Unofficial English Translation
LeFrançois c. Canada (Procureur général)
2010 QCCA 1243
COURT OF APPEAL
CANADA
PROVINCE OF QUEBEC
REGISTRY OF MONTREAL
No.:
DATE:
500-09-018958-082
(500-17-020104-041)
July 2, 2010
CORAM: THE HONOURABLE J.J. MICHEL ROBERT J.C.Q.
LOUIS ROCHETTE J.A.
NICOLE DUVAL HESLER J.A.
MARC LEFRANÇOIS
APPELLANT – Plaintiff
v.
ATTORNEY GENERAL OF CANADA
RESPONDENT - Defendant
and
VIA RAIL CANADA INC.
MIS EN CAUSE – Mis en cause
JUDGMENT
[1]
THE COURT; - On the appeal from a judgment rendered on July 18, 2008, by the
Superior Court, district of Montreal (the Honourable Benoît Emery), which dismissed the
appellant’s motion for damages for dismissal without good and sufficient cause.
[2]
After having examined the file, heard the parties, and on the whole deliberated;
[3]
For the reasons of the Chief Justice, with which Rochette and Duval Hesler JJ.A.
agree:
500-09-018958-082
PAGE: 2
[4]
DISMISSES the appeal.
[5]
AFFIRMS the trial judgement, with costs.
J.J. MICHEL ROBERT C.J.Q.
LOUIS ROCHETTE J.A.
NICOLE DUVAL HESLER J.A.
Mtre Claude-Armand Sheppard
Mtre Marie-Hélène Cantin
Robinson Sheppard Shapiro
Counsel for the appellant
Mtre J. Vincent O'Donnell
Mtre Louis Charette
Lavery de Billy
Counsel for the respondent
Mtre Marc Benoît
Ogilvy Renault
Counsel for the mis en cause
Date of hearing:
March 24, 2010
500-09-018958-082
PAGE : 1
REASONS OF THE CHIEF JUSTICE
FACTS AND PROCEEDINGS
[6]
On March 5, 2004, the federal government terminated the appellant's
employment as President and Chief Executive Officer of VIA Rail Canada Inc. ("VIA
Rail"). The appellant files a motion for damages pursuant to his employment contract
with VIA Rail for dismissal without good and sufficient cause. On July 18, 2008, his
motion was dismissed by the Superior Court (the Honourable Benoît Emery), and the
appellant now appeals that judgment before this Court.1
[7]
The trial judge described the parties to the dispute in the following terms:
[TRANSLATION]
In 1985, the applicant became a member of the board of directors of VIA Rail,
and in 1993, became Chairman of this Crown corporation. In July 2001, he was
appointed President and Chief Executive Officer of VIA Rail for a term of three
years. This appointment was confirmed by the signature of an employment
contract dated September 1, 2001.
VIA Rail operates a national railroad passenger transport service on behalf of the
federal government. The corporation operates more than 480 trains a week,
running on 14,000 kilometres of rails, and employs nearly 3,000 persons. VIA
Rail is a Crown corporation subject to Part X of the Financial Administration Act.2
[8]
On February 24, 2004, the appellant was suspended from his duties at which
point he provided the Minister of Transport with explanations, both verbally and in
writing. On March 5, 2004, the government passed Order in Council PC 2004-160,
terminating his employment as President and CEO of VIA Rail. There remained only six
months before the expiration of the three-year contract signed by the parties in 2001.
[9]
The chronology of events leading to the termination of the appellant's
employment can be summarized as follows:
9.1. In October 1998, the company L'Information essentielle inc. approached the
appellant to ask for a $1 million sponsorship for the television series entitled
"Série Télévisée Maurice Richard: Histoire d'un Canadien" (the "Maurice
Richard series"). Its president, Robert Guy Scully, told him that Public Works
Canada had assured him that VIA Rail would agree. The appellant, answering
1
2
LeFrançois v. Canada (Attorney General), J.E. (2008-1564, 2008 QCCS 3222).
Ibid. at paras. 3-4.
500-09-018958-082
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that VIA Rail's marketing budget for the current year was already earmarked,
refused.
9.2. A few days later, Charles Guité, Executive Director of the Communications
Coordination Services Branch ("CCSB") of Public Works, told him that if VIA Rail
agreed to pay $1 million in sponsorship money for the Maurice Richard series,
the CCSB would reimburse VIA Rail.
9.3. A few weeks later, despite the lack of written contract between VIA Rail and
Public Works, the appellant and Robert Guy Scully met and negotiated a
sponsorship in the amount of $910,000.
9.4. On December 7, 1998, L'information essentielle inc. submitted to the appellant a
first invoice for the Maurice Richard series for $650,000 plus tax, Chairman of
VIA Rail at the time.
