IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Drescher v. La Societe de Les Enfants Michif dba Métis Family Services,

 

2004 BCSC 1300

Date: 20041012
Docket: S069343
Registry: New Westminster

Between:

Rosalyn Drescher

Plaintiff

And

La Societe de Les Enfants Michif
doing business as Métis Family Services

Defendant


Before: The Honourable Mr. Justice Ralph

Reasons for Judgment

Counsel for the Plaintiff:

M.S. Menkes

Counsel for the Defendant:

J.G. Dives and
E.J. Stanger

 

Date and Place of Trial:

April 19 – 23, 2004

 

Vancouver, B.C.

April 30, 2004
New Westminster, B.C.

 

[1]            On January 30, 2001, Ms. Drescher was dismissed from her employment with Métis Family Services (“the Society”), where she had been employed since 1993.  In this action she seeks damages for wrongful dismissal, but Métis Family Services says she was dismissed for cause. 

[2]            Métis Family Services has provided services to children and families in the Métis community in British Columbia since 1992 and has grown in size over a number of years.  For the fiscal year beginning April 1, 2002, it had a budget of approximately $1.7 million and a staff of approximately 25.

[3]            In considering this action, I have concluded that it is necessary first to review in some detail the history of Ms. Drescher’s employment with the Society, and then to consider two matters separately that the defendant says are critical factors in assessing Ms. Drescher’s claim.  Each of the two matters is the subject of a counterclaim by the Society.

Background

[4]            Ms. Drescher was employed by the Society as a family support worker beginning in April 1993.  She signed an employment agreement that set out her terms of employment, including a procedure to be used for resolving grievances.  The agreement was signed for the Society by one of its directors.

[5]            On April 1, 1996, Ms. Drescher signed a new employment contract which gave her the job title of “Executive Director/Supervisor” at an annual salary of $40,000.  The Society already had an Executive Director, Mr. Tom Lalonde.  The evidence indicates, however, that the Society wished to have a person who was not so politically involved bear the title of Executive Director.  Because of Mr. Lalonde’s political activity in the Lous Riel Métis Council, a decision was made by the Society to name Ms. Drescher as Executive Director but to have both Ms. Drescher and Mr. Lalonde carry out the functions of Executive Director of the Society.

[6]            On April 1, 1997, Ms. Drescher signed a new employment contract in which she was employed as a “Program Coordinator” at an annual salary of $55,000.  Ms. Drescher testified that the job title was not an accurate description of her employment as she continued the duties of an Executive Director with Mr. Lalonde.  At some point in 1997, however, Ms. Drescher’s title was changed with her consent, to “Associate Executive Director”.  She and Mr. Lalonde continued to share the responsibilities of the Executive Director.  The Society employed about 20 staff at that time.

[7]            Beginning in about 1994, Ms. Drescher and Mr. Lalonde had developed an intimate personal relationship.  While some people may have been aware of it, Ms. Drescher and Mr. Lalonde kept their relationship quiet and it is clear that they did not disclose it to the board of directors.  The relationship came to an end in 1999 and, as a result, their employment relationship became strained.  Disagreements and disputes arose between Ms. Drescher and Mr. Lalonde.  Ms. Drescher was under considerable stress and it affected her ability to do her work.

[8]            On May 25, 2000, Mr. Lalonde wrote to Ms. Drescher and informed her that she was suspended indefinitely from her job duties.  Her salary was continued and she was advised that prior to her return to work she would be required to provide a medical certificate as to her “suitability” to return.  In the letter Mr. Lalonde alleged that Ms. Drescher had breached an agreement to remove herself from work until she was capable of resuming her position.

[9]            On July 24, 2000, Mr. Lalonde wrote to Ms. Drescher confirming that he had indicated to her a return date of August 7 conditional upon the completion of a medical form by her doctor.  After July 24, however, some incidents occurred which resulted in Mr. Lalonde cancelling the date of Ms. Drescher’s return to work.  One incident consisted of repeated calls made by Ms. Drescher to Mr. Lalonde’s cell phone.  It was estimated that 84 calls were placed in the space of 12 hours.  A further incident occurred on August 1 when Ms. Drescher attended at the Society’s office contrary to instructions that she was not to attend.  The police were called and Ms. Drescher left the premises before their arrival but returned after the police left.  On August 2, Mr. Lalonde wrote Ms. Drescher and advised her that her August 8 date of return to work was “cancelled indefinitely”.

