Goodkey v. Dynamic Concrete Pumping Inc., 2003 BCSC 546

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Goodkey v. Dynamic Concrete Pumping Inc. 2003 BCSC 546 Date: 20030325 Docket: S069441 Registry: New Westminster Between: Keith Christopher Goodkey Plaintiff And Dynamic Concrete Pumping Inc. Defendant Before: The Honourable Mr. Justice Groberman Oral Reasons for Judgment March 25, 2003 Counsel for Plaintiff T. Watkins Counsel for Defendant T. Britnell [ 1 ] THE COURT: Following his dismissal from employment, the plaintiff brought a complaint under the Employment Standards Act , seeking (among other things) statutory severance pay.

Ultimately that part of the claim was dismissed by the Employment Standards Tribunal, which agreed with the defendant’s position that the plaintiff was dismissed for cause. The plaintiff now sues for wrongful dismissal. I have before me competing applications under Rule 18A for a determination of the question of whether the plaintiff's claim is barred by the doctrine of issue estoppel. [ 2 ] The history of the matter is of some importance and I will begin by outlining it. The plaintiff worked for the defendant company for approximately 14 years; at the time of dismissal he was an office manager.

In March of 2001, the plaintiff gave another employee permission to use concrete pumping equipment for a private job. The details of the arrangement are in dispute. [ 3 ] The plaintiff says he allowed the employee to use the pump on condition that the employee pay the company the amount of $200. He say this sort of arrangement was common practice. [ 4 ] The defendant alleges that the plaintiff allowed the pump to be used for the benefit of a competing company, and that the plaintiff's intent was to pocket the money he received from the other employee.

It asserts that the use of company equipment outside of company business was against policy and that that policy was well known. [ 5 ] There is dispute as to what the company's policies were with respect to private use of company equipment by employees outside of working hours. Suffice it to say that the plaintiff's version of events colours the situation as an innocent one, while the defendant's version clearly makes out cause for dismissal. [ 6 ] After the use of the equipment came to the employer's attention, it commenced an investigation.

On April 10, 2001, it dismissed the defendant, allegedly for cause, and refused to pay severance pay. [ 7 ] The plaintiff filed a complaint under the Employment Standards Act . He was not aware at the time of filing that larger damages might be awarded in a wrongful dismissal action than could be awarded under the Employment Standards Act . This appears to have come to his attention in August of 2001, in the course of a discussion with the investigator appointed as the delegate of the Director of Employment Standards.

[8] In September 2001 the plaintiff retained a lawyer and on September 26th, 2001 he filed the Writ of Summons and Statement ofClaim in this matter.

Coincidentally, on the following day, a determination was issued by the Director of Employment Standards,finding that the defendant had failed to prove just cause for dismissal and awarding the plaintiff $8,000 in respect of his statutoryseverance pay entitlement. [9] The defendant appealed the decision of the Director to the Employment Standards Tribunal. [10] At this stage, the plaintiff attempted to withdraw the complaint in respect of severance pay, indicating that he wished to have itdetermined in a civil action rather than through the administrative process. [11] The Director's delegate concluded that she had no ability to cancel the determination under the Employment Standards Act, butsupported the plaintiff by presenting written argument to the Tribunal urging it to cancel the determination in respect of severance pay. [12] The defendant took the position that the Tribunal should deal with the merits of the matter.

It argued that the plaintiff, havingchosen to pursue a remedy under the Employment Standards Act, could not now resile from that position. It asserted that thedetermination of the Tribunal would make the issue of severance pay res judicata and would prevent the plaintiff from seeking furtherdamages before the court. [13] The defendant provided the Tribunal with evidence that had not been before the investigator.

The plaintiff did not do so, butindicated that he wished to be able to adduce additional evidence in the event that the Tribunal was not minded to cancel the Director’sorder. [14] The Tribunal set January 18th, 2002 as the date for the oral hearing of the defendant's appeal. On December 17th, 2001, however,it received a call from counsel for the defendant, indicating that an oral hearing might be unnecessary.

The Tribunal contacted counselfor the plaintiff, who agreed that the matter could proceed without an oral hearing. [15] There may well have been a misunderstanding as to what was to be decided on the initial hearing. The plaintiff contends that heunderstood that only the issue of whether the severance pay claim should be left to the court would be decided. [16] There is some support for this view in the materials.

In particular, there is no indication that the plaintiff ever abandoned hisposition that he should be entitled to present additional evidence in the event that the Tribunal elected to determine the appeal on itsmerits.

More importantly, the Tribunal's letter of December 24th, 2001, confirming that no oral hearing would be held, states thatcounsel for the plaintiff: ...suggested that there might not be a need for an oral hearing, since the written material should, in her view, provide sufficient basison which to decide the jurisdictional and legal issues in the matter. [Emphasis added] [17] While the Tribunal's letter does not specifically state that it would be determining only "jurisdictional and legal issues," I think itcontains at least an implication that that would be the case. [18] The issue of whose version of the events would be accepted by the Tribunal was not, of course, either a jurisdictional or a legalissue, but one of fact.