9.5. On August 31, 1999, L'information essentielle inc. submitted two other invoices
for the Maurice Richard series in the amount of $130,000 each, plus tax. Two
cheques were prepared to the order of L'Information essentielle inc. and drawn
from the VIA Rail Canada Inc. Executive Disbursement account.
9.6. On March 21, 2000, Pierre Tremblay, Charles Guité's successor at the CCSB,
told the appellant that he was submitting a cheque that day in reimbursement of
the sponsorship to Lafleur Communication. No contract existed between VIA
Rail and Lafleur Communication regarding the Maurice Richard series.
9.7. Tremblay called Diane Langevin, Administrative Assistant to the Chairman at the
time, to inform her that he would need an invoice to prove receipt of payment of
$750,000 from VIA Rail. Although no service was rendered to Lafleur
Communication, Langevin asked for an invoice to be prepared in the amount of
$750,000 and addressed to Lafleur Communication Marketing, mentioning
[TRANSLATION] "sponsorship television series 'the Maurice Rocket Richard
Story'". The total amount was for $862,687.50, which included the $750,000 plus
tax.
9.8. In November 2003, Canada's Auditor General filed a report entitled "Report of
the Auditor General of Canada to the House of Commons: Government-wide
Audit of Sponsorship, Advertising, and Public Opinion Research". This report
was tabled in the House of Commons and made public on February 10, 2004.
Among its findings, it contained the following:
In our opinion, given the highly unusual nature of these transactions such
as

the use of scarce VIA Rail funds to advance money to a private
sector production company on CCSB's behalf without a contract or
other legal obligation to do so, and

the issuing of a fictitious invoice to a communications agency,
Lafleur (which neither had a contract with VIA nor had rendered VIA
500-09-018958-082
PAGE : 3
any services) in order to recover a part of the funds in the full
knowledge that any funds recovered would be coming from CCSB,
we would expect that at the very least, VIA Rail's Board of Directors and
especially its Audit Committee would have been informed of these
transactions. This did not happen. VIA's management has informed us
that the dollar amounts of these transactions did not require its Board's
approval.3
[10] Regarding the relationship of the appellant with some of the persons mentioned,
the trial judge noted the following:
[TRANSLATION]
The applicant admits that he met Jean Lafleur [President of Lafleur
Communications] in 1994 or 1995. He acknowledges that he became one of his
friends over the years, but notes that the trips he took with him in Europe were all
business trips, the costs of which Jean Lafleur paid himself.[9] As for Charles
Guité, the applicant states that he met him in 1997 or 1998, when he began
acting as executive director of CCSB, but that in 1998 and 1999 they had a
strictly official business relationship.4
FIRST INSTANCE
[11] The trial judge found that the appellant was dismissed with cause and that
consequently he was not entitled to the severance pay stipulated in paragraph 9 of his
contract.
[12] He concluded that, although the appellant had not committed fraud from which
he personally benefited, his actions did not meet the standard of transparency required
from a director of a Crown corporation, as established in the Conflict of Interest and
Post-Employment Code for Public Office Holders.5
[13] The trial judge found the appellant's explanation on the following points to be
insufficient:
3
4
5
6
7
13.1.
Why he personally took charge of the sponsorship of the Maurice Richard
series even though he was Chairman.6
13.2.
Why he followed the instructions of a communications representative for
Public Works even though VIA Rail answers to Transport Canada.7
13.3.
Why L'Information essentielle inc. submitted an invoice for $650,000 plus
Ibid. at para. 19.
Ibid. at para. 20.
Ibid. at para. 73.
Ibid. at para. 63.
Ibid. at para. 64.
500-09-018958-082
PAGE : 4
tax to him on December 7, 1998, in connection with the Maurice Richard
series with the note [TRANSLATION] "as per agreement".8
[14]
13.4.
Why there was no contract executed between VIA Rail and L'information
essentielle inc., contrary to the corporation's policies.9
13.5.
Why the balance of $260,000 was split in half by L'Information essentielle
inc., who sent him two invoices on August 31, 1999, for $130,000 each,
bearing the notes [TRANSLATION] "as agreed" and [TRANSLATION] "minus
20% allowance granted between friends".10
13.6.
Why the two cheques for $130,000 were drawn from upper management's
special,
discretionary
account
entitled
"VIA
Rail
Executive
Disbursement".11
13.7.
Why the reimbursement by Public Works was carried out through Lafleur
Communications, who required an invoice to justify this payment.12
The trial judge also noted the two following irregularities:
14.1.
14.2.
