned that they may have kept the money locked in their own filing cabinets. There was no evidence from Arsenault. Those differences in safekeeping practices could explain how someone else could have taken cash for maintenance fees received by Headley but not cash for maintenance fees received by O’Brien and Lovi.

[338] In Prashad v. ICI Paints (1997), 1997 CanLII 12333 (ON SC), 30 C.C.E.L. (2d) 223 (Ont. Gen. Div.) at para. 21, Lane J. wrote “When suspicion is confirmed by cogent evidence it ceases to be suspicion and becomes proof on a balance of probabilities.” At para. 22, his Honour noted that in that case, “no investigation whatever was undertaken to test the truthfulness of the plaintiff’s denials and to see what light other employees could cast upon the events…There is an onus on an employer to conduct a full investigation before reaching conclusions that are devastating to an employee. Not having conducted a reasonable investigation the employer cannot successfully contend its suspicion was reasonably based.”

[339] In Tong v. Home Depot (2004), 2004 CanLII 18228 (ON SC), 39 C.C.E.L. (3d) 59 (Ont. S.C.) at paras. 12-18, Echlin J. of this court wrote:

His investigation was fatally flawed…

… [The investigator] failed to obtain corroborating evidence from other employees and admitted he did not interview any other Home Depot employees. Indeed, at no time did he even speak to Paul Griffin, Mr. Tong’s immediate superior, nor did he ever pass along his concerns. At no time did he offer Peter Tong an opportunity to respond to his concerns. He never sought feedback, comments or an explanation from the alleged dishonest perpetrator.

The evidence at trial is too weak to sustain a finding of just cause. In this instance Home Depot has failed to meet the onus required to establish just cause.

[340] In Porta v. Weyerhaeuser Canada Ltd., 2001 BCSC 1480 at paras. 113-115, Cullen J. wrote:

…[T]he sufficiency of the defendant’s contemporary investigation of these issues, so far as it governs the availability of evidence for this court to consider on the context of the misconduct relied on as just cause, is an important consideration in determining whether the defendant’s onus of proof has been discharged…

Where potentially cogent evidence relating to the context of an employee’s asserted misconduct is not mustered or preserved by a contemporary investigation, that failure may have a reductive effect on the positive evidence adduced. That is so, not because of any adverse inference to be drawn from the investigation’s failure, but rather from the court’s inability to conduct a qualitative contextual analysis of the misconduct as the law mandates

The investigation conducted by the defendant in the case at bar was short in duration and narrow in scope. In my view, the positive evidence which it produced was insufficient to permit proof of the sort required on a balance of probabilities that Porta either committed theft, breached company policy, or was dishonest to the required degree, and in the appropriate circumstances to permit a conclusion that termination was justified.

[341] Counsel for the Plaintiff submits that the City’s evidence falls short. I agree. To use the words of Lane J. ““suspicion” has not been confirmed by cogent evidence”. Even though Porta and Tong and Prashad were decided before McDougall, and even though only proof on a simple balance of probabilities is required here, I am of the view that even applying a simple balance of probabilities test, the result is the same- the investigation here produced insufficient positive evidence to prove that Headley committed theft or was dishonest.

[342] Because of the false underlying assumptions and deficiencies in the investigation, Anstett and the decision makers on Headley’s termination, including Smith, failed to appreciate that numerous others besides Headley did have the opportunity to steal cash for maintenance fees kept in the LTP shift leaders’ office, they focused unduly on Headley. They paid undue attention to Headley’s signature on a limited number of receipts and failed to fully investigate and consider alternative explanations as to when and how the money had gone missing.

[343] The decision makers gave little or no consideration to the other shift leaders’ and indeed, Anstett’s view of Headley’s integrity gleaned from many years of working together with him as part of a long-standing team of permanent shift leaders in the long-term programme.

[344] They relied unduly on Wilbur’s conclusions that I have held to be unreliable.

