Howard Eiserman - v. -, 2019 SKPC 17

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2019 SKPC 17 Date: March 6, 2019 File: 64/17 Location: Swift Current _____________________________________________________________________________ Between: Howard Eiserman - and - Rural Municipality of Maple Creek #111 Ryan M. Nagel For the Plaintiff Kevin N. Hoy For the Defendant _____________________________________________________________________________ JUDGMENT V.

MEEKMA , J _____________________________________________________________________________ INTRODUCTION [ 1 ] The plaintiff has sued the defendant municipality for payment of an indemnity and supervision claim from 2016 when he was reeve. The defendant denied payment for the portion which the municipality asserts was for supervision duties from which the reeve was removed.

The defence also suggests this court has no jurisdiction to order a payment rising from a motion of council made pursuant to The Municipalities Act , SS 2005, c M-36.1 , that instead application should have been made for review and mandamus to the Court of Queen’s Bench.

ISSUES I. Does this court have jurisdiction to order payment by the Rural Municipality of remuneration payable pursuant to a resolution? II. Is the plaintiff entitled to any or all of the payments for 2016? FACTS [ 2 ] The plaintiff was elected and served as reeve of the defendant municipality from October 2012 until October 2016. [ 3 ] After the Maple Creek flood in 2010, the reeve at that time was so overwhelmed with additional work that the municipality instituted a monthly payment of $1,000.00 as compensation.

This practice continued, and each January when council passed a resolution setting the remuneration for the year, it would include the specific term “Office Reeve: monthly remuneration $1,000.00”. [ 4 ] In addition, the resolution provided for an hourly rate for reeve and councillors attending meetings, a $25.00 fee for councillors to attend the office to sign cheques, mileage for the reeves and councillors to attendance meetings and supervision of public works, a daily rate for attendance at out of town meetings and conventions, and meal allowances. [ 5 ] Such a resolution was passed in January of 2014, 2015, and 2016.

The plaintiff received $1,000.00 each month until 2016. [ 6 ] In September of 2015, the administrator, who was going on sick leave, made out a cheque to herself for $10,000.00 and it was signed by the administrator and the plaintiff before being presented to council.

This raised concerns and led to an RCMP investigation and a forensic audit. [ 7 ] At the January 13, 2016 meeting of council, the following resolutions were passed: Resolution #14/01/16 “Reeve Supervision” Council has been advised by our lawyer, that due to the allegations, Howard Eiserman the reeve, be relieved of his supervision duties until the investigation is completed. Resolution #15/01/16 “Reeve Signing Authority” That the RM remove the reeve Howard Eiserman from signing authority until the allegations are investigated and completed.

Resolution #16/01/16 “Deputy Reeve Signing Authority” That the deputy reeve assume responsibility and signing authority in the absence of the reeve. Resolution #36/01/16 Entitled “Council Remuneration” which provided the usual provisions, including “Office Reeve: monthly remuneration $1,000.00”. [ 8 ] The plaintiff testified that the $1,000.00 monthly payment was to cover everything done by the reeve without requiring a lot of paperwork. His role as reeve never changed throughout 2016. He continued to chair the meetings and go to the office.

The only change was that he had very little communication with the administration office. Deputy reeve William McKenzie was in the office while they were sorting and disposing of papers. In the plaintiff’s opinion, the term “Office Reeve” in the resolution meant the same as “Reeve” and he was entitled to the payment as the reeve. [ 9 ] He also testified that in 2016 council agreed to pay out all remuneration once at the end of the year, so he did not expect to receive the $1,000.00 monthly payment during that year and did not complain.

He referred to resolution #498/12/16 entitled “Council Indemnity” passed on December 14, 2016 (when he was no longer on council): That the RM of Maple Creek #111 acknowledge that the councillor indemnity will be paid out for the year by December 30, 2016.

[ 10 ] He testified that another resolution was passed in 2016 delaying payment until the end of the year, but was unable to provide such a motion. [ 11 ] The plaintiff filed a document entitled “Statement of Indemnity and Supervision” as Exhibit P-7 (also filed as D-1 to show an item missing at the bottom of the page). He testified that this form, his claim for the year, was used for the time spent going to meetings and conventions, “not supervising of office staff”.

The supervision portion was for supervising road work, not his monthly remuneration. [ 12 ] He claims the total of $13,887.50 set out on Exhibit D-1, including $10,000.00 for “Office Reeve” remuneration from January through October of 2016. [ 13 ] Council did twice submit payment to him for $3,887.50 but he refused to accept it. [ 14 ] According to the plaintiff, the $1,000.00 per month which council authorized to be paid to deputy reeve McKenzie was not the same $1,000.00 per month which resolution #36/01/16 authorized for “Office Reeve”. [ 15 ] The plaintiff’s statement of indemnity and supervision form (P-7/D-1) includes entries for hours and mileage for council meetings, supervision or inspection of public works, and committee meetings.

He has filled in “0” in the blanks before “Days Reeve’s Supervision of Office” and “Kms Reeve’s Supervision of Office”. At the very bottom of the form, under “details of supervision or expense” he added the line “Jan 1 to Oct 31 – 16 36/01/16 Office Reeve $1,000.00 month $10,000.00”. [ 16 ] Council member Shawn Kramer testified for the defence. He served on council from 2014 to the present.

