2003BCSC0557

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Litster v. B.C. Ferry Corp.

and Taylor,

2003 BCSC 557

Date: 20030411

Docket: 01-1796

Registry: Victoria

Between:

Elaine Litster

Plaintiff

And

British Columbia Ferry Corporation

and Trafford Taylor

Defendants

Before: The Honourable Madam Justice Gray

Reasons for Judgment

Counsel for the Plaintiff:	C. Lott, P. Bower
Counsel for the Defendants:	E. Marion, M. McCreary
Date and Place of Hearing:	Sept. 10-12, 16-19, 2002
	Victoria, B.C.
Written Submissions Received:	Defendant, Feb. 19, 2003 Plaintiff, March 03, 2003 Defendant, March 07, 2003

INTRODUCTION

[1] Ms. Litster worked for the British Columbia Ferry Corporation (“B.C. Ferries”) for 20 years before she was dismissed on December 5, 2000. At that time, she was terminal manager, Inter-Island Services South, based on Saltspring Island, B.C. Ms. Litster claims that she was wrongfully dismissed and that she was defamed by the circulation of the letter confirming her dismissal. Her claim in defamation was brought only against the personal defendant, Capt. Taylor. She also claims that B.C. Ferries made a negligent misrepresentation in connection with offering her the position she held at her dismissal. She claims damages for all of those things, including her expected income to retirement, less a contingency for future earnings, in respect of her claim for negligent misstatement.

[2] B.C. Ferries alleges that it had just cause to dismiss Ms. Litster because she took some B.C. Ferries’ paint and related products from its premises. Ms. Litster agrees that she physically took B.C. Ferries’ paint products, but says that she did so intending to deliver the items to a recycling depot. B.C. Ferries argues that Ms. Litster’s evidence should not be believed.

[3] Capt. Taylor argues that the dismissal letter was published only to individuals in B.C. Ferries who had a legitimate interest in the information and so the letter is subject to qualified privilege. He argues that in any event, the contents of the dismissal letter are true.

[4] B.C. Ferries denies that it made a negligent misrepresentation to Ms. Litster about the terminal manager position.

ISSUES

[5] The issues are as follows:

(a) Did B.C. Ferries have just cause to dismiss Ms. Litster on the basis of her dealings with the paint and solvents?

(b) If Ms. Litster was wrongfully dismissed, what damages should she recover?

(d) If the letter is defamatory, can it be defended on the ground of qualified privilege?

(e) Can the letter be justified on the basis of truth?

(f) Did B.C. Ferries negligently misstate the nature of the position of terminal manager to Ms. Litster?

(g) If so, what should Ms. Litster recover as a remedy?

FACTS

[6] Ms. Litster commenced working for B.C. Ferries on September 1, 1980. She held a variety of positions within the bargaining unit, including deckhand, tower controller, equipment operator, ticket agent and cleaner/driver. In mid-July 1999, she held the position of tower controller and relief assistant terminal manager at the Horseshoe Bay terminal near Vancouver, B.C. This was a bargaining unit position.

[7] B.C. Ferries has three ferry terminals on Saltspring Island, at Long Harbour, Vesuvius Bay and Fulford Harbour. The Long Harbour terminal receives vessels from other southern islands and from Tsawassen on the mainland. The Vesuvius Bay terminal receives vessels from Crofton on Vancouver Island, and the Fulford Harbour terminal receives vessels from Swartz Bay on Vancouver Island.

[8] In the summer of 1999, the B.C. Ferries’ position of terminal manager, Inter-Island Services South, based on Saltspring Island, became available. The position was posted in early June 1999.

[9] Ms. Litster and her family decided that they would be interested in making a home on Saltspring Island. Ms. Litster applied for the terminal manager position. She knew it was not a bargaining unit position, but that she could return to the bargaining unit without losing any rights so long as she did so within 120 days of leaving the bargaining unit.

[10] Ms. Litster was the successful candidate and accepted the position effective September 1, 1999. In this position, Ms. Litster was responsible for overseeing the administration of the region's terminals and the safety of terminal operations, as well as managing the customer service functions of the terminals in liaison with others. There were over 14 terminals in the region. Ms. Litster was the senior employee working from Saltspring Island, and a number of employees reported directly or indirectly to her.

[11] At the time she accepted the position, Ms. Litster understood that if there was just cause for her dismissal, she could be dismissed immediately. She understood that if there was not just cause for her dismissal, she could be dismissed only on reasonable notice or with pay in lieu of notice.

[12] At the time she accepted the position, Ms. Litster had never acted as terminal manager, although she had worked as an assistant terminal manager. Ms. Litster was of the view that she required training for the new position. The training she received was primarily on-the-job training from Mr. Dow who had been the casual acting terminal manager, Inter-Island Services South. Ms. Litster wanted more training than she received.

[13] For the first few months in her new position, Ms. Litster’s accommodation on Saltspring Island was at bed-and-breakfast facilities or other rental properties. However, she and her common-law partner, Mr. Hunt, were hoping to purchase property on Saltspring.

[14] The paint products which gave rise to Ms. Litster’s dismissal were in the paint shed at the Long Harbour terminal in October 1999. The paint shed was not insulated, but was heated. There were roughly twenty containers of paint and solvents, and the majority of the containers were four litres in size.

[15] The paint and paint materials in the Long Harbour paint shed in October 1999 were probably left over from the period during which Saltspring employees performed painting jobs at the terminal. During the period that Ms. Litster was terminal manager, any painting at the Saltspring terminals was done by painters who were based on Vancouver Island in Swartz Bay or Sidney. Previously, and probably up until 1998, employees at the Saltspring terminals did some painting.

[16] Paint loses its effectiveness over time. The degree of deterioration is affected by factors such as the type of paint and whether the paint has been exposed to freezing and thawing. Mr. Winning, the B.C. Ferries employee responsible for maintenance of terminals in the Gulf Islands, estimates that the useful life of most paint products under good conditions would be two or three years. There was evidence that some paint products were shipped to Saltspring as late as 1998, but it appears that most if not all of the paint products at issue in this case were shipped before 1998. Therefore, the paint products in the Long Harbour paint shed in 1999 were probably near the end of their useful life, or past it.

[17] A B.C. Ferries internal report from 1999 raised some concerns regarding the presence of the paint products in the Long Harbour shed. The report, dated October 4, 1999, is entitled “Environmental Audit and Risk Assessment Report” and was prepared by an environmental co-ordinator and environmental officer. It deals with issues like the oil spill plan, waste management, and pollution prevention. In the section “Recommended Actions", the report reads “paint shed has no containment”. It lists as “actions to be taken” “a special caution has to be exercised while handling paint and solvents to prevent these products from escaping the shed in case of an accidental spill.”

