COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Roe v. British Columbia Ferry Services Ltd.,

2015 BCCA 1

Date: 20150106

Docket: CA041674

Between:

Gregory Roe

Respondent

(Plaintiff)

And

British Columbia
Ferry Services Ltd.

Appellant

(Defendant)

Corrected
Judgment: The text of the judgment was corrected at page 2 in the Summary, and
at paragraphs 38 and 39 on March 19, 2015

Before:

The Honourable Mr. Justice Tysoe

The Honourable Madam Justice D. Smith

The Honourable Madam Justice Bennett

On appeal from:  An
order of the Supreme Court of British Columbia, dated February 28, 2014 (
Roe
v. British Columbia Ferry Services Ltd.
, 2014 BCSC 1712, Nanaimo Registry No. S66705).

Counsel for the Appellant:

P. Fairweather

Counsel for the Respondent:

P.J. Giroday

Place and Date of Hearing:

Vancouver, British
  Columbia

October 27, 2014

Place and Date of Judgment:

Vancouver, British
  Columbia

January 6, 2015

Written Reasons by:

The Honourable Madam Justice D. Smith

Concurred in by:

The Honourable Mr. Justice Tysoe

The Honourable Madam Justice Bennett

Summary:

Mr. Roe brought an
action against his former employer for wrongful dismissal. The employer
defended the action alleging cause. After an internal investigation, the employer
concluded that Mr. Roe, a senior manager, had on more than one occasion
knowingly given complimentary food and beverage vouchers to his daughters
volleyball team without prior authorization, contrary to the employers policy.
Mr. Roe denied that he knowingly contravened what he said was an ambiguous
policy. The trial judge did not resolve the conflict in the evidence, and made
no findings of fact with respect to the nature of Mr. Roes alleged
misconduct or which of the two posited scenarios had occurred. Instead, he
assumed for the purpose of his analysis that the employers version was true.
Based on that scenario, he found that Mr. Roes actions were bordering on
trifling and relatively minor and therefore did not amount to just cause for
dismissal. The employer appealed.

HELD: Appeal allowed; the
matter is remitted to the trial court for a new trial. The judge erred in his
characterization of the misconduct he assumed occurred for the purposes of his
analysis and for which Mr. Roe was dismissed for cause. In particular, the
judge erred in finding that Mr. Roes assumed conduct, objectively viewed
by a reasonable employer and in all of the circumstances, was bordering on trifling
or relatively minor, and therefore did not rise to the level of undermining
the obligations of good faith that are inherent in and essential to the
employment relationship. His finding as to the nature of Mr. Roes
misconduct does not appear to have been considered in the context in which it
occurred, including: Mr. Roes employment contract, the responsibilities
and trust attached to his senior management position, and the employers policy
and procedures that he was required to follow in the distribution of complimentary
vouchers. The judges failure to apply this contextual approach to assessing
the nature and seriousness of Mr. Roes misconduct resulted in palpable and
overriding error. Given that the factual underpinnings of the judges decision
were assumed and not determined, this Court cannot substitute a finding of just
cause for Mr. Roes dismissal. Accordingly, the matter must be remitted to
the trial court for a new trial.

Reasons for Judgment of the Honourable
Madam Justice D. Smith:

A.
Overview

[1]

Gregory Roe was the manager of the Duke Point ferry terminal from
November 15, 2007, until his dismissal on March 1, 2012. British
Columbia Ferry Services Ltd. (the Employer) terminated Mr. Roe, without
notice for cause, after an internal investigation concluded that Mr. Roe
had, on more than one occasion, knowingly given complimentary food and beverage
vouchers to his daughters sports teams without prior authorization, contrary
to the Employers policy.

[2]

On July 4, 2012, Mr. Roe commenced a wrongful dismissal action
against the Employer in which he sought damages in lieu of reasonable notice
for breach of his employment agreement. He contended that he did not knowingly
breach the Employers policy and that the procedure to be followed under the
policy with respect to the distribution of complimentary vouchers by employees
was unclear. On January 1, 2013, about 10 months after his dismissal, Mr. Roe
secured alternate employment of a managerial nature at a comparable salary.

[3]

There was a conflict in the evidence with respect to the nature of Mr. Roes
alleged misconduct that resulted in his dismissal.

[4]

The Employer characterized that misconduct as dishonest, claiming that
Mr. Roe knowingly misappropriated company property to his own financial
and reputational benefit. It submitted that Mr. Roes dishonest actions
irrevocably breached the requirements of good faith and trust that formed the
basis of their employment relationship.

[5]

Mr. Roe characterized his actions as simply a failure to comply
with an ambiguous policy of the Employer, with respect to employee use of complimentary
vouchers. He acknowledged that the policy had previously required getting prior
approval from his regional manager but said that in 2011 the policy was changed
to require notification of distribution of the vouchers to the marketing department
only after the fact, although he admitted he had not provided such notification
in this case. Mr. Roe submitted that his conduct was not dishonest but
merely inadvertent, and would not result in a complete breakdown of the trust
required for the continuation of the employment relationship.

[6]

The summary trial judge did not resolve this conflict in the evidence.
He made no findings of fact as to which of the two posited scenarios had occurred.
Instead, he assumed for the purpose of his analysis that the Employers version
of Mr. Roes alleged dishonesty was true. Based on that scenario, he concluded
that Mr. Roes actions were bordering on trifling and did not amount to
just cause for dismissal. In the result, he fixed the notice period at 11 months,
but awarded damages of $67,663.60 for 10 months salary (given Mr. Roes return
to employment at a comparable salary on January 1, 2013), $7,718.60 for
lost benefits, and $1,206.25 for medical expenses that would have been covered
by the Employers health plan, interest, and costs.

[7]

The Employer appeals the award, submitting the trial judge erred:

a)       In
finding that the Employer did not have just cause to dismiss Mr. Roe; and

b)       In the
alternative, in awarding Mr. Roe damages of 10 months notice for 4.5
years of service.

[8]

For the reasons that I shall explain below, I find it necessary to
address only the first ground of appeal.

B.
Factual Background

[9]

Mr. Roe was hired as the Duke Point terminal manager on November
15, 2007, after signing the terms and conditions of the Employers offer of
employment. As a terminal manager, Mr. Roe was the most senior management person
for the Employer when he was on duty.

[10]

Mr. Roes responsibilities included: (i) the management and
oversight of the terminal operations and its staff; (ii) the safety and
security of all customers and staff; (iii) the supervision and assistance
in the selection, development, training and motivation of employees; (iv) overseeing
special projects, teamwork and communications; and (v) daily revenue
reconciliations that included ensuring the accuracy of the revenue reports
prepared by the ticket agents and the accountability of all cash.

[11]

His employment contract listed the Employers core values as: safety
first, employees, quality, integrity, partnerships and environment. Included in
the employment contract as an attachment was a Code of Business Conduct and
Ethics (the Code). On November 16, 2007, Mr. Roe acknowledged in
writing that he had read and understood the Code and the consequences for a
breach of the Code.

[12]

In particular, the Code provided:

BCF [the Employer] personnel have the responsibility to
understand and conduct themselves in accordance with this code, and to report
conduct or proposed conduct that is in violation of this code.

Employees who breach the code may
be subject to disciplinary action, up to and including dismissal. If a
violation of law is involved, the matter may also be referred to the
appropriate law enforcement agency. Any Supervisor or Manager who directs or
approves of conduct in violation of this code, or who fails to report a
violation of which he or she has knowledge, is also in violation of the code
and subject to disciplinary action.

[13]

The Code set out the requirements for all personnel to: (i) act in
an honest and ethical manner at all times, (ii) comply with all of the
Employers laws and regulations; and (iii) avoid conflicts of interest with
the Employer. The latter requirement was defined as including using corporate
property, information, or position for personal benefit.

[14]

The Code further provided that [t]he property and assets of BCF [the
Employer] must only be used in the course of carrying out the bona fide business
purposes of the Company and that personnel may not dispose of BCF property or
assets except in accordance with guidelines established by BCF. The Code
prohibited the accepting or offering of gifts and entertainment by personnel
except in the normal exchanges common to, and generally accepted in, established
business relationships.

