Brian Butcher Respondent ( Petitioner ) v. Her Majesty the Queen in Right of the, 2003 BCCA 192

Court of Appeal for British Columbia Citation: Butcher v. British Columbia (Public Sector Employers' Council), 2003 BCCA 192 Date: 20030326 Docket: CA029693 Between: Brian Butcher Respondent ( Petitioner ) And Her Majesty the Queen in Right of the Province of British Columbia (Public Sector Employers' Council) Appellant ( Respondent ) Before: The Honourable Mr. Justice Braidwood The Honourable Mr. Justice Mackenzie The Honourable Mr. Justice Hollinrake J.G. Morley Counsel for the Appellant D.B.

Wende Counsel for the Respondent Place and Date of Hearing: Vancouver, British Columbia March 4, 2003 Place and Date of Judgment: Vancouver, British Columbia March 26, 2003 Written Reasons by: The Honourable Mr. Justice Hollinrake Concurred in by: The Honourable Mr. Justice Braidwood The Honourable Mr. Justice Mackenzie Reasons for Judgment of the Honourable Mr.

Justice Hollinrake: [ 1 ] This is an appeal from an order of a Chambers judge concluding that the respondent's 1995 contract of employment as Superintendent of School District No. 27 (Cariboo-Chilcotin) with the Board of School Trustees (the "Board") was not "renewed" within the meaning of s. 4.2 of the Public Sector Employers Act , R.S.B.C. 1996, c. 384 (the " Act ") on or after May 1, 1997. This judgment can be found at [2002] B.C.J.

No. 2789 (Q.L.) . [ 2 ] The respondent's contract as Superintendent with the Board as it pertains to this appeal was signed on June 26, 1995 but "deemed to have commenced on the 1st day of July, 1993." [ 3 ] That contract provided that unless the Board advises the respondent of lack of intention to renew or extend the contract by April 1 of each, the three-year fixed term was to be automatically extended by one year. The relevant clauses in the contract are: RENEWAL

9.1. The Superintendent's initial appointment shall be for three years and three months beginning March 26, 1990, to June 30, 1993, said employment period to be extended by one year by mutual consent every July 1st beginning July 1, 1991. 9.2.

If on or before April the first, the Board does not advise the Superintendent in writing that it does not intend to renew or extend his appointment as of its date of expiry, the term of the appointment of the Superintendent shall be deemed to have been extended to the terms of the Agreement for a period of a further twelve (12) months beyond its expiry date. [Emphasis mine.] [ 4 ] On May 1, 1997 the Employment Termination Standards , B.C.

Reg. 379/97 , (the " Standards ") came into force. [ 5 ] On July 28, 1997 the Public Sector Employers Amendment Act, 1997 was proclaimed bringing into effect the current s. 4.2 of the Act which provides as follows:

(1) The Lieutenant Governor in Council may, by regulation, adopt an employment termination standard for the purpose of this section.

(2) A regulation under subsection (1) may be made retroactive to May 1, 1997 and if made retroactive is deemed to be effective on the date specified in the regulation.

(3) If the Lieutenant Governor in Council adopts an employment termination standard by regulation under subsection (1), (

a) the regulation is deemed to be included in all contracts of employment commenced, changed or renewed on or after the effective date of the regulation, and (

b) any provision in a contract of employment commenced, changed or renewed after the effective date of the regulation that is inconsistent with the regulation is of no force or effect. [ 6 ] The parties are agreed, as they were in the court below, that if s. 4.2 applies it is on the basis of the word "renewed" as it appears in s. 4.2(3)(a). [ 7 ] Section 6(3) of the Standards promulgated under the Act effective May 1, 1997, reads:

(3) If an employee commences employment with a public sector employer during the notice period or period of notice in lieu of which severance is provided, (

a) no severance covering this period of re-employment is payable, and (

b) the employee must pay the government any amount that is attributable to the period during which the employee is re-employed. [ 8 ] As of May 1, 1997 the respondent's contract would have expired on June 30, 2000 if the Board had given him notice as to its intention to terminate on or before April 1, 1998.

