2013 NBCA 21, 2013 NBCA 21

COURT OF APPEAL OF NEW BRUNSWICK 89-12-CA GISÈLE OUELLETTE (Applicant) APPELLANT GISÈLE OUELLETTE (Requérante) APPELANTE - and - - et - SAINT-ANDRÉ, an incorporated rural community (Respondent) RESPONDENT SAINT-ANDRÉ, communauté rurale personnalisée (Intimé

e) INTIMÉE Ouellette v. Saint-André, an incorporated rural community, 2013 NBCA 21 Ouellette c.

Saint-André, communauté rurale personnalisée, 2013 NBCA 21 CORAM: The Honourable Justice Larlee The Honourable Justice Richard The Honourable Justice Bell CORAM : L’honorable juge Larlee L’honorable juge Richard L’honorable juge Bell Appeal from a decision of the Court of Queen’s Bench: June 22, 2012 Appel d’une décision de la Cour du Banc de la Reine : Le 22 juin 2012 History of case: Decision under appeal: 2012 NBQB 207 Preliminary or incidental proceedings: N/A Historique de la cause : Décision frappée d’appel : 2012 NBBR 207 Procédures préliminaires ou accessoires : S.O.

Appeal heard: October 17, 2012 Appel entendu : Le 17 octobre 2012 Judgment rendered: March 14, 2013 Jugement rendu : Le 14 mars 2013 Reasons for judgment by: The Honourable Justice Bell Motifs de jugement : L’honorable juge Bell

Concurred in by: The Honourable Justice Larlee The Honourable Justice Richard Souscrivent aux motifs : L’honorable juge Larlee L’honorable juge Richard Counsel at hearing: For the appellant: Clarence L. Bennett For the respondent: Christian E. Michaud Avocats à l’audience : Pour l’appelante : Clarence L. Bennett Pour l’intimée : Christian E. Michaud THE COURT The appeal is dismissed with costs of $2,500. LA COUR Déboute l’appelante et fixe les dépens à 2 500 $. The judgment of the Court was delivered by BELL J.A. I.

Introduction [ 1 ] On December 15, 2010 the Council of the rural community of Saint-André, New Brunswick voted unanimously to remove Gisèle Ouellette from her position as Clerk, Treasurer and Chief Administrative Officer, positions from which she could only be removed if dismissed for cause by a two-thirds vote of the whole Council. Ms. Ouellette sought judicial review in the Court of Queen’s Bench and an order that her termination be declared void ab initio because of Council’s failure to respect the rules of natural justice and procedural fairness.

In response, Saint-André contended the law of contract, and not public law, governed the termination of her employment. It followed, according to Saint-André , that it owed no duty of procedural fairness to Ms. Ouellette. In the alternative, Saint-André contended that, in the event it was required to treat Ms. Ouellette fairly at the time of her termination, it met its responsibility in that regard. The application judge accepted both positions advanced by Saint-André; namely, there was no duty of procedural fairness in this case, however, if such a duty exists, it was met. Ms. Ouellette appeals.

For the following reasons, I would dismiss the appeal with costs of $2,500. II. Facts [ 2 ] In 1994, the then village of Saint-André appointed Ms. Ouellette to the positions of Clerk and Treasurer, pursuant to s. 74(2) of the Municipalities Act , R.S.N.B. 1973, c. M-22. In 2001, the village appointed her to the newly created position of Chief Administrative Officer. On July 31, 2006, Saint-André became a rural community as contemplated by the Act . In her capacity as Clerk, Treasurer and Chief Administrative Officer, Ms.

Ouellette’s duties included, but were not limited to, maintaining the accuracy of the accounting systems, managing the payroll, accounts payable and receivable, and implementing recommendations of the auditors following year-end audits. At the time of her termination on December 15, 2010, s. 190.077(7) of the Act stipulated that Ms. Ouellette could only be terminated for cause by a two-thirds vote of the whole Council. [ 3 ] Ms. Ouellette appears to have been an exceptional employee until early in 200 7 , the year in which Saint-André nominated her for the local Chamber of Commerce Employee of the Year Award.

Unfortunately, sometime in 2007, Ms. Ouellette’s performance began to deteriorate. For the year ending December 31, 2007, Saint-André’s auditors made nine recommendations for improvement to the financial administration of the rural community. For the fiscal year ending 2008, the auditors’ report contained 17 recommendations for improvement. In the 2008 report, the auditors noted that many of the recommendations for

2007 had been ignored and were repeating themselves.