[10]        On September 6, Mr. Lalonde wrote two letters to Ms. Drescher.  In the first he advised her “again that all your functions and responsibilities as Associate Executive Director have hereby been withdrawn and accordingly you no longer have authority to act in this capacity.”  In the second he requested an opportunity to discuss other possible job functions with her.  Ms. Drescher then sought to grieve the loss of her Executive Director position pursuant to provisions in her contract that permitted her to place grievances before an “Elders Council”.

[11]        On September 11, Ms. Drescher met with Mr. Lalonde who raised the possibility of Ms. Drescher becoming a Community Development Manager at an annual salary of $60,000.  Ms. Drescher said that she would consider the position following the outcome of her grievance.

[12]        The evidence indicates that the Elders’ Council did meet on September 20 in response to the grievance request.  They appear to have concluded that the matter was a management issue and referred it to the board of directors.  They suggested, however, that Ms. Drescher should try the new job for three months.

[13]        On October 5, 2000, Ms. Drescher accepted the offer of employment as Community and Resource Development Manager.  On October 11 she signed an “Employment Agreement” to be effective from October 1 setting out the terms of her employment.  Her employment duties were not described in the agreement, but the agreement did contain a provision that the Society would have the option to terminate the contract upon notice of “30 days or at least one month”.

[14]        Ms. Drescher returned to work on October 11, but her father died on October 19.  On October 19 or 20, Ms. Drescher was at the office in an understandably upset state and in her own words at trial she “pretty well lost it”.  She was loud and rude to staff.  A day or two later, Ms. Drescher met with Mr. Lalonde who gave her the choice of having her employment terminated, taking sick leave, or working at home.  She chose sick leave.  On November 1 her family doctor wrote a letter stating that, because Ms. Drescher was experiencing great difficulties in returning to work, she had advised Ms. Drescher to take time off from work for an undetermined period. 

[15]        Ms. Drescher did not return to work.  On January 24, 2001, Ms. Drescher wrote to Mr. Lalonde requesting two weeks’ vacation from her 2001 entitlement, with the intention of returning to the position of Community and Resource Development Manager on February 16, 2001.

[16]        On January 30, 2001, however, Mr. Lalonde wrote to Ms. Drescher advising her that her employment was terminated for cause.  The letter stated:

Please also be advised that cause for your termination consists of gross insubordination, breach of confidentiality, capacity to perform job duties and liability arising to the organization as a result of your continued employment.

[17]        At the time of the trial Mr. Lalonde was no longer an employee of the Society and did not give evidence in the trial.  He was examined for discovery prior to his departure and while he remained Executive Director.  Portions of that examination were read into the record at trial.  Mr. Lalonde was asked why he chose to make the dismissal decision on January 30, 2001.  He answered (at Q.537): 

It was painfully obvious that there had been, over the last several months, no improvement in her behaviour where we would come to agreements in order to help manage the problem that she – she had gone through, which she had many, many problems.  Loss of relationship, death of parents, et cetera.

But there had been nothing improved that would indicate an ability to resume normal job duties as well.  I mean, we had been paying Mrs. Drescher for a number of months.  She had consistently refused to apply for – under the extended medical benefits program.

It cost a tremendous amount of money to our Society.  Got me into a tremendous amount of trouble with the board of directors.

The situation continued to worsen and worsen, including death threats on myself in December, and my having to go into hiding at the advice of the RCMP, whereby --.

[18]        The reference to “death threats” arose out of a telephone call made to the Society office by a male who alleged that Ms. Drescher had paid him $6000 to shoot Mr. Lalonde with $4000 to follow on completion of the shooting.  Ms. Drescher denied the allegation and no charges arose out of the police investigation.  I make no finding that the allegation against Ms. Drescher is true.

[19]        On February 15, 2001, Ms. Drescher wrote to Mr. Lalonde stating that she wished to “activate the grievance procedure that is in policy”.  On February 20 she wrote to the President of the Society, Mr. Duperron, requesting a meeting with the board of directors to “attempt remedial action”. 