[15]

As previously mentioned, the incident that led to Mr. Roes
dismissal involved his use of the Employers complimentary food and beverage
vouchers. The Employer has complimentary retail service vouchers for travel,
food, dessert and beverages. As a terminal manager, Mr. Roe was authorized
to issue complimentary vouchers to passengers who had been inconvenienced in
some way, in accordance with the Employers Customer Service Recovery Plan
(the Customer Recovery Plan).

[16]

Diane Finnie, Director of Employee Relations for the Employer, deposed
that the beverage and dessert vouchers are ordinarily only used for purposes
of Customer Service Recovery  as a gesture to those passengers who may have
experienced inconvenience during travel. Melanie Lucia, Superintendent of
Terminal Operations, South Region, echoed that the purpose of the complimentary
vouchers were for customer recovery only. She deposed that complimentary
vouchers had never been distributed for purposes of fundraising, donations or
charitable contributions, and their use was a rare event. She added:
Providing free food or drinks to friends and family members would be a misuse
of the Defendants assets and a serious breach of the Defendants policies.

[17]

The procedure for issuing complimentary vouchers under the Customer
Recovery Plan to an individual or group required prior approval. Until mid-2011
that approval was granted by the regional managers. Ms. Lucia was the
regional manager for Nanaimo. Mr. Roe and the other terminal managers were
reminded of this policy in an email dated March 21, 2009. In mid-2011, the
granting of prior approval was changed from the regional managers to the marketing
department. Mr. Roe deposed that he understood he had to obtain prior
approval before donating the complimentary vouchers; however, he also said that
the change in mid-2011 permitted terminal managers to use their own discretion
for making the donations so long as they notified the marketing department by
way of email after they had done so. He said that he had followed that
procedure prior to February 2012 but did not with respect to the predicate
incident.

[18]

Ms. Lucia denied that the procedure for obtaining authorization to
donate the complimentary vouchers had changed in any way except as to who was
to provide that authorization. She deposed that, as regional manager, she had
never informed Mr. Roe that he could use his discretion in making
donations of the vouchers and then notify the marketing department after the
fact. She reiterated that prior approval, which required formal written
requests from either the individual or group that was to receive the vouchers,
and the authorized personnel, was always required in advance of the donation. Bill
Marshall, another terminal manager, also deposed that he had never been advised
of a change in the procedure as alleged by Mr. Roe.

[19]

In mid-February 2012, Mr. Roe donated $70 worth of complimentary
dessert and beverage vouchers to his daughters volleyball team when they
travelled to the mainland for a tournament. He said that he did so as a
gesture of good will and to provide some minor support to the parents of the
players on the team, as the team had not done any fund-raising that season. He
acknowledged that on a previous occasion (during the summer sometime between
2009 and 2011), he had donated travel vouchers to his daughters fastball team.
Those vouchers had a value of about $120 to $130. He admitted that he did not
obtain prior approval for either of these donations or inform the regional
manager or marketing department that they had been made.

[20]

Upon learning of the February 2012 incident, the Employer commenced an
investigation. The investigation included a fact-finding interview with Mr. Roe
on February 28, 2012 (the Fact-Finding Meeting). Present at the
Fact-Finding Meeting were Monique Joubarne, Director of Security Programs, Ms. Lucia
and Ms. Finnie.

[21]

The Fact-Finding Meeting was conducted by Ms. Joubarne. The procedure
she followed included asking Mr. Roe a question and writing down his
answer. She then read out what she had recorded and asked Mr. Roe if her
record of his answer was accurate. Only then did she move on to the next
question. Ms. Lucia and Ms. Finnie took their own notes of the
meeting. The notes of all three representatives as to what occurred at the
Fact-Finding Meeting were consistent.

[22]

The three representatives reported the following findings from the
Fact-Finding Meeting:

Greg Roe confirmed he understood the purpose of the
complimentary vouchers - which was to compensate [the Employers] customers if
they had a bad experience or were loaded incorrectly or inconvenienced in some
way.

·

He confirmed that he did provide the vouchers to his daughters
volleyball team for travel on February 19, 2012 (about 12).

·

The vouchers were written in advance on February 13, 2012 with
the intention of providing them to the volleyball team.

·

They were written using old vouchers from 2005. When asked why he
would use these vouchers, he advised that the old ones dont have a carbon copy
so they are not sent back to revenue (the new books are tracked better with a
copy of each voucher going back to revenue).

·

His reason for providing the vouchers was because he wanted to do
a nice gesture for the kids and it made him feel good.

·

He knew it was wrong and that the vouchers were not to be used
for this purpose.

·

He advised he understood he overstepped his authority and
breached the trust of the Company.

He was then asked if he had ever done this before. He
responded that there may have been another occasion - when asked to clarify if
he had or had not  he then said there was another occasion for his daughters
fast ball team that was travelling previously but he couldnt remember the
dates, where he provided between 10-12 food vouchers.

He advised that he knew it was wrong at that time as well and
again explained that he thought it was a nice gesture. He also explained that
he knew they were of value and that he was being more generous than his
position allowed.

He was asked if he told anyone or got permission from anyone
to provide the vouchers  he advised that he did not tell anyone and did not
have permission to provide the vouchers.

He confirmed that he has not done
this for any other teams  other than his daughters [
sic
]. He advised he
was very remorseful and would hope that we would take into consideration that
others have been given a 2nd chance for things like alcoholism, or anger
issues, etc. Monique reminded him that there was a big difference between
someone having a problem with alcohol and someone breaching the trust of the Company.
He said he understood.

[23]

The representatives also concluded that:

Vouchers
issued post 2005 are managed electronically by the revenue department. The
vouchers are identifiable and the carbon copies provide explanations for the
issuance. When all vouchers have been issued the booklet is returned to revenue
for reconciliation.

It is the
writers opinion that Roe was aware that the complimentary vouchers he provided
lacked any identifiable markings and that they could not be traced in any way.
When the booklet was empty only the spine remained and that was recycled
locally
.

[24]

Lastly,

included in their report was a
recommendation that Mr. Roe be terminated for cause for the following
reasons:

Recommendation

·

Greg has relatively short tenure with the Company (4
+
years).

·

He is in a position of authority as a Terminal Manager and held
to the highest standard.

·

His actions were premeditated not once but twice.

·

He knew his actions were wrong and clearly understood the use of
the vouchers.

·

He used the old vouchers that he knew would not require tracking
back to revenue.

·

He has stolen from the Company and breached the trust of the
Company.

[25]

Mr. Roe deposed that he was not thinking clearly during the
Fact-Finding Meeting. He said that he was unrepresented, under duress, and
found the meeting to be difficult and stressful. He said that he had not been
advised of the gravity of the Fact-Finding Meeting or that his job might be in
jeopardy. He claimed that Ms. Joubarne, Ms. Finnie and Ms. Lucia
were aggressively attacking him. In response, Ms. Lucia deposed that the
Fact-Finding Meeting was conducted in a professional, respectful and calm
manner at all times.

C.
The Legal Framework

[26]

In
McKinley v. BC Tel,
2001 SCC 38 at para. 49, the Court
set out a two-part test for determining whether an employer is justified in
dismissing an employee on the grounds of dishonesty. The court must determine: (i) whether
the evidence establishes the employees deceitful (dishonest) conduct on a
balance of probabilities; and (ii) if so, whether the nature and degree of
the dishonesty warrant the employees dismissal. Both parts of the test involve
factual inquiries (paras. 48-49). Absent palpable and overriding error, it
is common ground that an appellate court may not interfere with a trial judges
findings of fact.

[27]

In particular, the test requires an assessment of whether the employees
misconduct gave rise to a breakdown in the employment relationship justifying
dismissal, or whether the misconduct could be reconciled with sustaining the
employment relationship by imposing a more proportionate disciplinary
response (paras. 48, 53 and 57). A contextual approach governs the
assessment of the alleged misconduct at this stage of the test (para. 51).
That assessment includes a consideration of the nature and seriousness of the
dishonesty, the surrounding circumstances in which the dishonest conduct
occurred, the nature of the particular employment contract, and the position of
the employee (paras. 48-57). The ultimate question to be decided is
whether the employees misconduct was such that the employment relationship
could no longer viably subsist (para. 29).