In her affidavit filed on the judicial review application, Chantal McCarthy, the accountant responsible for Saint-André’s audit, reported that: [TRANSLATION] Over the years, and particularly during the 2008 and 2009 year-end audits, it became obvious that our recommendations were not always being followed and that some serious errors were recurring each year. [ 4 ] The accounting errors that were repeating themselves included, but were not limited to, an approximate $4,700 shortfall in the water and sewer account, problems with the preparation of T-4 Income Tax forms, failure to file timely HST claims for reimbursement, and the discovery in 2010 that Ms.

Ouellette had overpaid herself by the equivalent of 6 weeks’ pay in 2009. [ 5 ] The Mayor of Saint-André, Lionel Poitras, deposed that in 2008, 2009 and 2010, he met with Ms. Ouellette on several occasions to discuss the problems identified by the auditors. Ms. Ouellette’s responses were, according to Mr. Poitras, never satisfactory. In a November 10, 2010 letter to Saint André, the auditors advised that the financial reporting was worsening rather than improving.

While the full contents of that letter are attached as Appendix “A” to these reasons, I would make the following observations: some accounting entries for the year ending 2009 were not yet recorded; the financial requirements of the Municipalities Act with respect to the transfer and balancing of village funds had not been met; HST reimbursements for 2007 and 2008 were only received by Saint-André in April, 2010 due to late filing by Ms.

Ouellette; the HST claim for 2009 had not been filed as of November 10, 2010; the late filing of the HST claims for reimbursement negatively affected Saint André’s cash flow and prompted the auditors to advise that better management of the HST accounts might enable Saint-André to avoid the need to access its line of credit; Ms.

Ouellette failed to include the employer’s cost of premiums for her group benefits on her T-4 report for income tax purposes; and finally, I would note that concern was again expressed regarding the $4,700 missing from the water and sewer account. [ 6 ] On November 23, 2010, Mayor Poitras met with Ms. Ouellette to discuss the November 10 letter. He specifically asked her about the missing money in the water and sewer account. On November 29, 2010 the Mayor and Council, without prior notice to her, invited Ms.

Ouellette to meet with them to discuss the November 10 letter, including the money missing from the water and sewer account. As was the case at the meeting with the Mayor on November 23, Ms. Ouellette’s responses were less than satisfactory. On November 30, the Mayor and Council met for approximately two hours with Ms. Ouellette and the auditor. Ms. Ouellette was afforded the opportunity to respond to concerns raised in the November 10 letter. Council, not being satisfied with Ms. Ouellette’s responses, suspended her without pay until December 3, 2010, at which time another meeting was scheduled.

The December 3, 2010 meeting was no more productive than previous meetings, although Ms. Ouellette did suggest that an enquiry at the Caisse populaire de Grand-Sault might resolve the issue regarding the water and sewer account. On December 15, 2010 the Caisse populaire confirmed it could find no transaction error that might explain the missing $4,700. [ 7 ] On December 15, 2010, without having informed Ms. Ouellette about the results of the inquiries at the Caisse, Council unanimously adopted a motion terminating her employment. Following the meeting, Ms.

Ouellette was invited to meet with Council, at which time she was verbally informed of her dismissal and provided a termination letter, the contents of which are attached as Appendix “B”. The letter specifically referred to such matters as the issues surrounding the incomplete financial reports, HST reimbursement claims, money missing from the water and sewer account, and unexplained payments made to her personally. [ 8 ] Before the application judge, Ms.

Ouellette claimed, among other things, that she was terminated without being given any “real opportunity” to respond to the “allegations in her termination letter” and without being given the “substance or basis of the allegations”. Before this Court her counsel argued she was entitled to know the “exact” details of each allegation made against her, full disclosure, an opportunity to conduct her own investigation and an opportunity to present her case before Council, all of which, he submits, did not occur. III. Issues [ 9 ] This appeal raises three issues: 1. Was Ms.

Ouellette entitled to procedural fairness prior to her dismissal?

2. If so, what was required of Council in the circumstances? 3. Presuming Ms. Ouellette was entitled to procedural fairness, was that obligation met in the circumstances? IV. Analysis [10] The modern approach to the right to procedural fairness finds its genesis in the opinion of LordReid in Ridge v. Baldwin, [1963] 2 All E.R. 66. In that case, the chief constable of Brighton was arrested on charges of conspiring withother officers and obstructing the course of justice. Although he was acquitted on both charges, the trial judge made certain negativeremarks regarding his professionalism and leadership.

