TOWN COUNCIL OF THE TOWN OF BRENT'S COVE Plaintiff / dffendant by counterclaim And: ELLEN BUTLER Defendant / plaintiff by counterclaim, 2019 NLSC 214

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Brent's Cove (Town) v. Butler , 2019 NLSC 214 Date : December 4, 2019 Docket : 201701G4948 Between: TOWN COUNCIL OF THE TOWN OF BRENT'S COVE Plaintiff / dffendant by counterclaim And: ELLEN BUTLER Defendant / plaintiff by counterclaim Before: Justice David B. Orsborn Place of Hearing: St. John’s, Newfoundland and Labrador Date(

s) of Hearing: November 14, 2019

Summary: The Town of Brent’s Cove applied for the

summary trial of its claim against its former Town Clerk for $57,479, money the Town says the Clerk stole during her tenure. Held : The claim was dismissed. The Town records and

forensic audit report relied on by the Town – assuming the audit report was admissible in the absence of a supporting affidavit – were notsufficiently reliable to amount to “clear, convincing and cogent” evidence of theft. Appearances: Joseph J. Thorne Appearing on behalf of the Plaintiff / Defendant by Counterclaim Ellen Butler Appearing on her own behalf Authorities Cited: CASES CONSIDERED: L.H.E. v. D.A.E., 2019 NLCA 66; Marco Ltd. v. Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld. & P.E.I.R. 317, 405 A.P.R. 317 (Nfld. S.C.(T.D.)); Dalley v. Northern Arm (Town), 2016 NLTD(G) 68; C. (R.) v.

McDougall, 2008 SCC 53. STATUTES CONSIDERED: Canada Evidence Act, R.S.C. 1985, c. C-5. RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D. REASONS FOR JUDGMENT Orsborn, J.: INTRODUCTION [1] The Town of Brent’s Cove has sued its former Town Clerk, Ellen Butler, for $57,479, money the Town claims Ms. Butlerstole during her tenure as Town Clerk. At the Town’s application, the matter was heard by way of

summary trial pursuant to Rule 17Aof the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D. (the “Rules”). There is a related ongoing criminal proceeding. ISSUE [2] Assuming that the

summary trial procedure is appropriate, has the Town proven that Ms. Butler stole money from the Town,and if so, has the Town proven that a particular sum of money was stolen? [3] Supporting the Town’s application is an affidavit of Scott Corbett, the present Town Clerk. Attached to his affidavit is areport by Matson Driscoll & Damico Ltd. (“MDD”), a firm of forensic accountants. This report is essentially a review of work done byMr. Corbett. There is no affidavit filed from anyone associated with MDD. Mr. Corbett was briefly questioned by Ms. Butler and wasthen questioned at more length by me. [4] Ms.

Butler represented herself. She did not file any affidavit or response to the Town’s memorandum of argument. In thecircumstances, I offered her the opportunity to give oral evidence under the protection of

section 5 of the Canada Evidence Act, R.S.C.1985, c. C-5. Ms. Butler testified and was cross-examined by counsel for the Town and was questioned briefly by me. To his credit,counsel for the Town raised no objection to this evidentiary accommodation. [5] By way of a counterclaim filed in this proceeding, Ms. Butler claims damages for wrongful dismissal and for harassment bycertain town councillors. I ordered that the counterclaim proceeding be transferred to the judicial centre of Grand Falls-Windsor, a centremuch closer to the town.

SUMMARY TRIAL PROCESS [6] As noted, this matter came before the Court through the Town’s application for a

summary trial. Ms. Butler, representingherself and not being familiar with the Court processes, raised no objection to the procedure chosen. [7] A

summary trial procedure as set out in Rule 17A of the Rules is intended to allow for a less expensive and expeditiousmechanism of adjudication in situations where a full trial is not necessary for a fair and just adjudication. [8] As the law has developed in this jurisdiction, an application for adjudication by way of

summary trial engages a two-step

process. The first step involves what is referred to as a “threshold question”, recently commented on by the Court of Appeal in L.H.E. v.D.A.E., 2019 NLCA 66, at paragraph 12: 12 An application under rule 17A engages a two-step process. The analysis begins with a threshold question, that is, “whether thecase is appropriate for

summary adjudication” (Young v. Noble, 2016 NLCA 58 (N.L. C.A.), 1 C.A.N.L.R. 197, (2016), 411 D.L.R. (4th)223 (N.L. C.A.), at paragraph 23). In Young v. Noble, Green C.J.N.L. explained: [27] It is important to appreciate, however, that the threshold question that can, on these authorities, be determined in advance ofthe

summary trial proper is truly a threshold question directed to determine whether, on the matters raised in the application, the caseappears to fall within the

summary trial rule, whether the applicant has provided some evidentiary basis for the assertions made andwhether the nature of the case is such that it is potentially capable of being dealt with in the attenuated manner contemplated by asummary trial, bearing in mind the comments of the Supreme Court of Canada in Hryniak v.

Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87(S.C.C.) about the salutary uses of such a procedure to ensure access to justice in appropriate cases. … [9] If the threshold test is met, the substantive analysis follows – whether or not there is a “genuine issue” for adjudication and, ifthere is, whether or not there is sufficient evidence in the form of affidavits and cross-examination to allow the judge to make a fairdetermination of that issue.

If the judge concludes that, in the circumstances, it would be unjust to make a final decision based on thesummary process, the matter then proceeds to a full trial. [10] For a fuller discussion of the legal framework of a

summary trial, see: Marco Ltd. v. Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld. & P.E.I.R. 317, 405 A.P.R. 317 (Nfld. S.C.(T.D.)); Dalley v. Northern Arm (Town), 2016NLTD(G) 68; and L.H.E. [11] The Town has provided an evidentiary basis for its claim and the factual and legal issues are not of a complexity that require afull trial. The threshold requirement is met.

As will be apparent from the following discussion, I am satisfied that the Town’s claimraises a genuine issue for trial – a claimed loss of over $57,000 – but I am also satisfied that, in the circumstances, it would not be unfairor unjust to adjudicate the claim on the basis of the evidence adduced. BACKGROUND [12] The Town of Brent’s Cove is a community of some 180 residents in the central-west portion of the island of Newfoundland. The Town collects property and water and sewer taxes – currently $720 per annum – and, in some circumstances, a poll tax of $200 perannum.

The Town also charges small amounts for a resident’s use of Town services such as fax or photocopying. [13] The Town Clerk has the primary responsibility for and control of the collection, recording and depositing of payments ofmunicipal taxes. Ms. Butler was the Town Clerk for over 20 years until August 2015 at which time her employment was terminated. Mr. Corbett was hired as Acting Town Clerk in July 2015 and became permanent when Ms. Butler’s employment was terminated thenext month. [14] In August, he prepared and sent to residents statements of account of taxes owing. He deposed: 5.

After mailing the invoices, many residents came to Town office to report their listed balance was overstated or non-existent. Some residents brought receipts to confirm those reports. I encouraged all such residents to bring in all receipts in their possession sothat an internal investigation could be conducted to confirm the true account balances. [15] When questioned, he said that five or six residents brought in receipts to confirm payment; subsequently he said that 70-80percent of the residents complained of not receiving credit for monies paid. [16] Because of these complaints, the Town Council asked Mr.

Corbett to conduct an examination of the Town’s records. The Town’s Bookkeeping System [17] As I understand it, the Town’s bookkeeping system, at least insofar as it applies to the collection of taxes, is a manual systemwhich provides for the provision of receipts from pre-numbered receipt books and the recording of payments – and presumably taxescharged – in a ledger referred to by Mr. Corbett as the general ledger. This general ledger seems to be what some might refer to as anaccounts receivable ledger. I will refer to it in these reasons as the general ledger. Mr.

Corbett described the system this way in hisaffidavit: 12. The Town’s accounting system is paper-based. Broadly, payments received by the Town through the Defendant were to berecorded in the general ledger, and payments documented with a receipt book for which the payor would receive one copy and the Townpreserve the other for its accounting records and later reconciliation. At various times, the general ledger would be subject to a bank

reconciliation, which would be submitted to Council for review. [ 18 ] Monies received by the Town, whether by cash or cheque, are held in a ‘cash drawer’ and are periodically deposited on no set schedule. Mr. Corbett’s Investigation [ 19 ] Mr. Corbett’s affidavit addresses his investigation: 8. I began the internal investigation by sorting all office documentation and separating out the receipt books and residential account ledgers. I then began to compile a spreadsheet which listed all receipts from each receipt book.

Then, I sorted the receipts by resident and made an electronic ledger for the period 2006 – 2015 for each property. The basis of this ledger was to add in the charge for annual property tax and water/sewer tax and credit all receipts paid by the residents. 9. Next, I began to compare the electronic ledger to the actual paper general ledger. I noted several math errors which had been carried through the balance owing for multiple accounts. Further, I noted that many receipts had not been credited to residents’ accounts, verifying many resident statements that their balance was incorrect. 10.

I compared the receipt books to accounts receivable ledgers, from the same period, and noted 4 receipt books in the Town’s possession had not been credited to resident accounts. Nor were the funds noted in the 4 receipt books deposited into the Town’s operating account. 11. These 4 receipt books entries discrepancies totaled $57,479.00. [ 20 ] He then outlined the events following his investigation: 13. Upon informing Council of my findings, we contacted our insurer in December of 2015 and a forensic audit was commissioned in January 2016. 14.