[28]

Mr. Justice Iacobucci, writing for the Court in
McKinley,
summarized
the contextual approach to the assessment of whether the employees dishonesty gives
rise to a breakdown of the employment relationship as follows:

[48]       I am of the view that whether an employer is
justified in dismissing an employee on the grounds of dishonesty is a question
that requires an assessment of the context of the alleged misconduct. More
specifically, the test is whether the employees dishonesty gave 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 employees obligations to his
or her employer
.

[51]       I conclude that a contextual approach to
assessing whether an employees dishonesty provides just cause for dismissal
emerges from the case law on point. In certain contexts, applying this approach
might lead to a strict outcome. Where theft, misappropriation or serious fraud
is found, the decisions considered here establish that cause for termination
exists. This is consistent with this Courts reasoning in
Lake Ontario
Portland Cement Co. v. Groner
, [1961] S.C.R. 553, where this Court found
that cause for dismissal on the basis of dishonesty exists where an employee
acts
fraudulently
with respect to his employer.
This principle
necessarily rests on an examination of the nature and circumstances of the
misconduct. Absent such an analysis, it would be impossible for a court to
conclude that the dishonesty was severely fraudulent in nature and thus, that
it sufficed to justify dismissal without notice
.

[Italic emphasis original;
underline emphasis added.]

D.
The Judgment

[29]

The trial judge made no findings of fact regarding: (i) the nature
or the seriousness of the alleged misconduct in the context of Mr. Roes
position as a terminal manager and his employment contract; (ii) the
conflict in the evidence regarding the policy and procedure with respect to the
Employers Customer Recovery Plan; and (iii) the manner in which the Fact-Finding
Meeting obtained the admissions from Mr. Roe that led to the
recommendation that he be dismissed for cause. Rather, the judge adopted the
following approach:

[7]        I assume for the
purpose of this analysis that the defendant is able to prove its allegations of
a knowing breach of company policy and misuse of company property, and
I
assume for the purpose of this analysis that where there is a conflict in the
evidence, the defendants [the Employers] version is true.
In saying this,
I want it to be clearly understood that these are assumptions made
arguendo
and
they are not findings of the court. [Emphasis added.]

[30]

Based on these factual assumptions, the judge concluded:

[8]        Does the nature and
degree of dishonesty alleged by the defendant warrant summary dismissal? I
conclude that it does not. In coming to this conclusion, I accept the
defendants submissions that Mr. Roe held a position of considerable
responsibility and trust. He was one of three persons sharing the most senior
management position on site at the terminal, responsible for overseeing and
supervising employees at that location. His responsibilities included ensuring
that all cash at the terminal was properly accounted for. If he knowingly
breached company policy in giving out these vouchers, Mr. Roe made a
significant mistake, a mistake to some extent magnified by the fact that his
daughter was one of the beneficiaries of the voucher distribution.

[31]

The judge then addressed whether the nature and seriousness of Mr. Roes
assumed dishonest actions were reconcilable with a continued employment
relationship:

[9]         I am not persuaded by the defendants
submissions that the conduct is, as counsel for the defendant put it in oral
argument, terrifically serious. In fact, I would place this conduct at the
lower end of [the] spectrum. While not a determinative consideration, the
amount involved is trifling, and there was not a great amount of prestige or
other non-monetary personal gain to be achieved for the plaintiff by the
voucher distribution. This was in no sense a nefarious scheme, and the
defendant does not suggest that it was  Mr. Roe took no steps to attempt to
deceive or cover his tracks.

[10]      In short, as to the
nature of the dishonesty, this is not a case of deception. As to seriousness,
the extent of the gain is very slight, bordering on trifling, although I accept
that the plaintiffs position as a terminal manager, and the corresponding
obligation to lead by example, is an aggravating factor.

[32]

Applying an objective standard to the issue of whether Mr. Roes
dishonesty led to an irreconcilable breakdown of the employment relationship,
the judge concluded that the employment relationship could be sustained by a
lesser sanction than dismissal:

[11]      I reject the contention
that the alleged behaviour was not reconcilable with a continuation of the
employment relationship. Disciplinary measures short of dismissal would have
been proportionate to the alleged conduct. Any knowing breach of policy or
misuse of company property by an employee in a position of considerable
responsibility is to some extent a breach of the trust that an employer reposes
in that employee. But when this apparently otherwise reliable employee
allegedly strayed from the path in what I have found is a relatively minor way,
the defendant has not demonstrated to me, on a balance of probabilities, the
soundness of its contention that this employee cannot thereafter be trusted to
carry out his duties.

E.
Discussion

[33]

Critical to the determination of this appeal is the judges assumption
of Mr. Roes account of what occurred, which included his admissions at the
Fact-Finding Meeting. This assumption of facts established the first part of
the
McKinley
test; it also formed the basis for the judges analysis of
the second part of the test.

[34]

The assumed facts include the following: (i) Mr. Roe held a position
of trust as a senior manager at the terminal site; (ii) his
responsibilities included the handling and reconciliation of large amounts of
cash; (iii) he acted as a role model and mentor to the other staff at the
terminal; (iv) the standards of integrity and honesty, included in the
Code, were essential conditions of Mr. Roes employment and had been
clearly set out by the Employer in Mr. Roes employment contract; (v) Mr. Roe
knew that his conduct with respect to the vouchers was contrary to the Customer
Recovery Plan; (vi) Mr. Roe knowingly did not seek authorization for
his donations of the complimentary vouchers or notify anyone of his actions after
the fact; (vii) these acts of dishonesty and misappropriation of the
Employers property were premeditated and therefore constituted deceptive
behaviour; (viii) Mr. Roe had engaged in similar acts on at least one
prior occasion; and (ix) Mr. Roes actions were in breach of the Code,
of the trust reposed in him as a senior employee in a management position, and
were unethical.

[35]

On appeal, the central issue was whether Mr. Roes assumed conduct,
objectively viewed by a reasonable employer, in all of the circumstances (including
the nature of the workplace, the nature of Mr. Roes position and
responsibilities, and the standards set by the Employer in Mr. Roes
employment contract), could be found to be bordering on trifling or
relatively minor, and therefore not rising to the level of undermining the
obligations of good faith that are inherent in and essential to the employment
relationship.

[36]

The judge appears to have based his characterization of Mr. Roes
conduct on the trifling monetary value of the donated vouchers, the lack of a
personal benefit to Mr. Roe, and Mr. Roes lack of steps to attempt
to deceive or cover his tracks. With respect, I cannot agree. The value of
the donations, as acknowledged by the judge, was of little consequence. Mr. Roe
did receive a personal benefit by appropriating the vouchers for his own
purpose (to gift the vouchers to his daughters volleyball team). That purpose
was a personal one and unrelated to the Customer Recovery Plan or the business
of his Employer. Mr. Roes failure to obtain prior approval, or to even report
what he had done, was also an act of deception in that he chose to conceal his
actions. Those actions only became known when someone observed a member of the
volleyball team attempting to redeem one of the vouchers. Mr. Roe did, however,
admit at the Fact-Finding Meeting that he understood he had overstepped his
authority and breached the trust of the Employer. This admission was significant
given that Mr. Roe was responsible for the handling and reconciliation of large
amounts of cash.

[37]

In reaching his finding that Mr. Roes actions were bordering on
trifling, the judge does not appear to have applied the contextual approach,
mandated by
McKinley
,

in assessing whether Mr. Roes
misconduct irreconcilably undermined the good faith obligations inherent in the
employment relationship (paras. 8-11 of his reasons). That approach, in my
view, would have required consideration of: (i) the high standard of
conduct expected of Mr. Roe given the responsibilities and trust attached
to his senior management position; (ii) the essential conditions (characterized
as core values) of integrity and honesty in his employment contract,
including the requirement in the Code to act in an honest and ethical manner
at
all times
 (emphasis added); and (iii) his deliberate concealment of
his actions which he later acknowledged to have been wrong and unethical. It
was in this context the judge had to consider whether Mr. Roes assumed
misconduct justified his dismissal. In my respectful view, it was the judges
failure to apply this contextual approach that appears to have led him to
commit a palpable and overriding error.

