Court File and Parties

COURT FILE NO.: CV-17-578601 DATE: 20210728 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Sunwing Airlines Inc., Plaintiff – and – Amilcar Mora and Sonya Sekulic, Defendants

COUNSEL: Jordan Goldblatt and Jocelyn Howell, for the Plaintiff Stathi Balopoulos, for the Defendant Amilcar Mora

HEARD: January 11-26, 2021

Reasons for Decision

J.E. Ferguson J.

[1] This trial took place between January 11 to January 26, 2021. I received written submissions from Sunwing Airlines Inc. (“Sunwing”) dated February 19, 2021, Amilcar Mora (“Mora”) dated March 29, 2021 and reply from Sunwing dated April 23, 2021. Sonya Sekulic (“Sekulic”) was let out of the action after her matter resolved.

[2] The fundamental issue in this case is whether Mora was involved in a kickback scheme.

FACTS

[3] Sunwing alleges that Mora received over $500,000 in kickbacks (the “kickbacks”) from one of its contractors in Cuba, Sylvie Leduc (“Leduc”), from 2012-2017 (the “kickback scheme”). Mora asserts that the kickback scheme is a figment of Leduc’s imagination.

[4] Sunwing is a corporation with its corporate head office in Toronto (the “Sunwing head office”). Sunwing is in the business of offering and scheduling commercial airline flights and other related services to consumers in Canada, United States, Mexico, Central America, Caribbean, and Europe.

[5] Mora was an employee of Sunwing until his termination for cause on May 15, 2017. He was hired by Sunwing on October 1, 2007 as a ramp supervisor. At all material times, Mora worked out of Toronto. Mora has a wrongful dismissal action against Sunwing in the event I find he was not involved in the kickback scheme.

Witnesses

[6] The following witnesses testified on behalf of Sunwing at trial:

(a) Mark Williams (“Williams”): the president of Sunwing;

(b) Leduc: a Sunwing contractor based in Cuba, who disclosed the kickback scheme to Sunwing in 2017;

(c) Jocelyn Leduc (“Jocelyn”): Leduc’s sister, who managed Leduc’s finances in Canada;

(d) Patrick Heinke (“Heinke”): special advisor to Williams in 2017, who supervised Sekulic and Gord Kenny (“Kenny”), the director of airport services at Sunwing in 2017. He was involved in the investigation of the kickback scheme;

(e) Matthew Hunter (“Hunter”): the senior vice president of Sunwing Travel Group, Sunwing’s parent company;

(f) Kenny: supervised Mora, and was involved in investigating the kickback scheme.

[7] Mora testified on his own behalf at trial. He also called Sekulic as a witness, who was the director of airport procurement at Sunwing in 2017.

The Issue and Conclusions

[8] This is strictly a credibility case. There are no complex legal issues. Do I believe and accept the evidence of Williams, Leduc, Jocelyne, Heinke, Hunter and Kenny on behalf of Sunwing, or of Mora and Sekulic on behalf of Mora?

[9] I believe and accept the evidence of the Sunwing representatives beyond a reasonable doubt (beyond that of the required civil standard of balance of probabilities). I do not believe or accept any of the evidence that came from Mora. Sunwing’s action is granted. Mora’s wrongful dismissal action is dismissed.

Background

[10] In September of 2010, Sunwing entered into an independent contractor agreement with Leduc, pursuant to which she provided representation, administration and supervisory services for Sunwing’s flights to Cuba (the “2010 contract”). Leduc had previously worked with Sunwing’s sister company, Sunwing Vacations.

[11] Under the 2010 contract, Sunwing paid Leduc $50 USD per flight on flights to Varadero, Cuba and $45 USD per flight on flights to other Cuban airports. From her per-flight compensation, Leduc paid certain disbursements, including per-flight amounts to Cuban workers who were assisting Sunwing on the ground in Cuba (the “Cuba incentives”). The 2010 contract ended on August 31, 2011.

[12] Neither Mora nor Sekulic were involved in negotiating the 2010 contract. Leduc was satisfied with its terms.

[13] By November of 2011, Leduc was negotiating a new contract with Sekulic, who at the time was the director of commercial operations.

[14] Leduc testified that Sunwing told her she would be placed into a salaried position of $50,000 USD per year (as opposed to being paid on a per-flight basis), and that Sunwing would take over the Cuba incentives. Leduc did not like this arrangement.

[15] Leduc countered by proposing a $52,000 USD per year salary (on a three‑year term) or, as an alternative, compensation of $35 USD per flight (the “2011 proposal”). The $35 USD amount would include communication and all travel expenses. Under the $52,000 USD salary option, Leduc would not be responsible for paying the Cuba incentives. From the $35 USD per flight amount proposal, Leduc offered to pay:

• $5.00 CUC per flight given to VRA Sunwing team;
• $1.00 CUC per flight given to VRA supervisor Yuri Lopez;
• $5.00 CUC per flight given to each airport Sunwing team;
• $50.00 CUC per month for HOG Sunwing supervisor Yoanis Martinez;
• $50.00 CUC per month for CCC Sunwing supervisor Frank Rodriguez;
• $50.00 CUC per month for the new dedicated Sunwing lost & found agent based in VRA.

[16] Sunwing accepted the $52,000 USD per year salary offer from the 2011 proposal, and Leduc and Sunwing entered into a second independent contractor agreement, effective November 1, 2011 (the “2011 contract”). The 2011 contract was for a term of six months, which expired on April 30, 2012.

[17] Mora was sent a copy of the 2011 contract, executed by Leduc. Sekulic told him its terms.