As the Town’s insurance policy for employee dishonesty was limited to $50,000.00, we submitted information to the auditing firm for the years where I identified losses totalling as near to $50,000.00 as possible to maximize our insurance recovery. Those years were 2009, 2012, 2013, 2014, and 2015. Information for pre-2009, 2010, and 2011 was omitted as the missing funds from those years exceeded our policy limited. 15. In April 2016, the firm that conducted the forensic audit provided their final report.

The report concluded that the Town suffered a loss of $49,429.00, which matched my calculation of the missing funds for those years. For the reasons set out above, the forensic audit firm was unable to confirm the entire loss that I calculated for amounts missing from 2011, 2010, and prior to 2009. … 16. Based upon my own investigation and compilation of all available evidence I believe that the $49,429.00 in missing funds identified by the auditing firm was misappropriated by Ms. Butler while she was employed as Town Clerk. 17.

Although we did not provide information for pre-2009, 2010, and 2011 years to the auditing firm, based upon my own investigation and compilation of all available evidence I believe that the balance of $8,050.00 (being the $57,479.00 in missing funds I identified minus the $49,429.00 the auditing firm identified) was misappropriated by Ms. Butler while she was employed as Town Clerk. [ 21 ] The Town’s position is straightforward. There are a number of receipts – in four identified receipt books – which the Town says are not reflected in the general ledger as payments credited to a resident’s tax account.

The Town assumes – and counsel fairly acknowledged that it is an assumption – that the failure to record a particular receipt as a payment in the general ledger means that money in the amount indicated on the receipt was actually received by Ms. Butler and was not deposited into the Town’s bank account. [ 22 ] The amount claimed by the Town is $57,479. Ms. Butler’s Response [ 23 ] Ms. Butler’s evidence did not add much clarity. Much of her evidence, given in narrative fashion, was directed at what she perceives as issues with members of the Town Council.

[ 24 ] For example, from the transcript of her evidence, in response to my questions: Q. … What about the access to the cash? You talked about a key to the office, but how was the cash kept? A. It was actually just kept in the drawer and am I allowed to discuss my dismissal? THE COURT: No, I’m not interested in your dismissal. MS. BUTLER: Okay. THE COURT: I’m interested in the cash and the bookkeeping and who else? MS. BUTLER: Well for 13 years, I did maintenance so yes a lot of my clerical work went downhill.

I spent many times at the water and sewer; however, there were a few people that I could have discredited when it comes to certain things. [ 25 ] She continued, referring to the handling of money: Q. How often would you make deposits? A. I would go once a week or actually I even did them by mail order. Do a money order through the post office if I couldn’t get to the bank. Q. Take the cash to the post office and get a? A. Draw a money order and make the deposit that way through mail. Q. How long would cash be kept in this drawer in the office? A.

Well at the end of it, they would not allow me to go to the bank except for probably once a month. Q. You got cash in the office for a month? A. Yes. They wouldn’t, they didn’t, like I stated, they since from 2009 until I got dismissed, they actually were after me. Like basically wanting me to quit and trying to find a loophole and they did. And I have evidence of that cause it’s in the minutes. [ 26 ] She was asked specifically about the receipt books relied upon by the Town: Q.

This claim is based on four receipt books that the Town says receipts were given to residents – and four specific books where receipts were given to residents for money received – but never entered. What can you tell me about those four receipt books? If anything? A. I know at one point I think I ended up starting a new book by mistake but it still stems back to a minute book that’s missing as I had stated that while there was a big major program on the go, there was receipt books that I never had a chance to – or receipts – that I never had a chance to receipt them in the ledger.

Ended up accidently went missing, and I had no idea whose names were in them or nothing. And that was in the minutes. It was told to council that book right now is not at the council. And I had spoken to Mr. Corbett on that matter when I went to take pictures of all the minutes right from when I started work there. Q. Yes, minutes don’t concern me. I’m interested in terms of these receipt books. I mean, did you have receipt books that were, you know, you’ve heard about these four receipt books. A. Yes. Q. And do you know which receipt books these were? A. No. Q. Have you seen them? A.

One I remember is like I said I’ve started the wrong book. I even wrote on it that I started the wrong book. Q. There is a number of cases and you heard me ask Mr. Corbett about it where we have on the same day, for the same person, for the same amount, we have two receipts. Can you tell me how that could happen? A. It would have happened due to the fact that where I started the wrong book, I did actually put it in the proper book afterwards. Q. Any other explanation for it? A. That would be it your honour.