F.
Summary and Disposition

[38]

In my view, the judge erred in his characterization of the misconduct he
assumed occurred for the purposes of his analysis and for which Mr. Roe
was dismissed for cause. His findings, which minimized the assumed misconduct,
appear to have occurred in large part because of a failure to consider that
misconduct in the context of Mr. Roes employment contract, the
responsibilities and trust attached to his senior management position, and the policy
and procedures he was required to follow in the distribution of complimentary
vouchers. The judges failure to apply the contextual approach mandated by
McKinley
resulted in palpable and overriding error.

[39]

As the

factual underpinning of the
judges analysis was assumed and not determined, this Court cannot weigh the
evidence, much of which is in conflict, in order to make the necessary findings
on: (i) the nature of the alleged misconduct; and (ii) whether it
justified Mr. Roes dismissal. Accordingly, I would allow the appeal, set
aside the judgment, and remit the matter to the trial court for a new trial.

The
Honourable Madam Justice D. Smith

I AGREE:

The Honourable Mr. Justice
Tysoe

I AGREE:

The Honourable Madam Justice
Bennett


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Acciona Infrastructure Canada Inc. v. Allianz Global
  Risks US Insurance Company,

2015 BCCA 6

Date: 20150113

Docket:
CA042166

Between:

Acciona
Infrastructure Canada Inc. and Lark Projects (2004) Ltd.,

collectively doing
business as Acciona Lark Joint Venture

Respondents

Appellants on Cross
Appeal

(Plaintiffs)

And

Allianz Global
Risks US Insurance Company Compagnie DAssurance
Allianz Risques Mondiaux E.-U., Zurich Insurance Company Ltd.
Zurich Compagnie DAssurances SA, Temple Insurance Company; and in
French, La Compagnie DAssurance Temple, GCAN Insurance Company

Appellants

Respondents on Cross
Appeal

(Defendants)

Before:

The Honourable Mr. Justice Harris

(In Chambers)

On appeal from:  An
order of the Supreme Court of British Columbia,
dated August 19, 2014 (
Acciona Infrastructure Canada Inc. v. Allianz Global
Risks
US Insurance Company
, 2014 BCSC 1568, Vancouver Docket S111660).

Counsel for the Appellants:

R.B. Lindsay, Q.C.
  & S.W. Urquhart

Counsel for the Respondents:

D.L. Miachika

Place and Date of Hearing:

Vancouver, British
  Columbia

December 23, 2014

Place and Date of Judgment:

Vancouver, British
  Columbia

January 13, 2015

Summary:

The respondents, two contracting
companies, obtained judgment against the applicants, four insurance companies, which
provided them with insurance coverage in relation to a large construction
project. The applicants seek an order staying the execution of the judgment
pending appeal, arguing that there would be a risk of irreparable harm if the
monies are paid out, namely, that they would be unable to recover the funds if
their appeal is successful. Held: Application dismissed. The applicants have not
demonstrated that there would be a real or serious risk of non-recovery if they
pay out the damages to the respondents and are successful in their appeal.

Reasons
for Judgment of the Honourable Mr. Justice Harris:

[1]

This is an application for a stay of execution of an order in favour of
the respondents awarding damages in the amount of approximately $8.5 million
in respect of a claim made under an insurance policy.

[2]

The losses were alleged to have occurred during the construction of a
new 500-bed patient care facility at the Royal Jubilee Hospital in Victoria,
British Columbia.

[3]

The applicants, Allianz Global Risks US Insurance Company, Zurich
Insurance Company Ltd., Temple Insurance Company, and GCAN Insurance Company,
underwrote and issued a Course of Construction Insurance Policy, covering
certain defined risks arising during the construction of the project.

[4]

The respondents, Acciona Infrastructure Canada Inc. and Lark Projects
(2004) Ltd., collectively doing business as Acciona Lark Joint Venture, were the
design-build contractors for the project.

[5]

It is not necessary to delve into the background facts, save to observe
that the trial judge concluded that the insurance policy, which covered ALL
RISKS of direct physical loss of or damage to the property insured, covered a
portion of the losses suffered by the respondents and their losses were not
excluded by the operation of an exclusion clause.

[6]

The general principles governing a stay of execution were succinctly
summarized by Mr. Justice Smith (in Chambers) in
Gill v. Darbar
,
2003 BCCA 3:

[7]        The applicable
principles are not in dispute. Generally, a successful plaintiff is entitled to
the fruits of the judgment but this Court may stay proceedings if satisfied
that it is in the interests of justice to do so:
Voth Brothers Construction
(1974) v. National Bank of Canada
(1987), 12 B.C.L.R. (2d) 43 at 44-45
(C.A. [In Chambers]). The trial judgment must be assumed to be correct and
protection of the successful plaintiff is a pre-condition to granting a stay:
Morrison-Knudsen
Co. v. British Columbia Hydro & Power Authority
(1976), 112 D.L.R. (3d)
397 at 404 (B.C.C.A.). The applicant for a stay must satisfy the familiar
three-stage test, that is, the applicant must show that there is some merit in
the appeal, that the applicant will suffer irreparable harm if the stay should
be refused, and that, on balance, the inconvenience to the applicant if the
stay should be refused would be greater than the inconvenience to the
respondent if the stay should be granted:
British Columbia (Milk Marketing
Board) v. Grisnich
(1996), 50 C.P.C. (3d) 249 at 252 (B.C.C.A. [In
Chambers]).

[7]

These general principles are not in dispute. Nor is it seriously in
dispute that the applicants satisfy the threshold test on the merits, although
the respondents do not accept that the appeal has substantial merit. The issues
of relevance to this application focus on whether, if a stay is not granted and
the appeal is allowed, there would be a sufficient risk that the applicants would
not be able to recover the damages they will have paid out (a form of
irreparable harm) and whether, if that is so, the balance of convenience
favours granting the stay.

[8]

In my view, whether a stay should be granted depends principally on
whether the applicants have discharged their onus to demonstrate irreparable
harm. The applicants apprehension that there may be difficulty recovering the
judgment if the appeal succeeds is not sufficient reason for granting a stay.
There must be a risk of non‑recovery that rises to a sufficient level of
materiality to warrant granting a stay, thereby depriving the successful
plaintiffs of the fruits of the judgment, in circumstances where the trial
judgment is presumed to be correct.

[9]

In
Susan Heyes Inc. v. South Coast B.C. Transportation Society
,
2009 BCCA 348, Mr. Justice Chiasson (in Chambers) observed:

[16]      There always is a risk
a business will fail and recovery of a judgment made impossible. More is
required before a judgment holder is denied the fruits of successful litigation.

[10]

Mr. Justice Chiasson had this to say about the standard to be met:

[7]        The appellants must
show that there is a serious risk they will suffer irreparable harm, that is,
harm that could not be remedied. The financial position of the respondent is a
relevant consideration (
R.J.R.  MacDonald Inc.
[
v.
]
Canada
Attorney General
, [1994] S.C.R. 311, at pp. 340-341;
Bancroft-Wilson
v. Murphy
, 2008 BCCA 498;
Coburn v. Nagra
;
Zylstra v. Hughes
,
2000 BCCA 8)[.]

[11]

Madam Justice D. Smith (in Chambers) in
Bancroft-Wilson v.
Murphy
, 2008 BCCA 498, characterized the relevant level of risk in the
following way:

[12]       If the appellant
establishes that the respondents modest means presents a real risk that the
appellant would, if successful on appeal, be unable to recover a large portion
of the funds paid to the respondent as damages, the appellant may have
established that she could face irreparable harm in that sense:
Zylstra v.
Hughes
, 2000 BCCA 8, 133 B.C.A.C. 21 (Chambers), Hall J.A.

[12]

The applicants submit that they would be at risk of suffering
irreparable harm if the stay is not granted. In their materials, they say that there
would be at least some risk that the respondents would be incapable of repaying
the judgment if the appeal is successful.

[13]

The respondents have filed material intended to show that there would be
no serious risk that they would fail to repay the judgment if the appeal is
successful. That evidence discloses: that both respondents are active companies
providing construction and construction management services for major projects
in British Columbia and throughout Canada; that they have a history of
conducting business in the province and that they continue to be active within
the province; and that they are profitable, generate very large revenues, and
are financially stable.