[18] Ms. Litster testified that she was told something a little different in the course of the environmental investigation. She testified she was told that a “containment” should be built for the paint shed, because it was close to the ocean.

[19] Ms. Litster did not exercise her right to return to the bargaining unit within the 120 day period. The evidence was not entirely clear concerning whether that period ended around the end of the calendar year, or whether it was 120 working days and therefore ended later. Either way, Ms. Litster did not exercise her rights and she intended to remain in the terminal manager position. In January 2000, Ms. Litster rented personal accommodation on Tripp Road, which included the use of a shed.

[20] In around March 2000, Ms. Litster and Mr. Hunt purchased property on Beddis Road, Saltspring, with possession delayed to July 2000. Ms. Litster and Mr. Hunt planned to renovate and paint the Beddis Road property for a family home. Mr. Hunt took a leave of absence from his position as a carpenter for the University of British Columbia, hoping that he would stay on Saltspring and not return to the UBC job.

[21] At the end of March 2000, Ms. Litster successfully completed her probationary period as terminal manager. A few days later, her boss was dismissed. At around that same time, Ms. Litster learned that her brother’s serious cancer had returned.

[22] On an occasion which was likely in the spring of 2000, Ms. Litster spoke to Mr. Winning about the paint and solvents. Mr. Winning did not have supervisory responsibility over Ms. Litster, but expected her to consult him on maintenance issues. Mr. Winning told Ms. Litster that building a containment would be too expensive, and suggested that she get rid of the paint and solvents. He was expecting painters to come on site that spring in connection with terminal building renovations. Mr. Winning suggested that the painters could take paint back with them so long as they had the necessary shipping documents, and that old paint could be taken to the recycling facility on Saltspring. There was room for misunderstanding in this conversation about whether “old” paint meant paint in containers that had been opened, or meant paint that had been on site for a long time.

[23] The defendants challenge the truthfulness of Ms. Litster’s testimony. Ms. Litster testified that she directed an employee to remove the paint and solvents from the paint shed and put the containers out for examination by the painter.

[24] Ms. Litster testified that she spoke to a male painter who was doing renovations. She testified that he told her that the paint was much too old, and should go to recycling. She testified that he declined to take the paint. Ms. Litster observed that some of the paint was labelled “Otter” and some “Sturdies”. Those are the names of other B.C. Ferries terminal facilities in the southern Gulf Islands.

[25] Ms. Litster prepared dangerous goods shipping documentation for the transport of containers to the Otter Bay and Sturdies Bay facilities, as appropriate. Some but not all of the containers with such labels were sent to those terminals.

[26] Mr. McIntosh, another B.C. Ferries employee, testified that Mr. James was the only painter involved in renovations at Long Harbour in the spring of 2000. Mr. James testified that he worked as a painter at Long Harbour in the spring of 2000. He did not inspect any paint and no one asked him to take paint back to terminal maintenance. He does not believe that he spoke to Ms. Litster about the paint.

[27] Ms. Litster testified that she decided to get rid of the remaining paint products. She testified that she was concerned that there was no room for it in the shed, which was being used for storage during renovations, and that she did not want to leave the paint items outside.

[28] Ms. Litster was not familiar with the B.C. Ferries Corporate Policy Manual regarding asset disposal. If she had read it, she would have found that disposal of all corporate assets, including scrap or useable material, was to be processed through the Materials Management Group located at Deas Dock. The stated objective of the policy is to ensure B.C. Ferries receives maximum benefit from all assets surplus to its requirements. The policy provides that the Materials Management Group will assess the requirement for the asset and either receive it in inventory, dispose of it through the purchasing commission or directly to a buyer, or make a gift of the asset to a registered B.C. charity. The policy also provides as follows:

Zero Valued Assets

Surplus assets, where the disposal costs exceed the value of the assets, or where the disposal value of the asset is less than $50.00, will be zero valued, and therefore, there will be no return of proceeds. Zero valued assets will be disposed of in an appropriate manner, as determined through consultation with Materials Management, i.e. charitable donation.

[29] Ms. Litster was not familiar with the B.C. Ferries Fleet Regulations regarding Safety and Environment Protection, Special Waste Shipping. If she had reviewed them, she would have read the following about Waste Paint:

Waste paint

All paints shall be stored in their original containers and sealed. Whenever possible, paints should be used to the end. All leftovers shall be disposed of through an approved contractor. For disposal information contact the Environmental Department at Fleet House. A Waste Manifest is not required for shipment of less than 205 litres.

[30] If Ms. Litster had checked B.C. Ferries Security Procedures Manual, Administration, Corporate Security Policy Statement, she would have read the following about assets:

Assets

Corporate assets will be protected against theft, loss, damage, misuse, and compromise, in a manner commensurate with their value and vulnerability.

[31] The asset disposal policy is not universally known among B.C. Ferries employees or believed to prevail over the Waste Paint terms of the Fleet Regulations. For example, Capt. Taylor, who became Ms. Litster’s supervisor in August 2000 when he became B.C. Ferries Marine Supervisor, Inter-Island Services, understood that surplus paint went to recycling, and not necessarily to Deas Dock. It is B.C. Ferries policy to recycle whenever possible. Mr. Byron, assistant terminal manager, understood that opened paint should be sent for recycling, and he did not mention seeking direction from Materials Management.

[32] I accept Mr. Dow’s evidence that it was routine for him to refer to B.C. Ferries policy manuals while in the position of assistant terminal manager, and that it would be common to refer to the manuals daily. Assistant terminal managers are responsible for ordering supplies for the terminal, including washroom supplies, safety gear and forms. I also accept Mr. Dow’s evidence that he knew that excess assets should be returned to Deas Dock for credit to the terminal’s operating budget. Mr. Dow understood that open used latex paint should be sent to a recycling depot, which is an “approved contractor”. He also understood that unopened cans should be sent to Deas for credit, or if there were only a couple of unopened cans, they should be given to terminal maintenance without credit.

[33] Mr. Byron was the assistant terminal manager in Long Harbour commencing in April 2000. He testified that Ms. Litster asked him to send paint products to recycling. Mr. Byron understood that she wanted the opened paint sent there, not all the paint items. Mr. Byron asked Mr. Valcourt to take opened paint to recycling. Mr. Valcourt took seven or eight used cans, leaving ten or more other cans under the corner of the paint shed out of public view.