[18] On December 22, 2011, Mora emailed Leduc, copying Sekulic, stating they should “keep [a] close circle” for “our mutual benefits”:

In order to better assess your performance as well as to have more power to support your status as Cuba Rep, I need to track the progress of your good job in all Cuba. We need to keep close circle between the two of us so I can assist you to obtain better results for the company benefits as well as our mutual benefits.

[19] It was well-known that Leduc was not happy with the 2011 contract. Sekulic and Mora both testified that they knew Leduc was unsatisfied with the agreement.

[20] It is uncontested that:

(a) the 2011 contract was set to expire on April 30, 2012;

(b) as this date approached, Leduc told Sekulic and Mora that she was considering resigning from Sunwing;

(c) on April 27, 2012, Leduc attended in Toronto to discuss her contract with Sekulic;

(d) that morning, Leduc met with Mora over breakfast (the “breakfast meeting”).

[21] Leduc started reporting to Mora in May of 2012.

[22] Mora and Leduc agreed that at the breakfast meeting they discussed that Leduc was dissatisfied with her contract – including specifically her pay. Mora knew Leduc wanted to be paid more than $52,000 USD per year and that she wanted to return to being paid on a per-flight basis.

[23] Leduc testified that during the breakfast meeting, she told Mora that she wanted a $50 per flight contract. Leduc testified that when she told this to Mora, he told her she should ask for $80 per flight instead and pay him the $30 overage between the $50 she wanted and the $80 she would receive (the kickback scheme). Leduc testified that she was surprised by Mora’s response. Although she had asked for $50, she expected and was prepared to negotiate down from that amount based on Sunwing’s prior rejection of her $35 per flight offer in the November 2011 proposal in November.

[24] Mora and Leduc agree that Leduc met with Sekulic on April 27, 2012 after the breakfast meeting (the “Sekulic meeting”).

[25] During the Sekulic meeting, Leduc asked for $80 per flight as instructed by Mora, to which Sekulic immediately agreed without attempting to negotiate.

[26] Sekulic’s evidence about the negotiations changed in direct examination and cross‑examination. Sekulic testified (i) that she agreed to $80 per flight on April 27, 2012; (ii) that she did not agree to $80 per flight on April 27, 2012; (iii) that $80 per flight had to be approved by Williams, Sunwing’s president; (iv) that Leduc asked for $100 per flight; and (v) that Leduc was still negotiating when their meeting ended.

[27] Leduc testified that Sekulic instructed her to draft a proposal for her contract on the spot, which Leduc did using her laptop at a desk at the Sunwing head office (the “2012 proposal”). On cross-examination, Sekulic would not agree that the 2012 proposal was drafted on April 27, 2012, but accepted that there was “urgency” surrounding having Leduc complete it.

[28] Leduc and Sekulic agreed that the 2012 proposal expanded the scope of Leduc’s services to include five duties not previously enumerated in the 2010 or 2011 contracts; however, they disagreed as to how those duties found their way into the 2012 proposal.

[29] Leduc testified that they were dictated to her by Sekulic while Leduc prepared the 2012 proposal at the Sunwing head office. Sekulic denied dictating the duties. However, she acknowledged that she would have told Leduc what new duties she wanted set out in the 2012 proposal and speculated in her evidence that perhaps her language had seeped into Leduc’s drafting.

[30] On April 30, 2012, Mora sent Sekulic a summary of Sunwing’s costs in Cuba (the “Cuba costs summary”). The Cuba costs summary stated that Sunwing’s total Cuba costs at the time were $109,900, based on 2,700 flights to Cuba per year.

[31] According to Mora’s calculations in the Cuba costs summary, the total cost of the Cuba operations excluding Leduc’s compensation was $57,900:

$109,900 [total cost] - $52,000 [Leduc’s salary] = $57,900 [original Cuba costs]

[32] Based on the $80 per flight compensation proposed in the 2012 proposal (which would include all Cuba costs), the total cost of Sunwing’s operations in Cuba would increase from $109,900 to $216,000, if Sunwing’s flights to Cuba remained at 2,700 flights:

$80 [per flight remuneration] x 2,700 [flights to Cuba] = $216,000 [$80 per flight remuneration]

[33] Sekulic and Mora agreed that this would result in a substantial increase in Leduc’s compensation. Mora agreed that if the Cuba costs remained fixed, then Leduc’s salary would increase from $52,000 to $158,100:

$216,000 [$80 per flight remuneration] - $57,900 [original Cuba costs] = $158,100 [new Cuba costs]

[34] Sekulic testified that this cost increase proposal was justified to Williams by noting that in the past six months, Leduc had only been paid $52,000. Sekulic did not tell Williams that whereas both the 2010 contract and the 2011 contract were fixed term contracts, the new contract with Leduc would be for an indefinite term.

[35] Williams testified that he asked Sekulic if Leduc would move down from $80 per flight, for example to $60 or $65 per flight. Sekulic responded that she would not and said that “she wanted $100; I got it down to 80 but she’s still fighting for 85.”

[36] On May 1, 2012, Williams approved Leduc’s contract at $80 per flight. He wrote: “We have no choice, so go for it.”

[37] Leduc and Sunwing accordingly entered into a new agreement, effective May 1, 2012 (the “2012 contract”). Leduc’s services under the 2012 contract mirrored those in the 2012 proposal and her compensation was $80 CAD per flight.

[38] Mora admitted under cross-examination that he had a copy of the email exchange between Sekulic and Williams regarding the 2012 contract, despite not being copied. He testified that he took a copy from a Sunwing file in 2013 to protect himself should the Cuba incentives come to light.

[39] In 2015, Sunwing increased Leduc’s compensation under the 2012 contract from $80 CAD per flight to $92 CAD per flight to reflect changes in the exchange rate between the Canadian dollar and the US dollar (which is tied to the Cuban convertible peso).