The following day, the watch committee met to discuss matters relating to thechief constable’s continued employment. Even though the chief constable was not present at the meeting, the committee votedunanimously to dismiss him. The Court concluded the termination was void because the reasons for which he was dismissed were notprovided and he had not been given an opportunity to be heard.

According to Lord Reid, there are three types of employmentrelationships: (1) contractual employment; (2) offices held “at pleasure”; and (3) offices such as the chief constable’s position, whereemployees can only be dismissed for cause. Since employees in either of the first two categories of employment could be dismissedwithout cause, the Court concluded that only the last category of employment required the employee to be afforded procedural fairness. [11] Until the decision in Dunsmuir v.

New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, the rightto, and the extent of, procedural fairness to be accorded to public officers on termination, found expression in such cases as Nicholson v.Haldimand-Norfolk Regional Board of Commissioners of Police, (SCC), [1979] 1 S.C.R. 311, Knight v. Indian HeadSchool Division No. 19, (SCC), [1999] 1 S.C.R. 653, [1990] S.C.J. No. 26 (QL), and Wells v. Newfoundland, (SCC), [1999] 3 S.C.R. 199, [1999] S.C.J. No. 50 (QL). The jurisprudence in New Brunswick (Boisvenue v. St. Stephen(Town) (1987), (NB KB), 78 N.B.R. (2d) 287, [1987] N.B.J. No. 138 (Q.B.) (QL); Hughes v.

Moncton (City) (1990), (NB CA), 111 N.B.R. (2d) 184, [1991] N.B.J. No. 818 (C.A.) (QL); and Gerrard v. Sackville (Town) (1992), (NB CA), 124 N.B.R. (2d) 70, [1992] N.B.J. No. 106 (C.A.) (QL)) established that municipal office holders are entitled tobe treated fairly on termination, which treatment includes the right to know one’s perceived shortcomings and an opportunity to respond. [12] Post-Dunsmuir, the law in New Brunswick with respect to the right of municipal public officeholders to be afforded procedural fairness on termination is divided.

This is evidenced by two decisions from the Court of Queen’sBench, in which opposite conclusions are reached regarding the impact of Dunsmuir upon municipal office holders’ rights to proceduralfairness on termination. In Cronkhite v. Nackawic (Town), 2009 NBQB 110, 344 N.B.R. (2d) 317, the Court concluded the Town ofNackawic owed its Chief Administrative Officer a duty of procedural fairness when it terminated her employment pursuant to s. 74(5) ofthe Municipalities Act.

In the present case, the Court, also relying upon Dunsmuir, reached the opposite conclusion with respect to theapplication of similarly worded s. 190.077(7) of the Act. Those two sections read as follows: 74(5) With the exception of auditors, allofficers employed solely by the municipalityon a full time basis and appointed under thissection, are entitled, subject to

section 85 andsubsection (6), to hold office until retirement,death, resignation or dismissal for cause bythe affirmative vote of at least two thirds ofthe whole council. [Emphasis is mine.] 74(5) À l’exclusion des vérificateurs, tousles fonctionnaires employés exclusivement età plein temps par une municipalité et nommésen vertu du présent

article ont le droit, sousréserve de l’article 85 et du paragraphe (6),d’exercer leurs fonctions jusqu’à leur retraite,leur décès, leur démission ou leur renvoi pourun motif valable, décidé à la majorité desdeux tiers au moins des voix du conseilplénier. [Je souligne.]

190.077

(7) With the exception of auditors, all officers employed solely by the rural community on a full time basis and appointed under this section, are entitled, subject to subsections (5) and (8), to hold office until retirement, death, resignation, or dismissal for cause by the affirmative vote of at least two-thirds of the members of the rural community council who are not disqualified from voting on the resolution . [Emphasis is mine.] 190.077

(7) À l’exclusion des vérificateurs, tous les fonctionnaires employés exclusivement et à plein temps par la communauté rurale et nommés en vertu du présent

article ont le droit, sous réserve des paragraphes (5) et (8), d’exercer leurs fonctions jusqu’à leur retraite, leur décès, leur démission ou leur renvoi pour motif valable, décidé à la majorité des deux tiers au moins des voix des membres du conseil de la communauté rurale qui ne sont pas privés du droit de voter sur une résolution . [Je souligne.] [ 13 ] In order to understand the conflicting opinions revealed in the Court of Queen’s Bench, it is necessary to revisit the facts and the law in Dunsmuir . As a Clerk of the Court of Queen’s Bench, Mr.