[345] They paid no attention to other obvious considerations, such as why would Headley issue receipts for cash that he intended to steal? Why would he not discard receipts he gave for that money where no one from administration had ever requested to see the receipts given by the shift leaders and where the City did not have any receipt retention policy?

[346] The City has not proved when the cash that Headley receipted disappeared and there was no reliable evidence proving the maintenance fee money Headley is alleged to have stolen disappeared at a time when Headley and only Headley had custody of it.

[347] In its letter of termination, the City referred to Headley’s “gross neglect of duty” including specifically his failure to follow City policies. It wrote, “You have violated our Division’s Shelter Standards and Guidelines that state: ‘Staff will carry out professional duties and obligations with integrity, objectivity and equity’. You are also in violation of the City’s Conflict of Interest Policy as well as the Toronto Fraud Prevention Policy that defines fraud as ‘obtaining city funds or compensation through dishonesty’. Such willful misconduct is in complete disregard of the trust and confidence bestowed upon you in your fundamental role as a shift leader working with vulnerable clientele and a public servant of the City of Toronto, and such breach of trust has irreparably severed the employment relationship.”

[348] It appears from the content of the termination letter that the breaches of policy for which the City terminated Headley’s employment related to dishonest conduct, fraud, dishonesty, wilful breach of trust, and preying on vulnerable clients.

[349] In my view, the City’s failure to marshal sufficient relevant evidence to prove theft, fraud or dishonesty, was and is glaring. I have concluded that Anstett’s investigation was based on false assumptions and inadequate.

[350] The City’s evidence taken as a whole does not provide a sufficient basis upon which this Court could fairly conclude that Headley stole the monies in question.

[351] In my view, given the gaping deficiencies in the City’s evidence, the City has not met its onus of proving fraud or dishonesty on Headley’s part, even on a simple balance of probabilities.

Alternative Ground for Just Cause-Neglect of Duty Sufficient to Cause Irreparable Breakdown in the Employment Relationship

[352] Has the City proved just cause apart from theft, fraud or wilful dishonesty?

[353] I shall here consider the City’s submissions on breach of policy falling short of dishonesty made in the alternative by Counsel for the City in argument.

[354] Counsel for the City submitted that even if this Court holds that the City has not proved that Headley stole from clients or acted dishonestly, its termination of his employment was nevertheless justifiable on the basis that his actions in issuing receipts for which no maintenance fees had been paid constituted a gross neglect of his duties as SH shift leader. He failed to follow City policies and procedures in a manner that led to an irreparable breakdown of the employment relationship.

[355] Has the City proved it was nevertheless justified in terminating his employment for misconduct incompatible with the employment relationship?

[356] In determining the answer to this question, I have followed the three-stage inquiry set out by the Ontario Court of Appeal in Dowling v. Ontario (Workplace Safety and Insurance Board) (2004), 2004 CanLII 43692 (ON CA), 246 D.L.R. (4th) 65 (Ont. C.A.): (1) Determining the nature and extent of the misconduct, (2) Considering the surrounding circumstances, and (3) Deciding whether the dismissal was warranted, i.e. whether the dismissal is a proportional response to the misconduct as found.

Determining the Nature of misconduct,

[357] I have found that Headley committed misconduct in granting two receipts totalling $820 when no money was actually paid. It was unacceptable to acknowledge payment when payment had not been made.

Considering the Surrounding Circumstances

In all the circumstances, did writing two receipts warrant Headley’s Dismissal?

[358] The circumstances surrounding Headley’s issuance of two receipts to Hinks are detailed above.

(1) Did telling Hinks that it was okay that he had not paid his maintenance fees to calm him down constitute serious misconduct?

[359] I have accepted the evidence of O’Brien that if a client such as Hinks did not have money to make a maintenance fee payment, there would not be much push back from administration. Anstett acknowledged in evidence that Hinks would never have been evicted for failing to pay maintenance fees. In Anstett’s view, it was acceptable that Headley had told Hinks that he would not be evicted from SH, even if Hinks had not paid his maintenance fees.