The request for a cheque to be issued in payment of the invoice for
$650,000 to L'Information essentielle inc. was prepared and signed by
Diane Langevin, administrative assistant to the Chairman at the time. 13
The advance of funds for the CCSB is entered in VIA Rail's financial
statements as "unbilled revenue", which does not reflect the nature of the
transaction between VIA Rail and CCSB.14
[15] Ultimately, the trial judge dismissed the appellant's claims for injury to his
reputation and exemplary damages.15 He found that the government committed no fault
in issuing a press release announcing the appellant's dismissal and that the media
coverage of this decision, which took place during the sponsorship scandal, was not the
government's responsibility.16
GROUNDS OF APPEAL
1. What is the standard of intervention of the Court of Appeal in this case?
2. Was the appellant dismissed for cause?
8
9
10
11
12
13
14
15
16
Ibid. at para. 65.
Ibid. at para. 67.
Ibid. at para. 67.
Ibid. at para. 69.
Ibid. at para. 70.
Ibid. at para. 66.
Ibid. at para. 71.
Ibid. at para. 75.
Ibid. at paras. 80-83.
500-09-018958-082
PAGE : 5
i) What is the legal meaning of "cause"?
ii) Do the facts demonstrate a cause for dismissal?
3. If the appellant was not dismissed for cause, what compensation is he entitled
to?
i)
What compensation is stipulated in the employment contract?
ii)
What moral damages is the appellant is entitled to?
iii)
What exemplary damages is the appellant entitled to?
POSITIONS OF THE PARTIES
1. What is the standard of intervention of the Court of Appeal in this case?
[16] The appellant submits that the standard of intervention applicable to decisions of
law is that of correctness.
[17] The parties agree that the standard of review applicable to questions of fact or
questions of mixed fact and law is that of palpable and overriding error.
[18] The respondent argues that the Court has neither the duty nor the right to
reassess the evidence presented at trial and that the decision to remove the appellant is
one of the "policy-making discretionary functions"17 of the Government and that the
courts should avoid becoming involved.
2. Was the appellant dismissed for cause?
i) What is the legal meaning of "cause"?
[19] The appellant submits that the trial judge erred in considering the fact that he
failed to fulfil the obligation of transparency expected from an executive of a Crown
corporation to be a cause for dismissal.
[20] The appellant cites Knight v. Indian Head School Division no. 19 and argues that
the government cannot remove him at its pleasure without complying with the terms of
his employment contract.18
[21] He adds that, under McKinley v. BC Tel, two conditions must be met for a
dismissal to be considered wrongful: (1) the employee's conduct was deceitful and (2)
the nature and degree of dishonesty warranted dismissal.19
17
18
Imperial Oil Ltd. v. Quebec (Minister of the Environment), [2003] 2 S.C.R. 624, 2003 SCC 58 at para.
31.
Knight v. Indian Head School Division no. 19, [1990] 1 S.C.R. 653.
500-09-018958-082
PAGE : 6
[22] In addition, McKinley requires that the employee's deceitful conduct be "at the
core of the employment relationship".20
[23] The appellant points out that matters involving dismissal call for prudence, given
the inherent inequality of the employment relationship pointed out in McKinley21and the
important place that work occupied in his life.
ii)
Do the facts demonstrate a cause for dismissal?
[24] The appellant states that the trial judge erred in law in failing to apply the
deceitful conduct test and that evidence of such conduct was not established.
[25] He affirms that he acted without intending to surprise or deceive and that he was
following the orders of Rod Morrison, President and CEO of VIA Rail, who had
authorized the sponsorship and asked the appellant to take care of it, [ TRANSLATION]
"also telling him that the financial aspect of the file would be covered".
[26] He adds that the interests of VIA Rail, L'information essentielle inc., and the
Department of Public Works were not neglected or ignored and that the VIA Rail
auditors, after reviewing their financial statements, were aware of the transaction and
[TRANSLATION] "saw nothing wrong with it".
[27] The appellant submits that the trial judge's conclusion that his testimony was
contradictory or insufficient was erroneous. In his factum, he presents the following
arguments:
(a)The authorization to oversee the file
[28] The appellant states that, in paragraph 63 of the trial judgment, the judge was
wrong to say that the appellant had not explained why he had taken charge of the
sponsorship file. According to him, his testimony and exhibit P-20 show that Rod
Morrison had asked him to do it.22
(b) The instructions from the Department of Public Works
[29] The appellant states that the trial judge, in paragraph 64 of his judgment, was
wrong to fault him for following the instructions from the Department of Public Works.
He argues that his testimony reveals that he enquired about the validity of the project
with Rod Morrison through Christina Keon Sirsly, vice president of marketing and
computer resources at the time.
(c) The invoices addressed to the appellant
19
20
21
22
McKinley c. BC Tel, 2001 SCC 38, [2001] 2 S.C.R. 161 ("McKinley").
Ibid. at para. 57.
Ibid. at para. 54.
Letter from Rod Morrison (VIA Rail) dated January 14, 1999, exhibit P-20, F.A., vol. III at 502.