Dunsmuir was both a non- bargaining contractual employee and a public office holder. His position was also subject to s. 20 of the Civil Service Act , S.N.B. 1984, c. C-5.1, which provided that termination of employment would be governed by the ordinary rules of contract. After having reprimanded Mr. Dunsmuir on three occasions, the Province chose to dismiss him with pay in lieu of notice rather than attempt to rely upon cause. The Supreme Court held that Mr. Dunsmuir’s employment was governed by the law of contract and that the Province did not owe him a duty of procedural fairness.

Bastarache and Lebel JJ., for the majority, concluded: In our view, the distinction between office holder and contractual employee for the purposes of a public law duty of fairness is problematic and should be done away with. The distinction is difficult to apply in practice and does not correspond with the justifications for imposing public law procedural fairness requirements. What is important in assessing the actions of a public employer in relation to its employees is the nature of the employment relationship.

Where the relationship is contractual, it should be viewed as any other private law employment relationship regardless of an employee's status as an office holder. The starting point, therefore, in any analysis, should be to determine the nature of the employment relationship with the public authority. Following Wells , it is assumed that most public employment relationships are contractual.

Where this is the case, disputes relating to dismissal should be resolved according to the express or implied terms of the contract of employment and any applicable statutes and regulations, without regard for whether the employee is an office holder. A public authority which dismisses an employee pursuant to a contract of employment should not be subject to any additional public law duty of fairness. Where the dismissal results in a breach of contract, the public employee will have access to ordinary contractual remedies.

The principles expressed in Knight in relation to the general duty of fairness owed by public authorities when making decisions that affect the rights, privileges or interests of individuals are valid and important. However, to the extent that the majority decision in Knight ignored the important effect of a contract of employment, it should not be followed. Where a public employee is protected from wrongful dismissal by contract, his or her remedy should be in private law, not in public law. The dismissal of a public employee should therefore generally be viewed as a typical employment law dispute.

However, there may be occasions where a public law duty of fairness will still apply. We can envision two such situations at present. The first occurs where a public employee is not, in fact, protected by a contract of employment. This will be the case with judges, ministers of the Crown and others who "fulfill constitutionally defined state roles" ( Wells , at para. 31 ). It may also be that the terms of appointment of some public office holders expressly provide for

summary dismissal or, at the very least, are silent on the matter, in which case the office holders may be deemed to hold office "at pleasure" (see e.g. New Brunswick

Interpretation Act , s. 20;

Interpretation Act , R.S.C. 1985, c. I-21, s. 23(1)). Because an employee in this situation is truly subject to the will of the Crown, procedural fairness is required to ensure that public power is not exercised capriciously. A second situation occurs when a duty of fairness flows by necessary implication from a statutory power governing the employment relationship . In Malloch , the applicable statute provided that dismissal of a teacher could only take place if the teacher was given three weeks' notice of the motion to dismiss.

The House of Lords found that this necessarily implied a right for the teacher to make representations at the meeting where the dismissal motion was being considered. Otherwise, there would have been little reason for Parliament to have provided for the notice procedure in the first place (p. 1282). Whether and what type of procedural requirements result from a particular statutory power will of course depend on the specific wording at issue and will vary with the context ( Knight , at p. 682). [Emphasis is mine.] [paras. 112-116]

[ 14 ] In Dunsmuir the Court concluded that, generally, the distinction between public office holders and contractual employees should be abandoned. However, in para. 116, the Court sets out one of two exceptions to this general rule. Th e second exception contemplates those circumstances in which the right to procedural fairness flows by “necessary implication from a statutory power governing the employment relationship”. In Cronkhite , the Court concluded the dual requirements of cause and a vote by a 2/3 majority implied that the office holder was entitled to procedural fairness.

In the present case, the application judge reached the opposite conclusion for similar reasons. She held the requirements of cause, and a 2/3 majority vote, offered adequate protection against arbitrariness by government. [ 15 ] Like the Court in Cronkhite , I conclude the provisions of the Act , by necessary implication, infuse a duty of fairness into the contractual relationship between Ms. Ouellette and Saint-André.