[40] Leduc and Mora agree that:

(a) Leduc or her sister, Jocelyne, paid Mora cash; and

(b) the cash was paid multiple times per year.

[41] Mora acknowledged in his testimony that his conduct in accepting this money from the Leducs was unethical.

[42] Mora denies the quantum of the amounts paid to him by the Leducs. He also acknowledged that he did not keep his own records of the payments and, other than the first time, he never asked why he was being paid these amounts.

[43] Leduc and Jocelyne testified (supported by documents) that Jocelyne kept detailed contemporaneous records of withdrawals made from Leduc’s bank account to be set aside for Mora (the “withdrawals”). The withdrawals were all contemporaneously recorded in Leduc’s National Bank passbooks (the “passbooks”). A summary of the withdrawals according to the passbooks are appended as schedule “A” to these reasons. The total amount withdrawn to January 5, 2017 was $537,885.

[44] In April of 2017, Jocelyne prepared a chart for Leduc setting out her accounting of the withdrawals she had made for Mora from 2012 to 2017 (the “chart”). The chart is largely consistent with the contemporaneous passbooks. Jocelyne in her testimony acknowledged that there could be errors between the withdrawals noted in the passbook and the summary of the withdrawals in the chart. She testified that she did her best to be accurate.

[45] The withdrawals, as explained by Jocelyne, did not directly link to the payments made to Mora. The withdrawals were cash taken from Leduc’s account, to eventually be delivered to Mora.

[46] Jocelyne explained that the withdrawals are to be distinguished from the summary of the cash paid to Mora as reflected in the chart from 2012 to 2017 (the “payments”). She testified that she derived the payment amounts from Leduc’s invoices to Sunwing, which set out the number of flights to Cuba over a one-month period (the “invoices”). She further testified that her sister sent her copies of the invoices and that she multiplied the number of flights by $30 to arrive at the amount to be paid to Mora (the kickbacks).

[47] Mora testified that in early 2017, there were a variety of safety and operational concerns in Cuba. He also stated that no e-mails or other written documents produced in this litigation reflect these concerns. Nonetheless, he testified that such documents existed.

[48] Audits of Sunwing’s Cuban airports in 2017 (the “audits”) revealed scores that Williams described as excellent. Mora testified that despite these scores, the audits identified major safety concerns at the airports. Kenny disagreed with Mora’s evidence, testifying that the issues raised in the audits were operational only. Mora testified that Williams did not fully appreciate how the audit scores should be interpreted and that Kenny was wrong in respect of the nature of the issues raised in the audits.

[49] In any event, Leduc did not submit a formal response to the audits to Mora by February 27, 2017, the deadline set out under the audits (the “audit deadline”). Mora agreed in cross‑examination that if the audits revealed major safety issues, the delivery of a formal response by the audit deadline would have been very important. There is no suggestion that Mora followed up with Leduc at the time the audit deadline expired or elevated the issues to Williams. While Mora claimed that he involved Kenny, Kenny denied any such involvement.

[50] On April 3, 2017, Sekulic re‑entered the picture. At that time, her title was director of airport procurement. Her job was not operational; she was responsible for procuring and negotiating contracts for aircraft services.

[51] Sekulic sent an email to Leduc threatening to cancel the 2012 contract, demanding a response to the audits, and claiming that ‘Sunwing’ was very disappointed with a drop in Cuba service levels. Sekulic did not include Kenny (the director of airport services, who was responsible for Sunwing’s ground handling operations) on the email.

[52] Both Mora and Sekulic stated they had not been provided with instruction from Williams to cancel Leduc’s contract. Despite this, Mora acknowledged his intention was to move Leduc’s work to another party.

[53] Leduc testified that she was confused. She felt that matters were proceeding well in Cuba. She reached out to Kenny to find out whether the purported concerns of Sunwing in respect of Cuba were genuine and learned from him that there were no such concerns. Kenny’s, Heinke’s and Williams’ evidence all echoed that of Leduc. They stated that they were unaware of any major concerns in Cuba.

[54] Over this same period, Mora and Sekulic were instant messaging each other expressing concern about Leduc’s behaviour (with Mora advising that “Sylvie is on fire” and “This could be a big problem”, and Sekulic responding “Jesus Christ”) and emailing each other in “ALL CAPS” saying that Leduc needed to be put in her place.

[55] Mora and Sekulic ultimately demanded that Leduc fly to Canada to attend a mandatory meeting with them in Montreal, not at the Sunwing head office.

[56] While the meeting was originally scheduled for Toronto, Sekulic told her assistant to move it to Montreal so she could also meet with Swissport, a Sunwing contractor. Despite justifying moving the meeting to Montreal with Leduc on this basis, Sekulic acknowledged that she had not set up a meeting with Swissport, that she ultimately did not meet with Swissport (although Mora testified that she did), and that her contact at Swissport was out of town on that date.

[57] In early April of 2017, Leduc disclosed the kickback scheme to Kenny. In late April, Leduc sent Kenny an email setting out the details of the kickback scheme in writing. In April or May of 2017, Leduc sent Kenny the chart prepared by Jocelyne.

[58] Sunwing retained Jacques Leclair (“Leclair”) – a private investigator specializing in corporate security – to assist it in obtaining further evidence.

[59] On May 5, 2017, Leduc met with Sekulic and Mora at a restaurant in Montreal by the airport (the “May 5 meeting”). Leduc had previously met Mora at this restaurant to deliver the kickbacks. She testified that she audio recorded the May 5 meeting (the “May 5 recording”), although there was some difficulty with translation and transcription.