[360] I find Headley told Hinks it was okay he had not paid because Hinks was in crisis, afraid he would be evicted from SH. I find that Headley acted properly in telling Hinks that it was okay and that he did not need to worry about being evicted.

[361] The answer to this question is no.

(2) Did giving Hinks a receipt to calm him down when no money had been paid constitute serious misconduct? Anstett said Headley’s error was not so much in waiving the maintenance fees unilaterally but in writing receipts for monies not paid.

[362] I have accepted the evidence of O’Brien, Premji and Okpara that Hinks was often robbed and assaulted and that he could become violent, especially over money concerns and fear of eviction from Seaton House. I find Headley gave Hinks the receipts to calm him down, to protect the staff in the area at the time, including Premji, from an escalation of Hinks’ violence, and as Headley said, to prevent Hinks from having a stroke.

[363] When the incident was reported to Anstett in June 2012, steps were finally taken to involve the Public Trustee in the administration of Hinks’ affairs. It is obvious that this should have been done earlier. Had that happened, Hinks would not have had his own bank account at a time when he was obviously incapable, would not have had cash to flash around, would not have been as vulnerable to theft and robbery, would not have had to worry that when his cash was stolen he would not be able to pay his maintenance fees, and would not have gone into crisis after because of fear of eviction from HS when his maintenance fee cash was stolen. In other words, had the Public Trustee been contacted earlier, Headley would not have been called upon to deal with the crisis that he was.

[364] I find that Headley derived no personal benefit from providing the two receipts.

Was Dismissal a Proportionate Response to the Misconduct?

[365] In McKinley v. BC Tel (supra), the Supreme Court of Canada held that given the sense of identity and self-worth individuals frequently derive from their employment, “an effective balance must be struck between the severity of the employees’ misconduct and the sanction imposed.”

Employer and Employee’s Circumstances

Employer

[366] Counsel for the City submitted in opening and in argument that men at SH are among the most vulnerable members of society. There is an inherent power differential between staff and homeless residents and SH employees are in an enhanced position of trust. Seaton House staff must adhere to the highest standards of integrity. The City has a responsibility to ensure its shelters meet the applicable standards. The city has a statutory obligation of financial accountability to City taxpayers. The City’s fraud prevention policy applies to all employees. The City cannot tolerate any misappropriation of its revenues including maintenance fees.

[367] I accept all of the above.

[368] The City has proved issuance of receipts on two occasions where no money was received.

[369] The Plaintiff has proved that Seaton House would not have insisted on payment in accordance with its practice of not evicting vulnerable, old, physically ill, forgetful long-term programme clients such as Hinks. Assuring Hinks it was okay that he could not pay, if not Headley’s precise method of doing so, (giving him a receipt) was a usual approach to de-escalating (calming down) clients such as Hinks.

[370] The environment at SH, a facility housing many clients with mental health problems and violent tendencies, created a need for the exercise of shift leader discretion to keep clients and City staff safe.

Employee

[371] Headley loved his job and by all accounts did it well, with empathy and humanity. He took serving, preserving the dignity of and keeping Seaton House clients safe very seriously.

[372] Headley had been in shift leader position since 2002, an employee of the City since 1998. As set out at Exhibit 1, Tab 1, this was an important and responsible position. Shift leaders at SH direct operations during shifts, supervise staff, manage crisis situations, investigate accidents, ensure appropriate medical care is provided, and assume all levels of management responsibility in after-hours operations. As the City acknowledged in the Auditor General’s Report THAT Headley had worked with the City for over 15 years, most of this time in management, he had been an above average employee in terms of his performance who had shown a great deal of empathy for the SH client population, had made decisions independently and had required minimal supervision.