In her book Sullivan on the Construction of Statutes , 5th ed. (Markham, Ont.: LexisNexis, 2008), Ruth Sullivan explains that an intention is “necessarily implied if (1) it can be established using ordinary

interpretation techniques and (2) the implication is essential to make sense of the legislation or to implement its scheme” (p. 183). I conclude a duty of fairness arises by implication for the following reasons. [ 16 ] First, in Dunsmuir , the contractual relationship was governed by s. 20 of the Civil Service Act, S.N.B. 1984, c. C-5.1 which provides: 20 Subject to the provisions of this Act or any other Act, termination of the employment of a deputy head or an employee shall be governed by the ordinary rules of contract. 20

Sous réserve de la présente loi ou de toute autre loi, la cessation d’emploi d’un administrateur général ou d’un employé est régie par les règles contractuelles ordinaires. No such provision is found in the Municipalities’ Act , nor is there any provision which incorporates the Civil Service Act into the procedures for the hiring and firing of municipal employees. In Dunsmuir , the employer preserved unto itself the right to fire with or without cause. A termination without cause could therefore be made at any time, provided adequate notice was given. As the Supreme Court explained in Canada (Attorney General) v.

Mavi , 2011 SCC 30 , [2011] 2 S.C.R. 504 : “ Dunsmuir dealt with an employment relationship that was found by the Court to be governed by contract. The fact the contracting employee was a senior public servant did not turn a private claim for breach of contract into a public law adjudication” (para. 48). In contrast , Saint-André could not have terminated Ms. Ouellette without cause under any circumstances.

Had the legislature wished to ensure the relationship between Chief Administrative Officers and their e mployers was to be governed uniquely by contract, it could very easily have incorporated the wording of s. 20 of the Civil Service Act into the Municipalities’ Act . I would note that s. 190.077(7) came into force on April 14, 2005, long after the decisions in Knight v. Indian Head School Division No.19 , Hughes v. Moncton (City) , and Gerrard v. Sackville (Town) . Had the legislator wished to avoid the consequences of those decisions, it could have acted accordingly. [ 17 ] Second, Mr.

Dunsmuir benefited from the provisions of the Public Service Labour Relations Act, R.S.N.B. 1973, c. P-25, particularly ss. 92(1) , 97(2.1) and 100.1 . The combined effect of these provisions would have provided Mr. Dunsmuir the opportunity to challenge a for cause dismissal. Had the employer terminated him for cause, he would have had the opportunity, without commencing court action, to have an independent third party determine whether cause existed. Such a hearing mechanism, absent the institution of court proceedings, is unavailable to Ms. Ouellette.

There are strong policy reasons for ensuring that governmental decisions (municipal, provincial or otherwise), with respect to termination of public office holders, are not arbitrary and are made in good faith. Those policy reasons include, but are not limited to: (1) ensuring public office holders feel confident to advise elected officials, based upon their own opinion, rather than what they think the elected officials wish to hear; and (2) ensuring public office holders administer and enforce applicable legislation, objectively and fairly, without fear of reprisals from elected officials.

This observation is not meant in any way to question the sound judgment and good faith of elected officials in carrying out their responsibilities. It is meant to highlight the importance of an impartial public service in the management of affairs of the state. I am of the view the nature of Ms. Ouellette’s employment, absent an objective non-curial adjudicative process for determining whether cause exists, as was the case in Dunsmuir , militates in favour of a finding that she is entitled to procedural fairness on termination.

Just as Dunsmuir is distinguishable because of the application of the Civil Service Act , it can also be distinguished because of the presence of the procedure set out in the Public Service Labour Relations Act . Mr. Dunsmuir had access to a non-curial review process. Ms. Ouellette does not. [ 18 ] Third, the Act provides Ms. Ouellette with significant job security. She can only be terminated with cause, and then by a minimum vote of 2/3 of the whole Council. The trial judge considered these two factors militated in favour of a finding that Ms. Ouellette was not entitled to procedural fairness on termination.

I would respectfully disagree. To the contrary, joint requirements of cause and a 2/3 majority would lead one to conclude that Ms. Ouellette was entitled to an opportunity to address Council. In my view, it would not be reasonable for the Legislature to impose such stringent conditions on termination, particularly the percentage vote by Council, without intending to provide the public officer an opportunity to respond and present her position to Council. I consider the circumstances in this case are akin to those in Malloch v. Aberdeen Corp ., [1971] 2 All E.R. 1278 , where the

statute provided that a teacher could only be dismissed by the education committee on three weeks’ notice of the motion to dismiss. TheCourt concluded the requirement for notice implied a right of the teacher to attend and make representations. In the same manner thatthe requirement of “notice” implied the right to procedural fairness in Malloch, the combination of just cause and a vote of Council implythe right to procedural fairness in this case. [19] Fourth, given the clear language of s. 190.077(7), the financial cost of error by the Council withrespect to the issue of “just cause” could be high.