So, on April 1, 1998, the Board having taken no steps pursuant to ss. 9.1 and 9.2 of the contract, the respondent's appointment was automatically extended to June 30, 2001, and the same applied to April 1, 1999 and April 1, 2000, leaving the contract in force until June 30, 2003. [ 9 ] However, on January 28, 2001, the respondent was advised by the Board that it no longer had confidence in his performance as Superintendent. As a result of this on February 9, 2001, the respondent reached a settlement agreement with the Board with releases being executed on both sides.

The consideration for the respondent's release was:

a) transfer of $44,000 to Mr. Butcher's RRSP;

b) a payment of $112,950 less statutory deductions on February 15, 2001;

c) a further payment of a gross sum of $112,950 less statutory deductions on January 1, 2002. [ 10 ] Then on August 1, 2001, the respondent obtained employment as a school superintendent with School District No. 8 (Kootenay Lake).

This led to the Public Sector Employers' Council taking the position that the Standards applied to the respondent and he was asked to repay the portion of his settlement payment attributable to his period of re-employment in the public sector after August 1, 2001. [ 11 ] The position of the appellant is that the respondent's contract with the Board was "renewed" after May 1, 1997 and is therefore caught by the Act and subject to the Standards.

The appellant says that: . . . a contract of employment is "renewed" within the meaning of the Act if and only if it would not be in continuing existence but for the free will of the parties exercised after May 1, 1997. Therefore, Mr. Butcher's contract was renewed after June 30, 2000, and the termination of his employment in February 2001 was subject to the Standards . [ 12 ] The position of the respondent and as the judge saw it, is that his contract cannot be said to have been "renewed" within the meaning of s. 4.2 of the Act on or after May 1, 1997.

The judge put it this way: The short point is that if the contract pursuant to which Butcher was employed by School District No. 27, as at February 8th, 2001, was "renewed" within the meaning of s. 4.2 of the Public Sector Employers Act on or after May 1st, 1997, the way is open for the Respondents to this petition to, perhaps , claw back some part of the benefit to Butcher under the February 9th, 2001 "Settlement Agreement." And if the contract was not "renewed" on or after May 1st, 1997, within the meaning of s. 4.2 of the Act , then Butcher prevails and the Respondents have no claim to make upon the proceeds of the "Settlement Agreement Dated February 9, 2001." For the answer to the question posed above -- "Was the 'Contract of Employment' renewed on or after May 1st, 1997?" -- to be yes, it must be that a receding of the termination date of a contract -- and nothing more -- triggered pursuant to a term of the contract by the parties doing nothing by or on a date fixed by the contract, such date occurring long before the contract is on the point of expiring, is a "renewal" of the contract within the true meaning of the words the Legislature used in s. 4.2 of the Public Sector Employers Act , (supra). [para. 10-11] [ 13 ] The appellant does not quarrel with the

interpretation principle set out by the judge when he said: I must apply the only principle or approach to statutory

interpretation that exists today, namely, "the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act , the object of the Act , and the intention of" the Legislature: [citations omitted]. [para. 14] but submits that the judge did not follow this principle in reaching his conclusion. Here is what the judge said in reaching his conclusion and with which I agree: As for R. v.

Pleich 1980 CanLII 2852 (ON CA) , 55 C.C.C. (2d) 13 (1980), I say this: In the case at bar, with nobody doing anything at all, the contract was extended each July 1st of 1998, 1999, 2000 when it was nowhere near "the point of expiring." That, in my respectful view, takes this case outside what is contemplated by the Ontario Court of Appeal in R. v. Pleich , supra , at 28, relied upon by counsel for the Respondents. I note here that other case law brought to my attention by counsel was considered by me but was, with respect, unhelpful to the point of not being worth mentioning in these Reasons for Judgment;

(4) At the end of the day, I find that the words of the statute -- note the use of "renewed" not "renewed or extended" -- as read in their entire context -- which context includes but is not limited to the statement of the purpose of the Act in s. 2 and the use of "renewal" but not of "extension" in s. 1 , item 4 of the Act -- and in their grammatical and ordinary sense -- "renew" and "extend" are properly viewed as words that are circles that are not concentric and cover only some of the same area -- harmonize with the scheme of the Act , the object of the Act , and the intention of the Legislature only if "renewed" is read so as not to catch every extension of a contract.