Equally, the question of whether or not there was just cause for dismissal was not a question of jurisdiction or law,but one of mixed fact and law. [19] Notwithstanding its letter, the Tribunal proceeded to deal with the appeal on the merits, without an oral hearing. It allowed thepart of the appeal dealing with just cause, finding that the plaintiff was properly dismissed for cause.

An attempt by the defendant tohave the decision varied by way of rehearing was unsuccessful. [20] It is against this background that I must decide whether the decision of the Employment Standards Tribunal is finallydeterminative of the issue of just cause. If it is, the plaintiff's claim must be dismissed. If it is not, the plaintiff will be allowed toproceed with his claim without the bar of issue estoppel. [21] The leading case on whether a determination of an issue by an administrative tribunal will bind a court in civil litigation isDanyluk v. Ainsworth Technologies 2001 SCC 44 , [2001] 2 S.C.R. 460.

In that case, Mr. Justice Binnie, speaking for aunanimous court, enunciated a two-stage approach to the issue of whether an administrative tribunal determination founded an issueestoppel. [22] First, the court should consider whether the three preconditions to the operation of issue estoppel are present.

Those are (1) thatthe same question that is before the court has been decided by the tribunal; (2) that the tribunal decision was of a judicial nature and wasfinal; and (3) that the parties to the tribunal decision are the same as the parties before the court. [23] It is undisputed that the three preconditions are met in the case at bar. The question of just cause is identical in the twoproceedings. The tribunal decision was clearly required to be made on a judicial basis and was final; indeed, it is the same sort ofdecision that was before the Supreme Court of Canada in Danyluk.

Finally, the two parties before the administrative tribunal are thesame as appear before me in this action. [24] The second stage of the approach set out Danyluk is the exercise of discretion by the court. The objective at this stage, in thewords of Mr. Justice Binnie in Danyluk, is: ...to ensure that the operation of issue estoppel promotes the orderly administration of justice, but not at the cost of real injustice in the

individual case. [ 25 ] The court in Danyluk provides a list of seven factors relevant to the exercise of the court's discretion, but also states that these are not exhaustive.

The list of factors is open. [ 26 ] The factors listed are: the wording of the statute from which the power to issue the administrative order derives; the purpose of the legislation; the availability of an appeal; the safeguards available to the parties in the administrative procedure; the expertise of the administrative decision-maker; the circumstances giving rise to the prior administrative proceedings; and finally, the potential injustice of applying the doctrine of issue estoppel. [ 27 ] The first five of these factors I would describe as structural in nature, dependent primarily on the nature of the legislation and the tribunal.

The last two factors are more case-specific. [ 28 ] The sort of open-ended discretion approved by the Supreme Court of Canada in Danyluk carries with it substantial risk of inconsistent application, of Chancellor's foot justice. This risk is particularly troublesome, given that the entire purpose of the doctrine of issue estoppel is to promote certainty and finality in the judicial process.

For this reason, close attention must be paid to the manner in which this court has exercised discretion in previous cases. [ 29 ] I am aware of at least two recent decisions of this court on the question of whether a determination under the Employment Standards Act forms the basis of issue estoppel. They are Stewart v. Tarpline Products Inc. 2002 BCSC 59 , 16 C.C.E.L. (3d) 271 and Fuggle v.

Airgas Canada , 2002 BCSC 1696 . [ 30 ] The analysis of the five structural factors going into the exercise of discretion in those cases is entirely applicable in the case at bar, and I adopt what was said about them by Madam Justice Garson and Mr. Justice Burnyeat respectively, in the Stewart and Fuggle cases. [ 31 ] I will particularly quote the analysis in the Fuggle case. In respect of the wording of the statute, the court stated, at paragraph 30: The Employment Standards Act does not require a claimant to choose between civil action and the procedures set out under the Employment Standards Act .

In fact, s. 118 of the Employment Standards Act makes it clear that a person's right to commence civil proceedings is not affected by the Employment Standards Act . As well, under s. 82 of the Employment Standards Act an employee must obtain consent of the Director to commence another proceeding only if a determination has been made requiring payment of wages. There is nothing prohibiting an employee from commencing or continuing an action to recover wages if the determination was that wages were not to be paid.

Accordingly, I can conclude that the wording of the Employment Standards Act does not create an exclusive forum. [ 32 ] I agree with this analysis. Nothing in the Employment Standards Act suggests that the administrative regime is designed to supplant, rather than supplement, the ability of courts to deal with severance pay. [ 33 ] In respect of the wording of the legislation, the court in Fuggle stated as follows at paragraphs 31 to 32: Mr. Justice Binnie described the purpose of the Ontario legislation [in Danyluk ] as providing: ...a relatively quick and cheap means of resolving employment disputes.

Putting excessive weight on the Employment Standards Act decision, in terms of issue estoppel, would likely compel the parties in such cases to mount a full-scale, trial-type offence and defence, thus tending to defeat the expeditious operation of the Employment Standards Act scheme as a whole. This would undermine fulfilment of the purpose of the legislation. The purpose of the Employment Standards Act is to the same effect. Although the Director has the power and authority of a commissioner, the usual procedure adopted by the Director does not involve such an investigation as a commissioner might undertake.