500-09-018958-082
PAGE : 7
[30] The appellant maintains that the trial judge was wrong to fault him for failing to
explain why the invoice from L'information essentielle inc. was submitted to him instead
of Rod Morrison. His inability to explain decisions made by others does not demonstrate
deceitful conduct, especially since he had been instructed to take care of the file and
had [TRANSLATION] "immediately sent it all to the authorized persons".
(d) The lack of a signed contract
[31] The appellant submits that the trial judge was wrong to fault him for being unable
to explain the lack of a signed sponsorship contract. He states that he had sent the
contract to Rod Morrison via the marketing department and for several years was
unaware that this step had not been completed.
(e) The amount of $260,000 split into two invoices
[32] The appellant argues that the trial judge was wrong to fault him for being unable
to explain the division of the balance due by VIA Rail to L'Information essentielle Inc.
into two equal amounts. He continues to maintain that he does not know the reason and
that this does not support the conclusion that his intention was fraudulent or deceitful.
(f) The payment from the Executive Disbursements account
[33] The appellant states that the trial judge was wrong to fault him for not explaining
why he used the Executive Disbursements account to pay L'information essentielle inc.
for the invoices. He maintains that he did not oversee the payment of the invoices by
VIA Rail and that he was unaware of the conditions, as Ms. Sirsly was the one who was
in charge. He points out that Mr. Rumjahn, VIA Rail accounting controller, testified that
this procedure was not irregular.
(g) The invoice issued to Lafleur Communications
[34] The appellant argues that the trial judge was wrong to fault him for issuing an
invoice to Lafleur Communications in exchange for the cheque for $760,000. He states
that he was unaware of this transaction and that he did not participate in it. He notes
that Mr. Rumjahn testified that VIA Rail's computer system could not issue receipts.
[35] In conclusion, the appellant points out that, although it is now common
knowledge that Mr. Guité, executive director of CCSB in the Department of Public
Works, and Lafleur Communications were involved in the sponsorship scandal, no one
knew it at the time. The appellant states that he had no reason to believe that his
interactions with Public Works were irregular in any way.
iii)
What compensation is stipulated in the employment contract?
[36] In his factum, the appellant claims the compensation stipulated in section 9 of his
employment contract – namely, six months' salary, representing the remaining time on
500-09-018958-082
PAGE : 8
his employment contract, plus the associated bonuses – and the compensation set out
in section 10 of the contract23 because he was not sent a notice of dismissal. The total
amount claimed in $191,425.
[37] At the hearing, he withdrew his claim for the bonuses and compensation for lack
of notice of dismissal, bringing the total down to $117,650.
iv)
What exemplary damages is the appellant entitled to?
[38] The appellant claims to be entitled to damages in addition to his period of notice
because of the abusive manner in which he was dismissed. He submits that the test
established by this Court for such damages is serious injury to reputation or the
humiliating, degrading, or hurtful way in which the dismissal was carried out.24
[39] Referring to reasons for a judgment rendered by this Court, the appellant states
that a dismissal causing [TRANSLATION] "prejudice beyond that normally caused by a
termination"25 is abusive.
[40] The appellant adds that [TRANSLATION] "the evidence submitted before the Court
clearly shows that the consequences of his dismissal went far beyond the normal
inconveniences related to the termination of an employment", that his reputation had
been seriously damaged, and that his dismissal was carried out in a public, humiliating,
and hurtful manner.
[41]
As examples, the appellant states that:
41.1. The meeting he was granted was nothing more than a [ TRANSLATION]
"masquerade", given that he was asked no questions and was not really
expected to provide any explanation, since the next day, the newspapers
announced that he had been fired even before he learned of it himself.
41.2. The press release announcing the connection between his firing and the
Auditor General's report was brutal and humiliating.
41.3. His reputation was tarnished: several members of the public called him
dishonest (a Bloc Québécois MP on the radio, his neighbour, his welder,
potential employers both within Canada and abroad).
41.4. He suffered from significant stress and major frustration following the
accusations, since he had devoted a great deal of effort to improving VIA
Rail's financial situation.
23
24
25
Copy of the employment contract executed on September 1, 2001, between the applicant and VIA
Rail, exhibit P-2, F.A., vol. II at 164.
Shire Biochem Inc. v. King, J.E. 2004-207 (C.A.) at para. 23.
Ponce v. Montrusco & Associés inc., [2008] R.J.D.T. 65, 2008 QCCA 329 at para. 22, leave to appeal
to SCC refused, 31 July 2008, 32569.
500-09-018958-082
[42]
v)
[43]
PAGE : 9
The appellant claims that he is entitled to $2,000,000 in moral damages.
What exemplary damages is the appellant entitled to?
At the hearing, the appellant abandoned his claim for exemplary damages.