[20]        Mr. Duperron replied to Ms. Drescher March 2, 2001.  He stated:

While I appreciate your feelings on this matter and after discussing this with the board of directors, I must advise you that there is little that the board of directors can do for you at this point in time.

[21]        At trial Mr. Duperron said that at an earlier meeting attended by Ms. Drescher and Mr. Lalonde the board of directors had discussed Ms. Drescher’s concerns.  They were of the view, however, that Mr. Lalonde had seemed to “carve out a leadership role”.  In addition they thought there was a possibility of Ms. Drescher working outside the office premises in a new role that would provide some insulation between Ms. Drescher and Mr. Lalonde.  He considered Ms. Drescher’s letter of February 20 was going over ground that had already been covered and was an effort to “reset the clock” to the time when Ms. Drescher and Mr. Lalonde shared the duties of the Executive Director.  He testified that, as a result, the board felt that there was nothing more the it could do.  Ms. Drescher commenced this action September 20, 2002.

[22]        The counterclaim arises out of the purchase of property in Kelly Lake, near Dawson Creek, and what is said to be the payment of excess unauthorized salary to Ms. Drescher by the Society.

[23]        Kelly Lake is home to a small Métis community.  The property in issue consists of 4.5 acres.  In January 1996, Ms. Drescher and Mr. Lalonde visited Kelly Lake and learned that Canada Mortgage and Housing Corporation was seeking bids on the property.  A successful bid of $5000 was made by Mr. Lalonde on Métis Family Services stationery on February 2, 1996.  Completion of the purchase did not take place until August 1996.  The purchase was made with Society funds, but title to the property was placed in the name of Ms. Drescher and Mr. Lalonde. 

[24]        At trial Ms. Drescher said that she considered it appropriate to use Society funds because the property was for “the Métis community”, although she did not know why the property was not put in the name of the Society.  She testified that she thought that she had paid the Society for her half of the property.  She also said that beginning around 1997 or 1998 she started to pay the property taxes.  She remains a co-owner of the property with Mr. Lalonde.

[25]        The allegation of payment to Ms. Drescher of excess and unauthorized salary arises out of the arrangement for her salary that was in place in 1997, 1998 and 1999.  It was Ms. Drescher’s evidence that, although her 1998 salary was to be $55,000 and her 1999 salary was to be $60,000, she had instructed the Society accountant to pay her $3,000 per month.  The intention was that the balance of her salary was to be paid to Ms. Drescher at the end of the fiscal year once it was confirmed that the Society had sufficient funds to pay it.

[26]        The evidence indicates that the balance for each year was paid to Ms. Drescher with no deductions having been made for income tax or other statutory deductions.  Copies of Ms. Drescher’s income tax for the relevant years indicate that she declared the gross amounts as income.  Evidence was given by the staff member who had been the finance clerk at the time.  She testified that the practice of the Society was to pay these top-ups from the Society’s administration account and not to make deductions from amounts paid out of administration account funds.  Records filed in these proceedings indicate that those portions of Ms. Drescher’s salary that were paid to her from the payroll account were net of the usual payroll deductions.

Position of the Parties

[27]        It is the position of Ms. Drescher that the defendant has not shown cause for her dismissal and that she is entitled to damages, including damages for bad faith demonstrated by the Society. 

[28]        Ms. Drescher denies a conflict of interest in the role she played in the setting of her salary.  She says that Mr. Lalonde had authority to set her salary, he did so, and the salary was reasonable.  Ms. Drescher argues as well that her 1997 contract setting out a salary of $55,000 was also signed by a member of the board and that the board’s treasurer, who was also the staff accountant, was aware of the salaries and reported from time to time to the board.

[29]        Ms. Drescher also says that with respect to the Kelly Lake property there was a good policy reason to acquire the property given its connection to the Métis community, there was considerable transparency to the transaction, and there were circumstances which led to urgency in the bidding process and placement of title in her name and Mr. Lalonde’s.

[30]        On the allegation of misbehaviour, Ms. Drescher says that very little weight should be given to the evidence of emotional outbursts prior to the May 2000 suspension.  Some of it was attributable to the significant personal conflict which had arisen between Ms. Drescher and Mr. Lalonde and it is unknown which of them started the argument that caused Ms. Drescher to make an inordinate number of calls to the office.  She submits further that some of the incidents described in evidence were the product of Ms. Drescher’s disability, arising from the stress and matters for which she was receiving medical attention.  As a result Ms. Drescher says that her employer had an obligation to accommodate her.