[34] Ms. Litster testified that she told people in the office that all the paint had to go to recycling, and asked anyone who could help to please do so. She did not testify about asking Mr. Byron to take some items to recycling.

[35] Ms. Litster testified that two people in the office, Joan Patterson and Tony White, said that they could use the paint and she told them that they could take it. Ms. Patterson removed four containers and Mr. White took two.

[36] Ms. Litster testified that she did not want the paint and solvents to be returned to the shed because she did not think there was enough room in the shed, which was full of light bulbs. She took the paint and solvents that were out of the shed and put them in her car.

[37] Ms. Litster testified that she understood that she was not entitled to make personal use of the paint she offered the employees.

[38] Ms. Patterson did not agree that Ms. Litster told her in the office that she could take the paint. Ms. Patterson testified that one evening she saw Ms. Litster struggling with a large container of paint, and that Ms. Patterson asked Ms. Litster flippantly if she was redecorating. Ms. Patterson testified that Ms. Litster responded by saying that the paint was going to recycling, and that if Ms. Patterson needed paint, she should help herself. Ms. Patterson removed four one-gallon containers of apparently unopened white latex paint from under the paint shed and took them home.

[39] Later, after her boyfriend and Greg Dow told her that it was a poor idea to have B.C. Ferries paint in her possession, Ms. Patterson replaced the paint under the shed. Ms. Patterson told Mr. Dow, apparently in the spring or summer of 2000, that she had taken the paint and that Ms. Litster told her she could do so. Mr. Dow did not raise any concern about this with Ms. Litster or anyone else until he was contacted by Ms. Jourbarne, a B.C. Ferries security officer, in the fall of 2000.

[40] The recycling depot on Saltspring is about ten minutes by car from the Long Harbour terminal and about twenty minutes from the Fulford Harbour terminal. There was a regular recycling run from the Long Harbour terminal on Thursdays and mail runs from Long Harbour to various locations. Mr. Dow was qualified to transport dangerous goods and could have taken the paint supplies for recycling.

[41] Ms. Litster testified that she did not immediately take the containers to recycling because she was working during the hours that the recycling centre was open. She testified that she left the containers in her car and did not consider it a priority to take them for recycling. At the time, she was adjusting to a new job and making arrangements for a new home.

[42] Some days after Ms. Litster put the paint and solvents in her car, she had a work-related appointment on Vancouver Island, and planned to take her car on the ferry. She testified that she was not sure whether the paint and solvents in her car could be taken on a ferry without dangerous goods documentation, and she did not feel that she had time to go to the recycling centre. On her way from her office at Fulford Harbour to the ferry at Vesuvius Bay, she stopped at the shed on Tripp Road. Tripp Road is a private road which led to Ms. Litster's accommodation. Ms. Litster and Mr. Hunt used the shed on Tripp Road for storage. Ms. Litster unloaded the paint and solvents and placed them beside the shed. She then telephoned Mr. Hunt and asked him to move them into the shed, which he did.

[43] Ms. Litster’s brother underwent surgery for his cancer in May, and passed away in early June 2000. He was survived by his son, aged six, and his wife, who is the boy’s step-mother. Ms. Litster’s brother appointed Ms. Litster as the boy's legal guardian. The boy has lived with his step-mother since his father passed away, although Ms. Litster looked after the boy for a couple of months while the step-mother was away.

[44] Around this time, the local Union executive was challenging many of Ms. Litster’s management decisions.

[45] In the summer of 2000, Mr. Hunt was working on the property he and Ms. Litster had acquired on Beddis Road for their home. Mr. Hunt raised the house and did work such as framing and painting. Mr. Hunt applied the first coat of primer sometime in June. He testified that he painted the house with six to eight cans of oil primer that he bought at Windsor Plywood, and that he also bought the paint thinner that he used.

[46] In July 2000, Ms. Litster and Mr. Hunt and some of their children moved into the home on the Beddis Road property.

[47] Also in July 2000, B.C. Ferries completed a further environmental audit. This one was dated July 17, 2000, and was completed by two environmental officers, one of whom had completed the October 4, 1999 audit. Two places in the report make reference to the paints and solvents. In answer to the question “What Special Wastes are generated/collected at the terminal?”, it reads “Small collection of containers with old paints and thinners – originate from the former paint shop, which use was discontinued. All leftover paints and thinners will be transferred to the paint depo (sic).” Under General Observations, it reads “Well maintained terminal. Since there is no paint shop at the terminal anymore, need for special containment for the shed is no longer required; and potential for contamination eliminated.”

[48] There was no evidence regarding where the environmental officers got the information that leftover paints and thinners would be transferred to the paint depot. I assume that they got that impression from conversations with Ms. Litster because the report refers to Ms. Litster as representing the terminal in the audit. The environmental officers would not be expected to be precise in recording what Ms. Litster said would be done with the paint. The focus of the environmental officers would have been on the fact that there would no longer be special waste on the terminal property, rather than on whether the paint went to the paint depot or for recycling. Ms. Litster could have said that the Long Harbour terminal was getting rid of the paint, and the environmental officer may have assumed that the paint was useful and that it would therefore be returned to the paint depot.

[49] At some point in the summer, Ms. Aleksich, who at the time did casual clerical work for Ms. Litster, told Ms. Litster that there was a rumour that Ms. Litster had taken some paint from Long Harbour. Ms. Litster said that it was just two cans, half-full of used or leftover paint, and tried to discuss it with Ms. Aleksich, who did not want to be involved further.

[50] Ms. Litster immediately spoke to Don Funk, who was Ms. Litster’s supervisor, and told him that there was a rumour circulating about her taking paint from B.C. Ferries. Ms. Litster testified that she thought the containers in her car had no commercial value, and that she simply explained to Mr. Funk that she had items that she had been meaning to take to recycling. Mr. Funk told Ms. Litster to continue with the plan to take the containers for recycling. With hindsight, Ms. Litster thinks she was not sufficiently complete in describing to Mr. Funk what she had in her car.

[51] At some point following this conversation, Ms. Litster told Mr. White that there were rumours about paint and that it was probably not a good idea for him to talk about having painted his home with the two cans that he took.

[52] In September, Ms. Patterson told her Union president, Ms. Miller, that she had removed and returned paint from the corporation’s premises and asked whether that could become a problem. Ms. Miller suggested that Ms. Patterson write a letter to the Union business agent outlining what had taken place. Ms. Patterson did so by letter dated October 5, 2000.

