Fennel v. Kelowna Yacht Club Date:, 2012 BCPC 545

Citation: Fennel v. Kelowna Yacht Club Date: 20120522 2012 BCPC 0545 File No: 89286 Registry: Kelowna IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: HAROLD BRENT FENNEL CLAIMANT AND: KELOWNA YACHT CLUB DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE A.E. ROUNTHWAITE Appearing in person: Harold Brent Fennel Counsel for the Defendant: Alfred C. Kempf Place of Hearing: Kelowna , B.C.

Date of Hearing: April 25, 2012 Date of Judgment: May 22, 2012 [ 1 ] Harold Brent Fennel is suing the Kelowna Yacht Club (“the Club”) for damages for wrongful dismissal. Mr. Fennel worked as the Club’s Moorage Manager for 16 months before being dismissed without notice on August 16, 2010. Since the Club admits that it dismissed Mr. Fennel, it bears the burden of proving on the balance of probabilities that it had just cause for dismissal without notice.

In these Reasons for Judgment I will begin by setting out the facts proven in the trial and my assessment of the conflicting evidence, and then consider the following issues: 1. Has the Club proved that an email sent by Mr. Fennel on August 13, 2010 constitutes just cause for his immediate dismissal? 2. If not, what is the reasonable notice period? 3. If not, has he failed to mitigate his damages? Facts [ 2 ] A judge can never know all the facts but must decide cases on the admissible evidence presented in a trial. The relevant facts proven in this case are as follows. In 2007, Mr.

Fennel obtained a trade licence and began to operate a yacht charter business in the British Virgin Islands (“BVI”), similar to one he had previously operated and sold in 2002. He immediately listed the new business for sale: he intended to return to Canada eventually. [ 3 ] Early in 2009, the Club created the full time paid position of Moorage Manager and advertised it within British Columbia. Mr. Fennell heard about the employment possibility from a family member in Kelowna and applied. After three interviews, he was offered the position on March 3, 2009. He accepted and agreed to start work on April 13, 2009.

He hired a friend to honour his charter commitments in the BVI and ceased operating his business that summer. [ 4 ] The Club did not entice or induce Mr. Fennel to leave his business. He applied, was selected from about fifty applicants, and accepted the Club’s job offer knowing that he could be terminated for any reason during a three-month probation period. Mr. Fennel was induced to seek the job by his own desire to obtain long-term employment in Canada rather than by anything the Club promised or did. His circumstances are similar to those in Quinlan v.

Bridgeport Self-Serve Carpet Clinic Ltd., 1993 Carswell BC 1196 (BCSC) , where the employee had owned his own business, was looking for an opportunity to move on, and approached the employer seeking employment. In that case the B.C. Supreme Court found no inducement. [ 5 ] Although Mr. Fennell’s probation was extended by three months, he proved to be a competent employee, obtaining positive performance appraisals. His communication with Club Members improved over time.

He also demonstrated initiative in proposing improvements to the Club’s marina that increased its income. [ 6 ] The Club has about 1200 voting members and its operations are controlled by a Board of Directors. Its Chief Executive Officer (“CEO”) and Board Chair has the title of Commodore and gives direction to the General Manager. Volunteer members serve as Moorage Director and on a Moorage Committee. Initially Mr. Fennell was told to report to the Moorage Director because the Club anticipated a change in General Managers. When James Kay became the General Manager in June 2010, Mr.

Fennel was required to report to him. [ 7 ] The duties of the Moorage Manager included ensuring “the moorage regulations and the moorage agreements are complied with.” The moorage regulations contained provisions governing the size of vessels to be accommodated in different length slips. Because slips are allotted in accordance with members’ seniority and boat size and there is a waiting list, assignment of slips is always contentious.

One witness described the challenge of enforcing moorage regulations against Club members as “knitting fog and herding cats.” [ 8 ] In the spring of 2010 issues arose with regard to enforcement of the moorage regulations. Mr. Fennel believed the regulations as he interpreted them should be strictly enforced and members in violation brought into compliance. He was particularly upset when the Club’s Commodore, Robert Smith, involved himself in issues concerning a long-term member’s boat, met with the member’s employee and the Club’s General Manager without Mr.