ANALYSIS
1. What is the standard of intervention of the Court of Appeal in this case?
[44] Under Housen v. Nikolaisen, the standard of intervention in decisions of law is
that of correctness, and the standard applicable in questions of fact or questions of
mixed fact and law is that of palpable and overriding error.26
[45] The respondent correctly notes that the courts must avoid becoming involved in
discretionary administrative decisions or those that touch on policy. 27
2. Was the appellant dismissed for cause?
i) What is the legal meaning of "cause"?
[46] Although under Knight v. Indian Head School Division no. 19, mere
dissatisfaction on the part of the employer is sufficient to dismiss an employee holding a
position at pleasure,28 this Court must determine whether the appellant's dismissal was
based on sufficient and just cause to decide whether he is entitled to compensation for
involuntary departure.
[47] The Court finds that the appellant failed in his obligation of transparency and
considers this fact to be a just and sufficient cause for dismissal.29
[48] As the Supreme Court indicated in Wells v. Newfoundland,30 the law applicable
to high-ranking civil servants is neither feudal law nor the common law of employment; it
is contractual.
[49] In McKinley,31cited by the appellant, the Supreme Court carried out an
exhaustive review of the case law on the notion of dismissal for cause. It adopted a
contextual approach to the determination of whether the misconduct was incompatible
with the employment relationship. It also noted that, when the conduct is dishonest,
26
27
28
29
30
31
Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33, at para. 26-37.
Dunsmuir v. Nouveau-Brunswick, [2008] 1 S.C.R. 190 at paras. 20, 53, and 123.
Knight v. Indian Head School Division no. 19, [1990] 1 S.C.R. 653 at 676.
Judgment a quo at paras. 73-74.
Wells v. Terre-Neuve, [1999] 3 S.C.R. 199 at paras. 29-31.
McKinley v. BC Tel, supra note 25 at para. 48. See also para. 57.
500-09-018958-082
PAGE : 10
dismissal is justified only when the misconduct is serious: "theft, misappropriation or
serious fraud".32
[50] The appellant argues that the judgment cited deals with dismissal "on the
grounds of dishonesty" and does not apply in the present case because the trial judge
found that the cause of the appellant's dismissal was lack of transparency.
[51] In actual fact, however, the test in McKinley is applicable by analogy in the
present case. According to Sproat J., the Supreme Court set out a principle in that case
that is generally applicable to dismissal:
In McKinley …, the Court addresses the question of whether proven misconduct
in and of itself constituted just cause or whether it was also necessary to
consider the context of the misconduct. While McKinley was concerned with
dishonesty the Court stated principles generally applicable to allegations of
misconduct which could include insubordination, insolence, culpable
absenteeism, intoxication, sexual harassment, conflict of interest, breach of
fiduciary duty and other criminal, immoral or improper conduct.33
[52] This Court, which used a similar contextual approach before McKinley,34 has
since adopted this test in two judgments.
[53] In Dubé v. Cliche,35 it considered the case of the General Director of the Société
du Centre des congrès du Québec, who embezzled and appropriated funds from the
Société. After pointing out that the relationship of trust between employer and employee
is not necessarily breached by a given fault, the Court found that the dismissal was
justified on the basis of the following factors:
[TRANSLATION]
In this case, the appellant's position in the hierarchy of the Société, the degree of
autonomy she possessed in the performance of her duties, and the management
responsibility she bore made it impossible for the relationship with her employer
to continue.36
[54] More recently, in Ascenceurs Thyssen Montenay inc. v. Aspirot,37 this Court
found that a dismissal after theft, damage caused by equipment, and the use of the
workplace for personal reasons was justified. Dalphond J. noted the following factors:
[TRANSLATION]
32
33
34
35
36
37
Ibid. at para. 51.
The Hon. Mr. Justice John R. Sproat, Wrongful Dismissal Handbook, 5th ed., (Carswell, 2009) at 4-2.
Sauvé v. Laurentian Bank of Canada, [1999] R.J.Q. 79
Dubé v. Cliche, J.E. 2003-2161 (C.A.).
Ibid. at para. 44.
Ascenseurs Thyssen Montenay inc. v. Aspirot, [2008] R.J.Q. 28, 2007 QCCA 1790.
500-09-018958-082
PAGE : 11
In light of these principles, it is my view that, in the present case, the employer
had serious reasons to dismiss the respondent without notice: the company's
great financial difficulty, the respondent's awareness that he needed
authorization but refused to seek it, the respondent's position in the hierarchy, the
respondent's personal benefit from his insubordinate actions.38
[55] In Dowling v. Ontario (Workplace safety and Insurance Board), 39 the Court of
Appeal for Ontario had the opportunity to apply the contextual analysis outlined in
McKinley. It found that the firing of an employee who had taken bribes, lied, and falsified
documents was justified. It proposed the following three steps: (1) determine the nature
of the misconduct, (2) consider the surrounding circumstances, and (3) decide whether
the misconduct is irreconcilable with the employment relationship and the dismissal is a
proportional response in the circumstances.