According to Kramer, the $1,000.00 was for supervision of the office and supervision of public works, overseeing the office and equipment operations. [ 17 ] Kramer testified that by resolution #14/01/16 the plaintiff was to have no more contact with the equipment operators or office and by resolution #15/01/16 the plaintiff was removed from signing authority on cheques and contracts. In addition to the cheque issue, there were harassment issues so supervision of staff was addressed in the resolution. [ 18 ] At the February 17, 2016 meeting, council passed resolution #87/02/16 entitled “Supervision Payment”.

That the RM approve the supervision monthly payment to William McKenzie until the RCMP investigation is completed. [ 19 ] According to Kramer, deputy reeve McKenzie was doing a lot of work because of the forensic audit, and the paperwork, so council felt he should get the $1,000.00 “because he was doing the office and public works supervision”. [ 20 ] With respect to when payment was made, Kramer testified that the indemnities were paid semi-annually and the $1,000.00 amount was paid monthly. [ 21 ] At the council meeting on May 11, 2016, resolution #221/05/16 was passed under the heading “Office Supervision Payment”.

That the office supervision payment of deputy reeve William McKenzie will be discontinued. [ 22 ] Kramer testified that at that time the office clean-up for the forensic audit had been done and McKenzie was no longer coming into the office. [ 23 ] The $1,000.00 was subsequently eliminated and now everyone is paid the same allowance. Any meetings and phone calls can be claimed on the indemnity form. [ 24 ] The RCMP investigation was complete in January or February of 2017. [ 25 ] William McKenzie, the former deputy reeve, also testified for the defence.

He served on council from 2001 until 2016. [ 26 ] He testified that the $1,000.00 payment was referred to as the “Extra $1,000.00 per month for office supervision or employee supervision.” [ 27 ] Some of the reeve’s duties were removed by council at the January 2016 meeting as a result of the audit, and with respect to resolution #14/01/16, council had received some complaints from some of the employees of disturbances and harassment.

The reeve supervised the office. [ 28 ] From mid-January 2016 to mid-March 2016, McKenzie spent a lot of time in the office sorting through paperwork and helping the staff. [ 29 ] He testified that the “investigation” referred to in the minutes was the forensic audit. The RCMP were also involved but they based most of their investigation on the finding of the forensic audit team. [ 30 ] Resolution #87/02/16 approved the payment to him of the $1,000.00 per month for supervision of the office. In McKenzie’s opinion, it was the same $1,000.00 amount provided for in the minutes of January 13, 2016.

He said “We always consider it for supervision”. He also thought that public works was covered in “remuneration”, and supervision was in reference to the office. He was

responsible for supervising the employees and as long as he was supervising the employees, he would receive the $1,000.00. [31] Resolution #221/05/16 on May 11, 2016 discontinued the $1,000.00 office supervision payment to McKenzie because he wasdoing little supervision at that time. He stated “The employees were out on the roads. I believe I only received payments for Februaryand March, at the end of the month, I believe.” ANALYSISJurisdiction [32] Section 3(1) of The Small Claims Act, 2016, SS 2016, c S-50.12 stipulates: 3(1) Subject to

section 4 this Act applies, whether or not the Crown is a party to the action, to any claim or counterclaim for: (

a) debt or damages; . . . [33] The plaintiff claims the money as a debt or alternatively, as damages for conversion. The defendant says that the resolutionof council does not create a debt for which the plaintiff can sue, that his only remedy would be for a judicial review in the Court ofQueen’s Bench and an order for mandamus requiring the defendant to pay the funds in compliance with the statute.

It is the defendant’scontention that entitlement under the statute does not create a debt. [34] Defence submits that the plaintiff cannot now claim damages for conversion, not having pled it. [35] The Municipalities Act provides: 82(1) Each member of council is to be paid any remuneration and benefits and any reimbursement or allowances for expenses that maybe fixed by the council. [36] In my opinion that

section does create a right to claim the remuneration as a debt and would fall within

section 3 of The SmallClaims Act. It is a specific provision in The Municipalities Act, which creates a debt, distinct from other resolutions of council for theexpenditure of monies. [37] Noble, J. applied the following definition of debt in Northwest Holdings Ltd. v Canoe Lake Band, (SKKB), 28 Sask R 28 (QB): [8] …[D]ebt or liquidated demand means the amount must be agreed upon or ascertained either by the parties, by operation of law orotherwise.

It must be a claim which can be determined with exactness by a mathematical computation. [38] Wilkinson, J. wrote this in Colby v Burlaka (1998), (SK KB), 170 Sask R 87 (QB): [8] The definition of “debt or liquidated demand” will include claims based on contract, restitution, equity or statute so long as thereexists an obligation to pay a certain or ascertainable sum… [39] Some examples which were held to be debts created by statute are as follows: 1.