CONCLUSION ON JUST CAUSE

[373] In all the unusual circumstances here, I am of the view that there was an insufficient basis for dismissal for cause. There was no misconduct, dishonesty etc. here, sufficient to warrant a finding of irreparable breakdown of trust or of conditions necessary to sustain employment relationship.

[374] While Headley erred in issuing the two receipts in question, in light of all the surrounding circumstances I am of the view that dismissal was not warranted.

[375] In my view, the misconduct found is not so serious as to warrant dismissal. Headley’s dismissal was disproportionate to the gravity of his misconduct.

[376] The City did not have just cause to terminate Headley’s employment.

PERIOD OF NOTICE

[377] The period of reasonable notice is to be decided having regard to the particular circumstances of each case. The court must consider the factors set out in Bardal v. Globe and Mail Ltd. (1960), 1960 CanLII 294 (ON SC), 24 D.L.R. (2nd) 140 (Ont. S.C.), including the character, inter alia, of the employment, the employee’s position, responsibility, length of service and age at termination, and the availability of similar employment having regard to the experience, training, and qualifications of the employee.

[378] At termination, Headley was 40 years old. He had worked at SH for 15 years, most of that time in management. He had had a high level of managerial responsibility as an SH shift leader, including responsibility for the health and safety of 134 residents of the LTP plus staff when on shift. (see Tab 1, Tab 86 at p. 370). I have found that with the other shift leaders, Headley had been given responsibility by Anstett for running the day to day operations of the LTP when on shift. When he was on secondment he had performed Anstett’s responsibilities as LTP supervisor. Anstett said Headley had run the LTP well. After the secondment ended, as Anstett said, he was part of the LTP management inner circle.

[379] Bearing in mind the factors to be considered in all the circumstances here, I hold that the appropriate period of reasonable notice is 18 months.

[380] The parties have agreed on all compensatory and mitigation issues and for the quantification of wrongful dismissal damages have consented to this Court using the amount of $5,839.88 for each month of notice. This figure reflects the value of Headley’s gross annual salary, pension and benefits and the deduction of post-termination wages earned by Headley in mitigation of his damages.

[381] Eighteen months at $5,839.88 per month results in total damages in lieu of notice of $105,117.84.

Wallace/Keays damages

[382] In order to be awarded Wallace damages (named after Wallace v. United Grain Growers Ltd., 1997 CanLII 332 (SCC), [1997] 3 S.C.R. 701), an employee must prove that the employer engaged in bad faith conduct or unfair dealing during the course of the dismissal and that the employee suffered damages as a result thereof.

[383] In Wallace, the Supreme Court of Canada held at para. 88 that bad faith or unfair conduct in the manner of dismissal may be properly compensated for by an addition to the notice period.

[384] A court may award damages resulting from the manner of dismissal are available if they result from circumstances that are unfair or in bad faith by being, for example, untruthful, misleading or unduly insensitive.

[385] At para. 98, Iacobucci for the Court wrote:

“The obligation of good faith and fair dealing is incapable of precise definition. However, at a minimum, I believe that in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive. In order to illustrate possible breaches of this obligation, I refer now to some examples of the conduct over which the courts expressed their disapproval in the cases cited above.”

[386] He referred to Trask v. Terra Nova Motors Ltd. (1995), 1995 CanLII 9836 (NL CA), 127 Nfld. & P.E.I.R. 310 (Nfld. C.A.), where an employer maintained a wrongful accusation of theft and communicated it to other employers of the dismissed employee. Jivrag v. Calgary (1986), 1986 CanLII 1701 (AB KB), 71 A.R. 87 (Q.B.), involved similar unfounded accusations of theft combined with a refusal to provide a letter of reference after the termination.