[14]

Mr. Fisher, who is the President of the Lark Group, which includes
the respondent, Lark Projects, deposed that the Lark Group has operated in British
Columbia for over 40 years, providing services for construction and real
estate development. Lark Projects, in particular, has operated for over 10 years
in British Columbia in construction and real estate development projects, and
has been consistently profitable. He deposed that the company has significant
assets within the jurisdiction. His affidavit identified a variety of large
current projects in British Columbia, principally involving health care
facilities. He attached to his affidavit the most recent financial statements
for Lark Projects, which disclose,
inter alia
: assets of $39.4 million;
cash and cash in trust of $2.1 million; retained earnings of $12.2 million;
construction revenues of $92 million; gross revenues of $3.9 million;
and net income of $2.3 million. He expressed the opinion that the risk
that Lark Projects would not be able to repay the judgment, should the appeal
succeed, would be minimal.

[15]

Mr. Palomar swore an affidavit on behalf of Acciona Infrastructure
Canada, Inc. (Acciona Canada). Mr. Palomar is the Vice President,
Finance and Administration, of Acciona Canada.

[16]

He deposed that Acciona Canada has operated continuously in Canada for
over 10 years, providing construction and construction management services
in various provinces, primarily for large-scale infrastructure projects.
Although federally incorporated, Acciona Canada has offices in Toronto,
Montréal, and Calgary, and its head office is in Vancouver. Acciona Canada is
part of the Acciona Group, a Spanish company employing more than 30,000 professionals
and operating in over 30 countries. Its Canadian operations account for
approximately 8% of the groups global construction business, a contribution
valued in the billions of dollars. Mr. Palomar deposed to various major
ongoing projects across Canada with which Acciona Canada is involved.

[17]

Mr. Palomar deposed that, in his opinion, the risk that Acciona
Canada could not repay the judgment, should the appeal succeed, would be
extremely low.

[18]

In light of the affidavit material provided by the respondents, the
applicants refined their submissions. My attention was drawn to
Voth Bros.
Construction
(
1974) Ltd
.
v.

National Bank of Canada
(1987),
12 B.C.L.R. (2d) 43 (C.A.), to support an alternative argument that a stay be
ordered, in light of the significant amount involved, unless the applicants
provide security (in the form of a letter of credit) for the return of the
judgment amount, in the event the appeal is successful. In particular, emphasis
was placed on the comments of Mr. Justice Lambert identifying the risk
that if no order is made for a stay of execution and a plaintiff receives the
judgment amount, a defendant would have no assurance that the amount of the
judgment would be repaid if successful on appeal. As he pointed out, a
plaintiff will have had interest-free use of the funds, to which it was never
entitled. He went on to say at 46:

To avoid those problems, the practice has been adopted, where
the amount involved is significant, of ordering a stay of execution on payment
of the amount of the judgment into court by the defendant, and ordering payment
out [to] the plaintiff on terms first that if the defendant is successful on
its appeal it will be entitled to interest on the funds repaid to it and,
second, that the plaintiff provide sound security, sufficient to secure the
repayment of the amount paid out, together with an amount representing an
estimate of the defendants costs of the appeal on a party-and-party basis, and
an amount representing interest on the funds that would be repaid if the
defendant were to be successful in the appeal

The advantage of such an order is
that it gives the plaintiff the fruits of his judgment as soon as he is
entitled to them, but at the same time it protects the defendant against the
risk that he will not be repaid, and against the loss of the interest he would
earn from the use of the money which may ultimately turn out to have belonged
to him all along.

[19]

The applicants also argue that the affidavit material fails to give
sufficient assurance that the respondents would repay the judgment if the
appeal is successful. They argue that nowhere is it unequivocally stated that
the respondents would repay the judgment. The applicants expressed concern that:
the affidavit material does not clearly disclose what assets are available in
British Columbia to satisfy a judgment; does not disclose what kind of real
property is available within British Columbia; arguably overstates the value of
projects with which the respective respondents are involved; and presents an
unclear picture of how readily available assets would be to repay the judgment.
Furthermore, Acciona Canada is part of a complex group of companies
headquartered in Spain and although the group overall has very considerable
resources, the relationship of the Canadian company to the group as a whole is
unclear.

[20]

The applicants also point out that the respondents propose to use the
judgment proceeds to finance ongoing business operations. In their view, such
use could put the proceeds beyond recovery.

[21]

In brief, the applicants accept that the respondents are viable business
enterprises of significant scope and financial strength. They argue, however,
that the affidavit evidence is not sufficiently precise, clear, compelling, or
unequivocal to lay to rest a concern that recovery of the judgment proceeds
might not be possible, or could be uncertain or difficult if the appeal
succeeds.

[22]

On a review of the evidence, I am satisfied that the respondents are
large, well-established, viable, profitable, and financially stable enterprises
with a history of conducting business in British Columbia and Canada, each of
which has significant assets, including assets in British Columbia. I am
satisfied that there would be no real or serious risk that the judgment amount
would not be repaid in the event the appeal is successful. The criticisms of
the affidavit material offered by the applicants do not, in my view, materially
detract from that conclusion.

[23]

The parties to this litigation, on both sides, are very large
enterprises dealing in hundreds of millions, if not billions, of dollars of
business. I do not think that the judgment amount is particularly
significant or large in light of the financial resources of the parties. In
particular, the applicants deal with sums vastly in excess of what is in issue
in this litigation, given the nature of their business and resources. I am
not persuaded that, from the perspective of the applicants, the judgment amount
here should be regarded as sufficiently significant to invoke the principles
discussed in the
Voth
case.

[24]

The onus is on the applicants to meet the test for the granting of a
stay of execution. In my view, they have failed to establish that there would
be a real or serious risk that they would suffer irreparable harm if a stay is
not granted. Accordingly, the application is dismissed.

The Honourable Mr. Justice Harris


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Edgewater Casino v. Chubb-Kennedy,

2015 BCCA 9

Date: 20150113

Docket: CA041688

Between:

Edgewater Casino

Appellant

(Petitioner)

And

Anita
Chubb-Kennedy and
The British Columbia Human Rights Tribunal

Respondents

(Respondents)

Before:

The Honourable Madam Justice Saunders

The Honourable Madam Justice Bennett

The Honourable Mr. Justice Willcock

On appeal from:  An
order of the Supreme Court of British Columbia, dated March 13, 2014 (
Edgewater
Casino v. Chubb-Kennedy
, 2014 BCSC 416,
Vancouver Docket No. S137857).

Counsel for the Appellant:

N. Mitha
S. McCann

Respondent Appearing In Person:

A. Chubb-Kennedy

Counsel for the Respondent,
BC Human Rights Tribunal:

M. Underhill

Place and Date of Hearing:

Vancouver, British
  Columbia

September 26, 2014

Place and Date of Judgment:

Vancouver, British
  Columbia

January 13, 2015

Written Reasons by:

The Honourable Madam Justice Saunders

Concurred in by:

The Honourable Madam Justice Bennett

The Honourable Mr. Justice Willcock

Summary:

This appeal is from the
dismissal of a petition for judicial review of a decision of the Human Rights
Tribunal declining to dismiss a human rights complaint prior to a hearing. The
reviewing judge held that the decision, a discretionary one made in the
exercise of the Tribunals gatekeeping function, was not patently unreasonable.
Held: appeal dismissed. The judge did not err in concluding the Tribunals
decision was not patently unreasonable. Section 27(1)(c) of the Human Rights
Code, R.S.B.C. 1996, c. 210 discussed.

Reasons for Judgment of the Honourable
Madam Justice Saunders:

[1]

Edgewater Casino appeals from dismissal of its petition for judicial
review of a decision of the British Columbia Human Rights Tribunal. The Human
Rights Tribunal, on Edgewater Casinos preliminary motion, had dismissed two
aspects of Mrs. Chubb-Kennedys complaint against Edgewater Casino but not
a third, a complaint that Edgewater Casino had discriminated against Mrs. Chubb-Kennedy
on the basis of race and ancestry. In its petition for judicial review Edgewater
Casino contended that the Tribunal erred in failing to dismiss the complaint
entirely. It takes the same position before us.

[2]

The complaint arises from Edgewater Casinos provision of a shuttle bus
service for its patrons to transport them to and from its casino in Vancouver,
British Columbia. Mrs. Chubb-Kennedy is a woman of First Nations descent.
She was a frequent patron of the casino and user of the shuttle bus. Mrs. Chubb-Kennedy
alleges in the complaint, and it is accepted by all, that on two occasions the
driver of the shuttle bus removed her from the bus and declined to transport
her from the casino. She alleges these actions contravened the
Human Rights
Code
, R.S.B.C. 1996, c. 210.