[31]        Ms. Drescher also submits that the offering to her of the position of Community and Resource Development Manager constituted a demotion even though it was at the same level of salary of her former position.  As such, Ms. Drescher argues that placing her in this position amounted to a constructive dismissal.

[32]        Dealing with damages, Ms. Drescher claims entitlement to a substantial period of notice.  She also seeks an extended notice period by reason of the alleged bad faith demonstrated by her employer.  In this regard, Ms. Drescher emphasizes the Society’s failure to make proper use of the grievance procedure and the role of the Elders’ Council.

[33]        It is the position of the Society that in failing to disclose their personal relationship to the board of directors, Ms. Drescher and Mr. Lalonde were in a conflict of interest in determining each other’s salaries. 

[34]        In addition, the Society says that Ms. Drescher had been warned on a number of occasions prior to her dismissal that her continued inappropriate behaviour at work would lead to her dismissal.  It submits that Ms. Drescher’s unauthorized return to the office in circumstances where the police were called also amounted to insubordination.

[35]        The Society also says that it was improper for Ms. Drescher to direct the staff of the Society to pay her the balance of her salary in 1998 and 1999 in a manner in which statutory deductions were not made.

[36]        The Society says further that Ms. Drescher and Mr. Lalonde improperly used Society funds to purchase the Kelly Lake property and place it in their names, where it remains today.

[37]        If the court finds that the Society did not have cause to dismiss Ms. Drescher, the Society says that Ms. Drescher accepted a new position with the Society and its terms were agreed to in the employment agreement of October 11, 2000.  If the Society is found not to have had cause for dismissing Ms. Drescher, it is the Society’s position that it is obliged to pay her only one month’s salary, pursuant to that agreement. 

[38]        The Society has counterclaimed for an order transferring Ms. Drescher’s interest in the Kelly Lake property to the Society.  At trial the defendant sought to alter this claim and to seek in its place an order that Ms. Drescher pay the Society $5000 in lieu of transferring her interest.  The Society has also counterclaimed for repayment of “the excess unauthorized salary”.

Analysis

[39]        The onus to prove just cause for dismissal of Ms. Drescher rests upon the Society.  In assessing whether that obligation has been met, I am of the view that the fact that the personal relationship between Ms. Drescher and Mr. Lalonde came to an end in 1999 is central to the manner in which Ms. Drescher’s employment came to an end.  Prior to that time, it is clear that Ms. Drescher carried out a broad set of responsibilities in a position which was essentially co-equal with the position of Mr. Lalonde. 

[40]        In May 2000, the Society, through Mr. Lalonde, recognized that the situation had caused Ms. Drescher stress to a degree that it was appropriate to grant her a leave of absence from work.  That was a reasonable accommodation by her employer.

[41]        What is troubling about what transpired, however, is that with the ending of the personal relationship there was little or no chance that Ms. Drescher could continue the same work relationship within the Society that existed earlier.  Realistically, either Ms. Drescher or Mr. Lalonde had to emerge as the Executive Director.  This was clearly recognized in the evidence of the Society president, Mr. Duperron, that Mr. Lalonde seemed to “carve out a leadership role” and the board could not then “reset the clock”. 

[42]        Despite the fact that Ms. Drescher’s stress had caused her to behave in an unacceptable manner, the Society made a decision to offer her a new position.  While the position provided Ms. Drescher with the same salary as her former position, there is little doubt that it constituted a diminished set of responsibilities.  I note, as well, that Ms. Drescher’s acceptance of the position was subject to the outcome of the grievance she had filed.  Ms. Drescher worked only a short time in the new position before she was given an option in mid-October 2000 to take sick leave.  There is therefore little evidence of Ms. Drescher’s conduct or behaviour between October 2000 and her dismissal date of January 30, 2001 that would indicate grounds for dismissal.  Subject to what follows, the evidence of the grounds for dismissal for cause arising in or around January 30, 2001, is not strong. 

[43]        The Society has submitted, however, that the purchase of the Kelly Lake property in the names of Ms. Drescher and Mr. Lalonde with Society funds is sufficient cause for dismissal without notice.  It says that this is the case even though it was not a stated reason for the dismissal and may not have been known to the Society at the time of the dismissal. 