[53] Ms. Litster’s supervisor, Capt. Taylor, was scheduled to visit the terminal on October 31, 2000. Ms. Litster wanted the terminal to look its best for that inspection so she could impress Capt. Taylor. She testified she asked a terminal attendant to tidy the premises in advance. She testified she was told that there were paint cans under the shed getting rusty, and so she asked the person to ensure the cans got recycled before the October 31, 2000 inspection.

[54] It appears that when paint and solvents were removed from the shed in the spring of 2000, some were put under the shed rather than taken by Ms. Patterson, Mr. White or Ms. Litster and they were what remained under the shed in October 2000.

[55] Mr. Bunton, a terminal attendant, handwrote a list entitled “Paint Products on Terminal,” and it was date stamped October 25, 2000. It lists about ten containers, five of which are paint and the balance of which are thinner, stain, and asphalt emulsion. Mr. Bunton prepared this by looking at items that were under the shed. They had apparently been there all summer, and some were starting to rust. He gave the list to Ms. Litster so that she could prepare the dangerous goods documentation to ship the items on the ferry.

[56] Ms. Litster testified that she asked the terminal attendant to take these items to recycling by October 30, 2000, the day before the inspection. The list is marked “Recycle Depot” with a telephone number, which is consistent with Ms. Litster giving such an instruction.

[57] Ms. Litster testified that on October 30, 2000, she inquired whether all the paint had been removed and she was advised it had not. She testified that she asked that it all be brought into the terminal and placed on cardboard to avoid rust damage to the carpet and she could take it to the recycling depot early the next morning. Mr. McNut, the nightshift terminal attendant, helped her load the paint into her van.

[58] Ms. Litster loaded into her car a pail of paint with a capacity of about 20 litres (or five gallons), and three smaller tins of stain. She testified that she did not know whether the five gallon pail had been opened. She said that she was not certain at that time about the legal requirements for carrying oil based paint on the ferry.

[59] Capt. Taylor arrived at the terminal on October 31, 2000 for the inspection. He arrived later than Ms. Litster had expected. She testified she had hoped to take the items for recycling after his visit and before she took the ferry to the mainland. She wanted to be there in time to go trick-or-treating with her nephew. Because of the delay in Capt. Taylor’s visit, she did not have enough time to go to the Saltspring recycling depot before boarding the ferry sailing she wanted.

[60] Ms. Litster testified that she went to the Lower Mainland that night, and the next morning, took the pail of paint and the containers of stain to the Kingsway recycling depot in Coquitlam.

[61] B.C. Ferries commenced an investigation into Ms. Litster’s dealings with the paint because the Union passed on to it the letter from Ms. Patterson dated October 5, 2000.

[62] On the evening of November 21, 2000, Ms. Litster was advised that she was suspended from duty with pay, and that she should report to the office in Victoria for an interview at 10:30 a.m. the next day. Ms. Litster was not given as much notice as a bargaining unit employee would receive for an interview investigating dishonesty. Usually, bargaining unit employees are counselled to have a shop steward attend with them, but Ms. Litster was not advised to have an advocate or other person present with her for the interview.

[63] On November 22, 2000, Ms. Litster met with Ms. Jourbarne, a B.C. Ferries security officer who is a former R.C.M.P. officer. Ms. Jourbarne interviewed Ms. Litster and wrote out a statement which Ms. Litster signed. After the meeting, Ms. Litster and Ms. Jourbarne took the ferry to Saltspring. Ms. Jourbarne followed Ms. Litster to the shed on Tripp Road.

[64] Ms. Jourbarne saw the containers of paint and other material in the shed. It was difficult for her to see the containers because planks were strewn around the dirt floor of the shed, and she noticed them only after Ms. Litster pointed them out. The containers were in good to excellent condition. The containers were dry with only a small amount of rust on the bottom where they were sitting on dirt. Two had pen markings of “Otter Bay”. Ms. Jourbarne put the paint in her vehicle.

[65] Ms. Litster and Ms. Jourbarne left the shed, and then travelled to Ms. Litster’s home on Beddis Road. Ms. Jourbarne observed several cans of open and unopened paint marked “General Paint” and could see that the house had been painted recently. Ms. Litster told Ms. Jourbarne that the house required seven to nine cans of something on the outside. Ms. Litster testified she said seven to nine cans of paint, while Ms. Jourbarne testified that Ms. Litster said seven to nine cans of oil primer. Ms. Litster testified that she did not know how many cans of primer were required to paint the house, suggesting that she would not have spoken to Ms. Jourbarne about the quantity of primer used on the house.

[66] Ms. Litster located some paint receipts among the papers in the house and showed them to Ms. Jourbarne. Ms. Jourbarne could not see listed in the receipts as much as seven to nine cans for the primer on the house. At trial, Ms. Litster produced receipts which refer to five cans of primer in total.

[67] Ms. Litster’s evidence differed from Ms. Jourbarne’s over whether Ms. Jourbarne told Ms. Litster that there would be a hearing and that Ms. Litster should save her receipts. It is not necessary for me to resolve that question. The likelihood of misunderstanding at that meeting was greater than in ordinary circumstances, since Ms. Litster would naturally be upset because she knew her job was in jeopardy and her integrity was being questioned. Ms. Jourbarne said that Ms. Litster said she would find or get additional receipts and provide them to her, but did not provide anything further.

[68] Ms. Jourbarne observed a number of B.C. Ferries documents on Ms. Litster’s desk and in the van, and Ms. Jourbarne took them and suggested that Ms. Litster not contact anyone regarding work related issues. Ms. Jourbarne went back to Long Harbour with the containers and left them there. She was told that they would be sent to Deas Dock the following morning. There was no evidence regarding what in fact happened to the paint items after arriving at Long Harbour nor about whether the items were usable or recycled. The paint items were in total worth about $500 or less, depending on the condition.

[69] The investigation by B.C. Ferries of Ms. Litster’s conduct consisted of Ms. Jourbarne’s personal interview of Ms. Litster and Ms. Patterson and her telephone interview of Messrs. Byron, Bunton, McIntosh, Winning, Johnson, Dow and three others.

[70] Ms. Jourbarne prepared a report dated November 27, 2000. Mr. Grant, the Director of Corporate Security Services, sent Ms. Jourbarne’s report to Capt. Taylor and Ms. Jensen, Human Resources Manager for Inter Island & Northern Services. In his covering letter, Mr. Grant says that there are a number of inconsistencies in Ms. Litster’s account of the events, and that it was “our” (presumably Corporate Security Services’) view that Ms. Litster took a quantity of paint for personal use, that she knew this to be improper, and that her conduct constituted theft.