[ 27 ] This exchange was at the end of my questioning: Q. All right. Anything else you would like to tell me before Mr. Thorne. He may have some questions for you. A. No. Well, as for stealing, I’m not going to say I didn’t, but it had to do again with council. I mean, I was threatened with my job if I didn’t do certain things. [ 28 ] Under cross-examination by counsel for the Town she said: Q. Okay.

And prior to 2009, let’s – I’ll ask you a hypothetical – if there is $2,420 missing from tax accounts or tax payments from prior to 2009, the person who would have been responsible for ensuring that those monies came in and were recorded properly would have been you? A. Yes it would have been. However, I will add that once again from 2009 to 2015, I was threatened and stalked and in fear of my job if I didn’t do what they wanted. And I will bring up once again, council spending provincial money having me lie and using that for [unintelligible].

If they were here on this stand today, they would actually, they would have to agree. There’s one councillor that never even made a statement and I wonder why? Not one of them now is actually on council. They all resigned. [ 29 ] Counsel asked her about the Town’s claim for monies said to be missing from the 2014 receipts – an amount of $21,498: Q. Over the course of the, let’s just stick with the years that are in the claim here 2009 to 2015. Let’s look at 2014 for example. In

Schedule 1 that’s in front of you. There’s a claim for $21,498. A. Yeah, so I stole then. Not likely. I worked four jobs and it took me like four jobs to make that, so no. Q. So it’s your evidence that none of that money is— MS. BUTLER: I did not steal $21,000. MR. THORNE: —none of that money is missing from the Town? A. I’m not saying it’s not missing, but it’s not me that took it. Q. All right. So you don’t necessarily know if it’s not missing but your view is that you didn’t take it? A. Exactly. [ 30 ] And further: Q. Okay. And the same again for 2015. The year, you were dismissed in August 2015.

So 2015, the Town claims that it’s missing $16,546. And again I take it that you don’t know whether it’s missing or not? A. I was only there for, not, six months— MR. THORNE: Okay. You don’t know whether— MS. BUTLER: —And in six months, no. I didn’t steal $16,000. … … MR. THORNE: All right. And so is it your view now that the members of council have somehow taken $57,000 from the Town? A. Well right now we’re not saying it’s $50,000. I will bring that up again, but I will state to you once again if I were to have council here now and I could cross-examine them, they certainly would die.

I got one person that wouldn’t even make a statement because he watched me with binoculars. What were they afraid of? I’m here in Court. Every one of those people resigned. Why? [ 31 ] At the end of her evidence, this exchange: THE COURT: Let me ask just one more question Ms. Butler to see if I can get my head around this issue of the receipts. Do you remember Rose Matthews? A. Yes. Q. Okay. The documents show that on January 15, 2015, there was a receipt issued to Rose Matthews from one of these four receipt books for $720. A. Yes.

Period Number of Receipts Claim Prior to 2009 15 $ 2,420 2009 12 2,640 2010 2 185 2011 2 940 2012 5 1,700 2013 32 7,045 2014 70 21,498 2015 62 16,546 Undated 16 4,505 216 $ 57,479 Year Bank Deposits Receipts per General Ledger Difference 2009 $ 58,695 $ 56,559 $ 2,136 2012 90,894 89,687 1,207 2013 76,610 73,067 3,543 2014 67,223 69,893 (2,670) 2015 (to August) 47,192 46,936 256 Q. And the same day, the general ledger shows that there was a receipt issued to his Estate for $720. The same day. A. That’s the same money. Q. Why do we have two receipts? A. As I stated, I tried to fix up the mistake that I made. Q.

What was the mistake? A. I started the wrong receipt book. But that money was in the Town. I didn’t take it. And on that receipt book it should state, it’s written there, I started the wrong book. Due to the fact that I was run ragged. (Inaudible) water issues. I was the one that everybody called and not sure if Scott would realize it, but there’s many residents in Brent’s Cove that would tell you I spent more time at the water and sewer than I did in the office for 13 years. And I could get it all off Facebook if I need to. And as for a fair trial, no one knows what’s been said about me on Facebook.

A lot but nobody knows the situation of my work – what was going on inside the office. The public didn’t know. They didn’t want the public to know. They made me rewrite minutes. I wrote the minutes so that I would cover my ass but they didn’t want me to put it there. ANALYSIS [ 32 ] To assist the reader, the following is a brief explanation of the format of the claim and the terminology involved. The Town’s claim – A listing, by year, of the receipts contained in the four numbered receipt books referred to by Mr. Corbett in paragraph 10 of his affidavit – see paragraph 19 herein.

The references to “claim listing” and to “receipt” are to the Town’s listing of and the individual receipts in, these four receipt books. General Ledger – The compilation of resident accounts in which are recorded, by resident, charges for municipal taxes and payments received on account.