[60] Leduc brought $5,000 to the May 5 meeting to give to Mora. At the conclusion of the meeting, Sekulic excused herself and Leduc offered Mora the $5,000, which he did not accept.

[61] Leduc testified that she had not paid Mora the kickbacks since January of 2017, and therefore owed him roughly $57,000. Leduc testified that at the May 5 meeting, she told Mora that she only had $5,000 (not $57,000). Mora told her not to worry about the $5,000 and said he would arrange to pick up the entire amount at another time. The transcript of the May 5 recording states as follows:

• F2 keeps talking: “The payment, the bank could not get it. I asked for 55,000 and got 5,000”.
• M1: “OK”.
• F2: “So, the only thing I have is 2 weeks”.
• H1: “How come two….[indistinct]”?
• “I don’t know, it didn’t pass well [not sure for this]. I don’t know up to now. I didn’t want to” …[indistinct] until Monday, but, I don’t know. I am in business, in front of the computer, but physically, no. [H1 trying to say something but she cuts him off]. But I can’t leave …[indistinct] either”.
• M1: “We’ll see on Tuesday”.
• F2: “…[indistinct]” on Tuesday?
• M1: “Yes”
• F2: “Ok”

[62] Mora denied the accuracy of the transcription of the May 5 recording. Mora initially suggested that he just heard Leduc say the number “5,000” and thought that Leduc could have been referring to 5,000 cigars or bottles of rum. When pressed on cross-examination, Mora admitted he knew Leduc was referring to $5,000 and that he contemplated whether Leduc was bribing him.

[63] On May 12, 2017, Mora met Leduc in her car outside the Montreal airport (the “May 12 meeting”).

[64] The May 12 meeting was audio and video recorded (the “May 12 recordings”). The May 12 recordings show Mora: (i) taking a large beige envelope from Leduc; (ii) holding the envelope, which he described in his evidence as “heavy”, in his hands; (iii) pinching his left hand against the bottom of envelope, as if to feel what is in the envelope; and (iv) folding the envelope in two and tuck it under his arm. The large envelope contained $56,850 in cash.

[65] Mora testified that he thought the envelope contained a gift from Leduc of either a box of cigars or a bottle of rum.

[66] Mora testified that he only opened the envelope from Leduc on May 15, 2017 (three days after the May 12 meeting). He said that he was ‘shocked’ to discover $56,850 in cash, but that he went to work and did not call, text, email or otherwise communicate with Leduc.

[67] When Mora arrived at work, Kenny brought him to a termination meeting (the “termination meeting”). At the termination meeting, which was audio recorded (the “termination meeting audio recording”), Mora denied receiving any cash from Leduc in Montreal several times:

Patrick: Did you get any money from Sylvie while you were there? Mora: No.

[68] And later:

Patrick: So when you met Sylvie, you didn’t pick up any money? Mora: No.

[69] During the termination meeting, Mora admitted the kickback scheme to Sunwing:

Patrick: The point I’m trying to get at is that you were receiving regular payments from Sylvie, sometimes from her sister, and you’ve been doing so since 2012 on a regular basis. Is that fundamentally correct? We can, we can argue numbers after if you want. Is that fundamentally correct? 00:46:01 Mora: They’re all correct, yes.

[70] Mora testified that he only made these admissions to Sunwing under duress.

[71] After Mora admitted to receiving the kickbacks from Leduc, Sunwing and Mora discussed a plan for the repayment of Sunwing’s funds. Mora told Sunwing that he could not return the money he received from Leduc in Montreal (the “Montreal cash”) that day, but rather needed 24 hours to get the money.

[72] Mora and Heinke agreed to meet the next day, on May 16, 2017, for Mora to return the Montreal cash. Mora agreed, on Heinke’s recommendation, to leave his passport with Heinke as a sign of good faith. From the termination meeting audio recording, it is clear that Mora confirmed that his passport would be returned to him the next day (during his meeting with Heinke) and then said “OK” to leaving his passport with Heinke.Although Mora was scheduled to meet with Sunwing to return the Montreal cash on May 16, 2017, Mora called Heinke on May 15, 2017 and asked to meet that day instead. Heinke, Kenny and Mora then met at a restaurant by the airport in the afternoon of May 15, 2017 (the “May 15 meeting”).

[73] During the May 15 meeting, Mora returned the Montreal cash, and Heinke returned Mora’s passport. Mora also entered into two related contracts with Sunwing: a promissory note for $535,180 (the “promissory note”) and an executed letter of receipt (the “receipt”) (together, the “repayment contracts”). The repayments contracts are both dated May 16, 2017; however, it is undisputed that they were executed on May 15, 2017.

[74] In the receipt, Sunwing confirmed that Mora paid it the Montreal cash, leaving an outstanding balance of $535,180 (the “outstanding balance”) payable to Sunwing. The promissory note set out the terms of Mora’s repayment of the outstanding balance. Most significantly, Mora promised to pay Sunwing the outstanding balance on or before June 16, 2017.

[75] Mora agrees that he signed both the promissory note and the receipt. He also agrees that he did not question or challenge the quantum of the outstanding balance at the May 15 meeting.

[76] During the May 15 meeting, Mora and Heinke agreed to two handwritten changes to the repayment contracts to the benefit of Mora (the “amendments”). The amendments: (1) modified the repayment date from June 16, 2017 to “as expeditiously as possible”; and (2) added a provision that Sunwing would take no steps against Mora if he returned the outstanding balance.

[77] Mora testified that he was still under duress at the May 15 meeting and signed the repayment contracts without reading them.