[71] Capt. Taylor reviewed the documentation. Capt. Taylor thought it was not reasonable that the paint items remained at Ms. Litster’s residence for six months after removal from the terminal, that corporate procedures were not followed, that some paint was given away indicating that the paint may have been useful, and that there were differences between Ms. Litster’s description of the sequence of events and the description by others. Capt. Taylor discussed the report with his supervisor, Capt. Hughes, and with Ms. Jensen. Capts. Taylor and Hughes and Ms. Jensen all concluded that Ms. Litster had stolen the paint and should be dismissed. They did not discuss reporting the alleged theft to the police, and B.C. Ferries did not make such a report.

[72] Ms. Litster was dismissed in a meeting of December 5, 2000 with Capt. Taylor and Mr. English. Capt. Taylor read out a letter to her which was dated December 5, 2000 and reads as follows:

Dear Ms. Litster:

This is to advise you that your employment with the British Columbia Ferry Corporation has been terminated effective immediately.

Your termination is a result of the extensive fact finding investigation that took place regarding allegations of your removal of quantities of paint from corporate property. At the interview with Monique Jourbarne, Security Officer, you admitted to taking paint and you gave the explanation that the paint was still in your possession after approximately six to eight months because you had not yet taken it to a recycling depot. Your explanations are not acceptable to the Corporation. It is the Corporation’s view that you had no authorization to take the materials in your possession, and that those materials had a value to the Corporation.

You hold a position of trust as Terminal Manager and that trust has been irreparably damaged by your actions. The Corporation therefore cannot continue the employee and employer relationship and as a result you are hereby terminated.

Please ensure all Corporate property in your possession is returned immediately to me including your keys, personal ferry pass and pass book, business ferry pass, cell phone, pager and any other items or materials which you may have. Your attention is also directed to your outstanding debt to the Corporation for a computer loan in the amount of $2,250.00. Your immediate attention to payment of this outstanding loan is appreciated.

Yours truly,

Capt. Trafford Taylor

Marine Superintendent

Inter-Island Services, South

c.c. Capt. Michael Carter, EVP, Operations and Customer Service

Peter Hughes, AVP, Inter-Island & Northern Services

Julie Jensen, Manager, Human Resources, Inter-Island &

Northern Services, Peter English, Human Resources Advisor,

Inter-Island Services, South, Marg Zilkie, Manager, Payroll

[73] Ms. Litster wanted to say something or ask a question. Capt. Taylor said that he had nothing to add and he left the room.

[74] The letter indicates that copies were sent to five people. Capt. Carter is the most senior vice-president, who was functionally responsible for Ms. Litster. Mr. Hughes was responsible for Inter-Island Services and was involved in the decision. Ms. Jensen was the manager of human resources for Inter-Island Services. Mr. English was the local human resources officer on Saltspring, and the custodian of Ms. Litster’s personnel file. Ms. Zilkie was the manager of payroll, was responsible for benefits and payroll, and needed to know about changes in employment status and what benefits would accrue. Ms. Jensen and Mr. English were in the human resources group.

[75] It appears that Robin Tweed, a human resources administrative support worker who assisted Ms. Jensen, also received a copy of the letter. Mr. English received a copy for his record-keeping. Mr. Jones, the human resources acting manager, probably advised the vice-president of communications in case there were a public relations impact from the dismissal.

[76] At the time of her dismissal, Ms. Litster was age 44 and her salary was $5,477 monthly, being $65,724 annually. Her benefits included a pension as well as medical and dental benefits. She was also entitled to use B.C. Ferry passes, and the parties agreed that they had a monthly value of $109.

[77] Ms. Litster was shocked and upset by her dismissal. She had problems of sleeping excessively and crying which lasted a month or so. She did not seek any medical, psychological, or psychiatric treatment after her dismissal.

[78] Ms. Litster decided that she and her family should continue to live on Saltspring. She concluded that it was impractical for her to find work off Saltspring, because of the time required for her to commute to a new location. To meet immediate financial needs, Mr. Hunt ended his leave of absence and went back to working at U.B.C. He worked five days a week in Vancouver, returning to Saltspring only on weekends.

[79] Ms. Litster looked for work on Saltspring, but did not make a serious effort to find work anywhere else. While she reviewed the Times Colonist newspaper classified ads, she did not apply for any advertised positions. There were numerous jobs advertised in Victoria which may have been suitable for Ms. Litster. Victoria is a ferry ride away from Saltspring, and the commute would take about an hour each way.

[80] In August 2001, about eight months after Ms. Litster was dismissed, a student began living in the home Ms. Litster shared with her family. Ms. Litster would make breakfast for the student.

[81] Ms. Litster is presently employed as administrative assistant and office manager for Regency Apartments and Villas Ltd. Regency is a rental agency for corporate properties in Europe with an office on Saltspring. Ms. Litster got that job through first giving personal assistance, such as child care and home management services, to Ms. Wilson, a director of Regency.

[82] Ms. Litster earned $4,198 in 2001, the year following her dismissal. She operated a bed and breakfast operation from her home in the summer of 2002. There was no evidence that it was profitable. Ms. Litster’s earnings in 2002 were $4,793. Her earnings were from work as a babysitter and from Regency. The only jobs she formally applied for were the jobs she obtained.

[83] Ms. Wilson heard comments from people in the Saltspring community to the effect that Ms. Litster was dismissed for stealing. While she took these comments seriously, Ms. Wilson concluded that by the time she heard the comments, she was satisfied based on her own observations that Ms. Litster was trustworthy. The individuals who told Ms. Wilson about the reasons for Ms. Litster’s dismissal were not members of B.C. Ferries management. There was no evidence concerning the source of the rumours.

[84] The only information provided by B.C. Ferries management about Ms. Litster’s departure apart from the limited circulation of the dismissal letter, was to state that Ms. Litster had left the corporation effective December 5, 2000 and to name the person who would assume responsibility for Ms. Litster’s position.

ANALYSIS

(a) Did B.C. Ferries have just cause to dismiss Ms. Litster on the basis of her dealings with the paint?

[85] B.C. Ferries alleges that Ms. Litster took its paint intending to make personal use of it, that she may have used some of it, and that she was dishonest in explaining her conduct. B.C. Ferries agreed that to establish cause, it would have to show that Ms. Litster intended to appropriate the property, and that if she merely intended to recycle it, her conduct might give rise to discipline, but would not amount to cause for dismissal.