[3]

The evidence before the Tribunal was, in the main, filed by Edgewater
Casino. It includes a description of Mrs. Chubb-Kennedy on the first occasion
when she was removed from the shuttle bus as appearing to the driver to be
intoxicated or impaired by drugs or alcohol, and on the second occasion as
having attracted complaints from other passengers of smelling like alcohol. Mrs. Chubb-Kennedy
was, by the drivers account, loud, aggressive, and obnoxious on both occasions.

[4]

There was little material from Mrs. Chubb-Kennedy apart from her
complaint. She did file, however, a letter saying I have never gotten drunk on
the bus or at the Edgewater Casino. Before us, Mrs. Chubb-Kennedy asserted
that she does not consume alcohol, and she denies the unruly and disruptive
behaviour alleged by Edgewater Casino.

[5]

The Tribunal declined to dismiss the complaint of discrimination on the
basis of race and ancestry at the preliminary stage, saying that the
description of the complainants behaviour in the affidavits filed by Edgewater
Casino accuses Mrs. Chubb-Kennedy of behaviour stereotypical of persons
[of] First Nations descent. The Tribunal found this was enough to establish a
nexus between the behaviour complained of and the protection under the
Code
.

[6]

The issue before the reviewing judge was whether the Tribunals decision
was patently unreasonable. This patent unreasonableness, says Edgewater,
consists of the Tribunal giving undue weight to the evidence of the complainant
and in determining there was a sufficient nexus between the actions of
Edgewater Casino and the complainants race and ancestry so as to permit the
complaint to go forward to the next stage of the Tribunals process.

[7]

The reviewing judge observed that the finding of potential for a nexus
was an inference connecting the behaviour complained of and Mrs.
Chubb-Kennedys status as an Aboriginal woman. The judge identified the issue
before him as whether that inferentially-driven conclusion of the potential
for a nexus between the drivers removal of Mrs. Chubb-Kennedy from the
bus and the protection provided by the
Human Rights Code
could be
characterized as patently unreasonable (the standard of review under s. 59
of the
Administrative Tribunals Act
, S.B.C. 2004, c. 45). He found
that the decision of the Tribunal was somewhat surprising but not patently
unreasonable, saying:

[63]      I suspect that if many members of the community
were presented with the situation, they might well find the conclusion to be at
least somewhat difficult to understand. It does not scream logical. In the
vernacular, the drawing of that conclusion seems to draw a long bow. However,
in order to assess it for the purpose of the present application, I am obliged
to recognize that there is some element of specialization to the task which the
Tribunal had to perform. Implicit in the conclusion is that the Tribunal
applied some element of specialized knowledge to reach the conclusion it
reached and I am required to bear in mind the standard of review which is
applicable.

[64]      From the petitioners perspective, I believe the
result is particularly disconcerting because it essentially takes the evidence
which was tendered by the petitioner, tendered Im sure in an honest and
sincere way, and uses that evidence to support a conclusion quite adverse to
the petitioner. For the petitioner, the most obvious meaning of its evidence,
that the Complainant was acting irrationally and actually seemed to be under
the influence at the time, appears to have been swept aside in favour of
another more obscure and, for the petitioner, sinister interpretation. Quite
naturally, a sense of frustration is engendered.

[65]      In the final result, while I consider the
conclusion drawn by the Tribunal to be somewhat surprising, I must also
recognize that this Court is obliged to accord a reasonable measure of
deference to decisions of specialized tribunals.

[66]      There is also the fact that the Tribunals decision
was made at a time before the evidentiary record had been properly developed.
The Tribunal was not being asked to conclude that the discriminatory act had
been proven, but rather to decide whether there was some reasonable possibility
that it might be proven in the circumstances of a full hearing.

[67]      While I am not without
some reservation as to the correctness of the Tribunals decision, that is not
the test to be applied. The threshold for the decision to survive is a low one:
unless that decision is one which is properly characterized as patently
unreasonable, this Court will not interfere. I find the threshold for survival
has been met.

[8]

The question for us is whether the reviewing judge erred in concluding
the Tribunals decision was not patently unreasonable.

[9]

Edgewater Casinos application to the Tribunal for dismissal of the
complaint was made under s. 27(1)(c) of the
Human Rights Code
,
which provides discretion to the Tribunal in these terms:

27   (1) A member or panel may, at any time after a complaint is filed
and with or without a hearing, dismiss all or part of the complaint if that
member or panel determines that any of the following apply:

(c) there is no reasonable prospect that
the complaint will succeed;

[10]

That section accords the Tribunal a gatekeeping function, intended to
allow the complaint process to be abbreviated so that parties are not embroiled
in the expenditure of time and money on complaints, and the Tribunal is not
engaged in hearing cases, that are not realistic candidates for a remedial
order.

[11]

The approach to the Tribunals s.27(1)(c) function is found in jurisprudence
developed for a former articulation of the gatekeeping power, s. 14(1)(a) of the
Human Rights Act
, S.B.C. 1984, c. 22. As that section allowed the then
Human Rights Council to order that the proceedings be discontinued but did
not describe the criteria the Council should consider in making such a
determination, the Supreme Court of British Columbia addressed the question in
a series of cases, including in
Cook v. British Columbia Council of Human
Rights
(1988), 26 B.C.L.R. (2d) 52, and
Onischak v. British Columbia
(Council of Human Rights)
(1989), 38 Admin. L.R. 258. In
Cohen v.
British Columbia Council of Human Rights
(1990), 72 D.L.R. (4th) 306
(B.C.S.C.),  Mr. Justice Lysyk relied upon this passage of Mr. Justice
Wood in
Cook
:

When considering whether or not
to discontinue proceedings under s. 14(1)(a), it is my view that the
council must employ an objective standard. The one that comes readily to mind
is that to which the common law has frequently resort[ed], namely, a standard
which invokes a test of reasonableness.
I conclude that when considering a
complaint the council must determine whether there is any evidence upon which
either a board of inquiry under s. 16, or a designated member of council
under s. 14(1)(d), acting reasonably, could find the complaint to be
proved on a balance of probabilities
. [Emphasis added at 315-316.]

Mr. Justice
Lysyk in
Cohen
concluded with these comments:

The Act does not require Council members to be legally
trained and it may be doubted whether the legislature intended the Council to
perform its filtering function, contemplated by s. 14(1)(a), by applying a
sophisticated legal formula in the manner of a court of law.  In
S.E.P.Q.A.
v. Canadian Human Rights Commission
, [1989] 2 S.C.R. 879, 11 C.H.R.R. D/1,
consideration was given to principles governing exercise of the commissions
authority under the relevant provisions of the
Canadian Human Rights Act
to
dismiss a complaint, after investigation, without appointing a tribunal to
conduct a hearing. Mr. Justice Sopinka, writing the majority reasons, made the
following observations concerning this function of the commission (at
p. 428):

It is not intended that this be a determination where the
evidence is weighed as in a judicial proceeding but rather the Commission must
determine
whether there is a reasonable basis in the evidence for proceeding
to the next stage
. It was not intended that there be a formal hearing
preliminary to the decision as to whether to appoint a tribunal. [Emphasis added
in
Cohen
.]

[12]

In
Lee v. British Columbia (Attorney General)
, 2004 BCCA 457, 32
B.C.L.R. (4th) 1, Mr. Justice Donald discussed a former version of the current
provision, drawing on the jurisprudence of the
Human Rights Act
:

[26]       there will almost always be some evidence of the
possibility of discrimination when a member of a minority group is passed over
in favour of a member of the majority group. But a mere possibility surely
cannot be enough to require a hearing.
The scheme of the statute involves a
screening process so that only complaints with sufficient merit will proceed to
a hearing
. The HRC was assigned the role of gate keeper. Thus the HRC had
to assess this case in a preliminary way and make a judgment whether the matter
warranted the time and expense of a full hearing.
The threshold is not
particularly high: whether the evidence takes the case out of the realm of
conjecture
: [Citations omitted.]

[27]      In my view
the evaluation of the complaint at
the gate keeping stage attracts the highest degree of curial deference
. It
involves the assessment of evidence in a specialized area.