Summary of Payments Recorded in General Ledger – This is the 38-page document attached as Appendix “A” to the MDD Report. It is a chronological listing for the years 2009 and 2012-2015 of all payments to the Town by date, resident and amount. I will refer to this as the general ledger listing and to individual entries as payments. That is, a reference to “payment” will reflect a numbered receipt for monies received that was credited to a resident’s account.

The Town’s Claim [ 33 ] As noted, the claim is for $57,479; however, because of an insurance coverage limit of $50,000, there was little attention paid to establishing any amount of loss in excess of $50,000. [ 34 ] The claim may be summarized: Bank Statement Information [ 35 ] In addition to the claim listing and the general ledger listing, the Town relied on bank statement summaries showing total deposits and total general ledger receipts, by month, for the years 2009 and 2012-2015. [ 36 ] That latter

summary, by year: [ 37 ] Within the annual figures, there are some monthly variances that are difficult to suggest are simply timing issues between the receipt and deposit. For example, August 2013 shows receipts of $2,723 and deposits of $4,631 – a difference of $1,908. The months before and after show differences of receipts over deposits of $860, well short of the August difference. There are similar unexplained discrepancies in November 2013, October 2014 and December 2014.

[ 38 ] The MDD Report dismisses these as “minor variances” and says: 30. We have compared the payments recorded in the insured’s general ledger for 2009 and 2012 to 2015 to the monthly bank statements for the same period and note some minor variances. We discussed these variances with the insured’s representative and on a test sample basis have reviewed the bank reconciliations and were advised that the variances relate to outstanding cheques and timing issues.

Therefore, it appears that all payments posted to the general ledger were received by the Town and the variances are not related to the misappropriated funds. [ 39 ] Relating the variances to outstanding cheques does not make sense. Mr. Corbett acknowledged that in the context of an exercise which simply compares cash receipts as recorded to total bank deposits for the period in question – with no reference to a month- end bank balance – outstanding cheques would be irrelevant. Basis for the Town’s Claim [ 40 ] The MDD Report essentially reflects a limited sample review of Mr.

Corbett’s work and then adopts his conclusions, at least up to the amount of the insurance coverage. The report, in part: 31. The insured’s claim is based on the assumption that none of the misappropriated amounts were recorded in the general ledger and, therefore, since the insured’s general ledger balances to the bank account, none of the claimed amounts were deposited into the Town’s bank account. 32.

Based on the foregoing, we have compared amounts recorded in the general ledger for 2009 and for 2012 to 2015 to the amounts claimed to be misappropriated utilizing the various receipt books and confirmed none of the allegedly misappropriated amounts were recorded in the general ledger. On this basis, we have accepted the claimed amounts for 2009 and for 2012 to 2015 to be reasonable. [ 41 ] The reasoning appears to be this: On examination of the four receipt books in question, none of the receipts was recorded as a payment in the general ledger.

Therefore it is assumed that the amounts shown in the receipts were misappropriated. This assumption reflects that made by the Town. [ 42 ] The MDD Report goes on: 33. We have analyzed a sample of receipt books to balance to the respective dates and amounts included in the claim.

Based on the sample selected, we have assumed the respective dates and amounts included in the receipt books to be reliable and have utilized same in our calculation of the claim. [ 43 ] I assume this means that MDD looked at some of the receipts in the four receipt books, found these receipts to be included in the claim listing, and therefore assumed that the entire claim listing was reliable. Examination of Town Claims [ 44 ] It was unfortunate that Ms. Butler did not have counsel. This left the Court in the difficult position of having to conduct its own examination of the Town’s claim.

Claims with Exactly-Matching Payments [ 45 ] A comparison of the claim listing (misappropriated claim) and the general ledger listing (recorded payments) shows at least 15 instances [1] where a receipt in the claim listing matches exactly with a payment in the general ledger listing – matched by date, resident’s name and dollar amount. [ 46 ] Three examples of this comparison: 1. The claim listing includes receipt number 1208 issued to Dave Haas on November 27, 2012, for $520; the general ledger listing includes payment number 4441 for $520 issued to Dave Haas on November 27, 2012. Mr.

Corbett was unable to explain why a claim was being pursued for the same amount acknowledged to be received; 2. The claim listing shows receipt number 1279 issued to Rose Matthews on March 28, 2014, for $720; the general ledger listing shows payment number 1468 issued to Rose Matthews on March 28, 2014, for $720, paid by cheque. I asked Mr. Corbett if it was the Town’s position that on March 28, 2014, Rose Matthews paid $1,440 (two years’ taxes), one-half of which was taken by Ms. Butler and the other half deposited.