I find that the extension of a contract after May 1st, 1997, at issue here -- an extension triggered by complete inaction and in place long before the contract was near the point of expiring -- is the exemplar of the extension not caught by the word "renewed" in s. 4.2(3) (

a) of the Act . [para. 17] [ 14 ] The extension of the contract is one built into that contract if nothing is done by the appellant by April 1. That is what happened here. I cannot see this contract expiring within its terms until such time as the parties agreed that it expired which was the date of the settlement agreement of February 9, 2001.

The contract uses the words "to renew or extend" in s. 9.2 in terms of action by the Board but on no action forthcoming from the Board as here "the term of the appointment . . . shall be deemed to have been extended." [ 15 ] With respect I cannot accept in this contractual and legislative setting an assertion that the contract has been renewed when that contract has never expired be it by the agreement of the parties or a provision of the contract itself. [ 16 ] Black's Law Dictionary , 7th ed.,` at p. 1299, defines "renewal" as:

renewal , n. 1. The act of restoring or re-establishing. 2. The re-creation of a legal relationship or the replacement of an old contract with a new contract, as opposed to the mere extension of a previous relationship or contract. — renew , vb. Cf. EXTENSION (1); REVIVAL (1). [ 17 ] Counsel has referred us to Schewe v. Okanagan University College , [2001] B.C.J. No. 501 (Q.L.) (B.C.S.C.) . One of the issues in that case was the effect of the Public Sector Employers Act and the Regulations made pursuant to the Act .

On this issue, Brooke J. said this: The regulation establishing the employment termination standards is ordered to be effective May 1, 1997, pursuant to s. 4.2 (ii) of the Public Sector Employers Act . However, s. 4.2(iii)(

a) provides that if an Employment Termination Standard is adopted by regulation that "the regulation is deemed to be included in all contracts of employment commenced, changed or renewed on or after the effective date of the regulation..."

Section 1 of the Public Sector Employers Act defines "contract of employment" to mean "a policy or contract, whether written or oral, expressed or implied, with respect to or containing, terms of employment between a public sector employer and an employee." The defendant says that the salary of the plaintiff was increased May 27, 1997, and that is a "change" in the contract of employment. However, the contract of employment contains a term which provides for increments and this is neither a "change" in the contract of employment nor a "change" of a term of the contract of employment.

It is simply an application of the contract of employment. I find, therefore, that the contract of employment between the plaintiff and the defendant has neither commenced, been changed, nor been renewed after May 1, 1997 and, accordingly, that the Public Sector Employers Act has no effect upon the plaintiff's claim. [para. 27] [Emphasis mine.] [ 18 ] I agree with the decision of Brooke J. and his reasons for reaching that decision on this one issue. In my opinion, Brooke J.'s conclusion in the Schewe case on this issue before him is similar to my conclusion in the case before us on the issue of renewal.

That is, the extension of the contract is simply an application of the contract of employment. The fact is that if the Board does nothing as here, the contract is in effect an open-ended one and in my opinion there is no issue of renewal. [ 19 ] As can be seen from the above, my conclusion is that there was no renewal of the contract of employment within s. 4.2 of the Act and I would dismiss the appeal. ______________________________________ The Honourable Mr. Justice Hollinrake I AGREE: ____________________________________ The Honourable Mr. Justice Braidwood I AGREE: ____________________________________

The Honourable Mr. Justice Mackenzie