[86] 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. Generally, cause for termination exists where the employee engages in theft, misappropriation or serious fraud. See McKinley v. B.C. Tel, [2001] 2 S.C.R. 161, ¶48 and ¶51. If Ms. Litster stole the paint, B.C. Ferries had just cause to dismiss her. The question must be decided on the balance of probabilities. The theft allegation must be proven on clear and cogent evidence and withstand the strict scrutiny appropriate for such a serious allegation.

[87] Ms. Litster was believable, careful and balanced in her testimony. She did not appear in any way to tailor her evidence to improve her position. Her testimony was reasonable and consistent with surrounding facts. I accept her explanation that she removed paint from the B.C. Ferries terminal with the intention of taking it to a recycling depot, that she did not do that in a timely way, and that she left most of the items at the Tripp Road property where they were available for her to produce to Ms. Jourbarne.

[88] In coming to this conclusion, I considered factors which supported or challenged Ms. Litster’s explanation.

[89] I considered Ms. Litster’s explanation for her initial removal of paint products. I concluded that it was reasonable for Ms. Litster to want the paint products to be removed from the terminal. While the environmental audit did not require that, both it and her conversations regarding the proximity of the ocean were consistent with taking some steps regarding the paint. Ms. Litster's conversation with Mr. Winning, in which he said building a containment would be too expensive, is also consistent with Ms. Litster deciding to remove the paint products. While he may not have told her to get rid of the paint, he said that containment would be an unwarranted expense. He gave her return and recycling options, rather than suggesting that she leave the paint on the premises without containment.

[90] I considered the fact that in her statement to Ms. Jourbarne, Ms. Litster said that the Environmental Department asked her to remove the paint, and implied that the audit required its removal. The environmental report did not object that strongly to the presence of paint. In the circumstances of her conversations with staff and Mr. Winning, however, I accept that Ms. Litster may have recalled the environmental report as stating that the paint issue demanded attention.

[91] More troubling is why Ms. Litster decided to remove paint products personally for recycling rather than have staff do it in the ordinary course. However, on balance, I concluded that this was unusual, but still reasonable.

[92] Ms. Litster was relatively new in her job at the time and eager to make a good impression. It was a difficult period for her for a number of reasons. First, she was in a new job, and her boss had been dismissed. Second, the work environment was difficult owing to controversy with the Union. Third, she had concern and later, grief, regarding her brother. Fourthly, she had concern and responsibility for her nephew. Lastly, she was adjusting to a new home for her family and significant renovations were underway.

[93] In all of these circumstances, I find it believable that Ms. Litster made the pragmatic decision that she would simply take the articles to recycling since she had a dangerous goods certificate and could do that without a lot of trouble and nuisance. I accept that she was working long hours and it was not convenient to drop the items off at the recycling centre. I also accept that she put items at the Tripp Road property because she was called to take a ferry on short notice and sought to remove those items from her vehicle before it was loaded onto a ferry.

[94] I also considered whether it was inherently improbable that Ms. Litster would fail to take the items to the recycling depot for such a long period of time. I accept that the paint products were out of her sight and not a priority in her mind. Again, she had many personal and work issues to deal with.

[95] I also considered the fact that there were differences between Ms. Litster’s testimony and that of several witnesses. For example, her evidence regarding her encounter with Ms. Patterson was entirely different from Ms. Patterson’s evidence. However, I have concluded on balance that I accept Ms. Litster’s testimony. With most of the witnesses, the discrepancy can be explained more as a matter of emphasis and what parties were focussed on and therefore recalled. With respect to Ms. Patterson’s evidence, the discrepancies are more troubling, but may be explained by the period of time before Ms. Patterson was approached for a statement.

[96] I also considered the fact that the paint seemed to have been hidden at the Tripp Road property. I concluded that the placement of the paint, which was done by Mr. Hunt, was more consistent with avoiding adverse weather than with avoiding discovery by someone from B.C. Ferries.

[97] I also considered that there were a number of factors which suggested that Ms. Litster’s explanation should be accepted. If Ms. Litster wanted the paint products for her own use, it would be surprising for her to offer the paint to Ms. Patterson and Mr. White. Even though she might have offered the paint to Ms. Patterson if she were discovered removing it, that does not explain why she would offer the paint to Mr. White.

[98] Furthermore, Ms. Litster told Mr. Funk about having items in her vehicle for recycling. If she had stolen the paint, it would have been more likely that she would have said she had already taken the items for recycling.

[99] During the investigation, Ms. Litster took Ms. Jourbarne to the Tripp Road property and showed her the items there. Again, if she had stolen the items, it would be more likely that she would lie and say she recycled them than take Ms. Jourbarne to the shed and show items to her.

[100] In addition, the cost of paint in the context of Ms. Litster’s circumstances and new salary suggests that it was unlikely that she would have stolen paint.

[101] It is not entirely clear whether Ms. Litster ought to have telephoned the Materials Management Group for authorization to recycle the paint. If the paint products were "leftovers", the Fleet Regulations suggest that recycling is acceptable without contacting either Materials Management or the Environmental Department. Mr. Winning suggested that painters could remove some of the paint without suggesting that Ms. Litster must first get authorization from Materials Management or the Environmental Department. If Ms. Litster ought to have contacted Materials Management, she made an error, but not an error which would give B.C. Ferries just cause for her dismissal. This is particularly so in light of the policy that “corporate assets will be protected...in a manner commensurate with their value and vulnerability”.

[102] Ms. Litster should not have authorized Ms. Patterson and Mr. White to take paint for their personal use. Ms. Litster appeared to be of the view that she as a management employee could not derive a personal benefit from the paint products, but she had the authority to give those items to employees beneath her in the hierarchy. This was an error of judgment. She may have made it in part because of her impression that paint taken for recycling was available for removal by anyone from the recycling depot. In all the circumstances, this error in judgement is not sufficient to establish cause for Ms. Litster’s dismissal.

(b) If Ms. Litster was wrongfully dismissed, what damages should she recover?

[103] The plaintiff seeks wrongful damages in the amount of 30 months’ salary less Ms. Litster’s earning in that period. The plaintiff claims this as a 20 month notice period extended by 10 months on the basis that B.C. Ferries acted in bad faith as discussed by the Supreme Court of Canada in Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701; 36 C.C.E.L. (2d) 1 at ¶103.

[104] The defendant argues that the appropriate notice period is 12 months and that it should be reduced by four months due to an alleged failure to mitigate. The defendant also argues that the effect of the Employment Termination Standards Regulation, B.C. Reg. 379/97, is that the maximum total award is 24 months, inclusive of any extension of the notice period as a result of a finding of bad faith as discussed in Wallace.