He confirmed that was the Town’s position but acknowledged that that position did not make sense; and 3. The claim listing includes receipt number 1331 issued to Rose Matthews on January 15, 2015, for $720; the general ledger listing shows payment number 620 issued to Ignatius Matthews ES on January 15, 2015, for $720 (ES refers to Estate. Ignatius Matthews died in 2011 leaving his wife, Rose). Again, Mr. Corbett could offer no explanation on how the claim and the acknowledged payment for the same amount could stand together. [ 47 ] Mr. Corbett was only asked about some of the 15 exact matches.

No explanation was forthcoming. [ 48 ] In my assessment, the reliability of the MDD conclusion that “none of the allegedly misappropriated amounts were recorded in the general ledger” is questionable.

Other Instances where a Payment may relate to a Claimed Amount [ 49 ] The comparison between the claim listing and the general ledger listing raises other questions beyond the ‘exact duplicate’ receipts. [ 50 ] The following are examples: 1. The 2013 claim listing includes a December 13 receipt issued to Colleen Haas for $700; the general ledger shows a December 13 payment of $200. Mr. Corbett acknowledged that a claim of a misappropriation of $700 combined with an acknowledged concurrent payment of $200 at least raises a question as to the reliability of the claimed amount; 2.

There is an October 3, 2014, claim in the name of Raymond Matthews for $1,000; for that same day, there is a general ledger payment recorded of $400; 3. There is an August 28 claim for a payment by William Sullivan – $300 – and an August 29 general ledger payment (cash) for William Sullivan in the amount of $300; 4.

On August 22, 2014, there are three consecutive receipts in the claim listing for: Elizabeth Andrews - $50; Max Haas - $100; and Gloria Butler - $440; the general ledger listing for the same day also shows three consecutive payments for identical amounts in the names of Max Haas - $100; Key Andrews - $50; and Elizabeth Umperville - $440. Even with the name differences (elsewhere Key and Elizabeth Andrews are identified as a couple), the coincidence of the dates, the consecutive receipts and the amounts raises a question; 5.

The claim listing for April 10, 2015, shows a claim in the names of Eugene and Bev Haas - $720, while a general ledger payment for April 16, 2015, shows Eugene and Bev Haas - $720; 6. The claim listing for May 14, 2015, Thomas Sullivan - $720; a general ledger payment, May 14, 2015, Thomas Sullivan - $300; 7. The claim listing for March 27, 2015, Paul Domalain - $720; a general ledger payment, March 27, Paul Domalain - $1,085; and 8.

The claim listing for March 27, 2015, Phonse Matthews - $720; a general ledger payment listing, March 27, Phonse Matthews - $410. [ 51 ] The relationship in these examples between the dates and amounts in the claim list and the dates and amounts of acknowledged payments raises enough questions to cast further doubt on the validity of the Town’s assertion that none of the amounts recorded in the claim listing found their way into the Town’s bank account. Undated Receipts in Claim Listing [ 52 ] Other questions are raised in the claims based on undated receipts: 1.

The Town claims, in respect of undated receipts 201-202 Aiden Sullivan - $360 and Annie Haas, Sr., - $100; the general ledger for March 31, 2009, shows payments from Aiden Sullivan - $360 and Annie Haas, Sr., - $100; 2. A claim in respect of receipt 1391, JML Enterprises - $1,080. The general ledger listing shows a payment from JML Enterprises on April 16, 2015, for $1,080. The general ledger shows other payments from JML for 2012-2013 and 2014 in the amount of $1,097 each. It is a reasonable inference that the claim amount is the same as the amount received on April 16, 2015; 3.

The claim includes undated receipt number 1392 - Wavey Haas for $720; the general ledger shows a payment of $720 from Wavey Haas on June 8, 2015. The claim listing shows receipts in the 1390 series dated in April and May 2015. It is not unreasonable to infer that the amount claimed is reflected in the June 8, 2015, receipt. Questions relating to Total Claims and Payments, by Resident [ 53 ] In some cases, the total amount claimed in respect of a particular individual suggests that an explanation is needed. For example: 1. The claim listing for 2012-2015 shows a total of $2,200 for resident Raymond Matthews.

For the same period, the general ledger payment listing shows $2,920 received. The Town’s position is that Mr. Matthews, over the four-year period, paid the Town a total of $5,120, $2,200 of which Ms. Butler stole. Mr. Corbett surmised that the amount actually paid by Mr. Matthews must include payment of arrears, but bearing in mind that four years of tax would be only $2,880 ($720 x 4), an unsubstantiated arrears amount of over $2,200 is, at the least, questionable; 2. There is an April 2, 2014, claim for $720 for Anthony Butler.