Fennel or the Moorage Director being present, led the Board of Directors in approving an accommodation for the member after the Moorage Committee had recommended enforcement, and authorized issuance of a key card to an employee of the member. [ 9 ] On June 21, 2010, Mr.

Fennel emailed a letter to the Commodore, Moorage Director, Assistant Moorage Director, and incoming and outgoing General Managers expressing confusion about the Board’s decision in this case, reporting on how he had dealt with certain commercial activities in the marina, and recommending that the Club take advantage of upcoming dock development to “eliminate the legal and financial liability the KYC faces in condoning the ongoing violation of this regulation.” He also expressed confusion about the Board’s decision in the member’s case and frustration on being “responsible but not in the loop” for discussions about it.

In this letter Mr. Fennel advocated his position forcefully, but expressed himself with appropriate tact and respect.

[ 10 ] The June 21 letter cannot be considered

an act of “whistle blowing” because in employment law that term refers to an employee reporting wrongdoing or illegal acts. Although Mr. Fennel alleges the Commodore engaged in “criminal breach of the KYC moorage contract by means of “accommodations”” there is no evidence whatsoever of any unlawful activity by the Club’s Commodore or Board. First, Mr. Fennel appears to have misinterpreted the moorage regulations. There is no evidence of the terms of any moorage contract, but the portions of moorage regulations entered in evidence are more ambiguous than Mr. Fennel thinks.

They contain guidelines for the length of vessels in slips of various lengths but state that they apply “in general” and contemplate exceptions based on boats’ beam. Another provision prohibits members from lending key cards but is silent on the Club issuing cards. So the evidence fails to prove that the Commodore or Board breached any contract or regulation.

Second, even if the Board had condoned violations of the Club’s moorage regulations or some contractual term, it would be a civil matter at most, and would not amount to “illegal acts” or “a criminal breach.” [ 11 ] If the Board was not consistent in making exceptions to the general rules contained in the Club’s moorage regulations it would have put Mr. Fennell in a difficult position and would undoubtedly have been frustrating for him, but there is no evidence that the letter played any

part in Mr. Fennel’s dismissal. However, he did not receive the response he wanted. He met with the people to whom he had sent the letter in July and was told that his new job description was to “make everyone happy.” It is clear from his testimony and demeanour while testifying that Mr. Fennel was unhappy with this direction, angry about the Board’s refusal to stringently enforce the moorage regulations as he interpreted them, and particularly unhappy with Mr. Smith’s leadership in this area. [ 12 ] That is the background to the events that precipitated Mr.

Fennel’s dismissal. [ 13 ] The Club is located in downtown Kelowna with the gate to its docks on a public promenade. On Friday, August 13, there were bands playing at the Club and in a nearby park. When Mr. Smith returned to the Club after a day of boating he was concerned by non- members milling around the main gate and slipping onto the docks when members opened it. He understood that Mr. Fennel had arranged for a commissionaire to guard the gate, but was unable to locate a commissionaire. [ 14 ] He telephoned Mr.

Fennel at home at 9:34 and left a calm, polite voice message saying he was at the club and didn’t see any sign of security; there were people running everywhere; and he thought there should be some security on the gates. He asked that Mr. Fennel call him and broke off while giving his phone number because his telephone beeped, indicating an incoming call. That call was from Mr. Fennel. The two men spoke, with Mr. Smith calmly explaining the problem. He was not angry and did not demand that Mr. Fennel come to the Club. Mr. Fennel offered to come and did so although Mr.

Smith told him it wasn’t necessary. [ 15 ] Mr. Smith then found two commissionaires who had been dealing with a problem on the dock, and asked them to place a guard at the gate. One of the commissionaires followed Mr. Smith back towards the gate, where they met the General Manager Mr. Kay walking on the promenade and spoke briefly. Mr. Smith looked concerned but was polite and appropriate during this short conversation. The commissionaire went to the gate, and Mr. Kay and Mr. Smith left. When Mr.