(i) Notice Period Before any “Wallace” Extension

[105] At the time of her dismissal, Ms. Litster was terminal manager, Inter-Island Services South, had 20 years service to her employer, was earning about $65,000 annually, and was age 44. She had moved to Saltspring Island in connection with her employment and the prospects of re-employment there were limited.

[106] As stated in Ansari v. B.C. Hydro and Power Authority (1986), 2 B.C.L.R. (2d) 33, damages for wrongful dismissal are intended to put the employee in the position she would be in if she had received proper notice. The most important factors in determining the length of reasonable notice are the responsibility of the employment function, the employee’s age and length of service, and the availability of equivalent alternative employment.

[107] I considered the following cases: Bonneville v. Unisource Canada, 2002 SKQB 304; Candy v. CHE Pharmacy Inc., [1995] B.C.J. No. 178 (S.C.); Davey v. Syncrude Canada Ltd., 2001 ABQB 652; Dey v. Valley Forest Products, [1995] N.B.J. No. 240 (C.A.); Dickinson v. Radio Atlantic (CFNB) Ltd., [1991] N.B.J. No. 1147 (Q.B.); Durand v. Quaker Oats Co. Canada, [1988] B.C.J. No. 734 (S.C.); Elderfield v. Aetna Life Insurance Co., [1996] B.C.J. No. 1817 (C.A.); Lee v. Parking Corp. of Vancouver, [1998] B.C.J. No. 1677 (S.C.); MacDonald v. Woodward Stores Ltd., [1991] B.C.J. No. 2576 (S.C.); McGeady v. Saskatchewan Wheat Pool, [1998] S.J. No. 885 (Q.B.); Michalchuk v. B.C. Hydro, [1987] B.C.J. No. 845 (S.C.); Millham v. B.C. Transit, [1995] B.C.J. No. 1161 (S.C.); Porta v. Weyerhaeuser Canada Ltd, 2001 BCSC 1480; Russell v. Molson Breweries (Ontario) Ltd., [1995] O.J. No. 753 (Ct. Just. Gen. Div.); Singh v. British Columbia Hydro and Power Authority, 2001 BCCA 695; Starr v. Woodward Stores Ltd., [1991] B.C.J. No. 4011 (S.C.); Webster v. B.C. (Hydro and Power Authority) (1992), 66 B.C.L.R. (2d) 129 (C.A.); and Wood v. Owen De Bathe Ltd. (c.o.b. Canadian Tire), [1998] B.C.J. No. 288 (S.C.);

[108] In all the circumstances, I find that an appropriate notice period, without considering “Wallace” damages, is 15 months.

(ii) Extension of Notice Period on basis of “Wallace” Analysis

[109] In Wallace, the Supreme Court of Canada held that a notice period can be extended as a consequence of the manner of dismissal of an employee. This can effectively compensate for injuries such as humiliation, embarrassment and damages to self-worth. Ms. Litster argues that the investigation of her conduct was inadequate and that the notice period should be extended as a consequence.

[110] I accept that Capt. Taylor honestly and regretfully concluded that Ms. Litster had stolen B.C. Ferries paint. I have found on the evidence before me and on the balance of probabilities that he and Capt. Hughes and Ms. Jensen were incorrect in their conclusion that Ms. Litster stole the paint. The difference is a different interpretation of the reasonableness of Ms. Litster’s explanation and the significance of the disparity between her evidence and that of documents and other people. This is not a case where an employer could have readily discovered a fact which would conclusively establish the employee's innocence.

[111] I do not find that B.C. Ferries engaged in bad faith conduct or unfair dealing in the course of the dismissal. As a consequence, I decline to extend the notice period on the basis of the analysis in Wallace.

(iii) Mitigation

[112] The defendant argues that Ms. Litster failed to take appropriate steps to mitigate her damages. The burden is on the employer to demonstrate a failure to mitigate on a balance of probabilities. To establish a failure to mitigate, the employer must prove that first, there was a lack of effort on the employee's part to search for alternative employment; and second, comparable employment was available had the employee made appropriate effort to secure it. See Red Deer College v. Michaels et al., [1976] 2 S.C.R. 324. In this case, the real issue is whether Ms. Litster unreasonably failed to seek work at a location which was not on Saltspring Island.

[113] In Forshaw v. Aluminex Extrusions Ltd. (1989), 39 B.C.L.R. (2d) 140 at 143-144 (C.A.), Taylor J.A. described the duty to mitigate in the following terms:

[The duty to mitigate] - to take reasonable steps to obtain equivalent employment elsewhere and to accept such employment if available - is not an obligation owed by the dismissed employee to the former employer to act in the employer's interests...

...The duty to "act reasonably" in seeking and accepting alternate employment, cannot be a duty to take such steps as will reduce the claim against the defaulting former employer, but must be a duty to take such steps as a reasonable person in the dismissed employee's position would take in his own interests - to maintain his income and his position in his industry, trade or profession. The question whether or not the employee has acted reasonably must be judged in relation to his own position, and not in relation to that of the employer who has wrongfully dismissed him. [emphasis in original]

[114] I have considered the following cases in which the plaintiff met the duty to mitigate despite failing to pursue possible relocation: Allen v. CP Express and Transport Ltd., [1989] B.C.J. No. 2074 (S.C.); Tennant v. Greyhound Lines of Canada Ltd., [1988] B.C.J. No. 1573 (S.C.); and Ferguson v. Spalding Co-operative Association, [1980] S.J. No. 561 (Q.B.).

[115] I have also considered the following cases, all of which were decided before Forshaw, in which the duty to mitigate was held to have required the plaintiff to consider relocation: Kozak v. Hallmark Engineering Ltd. (1983), 1 C.C.E.L. 113 (B.C.S.C.); Harris v. Eastern Provincial Airways (1963) Ltd. (1981), 35 Nfld. & P.E.I.R. 152 (Nfld. T.D.); and Farrugia v. Wabco-Standard Inc. (c.o.b. American Standard), [1984] O.J. No. 409 (H.C.J.).

[116] At the time of her dismissal, Ms. Litster had moved with her family to Saltspring. Following her dismissal, her domestic partner was able to promptly return to working in Vancouver on the basis of living away from Saltspring during the week. This was a reasonable decision in light of the sudden loss of Ms. Litster's employment income. The evidence was not entirely clear concerning how many of Ms. Litster's and Mr. Hunt's children were living at the family home at the time of Ms. Litster's dismissal, but it appears there was at least one teenager, aged about 14. Because Mr. Hunt was away, Ms. Litster was the sole adult available to the child or children during the week.