[Emphasis
added.]

[13]

In
Berezoutskaia v. British Columbia (Human Rights Tribunal)
,
2006 BCCA 95, 51 B.C.L.R. (4th) 4, Mr. Justice Smith referred to these passages
of
Lee
, and confirmed that these same considerations apply in reviewing
a decision made under the current s. 27(1)(c):

[26]      Although there is now a single tribunal, the scheme
has not changed in its essence. The discretion to dismiss a claim that, on a
preliminary assessment, does not warrant a full hearing has passed from the
former Human Rights Commission to a panel or a member of the Tribunal under the
current s. 27(1).
The nature of this gate keeping function has not changed. In
my view, the approach set out by Mr. Justice Donald to a gate keeping decision
of the Human Rights Commission is equally applicable to a gate keeping decision
made by a panel or a member of the Tribunal
.

[Emphasis
added.]

[14]

Before us Edgewater Casino says the reviewing judge erred in failing to
find the decision was patently unreasonable for the same two reasons advanced
before the judge: first, the Tribunal gave undue weight to the evidence of Mrs. Chubb-Kennedy,
and second, the material before the Tribunal did not support the nexus referred
to by the Tribunal between the behaviour complained of and Mrs. Chubb-Kennedys
race and ancestry. Edgewater Casino says the complaint is so unlikely to
succeed it should be dismissed at the preliminary stage.

[15]

As is apparent from the authorities I have referred to, consideration of
a complaint at the gatekeeping stage does not involve the weighing of evidence.
Rather the Tribunal performs a preliminary assessment of all the material filed
to that point. Thus I would not accede to Edgewaters submission that the Tribunal
erred in respect to the weight given to the complainants statement.

[16]

Nor do I consider that the judge erred in his view that the Tribunal was
not patently unreasonable in holding that the information before it laid enough
by way of groundwork to justify the complaint advancing to adjudication.

[17]

Edgewater Casino says it produced ample evidence of its policy of
refusing service to disruptive riders, and of Mrs. Chubb-Kennedys behaviour as
loud and disruptive consistent with intoxication by alcohol, to establish that
no credit could be given to a complaint of discrimination. It says the
complaint has no reasonable prospect of success because a connection between the
behaviour of its driver which founds the complaint and the prohibited head of
discrimination is simply not apparent on the material that was before the
Tribunal. In its submission, both the Tribunal and the reviewing judge erred in
failing to recognize this. But one may ask, if Mrs. Chubb-Kennedy testifies
at the hearing, and is believed, that she was not intoxicated and had not
consumed alcohol, is it outside the realm of conjecture to consider that she
was the recipient of stereotypical assumptions based simply on her presentation
and if so, was the
Human Rights Code
violated?

[18]

The case at this stage, of course, is far from establishing the finding
just described, but these are early days. It is, in my view, important to view the
limits of the Tribunals finding. The decision does not say that the necessary
connection for a finding of prohibited discrimination
is
established,
but rather that considering what may be known of stereotypical behaviour, proof
of the complaint was not out of the realm of conjecture:
Lee
at para. 26;
Berezoutskaia
at

para. 26.

[19]

The reviewing judge held that it could not be said the Tribunal was
patently unreasonable in allowing the complaint to proceed to completion on the
allegation of discrimination on the basis of race or ancestry. I agree. The
nature of the particular question addressed by the Tribunal engages its
expertise and the answer given by the Tribunal is one that attracts the courts
highest deference. Having reviewed the materials filed, it seems to me it was
open to the Tribunal, applying a relatively low merits threshold, to decline
to abbreviate the natural complaint process so as to allow this aspect to
proceed to an adjudication.

[20]

As I do not consider that the reviewing judge erred in concluding that the
Tribunals refusal to dismiss this aspect of the complaint under s. 27(1)(c)
was not patently unreasonable, I would dismiss the appeal.

The Honourable Madam Justice Saunders

I agree:

The
Honourable Madam Justice Bennett

I agree:

The Honourable Mr. Justice
Willcock


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Sampley v. Sampley,

2015 BCCA 51

Date: 20150113

Docket: CA042350

Between:

Matthew Jason
Sampley

Respondent

(Petitioner)

And

Michelle Denise
Sampley

Appellant

(Respondent)

Before:

The Honourable Mr. Justice Groberman

(In Chambers)

On appeal from: an
order of the Supreme Court of British Columbia dated
November 5, 2014 (
Sampley v. Sampley
, 2014 BCSC 2434,
Cranbrook Registry No. 24551)

Oral Reasons for Judgment

Counsel for the Appellant:

G.A. Lang

Counsel for the Respondent:

J. Lalonde (via
  teleconference)

Place and Date of Hearing:

Vancouver, British
  Columbia

January 13, 2015

Place and Date of Judgment:

Vancouver, British
  Columbia

January 13, 2015

Summary

Mr. S. sought and obtained
relief under the Hague Convention on the Civil Aspects of International Child
Abduction. Before the litigation commenced, he had consulted with Ms. L.
with a view to having her represent him. On the appeal, Ms. S. retained
Ms. L. Mr. S. applied to have Ms. L. removed from the case on
the basis of conflict of interest. Held: Application dismissed. Ms. L. was
in a situation of conflict, having received confidential from Mr.  S. She
should not have accepted a retainer to represent Ms. S. on the appeal. The
dangers of abuse of confidential information are generally attenuated on
appeal, but remain present. A bright-line test generally prevents counsel from
representing one party after having received confidential information from the
opposite party to the litigation. There is, however, a discretion in the court
to allow counsel to continue where it is satisfied that it is in the interests
of justice to do so, and where the dangers of misuse of confidential
information are minimal. Here, there was no real likelihood of misuse of
confidential information. Counsel took on the case in good faith, there was
urgency in having the matter heard, and Mr. S. had not brought the
application on in a timely fashion. Ms. L. was allowed to continue to represent
Ms. S., but only for the purposes of the current appeal.

[1]

GROBERMAN J.A.
: This is an application brought by the respondent
for an order that the appellants counsel be required to withdraw from the case
on the basis that she is in a conflict of interest.

[2]

The appeal arises out of an order made in the Supreme Court on
November 5, 2014 under the
Convention on the Civil Aspects of
International Child Abduction
, Can. T.S. 1983 No. 35 (the
Hague
Convention
). Reasons for judgment were issued on December 23, 2014, a few weeks
after the order was made.

[3]

Within a week of the order being made, Ms. Sampley decided to bring an
appeal and she retained Ms. Lang to act as her appeal counsel. That created a
potential problem because, when he was initially contemplating bringing his
Hague
Convention
application, Mr. Sampley had contacted Ms. Lang with a view to
having her represent him.

[4]

Mr. Sampleys evidence is that in April 2014, he left a voicemail for
Ms. Lang in his initial attempts to find counsel. He deposes:

I received a return phone call
from Ms. Lang a few days after I left her the initial voicemail. During my
conversation with Ms. Lang, I explained my entire personal situation involving
the abduction of [the child] by Michelle, including but not limited to a
detailed account of the facts of my case, my desired outcome, and my thoughts
on my case. I told Ms. Lang intimate details regarding this proceeding, and I
consider the information that I told Ms. Lang to be confidential information.

[5]

On November 11, 2014, Ms. Lang advised Mr. Sampleys counsel that she
had been retained to bring the appeal. He immediately raised the issue of conflict
of interest. In a letter dated November 14, 2014, he stated:

My client informed me that he spoke with you regarding this
file prior to him commencing his
Hague
petition. He spoke with you in
length about his situation and informs me that you were willing to represent
him for the petition.

It seems that this puts you in a
conflict in acting for Ms. Sampley in the appeal, however, I will wait to hear
from you on this issue.

[6]

There followed correspondence between counsel. At a case management
conference on November 20, 2014, before Neilson J.A., it was agreed that the
issue should be dealt with by way of an application in chambers to be brought
during the week of December 5, 2014.

[7]

There were some perfunctory attempts made by Mr. Sampleys counsel to
bring the matter on in chambers, but despite the lack of any serious obstacles
to doing so, nothing much actually occurred until the material for the
application was filed on January 5, 2015. The matter comes on for hearing, for
the first time, this morning.