[56] Recently, in Perewernycky v. National-Oilwell Canada Ltd.,40 the Alberta Queen's
Bench used this three-step approach to determine the proportionality of the sanction
outlined in Dowling. It found that the dismissal of an employee who left another recently
fired employee alone in her office with her computer and confidential documents was
unjustified.
[57] In National Bank of Canada v. Lepire,41 cited by the respondent, the Federal
Court found that the breach of the relationship of trust between the employer and
employee due to the infringement of the Bank's Code of Ethics and to a conflict of
interest is a sufficient cause for dismissal. That judgment distinguishes McKinley, stating
that it would be too restrictive to limit the possibility of dismissal to cases of theft,
embezzlement, or serious fault.42 The Court finds that, in the world of banking, a higher
standard is required to preserve the employer-employee relationship:
The result, therefore, is that in the banking industry especially and above all, the
relationship of trust between employer and employee must always exist, not be
undermined in the least and, if there is a breach or break in this relationship of
trust, this breach, this break, as the cases show, may be considered a just cause
of dismissal. The loss of confidence, which has the immediate effect of ending
the relationship of trust, results in most cases from the attitude, deeds and
actions, reluctance, lack of frankness, in the employee's conduct.43
[58] Finally, in Casavant v. Agropur Coopérative, the Superior Court found that the
following actions of an executive justify dismissal:
[TRANSLATION]
38
39
40
41
42
43
Ibid. at para. 60.
Dowling v. Ontario (Workplace Safety and Insurance Board), 246 D.L.R. (4th) 65 at para. 50-53.
Perewernycky v. National - Oilwell Canada Ltd., 415 A.R. 219, 2007 ABQB 170.
National Bank of Canada v. Lepire, 2004 FC 1555 at paras. 18-21.
Ibid. at para. 17.
Ibid. at para. 26.
500-09-018958-082
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In the present case, it is the Court's opinion that this is a case of dismissal for just
and sufficient cause, to wit, loss of the relationship of trust caused by the
falsification of financial statements, the creation and use of forgeries, and
resorting to a third party – namely, the dairy equipment supplier – to camouflage
the falsification of the financial statements.44
[59] Thus, this overview of the case law supports the conclusion that not every fault
automatically gives rise to a breach of the employer-employee relationship. Rather, the
nature of the misconduct must be determined, along with the context in which it took
place and the proportionality of the dismissal as a sanction. The dismissal is justified if
the misconduct is serious enough to be at odds with the continuation of the employment
relationship.
[60] The factors considered in the case law cited are: the hierarchical position of the
employee and his or her level of responsibility, seniority, the degree of autonomy
exercised by the employee in the performance of duties, the difficulties the company
faces, the employee's awareness of the misconduct, the employee's age, his or her past
conduct, and workplace policies.
ii)
Do the facts demonstrate a cause for dismissal?
[61] The Court must determine whether the appellant's lack of transparency in the
circumstances had such an effect on the employer-employee relationship that it justified
dismissal. A negative answer to this question will entitle the appellant to his severance
pay.
[62] It should be noted that the source of the appellant's rights is not the employment
contract to which he refers but Order in Council PC 2001-1293 approving his
appointment. As confirmed in Pelletier v. Canada (Attorney General), such a contract
has no value if not approved by the government.45 Although none of the parties made
submissions on this point, this issue is not fatal to the action. The order-in-council
appointing the appellant as President and CEO of VIA Rail itself contains a provision on
severance pay in the event of involuntary departure. It states:
Involuntary Termination Allowance: In the event of the Involuntary Termination of
the officer’s Term of employment for any reason other than cause, VIA agrees to
pay to the Officer a termination allowance equal to eighteen (18) months of the
Officer’s then remuneration or the remainder of the term….46
(a) The nature of the misconduct
44
45
46
Casavant v. Agropur Coopérative, D.T.E. 2004T-321 at para. 35.
Pelletier v. Canada (Attorney General), [2009] R.J.D.T. 459, 2009 QCCA 567 at para. 140-141
("Pelletier").
Copy of the Order in Council CP 2001-1293 dated July 31, 2001, appointing the petitioner as
President and Chief Executive Officer of VIA Rail, F.A., vol. II, Schedule III, Exhibit P-1.
500-09-018958-082
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[63] The trial judge pointed out that, while the appellant did not commit fraud, the
series of irregular transactions carried out under his supervision or with his knowledge
showed a lack of transparency. Said actions can be summarized as follows:
63.1.
taking charge of a sponsorship, when such a task did not fall under his
responsibility;
63.2.
following instructions from a department other than the one that has
authority over him;
63.3.
paying a sponsorship without a written contract, in violation of the
corporation's policies;
63.4.
receiving two invoices for the balance of the sponsorship to be paid, for no
reason;
63.5.
issuing cheques for a sponsorship from his own special, discretionary
account intended for other uses;
63.6.
invoicing a corporation without having performed a service; and
63.7.
making an erroneous entry in the financial statments for the amount given
in sponsorship.