Fennel arrived about 9:50 there was a commissionaire at the gate, and he made the erroneous assumption that because there was no security problem when he arrived there had been no problem previously. [ 16 ] Mr. Fennel remained at the Club for forty minutes and wrote the following email which he sent to the General Manager and all of the Club’s Directors except Mr. Smith at 10:33 that evening. Subject: Professionalism I do not need drunken phone calls from the Commodore at 9:35 at night telling me I’m not doing my job.

I do not need to be micro managed down to the KYC at 9:35 at night by a drunken Commodore to be ordered to do security at the gate when there are 3 Commissionaires on duty doing their jobs properly. Brent Fennel, Moorage Manger, KYC ( sic ) [ 17 ] The next morning, a Saturday, Mr. Kay told Mr. Fennel that he sympathized with him for being called after hours as often as he was; he wasn’t sure how the Club would react to his email; and they’d find out on Monday. Mr. Fennel showed his email to Christine Anderson, the Club’s Office Manager.

She told him not to send it, and he said something to the effect of “It’s too late. It’s gone. They’re going to fucking have to choose – it’s fucking Commodore Bob or me.” That afternoon when he said goodbye to her he said “I don’t know if I’ll see you again. It’s been nice working with you.” [ 18 ] On Sunday, Mr. Smith read the email after the Vice Commodore forwarded it to him. He saw Mr. Fennel at the Club but they didn’t speak. The Club’s flag officers convened a Special Meeting and passed a motion electronically to terminate Mr. Fennel’s employment. Mr.

Smith did not move the motion or vote on it. [ 19 ] On Monday, August 16, three Directors instructed Mr. Kay to dismiss Mr. Fennell. He did so in the presence of two Directors, one of whom told Mr. Fennell his email was “political suicide”. They accompanied Mr. Fennell to his office to collect belongings and he left the Club. Mr. Kay told him he could return to collect anything he forgot. The next day Mr. Kay sent Mr.

Fennel written confirmation of his dismissal, stating that his email was very confrontational and disrespectful; it was not consistent with the Rules of Conduct for employees, and his decision to bypass the chain of command could not be condoned. Assessment of the evidence [ 20 ] There were two main areas of dispute about the facts: whether Mr. Smith was drunk when he spoke to Mr. Fennel on August 13, and the content and tone of their conversation. With regard to the first issue, Mr. Fennel said Mr. Smith was drunk when he telephoned. Mr.

Smith testified that he had about four drinks in four hours that evening and didn’t feel impaired.

[ 21 ] Because his recorded voice message was entered in evidence, I was able to listen to Mr. Smith’s speech a moment before he spoke to Mr. Fennel. In the voicemail Mr. Smith spoke clearly and at a normal pace without slurring any words. Having listened carefully to the recordings of the voicemail and his testimony several times, I noticed no difference between Mr. Smith’s speech on the voice message and his speech while sober and testifying in court. Mr. Fennel interpreted Mr. Smith’s behavior in breaking off while giving his phone number as a sign of intoxication but I found it to be more consistent with Mr.

Smith being interrupted by the incoming call. [ 22 ] Karen Dowsett, then Restaurant Manager for the Club, said she spoke to Mr. Smith for 1 to 1½ minutes that evening when he came into the kitchen to ask about security at the gate. She said she thought he was inebriated based on her observations that his eyes were red and a little glazed, his speech slightly slurred on some words, and the smell of alcohol on his breath. [ 23 ] I accept that Ms. Dowsett was a truthful witness. She was later dismissed by the Club but received severance pay and is at peace with having been terminated.