[8]

There is often urgency in
Hague Convention
matters, and in this
case an expedited appeal has been arranged with a hearing date of February 17,
2015. The appellants factum, I am advised, was filed yesterday. Although there
is some issue as to when the respondents factum will be filed, I am informed
that, assuming counsel for the appellant is able to continue, the parties are
on-track for a hearing on the scheduled date. It is acknowledged by counsel for
the respondent that if Ms. Lang is required to withdraw as counsel, the
February 17 date will be lost and the matter will have to be rescheduled at
some point further in the future.

[9]

There are effectively three issues in this application. The first is the
question of whether Ms. Lang was given confidential information that raises an
issue of conflict of interest. The second is whether, this being an appeal, any
confidential information received by Ms. Lang is effectively irrelevant so that
a conflict does not arise. The third issue, if there is a conflict of interest,
is whether the delays in bringing this application are such that Ms. Lang
should be allowed to continue notwithstanding any conflict.

[10]

On the first question there is little evidence of the information that
was imparted to Ms. Lang apart from the paragraph in the affidavit of Mr.
Sampley that I have already referred to. It is difficult to determine precisely
what information may have been exchanged. In such a situation, the law
generally errs on the side of caution. In
MacDonald Estate v. Martin
,
[1990] 3 S.C.R. 1235 at 1260, Sopinka J. said:

In my opinion,
once
it is shown by the client that there existed a previous relationship which is
sufficiently related to the retainer from which it is sought to remove the
solicitor, the court should infer that confidential information was imparted
unless the solicitor satisfies the court that no information was imparted which
could be relevant. The degree of satisfaction must withstand the scrutiny of
the reasonably informed member of the public. This will be a difficult burden
to discharge.

[11]

The affidavit of Mr. Sampley indicates that confidential information was
imparted to Ms. Lang. In any event, on the basis of the reasoning of Sopinka J.
in
MacDonald Estate
, it should be inferred that she received confidential
information. There is nothing in the respondents material that serves to rebut
the inference. I proceed on the basis, therefore, that confidential information
was provided by Mr. Sampley to Ms. Lang.

[12]

In saying this, I wish to emphasize that Ms. Lang has advised the Court
that she was not conscious of having spoken to Mr. Sampley when she accepted a
retainer from Ms. Sampley. Even now, she has only a vague recollection of some
gentleman contacting her with respect to a
Hague Convention
application.
It is not suggested that she recalls confidential information nor is it
suggested that she has made use of such information. Her good faith in
accepting the retainer is not challenged. Good faith, however, does not
eliminate the conflict.

[13]

I turn to the next question, which is whether the fact that this is an appeal
is a consideration that takes this outside the general rule that, having
received confidential information from one party, counsel cannot act for the
opposite party

[14]

Ms. Lang notes that the appeal is on the record, and says that there
will be no attempt to put additional evidence before the Court or, at any rate,
no attempt will be made to put additional evidence before the Court that could
in any way be influenced by confidential information. She emphasizes that the
arguments on an appeal are legal in nature. Her factum has been filed and it
contains nothing that relies on confidential information. Accordingly, she
says, any confidential information that she might have been given is irrelevant
to the appeal.

[15]

I accept that the dangers of misuse of confidential information are very
much attenuated on an appeal. That said, Ms. Sampley, having retained Ms. Lang
for the appeal, has retained her for the purposes of dealing with the
Hague
Convention
matter, at least during the currency of the appeal. Mr. Sampleys
personal situation, his goals in the litigation, and his concerns about the
process may well be of interest should there be discussion of settlement, should
issues of scheduling arise, or should there be a need to canvass appropriate
terms of an order. While I accept that the risks of misuse of confidential
information are attenuated on appeal, they are nonetheless present. In my view,
the general principle that counsel, having received confidential information,
cannot act against the person who has furnished it must be respected. It is
important in this area of the law, as far as possible, to have bright-line
rules so that counsel and their clients are clear on when a retainer can be
accepted and when it cannot be.

[16]

If this matter had been brought before the Court in early December as
planned, I would not have had any hesitation in requiring Ms. Lang to withdraw
due to conflict of interest.

[17]

The question is whether that same situation obtains today, given the
delay in bringing the application. The question is whether I should make an
order requiring Ms. Lang to withdraw given that the inevitable result of such
an order would be to delay the appeal proceeding.

[18]

In the case of
Canadian National Railway Co. v. McKercher LLP
, 2013
SCC 39, the Supreme Court of Canada considered circumstances that might justify
allowing a lawyer to continue to act despite a finding of conflict. The court
said:

65.        [I]n circumstances
where the lawyer-client relationship has been
terminated and there is no
risk of misuse of confidential information, there is generally no longer a
concern of ongoing prejudice to the complaining party. In light of this
reality, courts faced with a motion for disqualification on this third ground
should consider certain factors that may point the other way. Such factors may
include: (i) behaviour disentitling the complaining party from seeking the
removal of counsel, such as delay in bringing the motion for disqualification;
(ii) significant prejudice to the new client's interest in retaining its
counsel of choice, and that party's ability to retain new counsel; and (iii)
the fact that the law firm accepted the conflicting retainer in good faith,
reasonably believing that the concurrent representation fell beyond the scope
of the bright line rule and applicable law society restrictions.

[19]

This is not a case like
McKercher
, where the retainer at issue
was in respect of a completely different matter than the one on which
confidential information was imparted. The retainer in issue here of Ms Lang is
with respect to the same matter  the
Hague Convention
application  on which
she was contacted by Mr. Sampley. Nonetheless, the bright-line rule itself is
not contravened here because there is no concurrent obligation or concurrent
representation. In my view, the court has some discretion to allow Ms. Lang to
continue, notwithstanding a finding of conflict.

[20]

I take into account that, this being an appeal, there is a very limited
possibility of any prejudice resulting from Ms. Lang having confidential
information. The factum has been filed and, as Ms. Lang points out, it does not
in any sense rely on anything that can be said to be confidential. The appeal
is on the record and there is no attempt to bring forward evidence resulting
from confidential disclosures. Thus, there is only a very remote possibility
that the conflict will prejudice the respondent.

[21]

I accept that Ms. Lang accepted the retainer in good faith and that
considerable resources have now been expended on getting the matter ready for
appeal. The factum has been filed and the matter from the appellants point of
view is ready to be heard.

[22]

I am concerned about the delays by the respondent in bringing this
application forward. Those delays have resulted in significant prejudice to the
appellant both because resources have been expended and because the appeal date
will be lost in the event that counsel is required to withdraw.

[23]

In the circumstances, notwithstanding my finding that there is a
conflict, I am satisfied that it is appropriate not to require Ms. Lang to
withdraw from her representation of Ms. Sampley on the appeal.

[24]

I come to that conclusion on the basis that the appeal will be heard on
February 17 and on the representation of Ms. Lang that her retainer will be at
an end once the appeal has been heard. In my view, that latter indication is of
paramount importance. Ms. Lang should not be involved in further proceedings in
this matter. That would include any further hearings in the B.C. Supreme Court,
but it would also include any subsequent appeals beyond the hearing before this
Court. The ruling that I am making is based on the exigency of there being an
appeal scheduled for February 17 and on the very limited relevance of any
confidential information to that particular proceeding.

[25]

In the result, I am dismissing the application for an order that Ms.
Lang withdraw as counsel but I am granting a declaration that she does find herself
in a position of having obtained confidential information which precludes her
from involvement in this matter beyond the current appeal.

[discussion with
counsel re. filing timeline]

[26]

GROBERMAN J.A.
: I am going to direct then that the respondents
factum including the factum of the appellant by cross-appeal be provided to
counsel and filed with the Court no later than the close of business on January
23, 2015.

[27]

Ms. Lang you will then be in a position of filing any reply factum and
the response to the cross-appeal by January 30, 2015.

[28]

Unless I am missing something that would leave only the reply factum on
the cross-appeal. That will be due February 6.

[discussion with
counsel re. costs]

[29]

GROBERMAN J.A.
: I think it is appropriate that each party bear
his or her own costs of the application today.

[30]

Madam Justice Neilson remains the case management judge on this appeal.
I will report to her on the deadlines that I have imposed. I am very hopeful
that no further appearances on case management will be necessary, but if they
are they should be scheduled before Madam Justice Neilson.

The Honourable Mr. Justice Groberman