Presume that a Chief Administrative Officer is dismissed and has no opportunity toexplain his or her position. Presume also that that explanation would clarify the matter and obviate any cause upon which Councilthought it could rely. Presume also that the Chief Administrative Officer commences court action and seeks reinstatement. Followingprotracted and expensive litigation, including the issuance of pleadings, discovery and trial, the rural community could find itself with areinstated administrator entitled to significant back pay.

Surely, the Legislature did not intend that the only opportunity a Clerk, Treasureror Chief Administrative Officer would have to respond to allegations of cause would be in Court, when a very simple process beforeCouncil might resolve the issues and prevent significant wasting of costs. [20] For all of these reasons, I would conclude Ms. Ouellette, being an officer of the ruralcommunity, had a right to procedural fairness on termination. V.

Features of procedural fairness required in this case [21] The requirements of procedural fairness vary from case to case “and its content is to be decidedin the specific context of each case” (Baker v. Canada (Minister of Citizenship and Immigration), (SCC), [1999] 2S.C.R. 817, [1999] S.C.J. No. 39 (QL), at para. 21). Those requirements may be minimal, as was the case in Nicholson, where the Courtconcluded a probationary constable was entitled to know the reasons for his termination, and an opportunity to be heard.

By contrast,maximum procedural fairness could include the right to retain and instruct counsel, call and cross-examine witnesses and make writtenand oral argument. In Baker, L’Heureux-Dubé J. set out five factors that have been recognized as relevant to determining the degree ofprocedural fairness required in any given set of circumstances.

While not intended to be exhaustive, they can be summarized as follows: i. the nature of the decision being made and the process followed; ii. the nature of the statutory scheme; iii. the importance of the decision to the individual or the individuals affected; iv. the legitimate expectations of the person challenging the decision; and v. the choice of the procedure made by the agency itself when the statute leaves to the decision-maker the right to determine theprocedures it considers appropriate. [22] Counsel for Ms.

Ouellette contends she had the right to “full disclosure of the particulars of theallegations against her” in order that she could make “full answer”. He says Ms. Ouellette was “accused of stealing money without everhaving a chance to investigate as to where the missing funds may have been”. He claims Ms. Ouellette was denied procedural fairness, inpart, because she did not have the details of “exactly what was missing” and that she should have been informed of “the evidence againsther” in order to defend herself. Essentially, Ms.

Ouellette claims a right to a maximum degree of procedural fairness akin to thatavailable at trial or arbitration. [23] In considering the context within which Ms. Ouellette and the Council were operating, I notethe following:

i. Ms. Ouellette was the person in charge. She not only received the auditors’ reports, she was also the person responsible for ensuring appropriate follow-up and implementation of recommendations. Through her access to the reports, she was keenly aware of concerns about her competence. Furthermore, regardless of the contents of any audit report, it was Ms. Ouellette’s responsibility to ensure no money went missing in any circumstances. ii. Council was entitled to rely upon Ms. Ouellette. iii.

The Act leaves to Council complete control of its procedures regarding issues of termination with the exception of the requirements of cause and a 2/3 majority. iv. Any decision regarding continued employment is very serious to the person affected. However, termination of employment is a necessary and common occurrence in workplaces throughout both the public and private sector. v. In this case, if Council errs with respect to cause, Ms. Ouellette may bring an action for wrongful dismissal, which, if successful, could result in her reinstatement. [ 24 ] I am not satisfied the procedural fairness to which Ms.

Ouellette was entitled compares to that afforded most employees governed by collective agreements, where the features of procedural fairness are prescribed by contract; nor can her right to procedural fairness be compared to those persons subject to a professional governing body where there exists a statutorily mandated code of procedural fairness. Here, the features of procedural fairness must not unduly hamper the effectiveness of Council’s responsibilities toward its citizens in this and other matters.

It must not have the potential to become a procedural gridlock, which might function as a means unto itself, with ever expanding claims to “fairness”. The procedural fairness required in this case must, in my view, be minimal, yet reasonable and efficient. Those minimal features consist of an opportunity to know the concerns about one’s performance that could lead to termination, and an opportunity to explain them or demonstrate why they have no merit. Obviously, an appropriate opportunity should be afforded to the office holder to make the necessary enquiries and prepare a response.