The right to recover interest charged in excess of what the Interest Act, RSC 1985, c I-15 permits is a debt created by statute, and thus is a specialty; Bank of Nova Scotia v Dunphy Leasing Enterprises Ltd. (1987), 1987 ABCA 78 , 38 DLR (4th) 575 (AltaCA). 2. An action by a municipality for taxes or arrears of taxes is a debt created by statute, and a specialty: Scarborough (Township) vOrford (1940), (ON SC), 2 DLR 790 (Ont SC). 3. A claim for sewer rates is a debt created by statute, known as a specialty: Chester (District) v Dorey (1993), (NS SC), 126 NSR (2d) 192 (NS SC). 4.

A requirement to make a 5/12 contribution for premium reduction to employees by way of benefits was a debt created by statute: Beaver v Metropolitan Authority (1990), (NS SC), 94 NSR (2d) 250 (NS SC). [40] The requirement in section 82(1) of The Municipalities Act to pay the remuneration fixed is a debt created by statute. It is adebt which can be determined with exactness. As there is no reference to “court” in section 82(1), the Provincial Court is not precludedfrom jurisdiction. Entitlement

[ 41 ] Whether the plaintiff is entitled to the $1,000.00 monthly indemnity depends on what duties were included in the reference to “Office Reeve” in the resolution, whether the plaintiff performed those duties, and whether council had imposed those duties on him, or taken them away. [ 42 ] Section 93(1) of The Municipalities Act states: 93

(1) In addition to performing the duties of a councillor, a mayor or reeve has the following duties: (

a) to preside when in attendance at a council meeting unless this Act or another Act or a bylaw of council provides that another councillor is to preside; (

b) to perform any other duty imposed on a mayor or reeve by this or any other Act or by bylaw or resolution. [ 43 ] Therefore, council had the power to impose the duties of staff supervisor on the reeve, and it follows that council could remove those duties as well. [ 44 ] By resolution #14/01/16, council relieved the plaintiff of his supervision duties until the investigation was completed. [ 45 ] The evidence was that the RCMP investigation continued until after the plaintiff’s term as reeve ended. [ 46 ] It was the plaintiff’s evidence that the monthly remuneration was to reduce paperwork required to submit claims.

The plaintiff and McKenzie, the only two witnesses who actually received the $1,000.00 monthly payments, both testified that the term “Office Reeve” did not include public works supervision duties. Indeed, the plaintiff made a separate claim for supervision or inspection of public works in his statement of indemnity and supervision (Exhibit P-7/D-1).

Presumably, he would not claim for it twice. [ 47 ] The plaintiff filled in “0” in the blanks before the categories on the form for “Days Reeve’s Supervision of Office” and “Kms Reeve’s Supervision of Office”. [ 48 ] Both defence witnesses testified that “Office Reeve” was to include supervision of office staff.

They only differed on whether or not it also included supervision of public works. [ 49 ] Further support for the fact that the “Office Reeve” payment was for office supervision is found in the wording of resolution #221/05/16 under the heading “Office Supervision Payment”, that the “Office Supervision Payment” to McKenzie be discontinued. [ 50 ] The wording of resolution # 87/02/16 approving “ The (emphasis mine) supervision monthly payment to William McKenzie until the RCMP investigation is completed”, also supports the position that it was the same $1,000.00 referred to in resolution #36/01/16, originally authorizing the office reeve remuneration. [ 51 ] The wording of the resolutions, the circumstances and context in which they were passed, the duties performed and payments made to McKenzie, and the fact that no monthly payments were made to the plaintiff, nor were any requested, all support the defence position that the monthly payment for “Office Reeve” was for office supervision and duties which were not assigned to the plaintiff by council in 2016 and were not performed by him. [ 52 ] The $1,000.00 payment was in lieu of an hourly or daily rate for the same duties, which would have required more detail and accounting.

If no such duties were performed, presumably no hourly or daily rate would have been claimed. Similarly, I fail to see any justification for paying a monthly rate if no duties were performed by the plaintiff. [ 53 ] There is no evidence to support the plaintiff’s contention that council agreed or resolved to pay out the indemnity only at the end of the year in 2016. Resolution #498/12/16 only directs payment by December 30, 2016 and does not speak to delaying earlier payments. [ 54 ] The plaintiff was present at and chaired all of the RM council meetings until the election in 2016.

I am satisfied that he was well aware of the intention and purpose of the resolutions. By not requesting the payment, if he did continue to believe he was entitled to it, he did not alert council to any misunderstanding which they could easily have rectified with another resolution. CONCLUSION [ 55 ] I am satisfied that the term “Office Reeve” and the $1,000.00 monthly stipend referred to in the resolutions, including resolution #36/01/16, was intended as compensation for office supervision duties.

The plaintiff was relieved of those duties by council and the duties were temporarily assigned to another councillor along with the payment. The office supervision duties were never again assigned to the plaintiff during the term of his office nor did he perform those duties throughout 2016. [ 56 ] The plaintiff’s claim for the $1,000.00 monthly payment fails. The plaintiff is entitled to the sum of $3,887.50 for his other duties and expenses, in accordance with resolution # 36/01/16 and section 82(1) of The Municipalities Act .

[ 57 ] The plaintiff will have judgment against the defendant for $3,887.50. There will be no order as to costs. _______________ V. Meekma, J