However, I note that she appears to have been unhappy with Mr. Smith’s intrusion into the kitchen and to have spoken to him rather abruptly, telling him she didn’t know anything about security and he shouldn’t be in the kitchen. Ms. Dowsett had a very brief opportunity to observe Mr. Smith, and it is possible her perceptions were influenced by her impatience with an interloper in the kitchen. Moreover, I noticed no slurring in Mr. Smith’s voice message, and sun and fatigue are other possible causes of red, glazed eyes. [ 24 ] I conclude that it is possible Mr.

Smith was slightly inebriated, but if so, his degree of inebriation was indeed slight and would not have affected his behavior during his telephone conversation with Mr. Fennel. The word “drunken” has a pejorative connotation and commonly suggests greater intoxication than “inebriated.” Mr. Smith definitely did not sound drunk on the voice message recorded one minute before he spoke to Mr. Fennel. If Ms. Dowsett told Mr. Fennel that Mr. Smith was drunk that evening she was either mistaken or exaggerating. [ 25 ] Mr. Fennel and Mr.

Smith also gave contradictory evidence about the tone and content of their telephone conversation on August 13. Mr. Fennel claimed Mr. Smith berated him, insulted him personally and professionally, and ordered him down to the Club to stand guard at the gate. Mr. Smith denied this.

When assessing the reliability and credibility of both witnesses’ testimony, it can be helpful to consider factors such as: - changes in testimony during direct and cross-examination, - reliable evidence that conflicts with the witness’s testimony, - attitude and demeanour, - ability to remember, and - previous occasions on which the witness has been untruthful. [ 26 ] I conclude that Mr. Smith’s testimony was more credible than that of Mr. Fennel for the following reasons. First, Mr. Fennel’s testimony changed from direct to cross-examination. In his initial account of receiving Mr. Smith’s telephone call, Mr.

Fennel described what he was doing in minute detail: he said he was at home, in bed, eating crackers, and watching South Park . He said he missed the message and returned the call in several minutes. However, in cross-examination he said he wasn’t there when the message happened. When asked to explain the contradiction he said he may have been in the shower when Mr. Smith called since they usually go for a run in the evening and then shower. Mr. Fennel’s vagueness on his whereabouts in cross-examination was in striking contrast to the specific details he volunteered in direct examination. [ 27 ] Second, Mr.

Fennel’s testimony was contradicted by other reliable evidence. For example, he insisted that he called Mr. Smith back several minutes after the message was left. However, the record of Mr. Smith’s wireless usage shows that he made a two-minute call to Mr. Fennel at 9:34 and received a three-minute call from Mr. Fennel at 9:35. I note that the wireless record doesn’t show fractions of a second and the wireless provider appears to round minutes off, but Mr. Fennel must have returned the call during or within seconds of Mr. Smith’s message, not several minutes later. [ 28 ] In addition, Mr.

Fennel’s evidence that Mr. Smith insulted and berated him is inconsistent with the pleasant tone of Mr. Smith’s voicemail message, and his demeanour when speaking to Ms. Dowsett and Mr. Kay. It simply doesn’t make sense that Mr. Smith’s mood would have changed within a minute from polite and calm to angrily berating and insulting Mr. Fennel without provocation. [ 29 ] Third, Mr. Fennel was extremely evasive and argumentative under cross-examination. For example, although it was suggested to him five times that Mr. Smith didn’t sound angry in the voice message, Mr.

Fennel would not answer the question, but replied twice that his impression was that Mr. Smith was drunk, and three times that he believed he was upset. When asked about the chain of command he would not admit that he was required to report to the General Manager in August 2010 but first said he was routinely contacted by different people, and then said he was told to copy his reports to various people. [ 30 ] When asked if he was responsible for security, Mr. Fennel repeated several times that he didn’t sign the contract; then said he

made the arrangements for security at the direction of the General Manager; and then said he facilitated it at the direction of the G.M. However, Mr. Kay testified that Mr. Fennel was responsible for making security arrangements and in an August 6, 2010 email sent to the commissionaires’ operations manager and to Mr. Kay, Mr. Fennel gave detailed instructions for the placement of commissionaires and said “We will require a more visible presence on the dock in the future and I think this is the best way to accommodate our Members.” This certainly conveys the impression that Mr.