Whether that response is in writing or in person, would no doubt be a matter to be determined by the Council. VI. Was Ms. Ouellette afforded adequate procedural fairness? [ 25 ] Context is important. Since 2007, Ms. Ouellette received auditors’ reports which outlined certain of her shortcomings and required action by her. From 2007 to 2010, the Council expressed concerns to her about financial and reporting matters raised in those reports. Ms. Ouellette had personal knowledge of Council’s general concerns for some time.

The November 10, 2010 letter from the auditors to the Council was the “triggering event” that pushed Council into action. Council’s response was to meet with Ms. Ouellette on November 23 in order that she could respond to the concerns raised in the auditors’ letter. Council did not suspend Ms. Ouellette. She maintained access to her office and any material necessary to respond to concerns raised in the report. On November 29, Ms. Ouellette attended another meeting of Council called specifically for the purpose of giving her an opportunity to respond.

That meeting was followed by another on November 30, with the auditors present. It is at this point that Ms. Ouellette was suspended without pay and told to return for another meeting on December 3, 2010. Until that time, she had access to her files and all that she needed to respond to Council’s concerns. Council remained unsatisfied with Ms. Ouellette’s responses to the issues raised at the meeting on December 3. One must not overlook the fact that some of those concerns were very serious indeed: namely, missing money in the water and sewer account, failure to file HST remittances, overpayments to Ms.

Ouellette, and her failure to include certain benefits of employment on her own T-4 report for income tax purposes. [ 26 ] Following Ms. Ouellette’s suspension, Council contacted the Caisse populaire de Grand-Sault to follow up on her suggestion that the Caisse records might explain the discrepancy in the water and sewer account. When the Caisse confirmed the accuracy of its statements, Council voted, in a closed door session, to dismiss Ms. Ouellette. Counsel for Ms. Ouellette contends, in addition to other issues regarding full disclosure, that Ms.

Ouellette was entitled to know the results of the enquiries at the Caisse and an opportunity to further respond before being dismissed. I disagree. Acceptance of this submission by Ms. Ouellette would lead to the very sort of grid-lock I suggest should be avoided. Saint-André afforded Ms. Ouellette the opportunity to show that money was not missing or explain its absence. She could do neither. Whether or not Council accepted her explanation or chose to conduct further enquiries is entirely irrelevant to the issue of procedural fairness in this case.

VII. Conclusion [ 27 ] Although I would conclude that Council owed Ms. Ouellette a duty of procedural fairness on termination, I am satisfied it met its duty in that regard. I would dismiss the appeal with costs of $2,500. _______________________________ B. RICHARD BELL, J.A. WE CONCUR: _____________________________ M.E.L. LARLEE, J.A. _____________________________ J.C. MARC RICHARD, J.A. APPENDIX “A” [TRANSLATION] November 10, 2010

Lionel Poitras Mayor SAINT-ANDRÉ 438 Levesque Street Saint-André, New Brunswick E3Y 3C7 Dear Mr. Poitras: Further to the auditing of the accounts and to the preparation of the financial statements of SAINT-ANDRÉ for the fiscal year which ended on December 31, 2009, we would like to make the following recommendations: • The adjusting entries that were submitted must be entered in your accounting system as soon as possible and dated December 31, 2009. • Certain interfund transfer balances were not reconciled properly during the year and some transfers are more than a year old.

After having made the year end adjusting entries, you should review the transfers to be made between the various funds and all required transfers should be made before December 31, 2010. The Municipalities Act requires that transfers be made during the following fiscal year. Consequently, the Municipality has not complied with the policy established by the Province. • In carrying out our mandate, we noticed that the HST rebate report for the year 2009 had not been prepared.

As of December 31, 2009, the total HST rebate payable with regard to the various funds for the years 2007, 2008 and 2009 amounted to approximately $140,300. The HST reports for 2007 and 2008 were sent and rebates totalling $81,740 were received in April and June 2010. The balance yet to be received for 2009 thus amounts to $67,560. We would recommend that you prepare and send a rebate application to the Canada Revenue Agency as soon as possible. Please ensure that all balances owing or payable from funds, including capital funds, are taken into account in the preparation of the reports.

Upon receipt of the rebate from the CRA, please make the necessary transfers to cover the balance relating to each fund. • We suggest that you prepare your rebate applications more frequently, either every month or every three months. This would increase your working capital and hence help you finance your purchases, perhaps even avoid the need to use your line of credit during the year. • Several balance sheet accounts were adjusted at year end.