[78] Heinke testified that Mora requested the amendments during the May 15 meeting because he was worried about meeting the June 16, 2017 repayment deadline and was concerned Sunwing would take legal action against him even if he repaid the outstanding balance. Mora denied asking for the amendments or having any discussions about them with Heinke. He could not explain when they were made and denied that they were to his benefit.

[79] The next morning, on May 16, 2017, Mora flew to Miami.

[80] Mora did not deny any of the admissions he had made to Sunwing on May 15, 2017 for nearly ten days.

[81] On May 26, 2017, Mora wrote to Heinke disputing, for the first time, the amount of the outstanding balance. He did not set out why he thought the outstanding balance was incorrect or what he thought the correct amount was. Mora nonetheless reaffirmed his commitment to a “reasonable payback schedule” and offered a lien on his property (the “property”).

[82] When asked at trial to explain why he was still admitting a payment obligation to Sunwing more than 10 days after the termination meeting and the May 15 meeting, Mora testified that he still felt he was under duress. However, he had not met with a lawyer, and was in the United States.

[83] In respect of Mora’s property, the evidence was as follows:

(a) Mora purchased the property with an address of 13 Crawford Drive, Brampton on November 22, 2013 for $350,000;

(b) upon acquiring the property, Mora obtained a mortgage in the amount of $262,000 to Toronto-Dominion Bank (the “mortgage”) with an interest rate of prime + 10%. While Mora contested the accuracy of the registered interest rate on the mortgage, he produced no documents suggesting that the interest rate was any other amount and refused to answer what he said the rate on the property was;

(c) on June 10, 2016, Mora paid off the mortgage in its entirety; and

(d) Mora’s salary at Sunwing never exceeded $62,000 per year.

[84] Mora’s position is that the way that he repaid the mortgage is not relevant.

ANALYSIS

Damages

[85] The only amount Sunwing has recovered from Mora is the Montreal cash that Mora repaid during the May 15 meeting (reflected in the receipt). According to Leduc, this amount represented the kickbacks from January to April 2017.

[86] Sunwing has advanced two means of quantifying its damages.

i. The kickbacks per the repayment documents, the chart and the passbooks

[87] The outstanding balance, according to the repayment documents, is $535,180.

[88] The chart prepared by Jocelyne supports the outstanding balance. According to the chart, Jocelyne or Leduc paid Mora $535,180 from May 2012 to January 2017:

Period	“Paid at Car” (which Jocelyne testified meant paid to Mora)
2012 May to December	$51,390
2013 January to December	$109,350
2014 January to December	$116,755
2015 January to December	$130,490
2016 January to December	$127,195
Total	$535,180

[89] Jocelyne’s contemporaneous annotations in Leduc’s passbooks also largely support the quantification of the outstanding balance. As set out in Schedule “A”, according to the passbooks, Jocelyne withdrew $537,885 from Leduc’s account for Mora from May 2012 to January 2017.

[90] Jocelyne testified that the withdrawals did not align exactly with the payments to Mora because the withdrawals were based on her own rough estimations of upcoming payments, whereas the actual payments were based on the invoices. The two numbers were therefore not identical and there was sometimes a slight surplus of cash when she overestimated the amount of the withdrawals.

[91] In other words, the $535,180 paid to Mora came out of the $537,885 withdrawn from Leduc’s account, leaving a surplus of $2,675 to Leduc.

ii. Overages under the 2012 contract, per Williams’ testimony

[92] After Leduc disclosed the kickback scheme and Mora was terminated, Sunwing reduced Leduc’s compensation in the 2012 contract by $30 CAD per flight (the amount of the kickbacks) to $62 CAD per flight.

[93] Williams testified that from May 2012 to April 2017, Sunwing ran 19,480 flights in and out of Cuba, made up of:

(a) 3,488 flights from May 1, 2012 to April 30, 2013;

(b) 3,661 from May 1, 2013 to April 30, 2014;

(c) 3,930 from May 1, 2014 to April 30, 2015;

(d) 4,392 from May 1, 2015 to April 30, 2016; and

(e) 4,009 from May 1, 2016 to April 30, 2017.

[94] Based on these figures, if Sunwing had contracted with Leduc for $30 CAD less per flight from the outset of the 2012 contract (which it could have done but for the kickback scheme), it would have saved approximately $527,550 from 2012-2017.

Period	Flights
May 1, 2012 to April 30, 2013	3,488
May 1, 2013 to April 30, 2014	3,661
May 1, 2014 to April 30, 2015	3,930
May 1, 2015 to April 30, 2016	4,392
May 1, 2016 to April 30, 2017	4,009
Total flights	19,480
Damages to Sunwing (at $30 per flight)	$584,400
Less Montreal cash recovered from Mora at the May 15 Meeting ($56,850)	$527,550

[95] I agree that both calculations are within 2% of each other, which further supports Leduc’s narrative.

Credibility

[96] This trial turns on Mora’s credibility: is it believable that he was not involved in the kickback scheme? To answer this question, I must assess Mora’s credibility as well as the credibility of the witnesses with whom Mora’s evidence conflicts; namely, all of Sunwing’s witnesses.

i. Assessing credibility

[97] In assessing each witness’s credibility, this court should consider:

(a) the witness’s demeanour: are they honestly endeavouring to tell the truth; are they sincere and frank; or are they biased, reticent and evasive?; [1]

(b) how probable or improbable is the witness’s evidence? Is it in “harmony with the preponderance of probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions”? [2] Does it “make sense” and “conform to the way we expect people to behave in the circumstances?”; [3] and

(c) is the witness’s evidence internally consistent? While minor inconsistencies may not diminish the credibility of a witness unduly, a series of inconsistencies in a witness’s evidence can lead to the conclusion that the witness is not credible. There is no rule as to when inconsistencies rise to this threshold; the trier of fact “must look at the totality of the evidence to assess the impact of the inconsistencies in that evidence on questions of credibility and reliability pertaining to the core issue in the case”. [4]

[98] As the Supreme Court of Canada explained in F.H. v. McDougall, 2008 SCC 53: “In the end, believing the testimony of one witness and not the other is a matter of judgment.” [5]

ii. The Sunwing witnesses were credible

[99] I agree that the Sunwing witnesses were credible. None of Williams, Kenny, Heinke, Hunter, Leduc or Jocelyne were seriously challenged on cross-examination in respect of their credibility. Although Mora invites this court to make adverse credibility findings against each of them other than Kenny, I decline to do so.