The general ledger listing for 2014 for March 28-December 24 shows seven payments from Mr. Butler totaling $2,040, including a December 24 payment of $720. A payment in December 2, 2015, is recorded as $160 arrears. To conclude that Mr. Butler paid a total of $2,760 in 2014 ($720 + $2,040) given an annual tax bill of $720 is not a conclusion I am prepared to draw on the information before me; and 3. The claim shows receipts for Dave Haas on May 20, 2014 - $920 and October 15, 2014 - $740.

The general ledger shows a payment in the name of Dave Haas on May 20, 2014 - $360 and five other payments in 2014, including October 14 - $150, for total payments in 2014 of $1,110. It would seem implausible that Mr. Haas would pay $1,280 ($920 + $360) on May 20, with Ms. Butler taking $920 of that amount for herself. Similarly, the Town’s assertion that Mr. Haas paid $2,770 ($920 + $740 + 1,110) in one year –

including one payment of $720 – is a position that calls for more substantiation other than the records presented. Discussion of Claim [ 54 ] The above questions are a sample only of those raised by a straightforward comparison of the claim schedules and the general ledger payment schedules. They are sufficient in my view to call for an explanation of the primary assertion of the Town – supported by the MDD Report – that none of the amounts in the claim

schedule was recorded or received by the Town. No satisfactory explanation was forthcoming. [ 55 ] While superficially impressive in its detail and format, I do not consider the claims

schedule to represent reliable support for the Town’s claim. This conclusion is reinforced by the fact that for pre-2009 and for 2010-2011 – claims totaling $3,545 – the Town conducted no analysis at all of corresponding general ledger payments or bank deposits for the period in question.

Relying simply on the four receipt books in question, the Town assumed that the 19 receipts in question – some going back to 2005 – were in and of themselves sufficient evidence from which to conclude that the monies shown had been received, that no general ledger entry of any payment had been recorded, that the money had not been deposited to the Town’s bank account, and that the money had in fact been taken by Ms. Butler. I am not prepared to make the same assumption. [ 56 ] In C. (R.) v.

McDougall , 2008 SCC 53 , Rothstein J. said that in civil cases, there is only one standard of proof – a balance of probabilities. He said at paragraph 49, “ In all civil cases, the trial judge must scrutinize the relevant evidence with care to determine whether it is more likely than not that an alleged event occurred.” [ 57 ] Previously he had explained – at paragraphs 46-48: 46 Similarly, evidence must always be sufficiently clear, convincing and cogent to satisfy the balance of probabilities test. But again, there is no objective standard to measure sufficiency.

In serious cases, like the present, judges may be faced with evidence of events that are alleged to have occurred many years before, where there is little other evidence than that of the plaintiff and defendant. As difficult as the task may be, the judge must make a decision. If a responsible judge finds for the plaintiff, it must be accepted that the evidence was sufficiently clear, convincing and cogent to that judge that the plaintiff satisfied the balance of probabilities test. 47 Finally there may be cases in which there is an inherent improbability that an event occurred.

Inherent improbability will always depend upon the circumstances. As Baroness Hale stated in B (Children), Re at para. 72: ... Consider the famous example of the animal seen in Regent’s Park. If it is seen outside the zoo on a stretch of greensward regularly used for walking dogs, then of course it is more likely to be a dog than a lion. If it is seen in the zoo next to the lions’ enclosure when the door is open, then it may well be more likely to be a lion than a dog. 48 Some alleged events may be highly improbable. Others less so.

There can be no rule as to when and to what extent inherent improbability must be taken into account by a trial judge. As Lord Hoffman observed at para. 15 of B (Children), Re : ... Common sense, not law, requires that in deciding this question, regard should be had, to whatever extent appropriate, to inherent probabilities.

It will be for the trial judge to decide to what extent, if any, the circumstances suggest that an allegation is inherently improbable and where appropriate, that may be taken into account in the assessment of whether the evidence establishes that it is more likely than not that the event occurred. However, there can be no rule of law imposing such a formula. [ 58 ] Is there sufficiently clear, convincing and cogent evidence to satisfy me that Ms. Butler stole money from the Town? [ 59 ] The evidence satisfies me that Ms.

Butler had day-to-day control over the Town’s cash receipts and control over and responsibility for the Town’s paper-based record keeping. She had exclusive access to the “cash drawer”. [ 60 ] The Town says that, through the combination of this control and access and the unrecorded receipts (claim schedule), there is sufficient evidence to conclude both that the Town is missing over $50,000 and that Ms. Butler took this money. [ 61 ] Although Ms.

Butler did not give her evidence in compelling fashion, she did, at certain points, deny taking any money and asserted that the money claimed was not actually missing. [ 62 ] It is somewhat artificial to consider the fact of taking of any money and the amount of any such taking as separate issues, each to be assessed on a balance of probabilities. The evidence in support of the Town’s position – both as to the fact of theft and the amount of any theft – is essentially reflected in the schedules prepared by Mr. Corbett and reviewed by MDD. Mr.