We strongly recommend that you review these on a monthly basis in order to ensure that the recurring journal entries reflect the actual amount to attribute to each of the operating accounts. • Any cash amount and Christmas bonus given to employees must be included on the T4 slips at year end. Only reimbursements of incurred expenses supported by receipts need not be included on the T4 slips. • Regarding the amounts paid to the fire department with respect to volunteer firefighters, the Municipality may be required to issue T4 slips.

We strongly recommend that you review the amounts paid to each individual in order to ascertain whether these individuals are required to report these amounts in their personal income tax returns. We can assist you with this, should you wish it. • According to the administrator’s contract of employment, she is paid a monthly amount to compensate for the fact that she isn’t eligible to participate in the Municipality’s group insurance plans. The amounts paid to her must be reported on her T4 slip.

• With regard to the claims for reimbursement of expenses incurred by members of the Council, please ensure that these are prepared by the members and bear their signature. Receipts and mileage diaries must be attached to the claims for reimbursement. We note that, on occasion, amounts paid to members appear in the conference and delegation account and are not reported on the T4 slips. If these amounts represent actual reimbursements for expenses accompanied by supporting documents (bills or mileage diaries), we agree that these need not be reported on the T4 slips.

However, if the amounts which appear in the account represent amounts paid as remuneration, as per diem or as salary to members to allow them to attend meetings, these are taxable and must be reported on the T4 slips of Council members. • In the Water and Sewer Operating Fund, we have noted that there are discrepancies with the accounts receivable. Some of the accounts which appear on the subsidiary ledger had already been paid and the funds were never deposited.

Further to a closer inspection of the accounts receivable, we were able to establish that receipts in the amount of nearly $4,700 had been issued but had not been entered in the books of account. We discussed these amounts with the administrator and concluded that these funds are missing and, to date, have not been found. We strongly advise that you review your internal control procedure relating to customer accounts.

Having two or three persons involved in the invoicing and funds collection process would significantly reduce the risk of error or fraud. • Regarding the monies from the Gasoline Tax Fund, you must transfer all the funds to a separate reserve fund. When you incur expenses relating to approved projects, you must record the withdrawal from the reserve fund at that time and make a transfer to the operating fund. The amount entered in the books of account must not exceed the eligible expenditure. We remain at your disposal should you wish to discuss any question arising out of the above recommendations.

We would like to take this opportunity to thank you and your staff for your cooperation throughout our mandate. Nadeau-Picard & Associés Chartered Accountants /cm APPENDIX “B” [TRANSLATION] Rural Community of Saint-André 438 Levesque Road, Saint-André, NB E3Y 3C7 December 15, 2010 Dear Ms. Ouellette: This notice of termination, effective immediately, is hereby given by the Council of the Rural Community of Saint-André to Ms. Gisèle Ouellette, of Saint-André, for the following reasons:

The main duties of Ms.

Gisèle Ouellette were to administer the Rural Community of Saint-André and to do its accounting; as a result of the accounting not being done or of missing supporting documents, the following reports are either late or have not been prepared: - 2009 financial statements for the Rural Community of Saint-André - 2009 financial statements for the Town [ sic ] of Saint-André - 2009 tax statements for Habitations sociales de Saint-André de Madawaska Inc. - 2009 and 2010 GST reports - The following accounts of the General Fund were not up-to-date: Water and Sewer, Capital Fund; Water and Sewer, Capital Fund – General; General Reserve Fund; Water and Sewer General Fund and Reserve Fund The Rural Community was required to pay additional charges as follows: - to the firm “Cosateck”, as Ms.

Gisèle Ouellette did not make backup files of the accounting system - to the firm Nadeau Picard, as Ms. Gisèle Ouellette was behind with the accounting system - to the Caisse populaire La Vallée - to the Receiver General, as the income tax deductions had not been submitted in time Ms. Gisèle Ouellette was also the person responsible for the wage-payment system of the Rural Community of Saint-André: - an audit of the transactions has shown that an unexplainable number of salary payments (transfers) were made to her personally. Ms.

Gisèle Ouellette was also the person responsible for all the financial transactions (payments, deposits, transfers): - an audit has shown that funds are missing from the Water and Sewer Fund. Accordingly, for the above-mentioned reasons, we must terminate Ms. Gisèle Ouellette’s employment. Rural Community of Saint-André Lionel Poitras Mayor c.c.: Gisèle Ouellette