[100] I also agree that while there may be minor inconsistencies in their recollection as between each other (for instance, concerning how and what Leduc initially communicated to Kenny, or how and what Kenny told Heinke), these inconsistencies do not relate to the core allegations regarding the kickback scheme, and do not detract whatsoever from the underlying reliability of the witnesses’ recollections.

[101] I agree that both Leduc and Jocelyne were credible witnesses: they both testified in a sincere and compelling manner, and had no major inconsistencies revealed in their evidence. They may have not created or kept meticulous records of the amounts and dates of the payments to Mora. However, this is not surprising, as they were paying cash in a kickback scheme. Jocelyne had no incentive to lie and was not challenged on her credibility. While Mora suggests that she retroactively made up payments for mundane transactions by Leduc, the passbooks show that Jocelyne was recording every transaction she did on her sister’s behalf, not just the withdrawals. I give substantial weight to her evidence about the amounts paid to Mora.

iii. Mora and Sekulic were not credible

Mora:

[102] I agree that Mora was not a credible witness and I accept Sunwing’s submissions. For instance, Mora:

(a) was contradicted by his discovery evidence in respect of whether he had supervised Leduc during the 2010 and 2011 contracts;

(b) was contradicted in respect of when he learned about the terms of the 2011 contract (despite having received an e-mail attaching the 2011 contract);

(c) was contradicted in respect of whether Leduc was paying the Cuba incentives under the 2010 contract;

(d) asserted for the first time on cross-examination that there were errors in his calculation of the Cuba costs summary;

(e) asserted that he did not want the Cuba incentives going through his bank account because of tax concerns, yet was not concerned by accepting and not claiming the amounts Leduc paid him;

(f) asserted that Kenny was involved in, or aware of, concerns regarding Leduc and Cuba in 2017, without any supporting documentary evidence;

(g) asserted that there were major safety concerns in Cuba in 2017, without any supporting documentary evidence;

(h) was contradicted by his discovery evidence in respect of his changing view on whether the audit scores for the Santa Maria, Varadero and Holguin airports in Cuba were “very good”;

(i) by his own admission, misled Leduc in 2017 in respect of whether he had been instructed to cancel her contract;

(j) by his own admission, misled Leduc in 2017 in respect of whether Williams was prepared to approve her invoices;

(k) testified that Sekulic attended a meeting with Swissport on May 5, 2012, when Sekulic denied such a meeting occurred;

(l) testified that he believed Leduc was offering him 5,000 cigars at the May 5 meeting;

(m) suggested that the transcript of the May 5 recording was inaccurate, other than in the section where he deferred receiving $5,000 from Leduc;

(n) testified that he could not tell the difference between the feel of a bottle of rum, a box of cigars, and an envelope full of cash;

(o) testified that his statement of defence and the 2018 affidavit – both of which admitted him knowingly receiving cash from Leduc at the May 12 meeting – did not reflect a changing theory of the case;

(p) testified that he had no negotiations or discussions in respect of the amendments to the repayment contracts and that the amendments must have been inserted to Heinke’s benefit; and

(q) testified that while he was in the United States on May 26, 2017, he still felt under duress such that he was prepared to continue admitting he owed money to Sunwing.

[103] On the issue of safety concerns in Cuba, I prefer the evidence of Leduc, Kenny, Heinke, and Williams to that of Mora. Mora testified that he lacked funds to bring a motion to compel production of the documents, but could not point to a letter asking for production or a discovery request having been made. Moreover, Kenny, Heinke, and Williams all testified that they were unaware of any major concerns in Cuba. I agree with the plaintiffs that they would have known about any such concerns if they existed, and there is no reason for Kenny, Heinke, or Williams to lie about them. To believe they are lying would require me to conclude that in 2017, they were aware of safety concerns in Cuba and buried those complaints to justify terminating Sekulic and Mora. However, if Sunwing wanted to terminate its employees, it could have done so without concocting a story about a kickback scheme.

[104] The documentary evidence also does not support Mora’s version of events with respect to the safety concerns, which further undermines his credibility. Mora and Sekulic did not include anyone else at Sunwing on their email correspondence to Leduc demanding a response to the audits and expressing dissatisfaction with Leduc’s performance, even as their supposed concerns mounted. Mora admitted under cross-examination that it was unusual that Sekulic, the director of airport procurement, was copied on these emails.

[105] Mora’s evidence about the 2017 audit scores in Sunwing’s Cuban airports was also not credible. He claimed that despite the excellent scores, the audits identified major safety concerns at the airports. Williams described the scores as excellent and Kenny disagreed with Mora’s evidence on this issue. Mora testified that Williams did not fully appreciate how the audit scores should be interpreted and that Kenny was wrong about the nature of the issues raised in the audits. However, it is not believable that Mora’s supervisors, including the president of Sunwing, would both be mistaken as to the nature of the audits.