[64]
In defence, the appellant replies:
64.1.
that he acted under the orders of the President and CEO of VIA Rail, Rod
Morrison;
64.2.
that he sent a contract back to Mr. Morrison for it to be signed;
64.3.
that he was unaware of the reason two invoices were made for
L'Information Essentielle inc.;
64.4.
that VIA Rail's auditors and controllers did not criticize the transactions;
64.5.
that he did not oversee the payment of invoices from the Executive
Disbursements account; and
64.6.
that he did not take part in issuing invoices to Lafleur Communications.
[65] I find that the appellant, as President and CEO of VIA Rail, cannot justify his
actions on the grounds that they were requested by a hierarchical superior or that they
were not criticized by a subordinate. Moreover, his argument that he was unaware that
irregularities had been committed is unconvincing. As the person responsible for the
Maurice Richard series sponsorship file, it was his duty to supervise the manner in
which it was carried out so as to prevent any irregularity.
[66] The court committed no palpable and overriding error in characterizing the
management of the sponsorship file as lacking in transparency.
(b) The context of the misconduct
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[67] The appellant occupied a very high position in the hierarchy, had major
responsibilities, enjoyed significant autonomy in the performance of his duties, did not
benefit directly from his misconduct, has no disciplinary record at VIA Rail, does not
appear to have been aware of his misconduct, and was subject to the Conflict of
Interest and Post-Employment Code for Public Office Holders.
[68]
This Code provides the following, inter alia:
Every public office holder shall conform to the following principles:
(1) Ethical Standards
Public office holders shall act with honesty and uphold the highest ethical
standards so that public confidence and trust in the integrity, objectivity and
impartiality of government are preserved and enhanced.
(2) Public Scrutiny
Public office holders have an obligation to perform their official duties and
arrange their private affairs in a manner that will bear the closest public scrutiny,
an obligation that is not fully discharged by simply acting within the law.47
(c) The proportionality of the sanction
[69] Was the appellant's behaviour so unacceptable as to be inconsistent with the
performance of his duties? The trial judge did not commit a palpable and overriding
error in answering this question in the affirmative. As a high-ranking civil servant, the
appellant was subject to the strictest ethical guidelines as explicitly set out in the Code
to which he was subject. His inappropriate actions, when taken together, reveal
misconduct justifying dismissal.
3. If the appellant was not dismissed for cause, what compensation is he entitled
to?
i)
What compensation is stipulated in the employment contract?
[70] Given the answer to the previous question, the appellant was not entitled to the
severance pay indicated in Order in Council PC 2001-1293 approving his appointment.
ii)
What moral damages is the appellant entitled to?
[71] The trial judge did not give reasons for rejecting the appellant's claim for
damages for injury to his reputation.48
47
48
Conflict of Interest and Post-Employment Code for Public Office Holders, Office of the Commissioner
of Review Tribunals, http://www.ocrt-bctr.gc.ca/dapdep/coicdi-eng.html.
Judgment a quo at para. 75.
500-09-018958-082
[72]
PAGE : 15
The relevant provisions of the Civil Code of Québec read as follows:
6. Every person is bound to exercise his civil rights in good faith.
7. No right may be exercised with the intent of injuring another or in an excessive
and unreasonable manner which is contrary to the requirements of good faith.
2092. The employee may not renounce his right to obtain compensation for any
injury he suffers where insufficient notice of termination is given or where the
manner of resiliation is abusive.
[73]
The appellant states that he was dismissed in a manner that was abusive.
[74] The leading case in such matters is Standard Broadcasting Corp. v. Stewart.
After analyzing the case law and commentary, the Court of Appeal concluded that a
dismissal, even if sudden, is not necessarily abusive. Evidence of bad faith, negligence,
or intent to injure the employee's reputation must still be proved.49
[75] Our Court continued along the same lines in Shire Biochem Inc. v. King50 and
stated in Ponce v. Montrusco & Associés inc. that the demonstration of gross fault must
be conclusive, that is to say, it must be a fault which, although not intentional, causes
prejudice beyond what normally arises from resiliation.51
[76] Thus, the case law cited shows that not all dismissals are abusive, even if they
are without cause. Bad faith, negligence, or prejudice beyond what is expected in the
circumstances must be proved.
[77] Bad faith on the part of the respondent was not alleged. Rather, it must be
determined whether the consequences of the appellant's dismissal go beyond the
normal inconveniences related to the termination of an employment such as his, that is,
whether the announcement of his dismissal was brutal and that members of the public
considered him to be a dishonest person.