Fennel was making decisions about security for the Club. In this email Mr. Fennel advised that the Club required a third officer to be stationed at the main gate on weekend nights, the issue about which Mr. Smith telephoned him. [ 31 ] Fourth, Mr. Fennel said Mr. Smith berated him and ordered him to go to the Club to stand guard, but he did not provide any other details of the telephone conversation. Given how upsetting Mr. Fennel found the conversation, one would expect him to remember some of the personal and professional insults he alleges were made. [ 32 ] Fifth, Mr.

Fennel was proven to have been untruthful on other occasions. When dealing with a potential purchaser of his business in 2009, Mr. Fennel wrote in emails “I have an offer for the Trade Licence” although he had refused the offer two years before. He also wrote that he had sold his original business in 2002 for $430,000 although he testified the price was $220,000. [ 33 ] Considering all the evidence, it appears possible that Mr. Fennel’s perceptions of the phone call were affected by his feelings about Mr. Smith’s conduct in regard to enforcement of the moorage regulations. [ 34 ] On the other hand, Mr.

Smith gave his evidence in a straightforward manner. He was co-operative in cross-examination, agreeing with Mr. Fennel about having given a key card to the long-term member’s employee even though he couldn’t recall having done it. His testimony didn’t change, and except with regard to his state of sobriety it wasn’t contradicted by independent evidence. He gave responsive answers to the questions he was asked, and displayed no hostility towards Mr. Fennel. [ 35 ] Mr. Smith’s testimony that he spoke calmly to Mr. Fennel on the telephone is supported by other evidence.

It is consistent with his manner in the voicemail and with his polite conversations with Mr. Kay and Ms. Dowsett that evening. The commissionaires’ log also supports his evidence. It shows that at 8:52 on August 13 there were two commissionaires on site and a third at Hot Sands Beach. Then, at 9:15 more than one commissionaire dealt with a security problem on the dock. The log does not mention a commissionaire being at the gate until 10:00. Did Mr. Fennel’s August 13, 2010 email constitute just cause for his immediate dismissal? [ 36 ] I accept the propositions of law that Mr.

Fennel relied on: “Dismissal is an extreme measure, and not to be resorted to for trifling causes. The fault must be something which a reasonable man could not be expected to overlook.” ( McIntyre v. Hockin (1889) , O.J. No. 36, 16 O.A.R. 498 (OCA) . And where an employer relies on a single instance of misconduct to justify dismissal, the misconduct must be serious. ( Laws v. London Chronicle ( [1959] 1 WLR 698 CA) . Was Mr. Fennel’s misconduct so serious that a reasonable employer could not be expected to overlook it? I find it was, for the following reasons. [ 37 ] On the evidence in the trial, Mr.

Fennel’s email was inaccurate with regard to the security situation at the Club that evening and the content of the telephone conversation. It was either inaccurate or exaggerated about Mr. Smith’s state of sobriety. Its language and tone were pejorative, inflammatory, insubordinate, insolent, and disrespectful to the CEO and Board Chair of Mr. Fennel’s employer. [ 38 ] The email did not amount to whistle blowing. Even if Mr. Fennel were correct in thinking that there had been no security problem and Mr.

Smith was drunk when he called, there was no unlawful activity about which a whistle could be blown, and the telephone call he described was a very far cry from the sexual harassment or theft to which he compared it while testifying. [ 39 ] Nor did the email amount to a bona fide complaint requiring the Club to investigate and provide due process. The email was an angry outburst. A bona fide complaint would have described the conduct complained of in detail and in a factual manner. Mr. Fennel testified that he had no option but to immediately address Mr.

Smith’s behavior with the Board because it was the only body that could censure the Commodore. He said he believed Mr. Smith had “crossed the line and his transgression should be dealt with” by the Board. [ 40 ] Mr. Fennel was not seeking a solution to the problem of receiving unwanted after hours calls. He was not seeking a solution that would permit him to maintain a working relationship with the Club’s CEO. Instead, his sole motive in sending the email was to have Mr. Smith, whose failure to enforce regulations upset him, punished for a “transgression.” [ 41 ] Given that Mr.