[117] In my view, it was not unreasonable in these circumstances for Ms. Litster to confine her job search to Saltspring Island. I decline to reduce the notice period on the basis that Ms. Litster failed to reasonably mitigate her damages. She took reasonable steps to seek employment that was available on Saltspring Island.

(iv) Effect of Public Sector Employers Regulation

[118] The parties agreed that the Public Sector Employers Regulation applied to B.C. Ferries, and that it limited Ms. Litster’s recovery for severance to 24 months. The parties were opposed on whether damages based on a "Wallace" extension of the notice period should be included in that 24 month period.

[119] Because I have found that the appropriate notice period is 15 months, without any extension on the basis of a “Wallace” analysis, I do not need to decide this question.

(v) Summary of Damages for Wrongful Dismissal

[120] As a consequence, Ms. Litster is entitled to damages equal to her salary for the period of 15 months. This must be reduced by the amount she earned in that period. She is also entitled to compensation in respect of her pension. As I understand it, Ms. Litster is content to seek the employer’s contribution to her pension of $230.77 per month. She is also entitled to a sum for any benefits that she replaced at her expense during the notice period. If counsel cannot agree on these calculations, that matter can be spoken to.

[121] The letter states that Ms. Litster:

...admitted to taking paint and you gave the explanation that the paint was still in your possession after approximately six to eight months because you had not yet taken it to a recycling depot. Your explanations are not acceptable to the Corporation. It is the Corporation’s view that you had no authorization to take the materials in your possession, and that those materials had a value to the Corporation. You hold a position of trust as terminal manager and that trust has been irreparably damaged by your actions. The Corporation therefore cannot continue the employee and employer relationship and as a result you are terminated.

[122] Ms. Litster brought her defamation claim only against Capt. Taylor, even though there was no evidence suggesting that he was acting outside the scope of his employment duties.

[123] The statements in the letter confirming her dismissal were defamatory of Ms. Litster. The letter says that Ms. Litster violated her position of trust. While it is technically correct that she “took” paint, the plain and ordinary meaning of that term in the context of the letter is that Ms. Litster stole the paint. Such statements have the effect of lowering Ms. Litster in the estimation of others, and are therefore defamatory.

(d) If the letter is defamatory, can it be defended on the ground of qualified privilege?

[124] A person making a statement to another, which statement is reasonably appropriate to the occasion, in order to discharge a legal, social or moral duty concerning a subject in which both the maker and recipient have a legitimate common interest, enjoys a “qualified privilege”. The qualified privilege attaches to the occasion on which the communication is made, not to the communication itself. As stated by the Supreme Court of Canada in Hill v. Church of Scientology, [1995] 2 S.C.R. 1130 at ¶144:

The legal effect of the defence of qualified privilege is to rebut the inference, which normally arises from the publication of defamatory words, that they were spoken with malice. Where the occasion is shown to be privileged, the bona fides of the defendant is presumed and the defendant is free to publish, with impunity, remarks which may be defamatory and untrue about the plaintiff. However, the privilege is not absolute and can be defeated if the dominant motive for publishing the statement is actual or express malice.

[125] Management and other employees who make defamatory statements to an employee in a termination letter and copy that letter to other employees in the course of effecting the employee’s ultimate dismissal can be protected by qualified privilege. See Peck v. Canada, [1964] Ex. C.R. 966 at 991.

[126] Capt. Taylor had a legitimate interest in the course of his employment duties in advising all the recipients of Ms. Litster’s dismissal letter about the dismissal. Each recipient had a corresponding interest in receiving the information in discharging their employment duties. Therefore, they received the communication on an occasion of qualified privilege.

[127] Ms. Litster argued that the publication was broader than necessary, and exceeded the occasion of qualified privilege. For example, she argued that Ms. Zilke did not need to know all the information in the letter, and that as payroll manager, she only needed to know that Ms. Litster had stopped working for B.C. Ferries.

[128] The publication of Ms. Litster’s dismissal letter did not exceed the occasion. With respect to Ms. Zilke, it was relevant for her to know that the dismissal was on the basis of an allegation of just cause, in connection with her preparation of forms relating to Employment Insurance. With respect to the other recipients of the letter, they were involved with the decision-making, and the letter did not exceed the occasion.

[129] Where a defamatory statement is published on an occasion of qualified privilege, the presumption of malice is rebutted. As a result, Ms. Litster can succeed in the defamation claim only if she can prove that Capt. Taylor was not using the occasion honestly for the purpose for which the law gives protection, but was activated by some indirect motive not connected with the privilege, and in that sense, acted maliciously.

[130] Ms. Litster argued that Capt. Taylor acted recklessly, because he failed to make a reasonable investigation into the correctness of what he said in the letter. She relied on Ramsey v. Pacific Press et al., 2000 BCSC 1551. Mr. Ramsey was a member of the Legislative Assembly. The offending statement falsely quoted Mr. Ramsey as suggesting that Prince George residents were too lazy to get out of their chairs to go to the polls. The Prince George residents included Mr. Ramsey’s constituents. The Court held that the defendant broadcaster was not able to rely on the defence of qualified privilege, because he failed to do a reasonable investigation to determine the truth of the quote he attributed to Mr. Ramsey. The Court concluded that he could not be said to have had an honest belief in what he said because of the recklessness of his approach.

[131] Capt. Taylor’s investigation into the correctness of what he said in the dismissal letter was reasonable in the context of the letter and its intended and actual publication. The Ramsey case, where the publication was made broadly in the media, raises a different situation requiring a different analysis of what investigation would be reasonable. Capt. Taylor was not reckless in making the statements he did in the dismissal letter.

[132] Accordingly, Ms. Litster has not defeated the defence of qualified privilege by establishing malice. Her claim against Capt. Taylor for damages for defamation is accordingly dismissed.

(e) Can the letter be justified on the basis of truth?

[133] It is not necessary for me to consider this defence, since Capt. Taylor has succeeded in the defence of qualified privilege. If he had failed on the issue of qualified privilege, I would also have held that he failed on the defence of justification, since I have concluded that Ms. Litster did not steal the paint products.

(f) Did B.C. Ferries negligently misstate the nature of the position of terminal manager to Ms. Litster?

[134] Ms. Litster claims that B.C. Ferries negligently misrepresented to her that her job was more secure than it was in fact. The primary difficulty with this argument is that Ms. Litster admitted that she knew she could be dismissed on reasonable notice or with pay in lieu of notice if there was not just cause for her dismissal. That is what effectively occurred.

[135]