Corbett’s affidavit provided evidence of opportunity and second-hand evidence of residents’ assertions concerning payments. There was no evidence from any of the many, according to Mr. Corbett, town residents who came complaining about outstanding balances which they claim to have paid and for which they said they had receipts. There was no documentary support to show why some residents were said by the Town to have paid for more, in a given period, than the taxes actually billed for that period.

I would have expected that the question would have been anticipated and that evidence would have been produced of records of individual accounts receivable showing annual charges, periodic

balances, and payments, or lack thereof. [ 63 ] No explanation was forthcoming as to why, for some months when timing should not have been an issue, bank deposits exceeded general ledger receipts. The outstanding cheques’ explanation advanced by the Town and accepted by MDD was acknowledged by Mr. Corbett not to be persuasive. [ 64 ] The Town’s case, overall, rests on the reliability of the inferences that can be drawn from the compilation resulting from Mr.

Corbett’s and MDD’s review of the Town’s records. [ 65 ] To repeat, the Town asks me to assume – infer – that the mere fact that a particular receipt is not reflected as a payment in the general ledger (as that term was used by the Town) is proof that Ms. Butler received money in the amount shown on the receipt and kept the money herself. This is not an inference I am prepared to make. I agree that it is at least a possible inference but it could also be a mistake or mistakes as suggested by Ms.

Butler or, in fact, it could be that the money – or some of it – was deposited to the Town’s bank account without being properly recorded. Ms. Butler testified that there were receipts she “never had a chance to receipt in the ledger”. And, as mentioned, there are instances where the monthly deposits – even allowing for timing differences – exceed the recorded receipts for that particular month. [ 66 ] From Ms. Butler’s evidence and Mr. Corbett’s explanation of the Town’s record-keeping process, it is evident that, at least during Ms.

Butler’s tenure as the Town Clerk, the keeping of accurate records was not a priority. [ 67 ] Previously I referred to a number of receipts in the claim

schedule which were matched exactly – date, resident and amount – by receipts in the general ledger schedule. These receipts totaled only $3,550, but the fact that there are multiple receipts in this category casts significant doubt on the reliability of the blanket assertion of the Town. Further, as noted, there are numerous other receipts in the claims

schedule which, based on a comparison with the general ledger payment schedule, do not readily support the inference suggested by the Town. [ 68 ] Finally, the claims for the period prior to 2009 and for 2010-2011 – a total of $3,545 – are supported by nothing other than the listing of the receipts themselves – no general ledger payment comparison, nor any bank deposit analysis. Not even a weak inference is supported with respect to this aspect of the claim. [ 69 ] The fact that the accuracy of the records in questionable necessarily calls into question the reliability of the MDD Report.

I have previously mentioned that this report was not supported by an affidavit; that fact alone calls into question the report’s admissibility and, even if admissible, any weight that could be given it. But the blanket statement in the MDD Report (paragraph 32) that none of the receipts in the claim listing was recorded in the general ledger cannot, without some explanation from MDD, stand in the face of a number of receipts in the claim listing that match exactly with payments recorded in the general ledger.

Such unexplained matches, when considered with the other questions raised by the manner in which the claim was constructed, analyzed and quantified, call into question the reliability of the MDD Report and the underlying Town claim. To put it shortly, unreliable records and reports cannot support a claim of theft in excess of $57,000. [ 70 ] The inference requested by the Town is the foundation for its position. But even if I were to accept, in isolation, the proposition that an unrecorded receipt equates to theft, the claims

schedule is not sufficiently reliable to allow me to find as a fact that none of the listed receipts was recorded in the general ledger as a payment or that all of the receipts indicate an actual amount of cash received by Ms. Butler. [ 71 ] Viewing all of the evidence as a whole, it is not sufficiently clear, convincing and cogent to satisfy me that, on a balance of probabilities, Ms. Butler stole money from the Town. Even if I were satisfied that Ms. Butler had taken some money –and, as a discrete issue, I am not so satisfied – the evidence does not allow for a quantification of any amount.

The Town’s claim of a loss of $57,479 is, at best, aspirational. CONCLUSION [ 72 ] This matter proceeded by way of

summary trial. As plaintiff and applicant, the Town chose the

summary procedure, “putting its best foot forward” through the affidavit evidence of Mr. Corbett and the MDD Report. I have no difficulty in concluding that it would not be unfair or unjust to decide this matter on the basis of the case put forward by the Town. [ 73 ] For the reasons set out above, the Town has not proven its case. The claim is dismissed. Ms. Butler is entitled to her costs, Column 3. Ms. Butler’s counterclaim is transferred to the judicial centre of Grand Falls-Windsor. _____________________________ David B. Orsborn Justice