[44]        Five thousand dollars of the Society’s funds were used to purchase the property.  Although Ms. Drescher has stated that urgency to attain the property explains the placing of the property in her name and Mr. Lalonde’s, the bid on the property was made in February 1996 but the transfer was not completed until August 1996.  It was not until close to the August date that the decision was made to place the property in the joint names.  Between 1996 and today, the property has continued to remain in the names of Ms. Drescher and Mr. Lalonde.  Ms. Drescher has paid the taxes on the property from her own funds. 

[45]        While Ms. Drescher personally may have genuinely desired to keep the property within “the Métis community” in a general sense, no adequate explanation has been given for using Society funds to achieve this purpose, for not placing title to the property in the name of the Society, for continuing to retain title in the names of Ms. Drescher and Mr. Lalonde, and for paying the property taxes personally. 

[46]        The purchase of the Kelly Lake property therefore raises the question of whether the use of Society funds in this manner was sufficient misconduct to warrant Ms. Drescher’s dismissal.  In McKinley v. BC Tel, [2001] 2 S.C.R. 161, 2001 SCC 38, Iacobucci J. discussed the test at ¶ 48:

One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer.

[47]        The assessment of Ms. Drescher’s conduct must be made in the context in which it occurred.  In my view the use of the employer’s funds to purchase the property in this case was “fundamentally or directly inconsistent with the employee’s obligations to his or her employer.”  The board of directors had placed a remarkable degree of trust and confidence in Ms. Drescher and Mr. Lalonde.  They each had a substantial obligation to use the Society’s funds in a faithful manner.  Mr. Lalonde’s conduct is not before the court, but, as the transaction relates to Ms. Drescher, I conclude that she failed in her obligation to her employer to a degree that was sufficient to constitute cause for her dismissal.

[48]        The fact that this ground was not used as a basis for Ms. Drescher’s dismissal on January 30, 2001, does not detract from its validity as a cause for dismissal from employment.  This was the legal result in Godden v. CAE Electronics Ltd., [2002] B.C.J. No. 143 (QL), 2002 BCSC 132.  At ¶ 133 Thackray J. (as he then was) stated:

Mr. Justice Ritchie adopted the law as summarized in Halsbury where it is stated that it is immaterial whether the grounds for dismissal were known to the employer at the time of the dismissal.  Further, justification for the dismissal can be shown by proof of facts ascertained subsequent to the dismissal and different from those alleged at the time.

In the result, Ms. Drescher's claim must be dismissed. 

[49]        As noted above, the Society in its counterclaim sought an order that Ms. Drescher transfer to the Society her interest in the Kelly Lake property.  At trial it amended that claim to seek an order that Ms. Drescher be required to pay the Society $5000.  In my view, it is appropriate to order Ms. Drescher to repay the Society rather than transfer her interest in the property to the Society.  In the circumstances, however, she should not be required to repay more than the value of the half interest she acquired.  Ms. Drescher will, therefore, be required to pay to the Society the sum of $2500.  The Society will be entitled to interest under the Court Order Interest Act, R.S.B.C. 1996, c. 79. 

[50]        Although portions of her salary may have been paid to her in an irregular fashion, I am not satisfied that the evidence supports a finding that Ms. Drescher received excess unauthorized salary from the Society.  As a result the Society’s counterclaim for such repayment is dismissed. 

[51]        In the course of the evidence, allegations were also made that Ms. Drescher took part in a Society funded trip to Las Vegas that constituted a misuse of Society funds.  Although the trip was made, I am not satisfied that the allegation of misuse of funds has been made out as against Ms. Drescher and I have not considered it to be cause for dismissal.  There was also an allegation that Ms. Drescher improperly participated in the purchase and use of a vehicle owned by the Society.  Similarly, I am not satisfied that this allegation has been made out and I have not considered it to be a cause for dismissal. 

[52]        The parties sought an opportunity to speak to costs after this decision is handed down.  In my view, the Society would be entitled to its scale 3 costs against Ms. Drescher, but as submissions were not made, arrangements to speak to the matter may be made through the registry if counsel cannot resolve the matter. 

“Bryan F. Ralph, J.”
The Honourable Mr. Justice Bryan F. Ralph