[78] The appellant alleges that he learned of his dismissal through the newspapers
even before he received the information by the post, the day after a meeting in which he
had provided the respondent with explanations. This Court considered this issue in
Pelletier, a case with facts analogous to those before us. Mr. Pelletier was also
Chairman of VIA Rail, and the release announcing his dismissal was published three
days after a telephone conversation in which he had had the opportunity to provide his
version of events.
49
50
51
Standard Broadcasting Corp. v. Stewart, [1994] R.J.Q. (1751) ("Standard Broadcasting").
Shire Biochem Inc. v. King, J.E. 2004-207 (C.A.) at paras. 23-24. See also Aksich v. Canadian Pacific
Railway, [2006] R.J.D.T. 997 (C.A.) at para. 160.
Ponce v. Montrusco & Associés inc., supra note 45 at para. 22.
500-09-018958-082
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[79] The following reasons from Beauregard J.A. of our Court apply to the case
before us today:
[TRANSLATION]
The government chose to make the reasons for dismissal public. Since the press
release did nothing more than refer to reality, which was not defamatory and was
in the public interest, it is hard to see how the government committed a fault by
publishing the release. It is also difficult to understand how the publication was
hasty. The decision having been made, and the desire to communicate this
decision to the public being present, it was normal for the news to be released
relatively quickly.52
[80] Less than twenty-four hours is a very short time period, and learning of one's
dismissal in the newspapers certainly must have been a difficult experience for the
appellant. The respondent could have made the experience less painful by choosing a
more personal form of communication. Nevertheless, bad faith, negligence, or
extraordinary prejudice has not been established. As in Pelletier, the press release
merely related the facts, and the quick reaction was justifiable as being in the public
interest.
[81] As for the impact of the media coverage of the dismissal on the appellant's
reputation, it cannot be characterized as exceptional in the circumstances. High-level
civil sevants should expect such an impact on their reputations in the event of
misconduct. In the absence of defamatory remarks,53 the respondent cannot be blamed
for this impact.
[82]
iii)
I would therefore dismiss the appellant's claim for moral damages.
What exemplary damages is the appellant entitled to?
[83] The trial judge also did not give reasons for dismissing the appellant's claim for
exemplary damages.54 However, the Charter of human rights and freedoms 55 does not
apply to the Government of Canada. Consequently, the appellant cannot be awarded
exemplary damages.
[84] This Court dealt with this issue in Ouimette v. Canada (Attorney General), and I
adopt the following comments of Rochette J.A.:
[TRANSLATION]
52
53
54
55
Pelletier v. Canada (Procureur général), supra note 45 at para. 159.
Standard Broadcasting, supra note 76 at 8.
Judgment a quo at para. 75.
Charter of human rights and freedoms, R.S.Q., c. C-12.
500-09-018958-082
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[82] With respect to liability regimes arising from the Watercourses Act and the
Quebec Charter of human rights and freedoms, the respondent notes:
... that they are quite simply not applicable to the government of Canada, in
accordance with either the constitutional statutory immunity it enjoys in regard to
specific provincial statutes or with the basic principle whereby only Parliament
has the authority to impose a special liability regime “parallel” to the general
regime applicable to it under the Crown Liability and Proceedings Act;
[83] In my view, this statement reflects the state of our law.
[84] Henri Brun and Guy Tremblay wrote the following on the subject:
[TRANSLATION]
The questions that the Quebec Charter raises in terms of the distribution of
powers are therefore questions of applicability, not validity. What must be
determined in each case is whether the matter falls under federal jurisdiction. If it
does, the Quebec Charter does not apply. In any other circumstance, however, it
may apply because, under the provincial jurisdiction over private law (section
92(13) of the Constitution Act, 1867), the Quebec Charter determines the
ordinary law of human rights for the province. ... Every time it touches on
something that the courts deem to be an essential element falling under federal
jurisdiction pursuant to the distribution of powers, the Quebec Charter does not
apply.
-
Droit constitutionnel, 3d ed., (Yvon Blais), updated May 1, 1997, at 896.56
[85] Given that the remuneration of an executive of a Crown corporation is a vital part
of the federal jurisdiction over matters of the fixing of and providing for "the Salaries and
Allowances of Civil and other Officers of the Government of Canada" under the
Constitution Act, 1867,57 the appellant could not invoke the Quebec Charter in this case.
If he had not abandoned this ground at the hearing, it would have been appropriate to
dismiss it.
CONCLUSION
[86] For the reasons set out above, I would dismiss the appeal and affirm the trial
judgment, with costs.
J.J. MICHEL ROBERT J.C.Q.
56
57
Ouimette v. Canada (Attorney General), [2002] R.J.Q. 1228 (C.A.) at paras. 82-85.
Constitution Act, 1867 (U.K.) 30 & 31 Vict., c. 3, s. 91(8).