[387] Iacobucci J. noted that not all acts of bad faith or unfair dealing will be equally injurious and thus, the amount by which the notice period will be extended will vary. He wrote at paragraph 101:

“It has long been accepted that a dismissed employee is not entitled to compensation for injuries flowing from the fact of the dismissal itself: see e.g. Addis, supra. Thus, although the loss of a job is very often the cause of injured feelings and emotional upset, the law does not recognize these as compensable losses. However, where an employee can establish that an employer engaged in bad faith conduct or unfair dealing in the course of dismissal, injuries such as humiliation, embarrassment and damage to one's sense of self-worth and self-esteem might all be worthy of compensation depending upon the circumstances of the case. In these situations, compensation does not flow from the fact of dismissal itself, but rather from the manner in which the dismissal was effected by the employer.

Often the intangible injuries caused by bad faith conduct or unfair dealing on dismissal will lead to difficulties in finding alternative employment, a tangible loss which the Court of Appeal rightly recognized as warranting an addition to the notice period. It is likely that the more unfair or in bad faith the manner of dismissal is, the more this will have in effect on the ability of the dismissed employee to find new employment. However, in my view the intangible injuries are sufficient to merit compensation in and of themselves. I recognize that bad faith conduct which affects employment prospects may be worthy of considerably more compensation than that which does not, but in both cases damage has resulted that should be compensable.”

[388] In Keays v. Honda Canada Inc., 2008 SCC 39, [2008] 2 S.C.R. 362 at para. 54, the Supreme Court of Canada held that since Fidler v. Sun Life Assurance Company, 2006 SCC 30, [2006] 2 S.C.R. 3, it is no longer necessary that there is an independent actionable wrong before damages for mental distress can be awarded for breach of contract.

[389] Bastarache J., for the Court, wrote at para. 59:

“…there is no reason to retain the distinction between “true aggravated damages” resulting from a separate cause of action and moral damages resulting from conduct in the manner of termination. Damages attributable to conduct in the manner of dismissal are always to be awarded under the Hadley principle. Moreover, in cases where damages are awarded, no extension of the notice period is to be used to determine the proper amount to be paid. The amount is to be fixed according to the same principles and in the same way as in all other cases dealing with moral damages. Thus, if the employee can prove that the manner of dismissal caused mental distress that was in the contemplation of the parties, those damages will be awarded, not through an arbitrary extension of the notice period but through an award that reflects the actual damages.”

[390] Here, the plaintiff alleges that the City was unfair in its manner of Headley’s dismissal and that that unfairness caused him foreseeable mental distress as well as tangible financial loss.

[391] His counsel cited examples of conduct justifying Wallace damages. My comments are in square brackets:

(1) Anstett said “don’t worry about the Hinks matter, it is not necessary to put anything in writing, have a good vacation.” [At the time, Anstett said that because he believed Headley’s explanation for issuing the two receipts - Anstett wrote that Headley’s explanation was plausible. He did not reprimand Headley or send him home. He believed Headley had issued the receipts, as he had said, to calm Hinks down];

(2) Between June 25 (or 29) and mid-July 2012, Anstett did not advise Headley that he was under investigation; [I accept this evidence.]

(3) When management decided to suspend Headley with pay pending an investigation of the receipts issue, Anstett did not speak to Headley directly to advise he was being investigated and suspended. Instead, Anstett called Headley’s phone in mid-July 2012 and left a message that was not private: “Mark, this is Dan. Do not come back to Seaton House again. We don’t want to see you here. We don’t want you here anymore”; [While I do not find that Anstett used exactly these words I do find that Headley had been unaware he had been under investigation and was surprised to receive notice that he was suspended.]

(4) Headley tried to call Anstett back. Anstett refused to return his calls. The only way Headley could find out what was happening was to call Smith; [I accept this evidence.]

(5) When he spoke to Smith, Smith told him he was under investigation and suspension because of the Hinks receipts. This came as a surprise to Headley given Anstett’s reaction on June 25; [I accept this evidence.]