Fennel continues to maintain he acted appropriately and expresses no regret, and my findings that his email was inaccurate and exaggerated, nothing would have been gained by the Board asking Mr. Fennel “for his side of the story.” An investigation would merely have confirmed that termination was the only possible course of action. [ 42 ] Mr. Fennel’s misconduct in writing the email about his CEO was rendered more serious by his failure to follow the appropriate channels and bring the matter to the attention of his supervisor, the General Manager, or to address it directly with Mr. Smith. Mr.

Fennel’s dissatisfaction with the General Manager’s responses to other issues (in which Mr. Kay followed the directions of the Board) did not justify his failure to follow the chain of command with a complaint about the Commodore. There is no evidence that Mr. Kay would not have responded appropriately to a complaint about being telephoned after hours. In fact, he expressed sympathy about this. Nor does the fact that Mr. Fennell was encouraged to send copies of his reports to his supervisor to other people as well, change the chain of command or justify his sending the email to all members of the Board except Mr.

Smith. [ 43 ] The circumstances in this case are similar to those in Van der Meij v. Victoria Immigrant & Refugee Centre Society 2008 BCSC 954 where an employee’s disrespectful letter to her board criticizing her supervisor was found to constitute just cause for dismissal. Justice Bruce wrote:

[60] I accept as a general proposition that an employee should be entitled to criticize her superiors without fear of immediate dismissal. However, in some circumstances criticism can undermine the employment relationship and render it impossible for the employee and her manager to continue working together.

When this occurs it is clear that the employee’s conduct will constitute just cause for immediate dismissal. [61] Where an employee’s complaint or criticism about her manager is provoked by unreasonable conduct or where the complaints are reasonably justified on the facts the employer may dismiss the employee; however, the obligation to give proper notice or pay in lieu of notice remains. The manner in which the employee voices her criticism of her manager is also relevant.

If the criticism is disrespectful in tone or language or is otherwise irreconcilable with continued employment then the employee’s actions may give rise to cause for immediate dismissal regardless of whether the complaints are justified. [ 44 ] Justice Bruce found that Ms. Van Der Meij’s decision to send her letter to her board of directors without first attempting to resolve the problems directly with her supervisor effectively destroyed the employment relationship and made it impossible to salvage.

She also found the language and tone of the letter to be disrespectful, pejorative, and unnecessarily inflammatory, and its contents to be exaggerated and inaccurate. [ 45 ] Similarly, in Chan v. Sable Fish Inc., 2010 BCSC 444 , an employee’s exaggerated, disrespectful, and inflammatory letter criticising his employer to the employer’s shareholders, among others, was found to constitute just cause for dismissal. [ 46 ] The content, tone and manner in which Mr. Fennel communicated with the Club’s Board destroyed the employment relationship and were irreconcilable with his continued employment.

They made it impossible for Mr. Fennel and his CEO to continue working together. In fact, Mr. Fennel recognized this in his conversation with Christine Anderson the day after he sent the email. He intended to make the Board choose between himself and Mr. Smith. Moreover, Mr. Fennel has not expressed regret for his action nor sought to apologize. [ 47 ] As in the Van Der Meij case, I find Mr.

Fennel’s August 13 email to constitute just cause for immediate dismissal because it was inaccurate and exaggerated, insolent, insubordinate, disrespectful, and inflammatory in tone and language, and because it was sent to the Board of Directors without first giving Mr. Kay or Mr. Smith an opportunity to deal with the problem and attempt to salvage the working relationship. Both the content of the email and the manner in which it was sent to the Board constituted a fundamental breach of the trust relationship between Mr.

Fennel and his employer. [ 48 ] Because the defendant has met its burden to establish just cause for dismissal, I need not consider the issues of reasonable notice and mitigation of damages. A.E. Rounthwaite Provincial Court Judge