[106] In spite of his concerns, Mora also did not follow up with Leduc to ensure she submitted a formal response to the audits, nor did he discuss the alleged issues with Williams. Mora also testified that he involved Kenny in the response to the audits. Kenny denied being involved and his credibility was not challenged. I prefer Williams and Kenny’s evidence to that of Mora.

[107] Mora’s account of the May 5 meeting was also not credible. He denied the accuracy of the transcription of the meeting. However, this would require me to conclude that the transcript, which was prepared by a third party, was fabricated. I do not make that conclusion. Further, he admitted on cross-examination that he knew Leduc was offering him $5,000, despite having initially stated that he thought she was referring to 5,000 cigars or bottles of rum.

[108] I also reject Mora’s evidence about the May 12 meeting. Mora testified that he thought the envelope Leduc handed him in the video contained a gift of either a box of cigars or a bottle of rum. This evidence is wholly unbelievable. A box of cigars feels different than a bottle of rum and neither would feel like envelopes of cash. The May 12 recordings also show that Mora never thanked Leduc for the gift he claimed he thought he was receiving from her.

[109] I agree that in addition to being unbelievable, Mora’s evidence on this point has changed over the course of this litigation. In his statement of defence, Mora admitted that he knew he was receiving cash, but claimed that he took the cash as a bribe, “in exchange for leniency towards [Leduc] for the continuing deficiencies in Cuba”. His pleading states:

32. Mr. Mora ultimately met with Leduc at the Montreal Airport, as outlined in the Amended Statement of Claim in paragraph 22, on May 12th, 2017, and against his better judgment, accepted the secondary incentive offered by Leduc, in the amount of $56,850.00 in Canadian Currency, in exchange for his leniency towards her for the continuing deficiencies in Cuba. These funds were ultimately returned to Sunwing, as outlined below, on the very next business day, and make up the subject matter of the Plaintiff’s claim.

[110] Mora attempted to disavow his pleading at trial. I agree that nonetheless, the inconsistencies within his evidence and position throughout this litigation undermine his credibility and reinforce his shifting narrative. Moreover, as a matter of law, his pleading constitutes a formal admission that Mora knew he was receiving cash. This admission can only be withdrawn with leave of the court, and no such leave was sought. Mora cannot now claim he did not know he received cash and that he “accepted” it.

[111] Mora was also presented with an affidavit that he swore on July 7, 2018 (the “2018 affidavit”), which contains a similar narrative of the May 12 meeting to the one described in his statement of defence – specifically, that he knowingly accepted cash from Leduc:

It has become apparent that Leduc has made allegations against me to my employer, Sunwing, upon her becoming hostile to me for the audit reports that were deficient, which she began refusing to rectify beginning in late 2016. Further, as a result of the false information provided to them by Leduc, Sunwing ultimately set up an Entrapment scheme wherein they planned to offer me a sum of money, while being audio and video recorded without my knowledge, and with the co‑operation of Leduc. When the initial Entrapment scheme on May 5th, 2017 involving $5,000.00 in Canadian currency did not succeed, Sunwing provided Leduc with $56,850.00 in Canadian currency for the May 12th, 2017 meeting, to ensure the amount was enticing enough for me to seriously consider, since this totalled more than one year of my net salary at Sunwing.

[112] I agree that other than asserting, without basis, that Sunwing had itself proffered false evidence, Mora offered no explanation as to why he had sworn this evidence in the 2018 affidavit.

[113] Because of the admission in his pleading, I do not believe Mora’s evidence at trial that he did not know he was receiving cash from Leduc during the May 12 meeting. This admission is also consistent with other reliable trial evidence, including his recorded conduct during the May 12 meeting.

[114] I find, on balance (and beyond a reasonable doubt), that the evidence and Mora’s admissions establish that he knew he was receiving and accepted $56,850 in cash from Leduc on May 12, 2017.

[115] I do not believe Mora’s evidence about the termination meeting. First of all, at the meeting he denied receiving money from Leduc. It is not credible that he would have denied receiving this money if he was innocent of the kickback scheme and was genuinely shocked to discover the contents of the envelope from Leduc, as he claimed. Furthermore, Mora testified that he only admitted the kickback scheme to Sunwing under duress. However, during the meeting, he repeatedly told Sunwing he felt “comfortable” and pressed Sunwing to continue the interview when it became frustrated with his initial denials of the kickback scheme. Mora’s tone in the termination meeting audio recording does not sound like someone in panic or under duress; rather, his tone shifted from evasive to probing to remorseful as the termination meeting progressed.

[116] Mora was also not under duress at the May 15 meeting with Sunwing when the repayment contracts were signed. He testified that he signed the contracts without reading them. I agree with the plaintiffs that this evidence is fundamentally undermined by the amendments, which benefitted Mora at Sunwing’s expense. It is not credible that Mora did not request the amendments and that Heinke drafted and inserted them on his own initiative to benefit Mora. I accept and prefer Heinke’s evidence that Mora reviewed the repayment contracts and requested the amendments.

[117] I further reject Mora’s evidence that he still felt he was under duress on May 26, 2017, when he wrote to Heinke reaffirming his commitment to a “reasonable payback schedule.” He had not met with a lawyer at that point and was in the United States.

[118] The duress narrative, much like Mora’s changing evidence on what transpired during the May 12 meeting, is a manufactured after-the-fact explanation.