(6) When Anstett and Smith called Headley in for an investigation interview on July 19. Anstett and Smith did not advise him that he was entitled to bring a COTAPSA representative with him to the investigation interview;

(7) Anstett and Smith were unduly insensitive at that interview. They implied that they did not believe him, that they suspected that Hinks had not paid maintenance fees on the occasions when he gave Hinks receipts. They implied he had stolen the Foremsky cash. They accused him of taking maintenance fees for which the April 30 receipt had been given. They said providing receipts to Hinks could appear to be fraudulent. They refused to listen when he told them about others’ access to the LTP shift leaders’ office and other deficiencies in the SH systems. Anstett’s attitude was reflected in his comment at trial that it had been inappropriate for Headley to raise safekeeping flaws at the July 19, 2012 meeting “because Headley had had 10 years to give input about how things happen on the floor.” [I accept that their comments were insensitive. Smith’s insensitive attitude was reflected in her dismissive comments about the matters Headley raised and her acknowledgement at trial that she was not concerned about alternative possibilities or explanation.]

(8) They said they were focusing on Hinks, but they had not and did not attempt to speak to Hinks in detail. They did not even try to interview Foremsky. Though they drew what I have found were incorrect inferences about Lovi’s entries in the shift leader log concerning Foremsky after the first week of the investigation they did not interview Lovi at all, or in particular, about the underlining and question mark in the shift leaders’ log. [I accept these submissions.]

(9) On July 19, 2012, Headley was very distressed that they were accusing him of fraud and stealing from Hinks and Foremsky. [I accept this submission.]

(10) In her note of the July 19 meeting, Smith did not mention, and should have mentioned, the discussion about an unidentified $415 deposit that could have been Hinks’ maintenance fee receipted by Headley on April 30. [I accept this submission.]

(11) Smith wrote that Headley had said there were no witnesses in her typewritten version of the July 19 meeting. [I have noted that there was no similar entry in her handwritten note of the meeting made during the meeting.]

(12) Anstett and Smith told Headley on July 19 they would get back to him in a week.

(13) Two months went by during which Anstett would not return his calls.

(14) Not hearing back for so long caused Headley much stress. [I accept this submission.]

(15) After September 5, 2012 when Wilbur reviewed more receipts and drew negative conclusions about Headley, when another investigation meeting was scheduled with Headley, no one told Headley in advance that the investigation had been widened and that he would be asked about more receipts. He had no meaningful opportunity to prepare for the meeting to prepare a response to the specific matters they intended to raise with him. [I accept this submission.]

(16) On September 5, 2012, Wilbur had looked at “some” receipts of other shift leaders and made conclusions on them that were central to the decision to terminate. Anstett and Smith made no inquiries of other shift leaders about those receipts before or after the September 19 meeting. [No thorough methodical review of those receipts was made at that time and no consideration was given to missing receipts.]

(17) Wilbur, Smith, Anstett made no inquiries of clients Dalip or Hodgins, and Anstett made only cursory inquiries of Turner. [I accept this submission.]

(18) Representatives of the City jumped to the conclusion that Headley was a thief without conducting an adequate investigation and without obtaining sufficient cogent evidence to substantiate their suspicions. [I accept this submission.]

(19) Anstett and Smith brought Headley in for a 15 minute meeting without giving him any advance notice about what they wished to discuss with him and without giving him advance notice of specific receipts they would be asking him about. [I accept this submission.]

(20) Headley answered their inquiries to the best of his ability, generally saying he didn’t take money etc. In evidence, they unfairly criticized his demeanour and his responses. [I accept this submission.]

(21) They unfairly criticized him for expressing no remorse when he maintained he had nothing to be remorseful about. [I accept this submission.]

(22) They decided to terminate his employment based on suspicion (see Smith’s letter to Auditor General), without a final investigation report from Anstett, or any sufficient critical review of Wilbur’s conclusions, or any independent review. [I accept this submission.]