Accordingly, the investigation undertaken is not an exhaustive one, so that the Director will usually have to rely on the submissions received. The purpose of the Employment Standards Act is to have in place a relatively quick and cheap means of resolving employment disputes. The procedures established under the Employment Standards Act do not really contemplate, nor should they contemplate, the procedures that would be available to litigants under the Rules of Court.

That being the case, it cannot be said that the purpose of the Employment Standards Act is to provide a claimant with all the advantages that would be available, if the dispute was to be resolved in civil litigation.

[34] With respect to the third factor, the availability of an appeal, it is noteworthy that an appeal was available and indeed pursued, aswas a reconsideration. This is a factor weighing in favour of applying the doctrine of issue estoppel, as it is protective of the rights of theparties.

As in Fuggle, however, it is noteworthy that the appeal itself was a limited investigation of the issues here. [35] With respect to the safeguards available to the parties in the administrative procedure, the procedures of the Director ofEmployment Standards and the Tribunal are geared to efficient resolution of disputes, rather than exhaustive investigation of facts. [36] In the case at bar, in particular, the fact-finding exercise was conducted in a perfunctory way, probably because of amisunderstanding between the plaintiff and the Tribunal as to the scope of the decision that would be made based exclusively on thewritten submissions. [37] With respect to the institutional expertise of the Tribunal, I echo what was said at paragraphs 39 and 40 of the Fuggle decision,discussing Danyluk: … Mr.

Justice Binnie concluded that the Employment Standards Act officer was a non-legally-trained individual asked to decide apotentially complex issue of contract law, that was the rough-and-ready approach suitable to getting things done in the vast majority ofESA claims, is not the expertise required here.

I can reach the same conclusion, regarding the expertise of the delegate and the questions which were to be decided by the delegate. [38] This same observation applies in the case at bar. [39] The last two factors in the exercise of discretion are, to my mind, decisive in this case. [40] I have set out the circumstances giving rise to the administrative proceedings. What was said at paragraphs 78 and 79 of theDanyluk decision is equally apt here: In the appellant's favour, it may be said that she invoked the ESA procedure at a time of personal vulnerability with her dismissallooming.

It is unlikely the legislature intended a

summary procedure for smallish claims to become a barrier to closer consideration ofmore substantial claims. … As Mr. Justice Laskin pointed out in Minott v. O'Shanter Development Co. (1999), (ON CA), 42 O.R. (3d) 321(C.A.) at pp. 341-42: ... employees apply for benefits when they are most vulnerable, immediately after losing their job. The urgency with which they mustinvariably seek relief compromises their ability to adequately put forward their case for benefits, or to respond to the case against them.

On the other hand, in this particular case it must be said that the appellant, with or without legal advice, included in her ESA claim the$300,000 commissions, and she must shoulder at least part of the responsibility for her resulting difficulties. [41] Similar considerations apply in the case at bar.

While the plaintiff may have been in a vulnerable situation, he clearly came to adecision that the Employment Standards regime, at least initially, was his best option and he bears some responsibility for that. [42] I find, however, the plaintiff, once apprised of his legal position, attempted to withdraw his complaint from the administrativeregime at a time when there was no real prejudice to the defendant in allowing him to do so.

This is not a case in which the plaintiffchose the administrative tribunal and changed his mind only after losing. [43] Here, while there was an initial unconsidered decision to proceed under the Employment Standards Act, it was replaced by adetermination to proceed to court, even before the favourable determination by the Director of Employment Standards. [44] There can be no suggestion that the plaintiff abused the process, by changing his mind as to the appropriate manner of proceedingonly after meeting with a lack of success. [45] With respect to potential injustice, it concerns me that the plaintiff may have been misled, by the unfortunate language of theTribunal's letter cancelling the oral hearing, into believing that it was not embarking on a full factual inquiry, but only a jurisdictional and

legal one.

While I fully agree with the defendant's assertion that it was not open to the plaintiff to insist that the Tribunal bifurcate the hearing, I do not think that this would justify me in ignoring the fact that the plaintiff may have been deprived of an opportunity to have an oral hearing as a result of a misunderstanding. [ 46 ] In the result, I have concluded that it would be unfair to apply the doctrine of issue estoppel here, and I declare that the doctrine of issue estoppel does not apply in the circumstances of this case. [ 47 ] The plaintiff is free to pursue his claim in the court untrammelled by the decision of the Tribunal. [ 48 ] That leaves the issue of costs.

It is my view that the matter of issue estoppel could have been entirely avoided if the plaintiff had immediately withdrawn his complaint from the Employment Standards Act regime when he decided to pursue litigation. He did not do so. Equally, it was open to him to seek to cancel the Director's determination before putting the defendant to the inconvenience of having to launch an appeal. [ 49 ] In the circumstances, I think it right that each party bear his or its own costs of this application and I so order.

In the result, the plaintiff's application is allowed, but without costs, and the defendant's application is dismissed without costs. “H. Groberman, J.” The Honourable Mr. Justice H. Groberman