[119] Finally, I find that Mora repaid the mortgage on his property with the kickbacks given to him by Leduc. Mora’s position is that the way he repaid the mortgage is not relevant. He takes this position even though it has been clear since the outset of the litigation that Sunwing alleges the mortgage on the property was discharged with the proceeds of the kickback scheme. As Justice Sossin commented in a 2019 decision in this matter confirming a charging order against the property: “Sunwing alleges that the property that is the subject of the Corbett Mareva Order is part of the proceeds of the alleged scheme, as Mora discharged a $262,000.00 mortgage in just three years on the property.” In any event, Mora has refused to answer or produce any documents explaining how he could have repaid the mortgage. His maximum pre‑tax income over 2.5 years was less than the principal amount of the mortgage.

Sekulic:

[120] I agree that Sekulic was similarly not a credible witness. She overstated her knowledge of what had transpired, and her examination-in-chief was replete with numerous obvious errors and inconsistencies, including that:

(a) she was not involved in negotiating the 2011 contract (when documentary evidence confirms she was);

(b) she was not at one point the director of commercial operations (when documentary evidence confirms she was);

(c) Mora was not involved in making the Cuba incentive payments under the 2011 contract (when Leduc’s and Mora’s evidence and documentary evidence confirms he was);

(d) Leduc was not involved in making the Cuba incentive payments under the 2010 contract (when Leduc’s and Mora’s evidence and documentary evidence confirms she was);

(e) there was an ‘interim contract’ or ‘contract extension’ between Leduc and Sunwing to permit Sunwing time to find a new agent in Cuba (when documentary evidence confirms there was not);

(f) when she testified on discovery that she had only received a water bottle from Leduc, she was excluding gifts that she received but gave to third parties, such as cigars or bottles of rum; and

(g) she could not explain why her brother-in-law ‘loaned’ money to fund Leduc’s operations in Cuba, nor why she never reported such a strange occurrence to anyone at Sunwing;

(h) Mora had prepared the Cuba costs summary to illustrate the costs of Sunwing applying to the Cuban chamber of commerce, when Mora testified that he had been asked by Sekulic to prepare the Cuba costs summary to assist in negotiating Sekulic’s contract;

(i) the 2012 contract had sat with Williams for signature “for weeks” while also testifying that no agreement with Leduc was reached until April 27, 2012 (Williams signed the 2012 contract on May 1, 2012);

(j) both that Leduc had agreed to $80 per flight on April 27, 2012, and that she had not reached such an agreement;

(k) she was unclear in respect of whether she told Williams about Leduc’s proposal to work for $35 USD per flight in November 2011;

(l) she attempted to suggest that the figures in Mora’s Cuba costs summary were merely “approximations”, despite making no such limitations in her communications to Williams; and

(m) she repeatedly attempted to justify why she had remained involved with Leduc’s Cuban operations long after the execution of the 2012 contract, even though Kenny was responsible for operational issues.

[121] I agree that the conclusion to be drawn is that Mora and Sekulic are both untrustworthy witnesses. Their evidence, where it contrasts with any of Williams, Kenny, Heinke, Leduc or Joclyene, is not preferred and is given no weight.

[122] I reject Mora and Sekulic’s version of events and find that Mora was involved in the kickback scheme.

Wrongful Dismissal Claim

[123] Because I have found that Mora received kickbacks, his wrongful dismissal claim must fail. If he was terminated for cause, he cannot claim for wrongful dismissal.

[124] Just cause for dismissal exists where an employee’s dishonesty gives rise to a breakdown in the employment relationship. That test incorporates two essential questions: first, whether the evidence has established the employee’s deceitful conduct on a balance of probabilities; and second, whether the nature and degree of the dishonesty is such that dismissal was the appropriate response. [6]

[125] Sunwing clearly had just cause to terminate Mora on the basis of the kickback scheme. Where an employee is involved, as Mora was, in self-dealing and dishonesty, such cases have been said to “involve fundamental character flaws that may well cause an employer to lose trust and confidence in an employee.” [7] Kickbacks justify termination for cause, [8] as does misappropriation of an employer’s funds. [9]

Conclusions

[126] The action against Mora is granted. Damages are fixed in the amount of $537,885.00. Mora’s wrongful dismissal action is dismissed.

[127] If the parties cannot agree on costs, I am prepared to receive brief submissions from Sunwing by August 18, 2021 and from Mora by September 8, 2021 and any Sunwing reply submissions by September 15, 2021. The costs submissions may be emailed to my assistant at: lorie.waltenbury@ontario.ca.

J.E. Ferguson J. Released: July 28, 2021

COURT FILE NO.: CV-17-578601 DATE: 20210728 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: SUNWING AIRLINES INC., Plaintiff - and - Amilcar Mora and Sonya Sekulic, Defendants REASONS FOR DECISION J.E. Ferguson J.

Released: July 28, 2021

[1] R. v. White, [1947] S.C.R. 268, 3 C.R. 232, at p. 272. See also R. v. S.(N.), 2012 SCC 72, [2012] 3 S.C.R. 726, at paras. 25-26.

[2] Faryna v. Chorny (1951), [1952] 2 D.L.R. 354 (B.C.C.A.), at p. 357; R. v. Kiss, 2018 ONCA 184, at para. 30.

[3] Pinto v. Kaur, 2014 ONSC 5329, at para. 20

[4] F.H. v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41 [McDougall], at paras. 57-58.

[5] McDougall, at para. 76.

[6] McKinley v. BC Tel, 2001 SCC 38, [2001] 2 S.C.R. 161, at paras. 48-49.

[7] Schultz v. Canada Lands Company CLC Limited, 2019 ONSC 2124, at para. 13, quoting Barton v. Rona Ontario Inc., 2012 ONSC 3809, at para. 50.

[8] Nielsen v. Gulf Canada Ltd. (1982), 35 A.R. 320 (Alta. Q.B.).

[9] Roy v. Maple Creek Credit Union Ltd. (1983), 24 Sask. R. 43 (Sask. Q.B.),