(23) The termination letter was overly harsh, accusing him of a concerted repeated course of conduct including fraud, theft, dishonest, willful misconduct, breach of trust, given their lack of cogent substantiation of those grounds for dismissal especially given Headley’s 15 years of service and performance. [I accept this submission.]

(24) Anstett wouldn’t return Headley’s calls seeking a reference from his immediate supervisor. This made obtaining another management level job much more difficult. [I accept this submission.]

(25) Smith refused to provide a list of courses Headley had taken.

(26) They reported incorrect information to the Auditor General in Tab 86, including for instance, that he had issued 11 receipts for maintenance fees where no funds were deposited in the SH administration department. [I accept this submission.]

(27) They were dismissive of the input from the other shift leaders including Exhibit 1, Tab 10, prepared around the time of Headley’s dismissal. [I accept this submission.]

(28) Even at trial they insisted he had stolen client maintenance fee monies. [I accept this submission.]

(29) They refused to take into account the disappearance of maintenance fee money from the LTP shift leaders’ office in 2013 even after a much more thorough investigation corroborated much of Exhibit 1 Tab 10. [I accept this submission.]

[392] While it was reasonable to investigate Headley given the matters that came to light in June 2012, I find the City did not meet its obligation of good faith and fair dealing in the manner of Headley’s dismissal. Anstett was not forthright with Headley. Despite the gravity of the allegations and the foreseeable mental distress and negative financial implications that a dismissal based on unfounded allegations would have ultimately the dismissal was based on unproven suspicions after an incomplete investigation, insensitively and unfairly conducted.

[393] The termination letter was unduly harsh alleging unsubstantiated fraud and dishonesty. The City’s conduct of the dismissal was unfair, unreasonable, excessively harsh and unduly insensitive. It meets the foreseeability requirement in Hadley v. Baxendale mentioned in para. 59 of Keays.

[394] In all circumstances here, it was foreseeable that the City’s manner of dismissal would result not only in mental distress but also ongoing difficulties in finding comparable alternative employment.

The Quantum of the Damages to be Awarded for the Manner of Dismissal

[395] In Mastrogiuseppe v Bank of Nova Scotia, [2005] O.T.C. 1132 (S.C.), (decided before Keays), Pitt J. considered the quantum of Wallace damages to award because of the conduct of the employer. He wrote at para. 95: “…I am of the opinion that the plaintiff is entitled to an additional 8 months’ notice as compensation for the Bank’s unfair dealings in the manner of the plaintiff’s dismissal”.

[396] In that case, the bank alleged dishonest conduct and improper personal relations with a mortgage broker. The termination letter did not give reasons for the dismissal. Pitt J. found the dismissal was communicated to the plaintiff in a cavalier and high-handed manner. He wrote that the letter was written as if judgment had already been rendered by a court of law. Despite years of excellent service, the bank refused to give a letter of reference. The bank refused to allow the employee to re-enter the branch to collect her personal effects.

[397] The Ontario Court of Appeal wrote in Mastrogiuseppe v. Bank of Nova Scotia, 2007 ONCA 726, 61 C.C.E.L. (3d) 1 at para. 3: “With respect to the Wallace damages, while we agree that this was an appropriate case for such damages, we think, with respect, that the trial judge, in arriving at the eight-month figure, took into account several matters that he ought not to have. In particular, we see no bad faith on the part of the Bank in pursuing the allegations of dishonesty, albeit in the end those allegations were not proved…As well, along those lines, the Bank cannot be faulted for not giving the respondent a letter of reference. We are also of the view that the Bank did not act improperly, in the circumstances of this case, in couriering the respondent’s belongings to her. In our view, had the trial judge considered only the relevant factors, he would have awarded Wallace damages of four months.”

Wallace Damages for Mental Distress

[398] I have accepted Headley’s evidence on the mental distress caused by the manner in which he was treated in the manner of his dismissal. As Iacobucci J. recognized at paras. 51-57 of McKinley, work can be integral to an individual’s sense of identity and self-worth.

[399] I accept Headley’s evidence of the impact of the allegations on his sense of self-worth, including the following: “I don’t believe Dan [Anstett] would come at me like I’m a thief. Like I took clients’ money. The same guys I worked hard for that he would flip it around… to put it back on me. That put me into a dark place… I care for people. I did beyond my share…That is why this thing destroyed me…”.

[400] Headley was a motivated breadwinner and his inability to provide as before for his family has been not only costly but deeply distressing. I accept his evidence for example, about his distress when he was unable to take his young son to McDonalds.

[401] For foreseeable mental distress caused by the unfounded allegations of theft, the insensitive treatment in the manner of dismissal, the unduly harsh letter of termination, and the other matters cited above, I award damages of $15,000.

Wallace Damages for Loss of Income

[402] I am satisfied that the unfair allegations that Headley had committed theft, the City’s unfair dismissal on unsubstantiated suspicion of theft, fraud and wilful dishonesty, Anstett’s refusal to respond to his calls so he could request a letter of reference from his immediate supervisor and the inevitable cloud created by that unfairness have foreseeably led to tangible financial loss of income in the ensuing years. Hopefully this Judgment will dispel that cloud.

[403] Almost seven years have passed since the termination. Despite having made what I have found were reasonable efforts, Headley has not succeeded in finding a comparable managerial position. At the time of the trial he was still earning roughly half the total income he was earning in June 2012. With the cloud lifted, I expect that Headley will now be able to find a comparable managerial position.

[404] I have found that his employment history before the termination illustrates that he was highly motivated, consistently employed, often for more than 40 hours per week. He also volunteered and provided mentoring to others. But for the unfairness in the manner of his termination, including the unfounded allegations of theft, fraud and dishonesty, I find Headley would have had little difficulty obtaining a comparable managerial position and earning comparable income to the income he earned prior to June 25, 2012.

[405] Given the guidance given by Iacabucci J. in Wallace that “if the manner of termination affects employment prospects” it may be worth of considerably more compensation” and given the direction of Bastarache J. in Keays that such damages are to be awarded, not by an arbitrary extension of the notice period but through an award that reflects the actual damages, this Court must attempt to assess the actual damages/tangible financial loss caused by the unfair manner of dismissal.

[406] The financial consequences to Headley and his family of the manner of his termination have been significant.

[407] Bearing in mind the need to avoid duplication by reason of his receipt of damages as a result of the dismissal under the previous heading, I award $50,000 for tangible financial loss caused by the unfair manner of his dismissal.

PUNITIVE DAMAGES

[408] The Supreme Court of Canada has written at para. 62 of Keays: “Punitive damages are restricted to advertent wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own.”

[409] Throughout these reasons I have been critical of the City. Despite my findings, the City had reason to initially suspect Headley and to conduct an investigation. While that investigation fell far short, and while the treatment of Headley in the dismissal process was unreasonable, insensitive, and unfair, its conduct cannot be accurately described as malicious.

[410] This is not a case for punitive damages.

GENERAL COMMENT

[411] I do not want my comments herein to any way be taken as a criticism of the City’s counsel who in my view conducted the City’s case fairly and well.

DISPOSITION

[412] The Plaintiff will have judgment for $105,117.84 plus $15,000 plus $50,000, plus interest.

[413] If the parties cannot agree on the calculation of interest, they may include submissions on interest together with their costs submissions.

[414] The parties may make written submissions on costs not to exceed 15 pages each on or before September 23, 2019.

M.A. SANDERSON J.

Released:

COURT FILE NO.: CV-468777

DATE: 20190827

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MARK HEADLEY

Plaintiff

– and –

CITY OF TORONTO

Defendant

reasons for DECISION

M.A. SANDERSON J.

Released: August 27, 2019