The Whalley Trial Part I: Setting the Scene

Editor’s Note: John Whalley, the former Economic Development Manager of the Cape Breton Regional Municipality (CBRM) is suing the CBRM for constructive dismissal. The case finally came to trial from 20-24 August 2018 and the Spectator was there. We’re presenting our coverage in a series of articles because the trial touched on so many issues of interest to CBRM residents. 

 

A civil action or suit starts when individuals or corporations disagree on a legal matter, such as the terms of a contract or the ownership of a piece of property…The person who sues is called the plaintiff. The person being sued is called the defendant…The two sides can reach a settlement at any time before the judge makes his or her decision. In fact, 98 percent of civil suits never make it to the courts — How do civil cases work? Department of Justice Canada

John Whalley’s civil suit against the Cape Breton Regional Municipality (CBRM) for constructive dismissal played out in court this week on two completely different levels.

On the surface, it was as billed — a constructive dismissal case in which the plaintiff, Whalley, the former economic development manager with the municipality, argued that the removal of all responsibility for port development from his file in May of 2015 amounted to a significant breach of his employment contract.

Civic Centre, CBRM

Civic Centre, CBRM

Scratch that rather dry, legal veneer, though, and Whalley’s suit was something quite different — it was a peek into the inner workings of the administration of CBRM Mayor Cecil Clarke during a very controversial period that included the sale of Archibald’s Wharf,  the McKeil deal and other strange doings around port development. (I trust that, as a Spectator reader, you are familiar with both. If you are new to the story, I suggest you make a cup of coffee, type  “McKeil” or “Archibald’s Wharf” into the search bar on the home page and read everything that turns up.)

Clarke, who was not called upon to testify himself and did not attend  the trial, was nevertheless present literally from the beginning — when former CAO Jerry Ryan testified that within weeks of Clarke’s being elected, he was in Ryan’s office announcing he didn’t believe Ryan and Whalley could work with the new administration — to the end — when Whalley’s lawyer, in his summation, referred to a message the Mayor sent Whalley, the day after he’d resigned, to the effect that the “door was open” to his returning.

Arguably, in both instances, Clarke was overstepping his authority, given that in Nova Scotian municipalities the CAO is ultimately responsible for hiring and firing staff and the council is responsible for hiring and firing the CAO. The mayor, on the other hand, according to the handbook provided to newly elected municipal councilors in 2016:

…is elected at large by all voters in a municipality and acts as a chairperson of council meetings. While the mayor presides over council meetings, this position has the same single vote as other councillors.

The mayor is often considered the leader of a council and has a few additional responsibilities. It is important to remember, however, that the mayor is another member of council with no extra power on decision making. While mayors should provide some leadership to their councils, they should not use their powers to direct or focus councils on any personal agenda or attempt to influence voting.

I hope justice will be done in the actual legal case (I always hope justice will be done, which should probably go without saying) but I won’t lie to you: my real interest this week was in this deeper current; this unnamed “something” the CBRM’s solicitor, Tony Mozvik of The Breton Law Group, feared the trial was “turning into;” this attempt to, as Mozvik put it, “embarrass people;” this trip into “the weeds” of the McKeil deal and the sale of Archibald’s Wharf. In short, this possibility of finding out what was really going on at the Civic Centre during a period so puzzling it made me start caring about local municipal politics.

 

The Scene

As a reporter, I’ve never covered the courts.

As a citizen, I was in court precisely once: it was during something called (I kid you not) “Takeover Day” in high school when students from Sydney Academy and Holy Angels got to shadow municipal officials and employees for the day. I can’t remember which employee I shadowed, but one of the things we did was step into a family court session where I watched an unhappy-looking man explain why he wasn’t making child support payments. I think any thought I’d ever had of becoming a lawyer myself disappeared that day.

In short: the idea of covering a court trial was somewhat intimidating. But as I was entering the Provincial Court House on Charlotte Street last Monday morning (struck, as I always am, by its resemblance to a giant Airstream trailer), I heard a young man who had just gone through the metal detector inquire brightly of a sheriff, “Where do I go to be sentenced?”

It was grounding, to say the least.

If you are a member of the legal profession or a court reporter or a hardened criminal or a generally litigious person, you will probably want to skip the next few paragraphs, but if you are, as I was prior to this trial, unfamiliar with Sydney’s Provincial Court House, then read on.

Provincial Court House, Sydney, NS.

Provincial Court House, Sydney, NS.

The Whalley trial took place in Courtroom 10 on the fifth floor. It’s a small room that puts you in mind of a hospital chapel, complete with wooden pews. (I guess you could call them wooden benches, but  I had to fight the urge to genuflect before sitting down.)

The judge’s bench — occupied for the week by Justice Patrick J. Murray of the Supreme Court of Nova Scotia — dominates, taking up most of the back wall. The judge sits in an office chair flanked by Canadian and Nova Scotian flags.

The witness box is to the judge’s left while the judicial assistant (JA) sits at a desk in front and to his right. (There were two JAs over the course of the trial, both women. It seems to be a profession dominated by women in this province, if this list of 25 Nova Scotia JAs on LinkedIn is any indication.) The JA tells you to rise when the judge enters or leaves the chambers, announces court is in or out of session (and says “God Save the Queen” at the beginning of a session), transcribes the proceedings and swears in witnesses. Witnesses are given the choice of swearing they will tell the truth on the bible or by affirmation. The bible, along with a carafe of water and some Styrofoam cups, is kept on a table in front of the bench.

The lawyers sit at tables facing the judge – the lawyer for the defendant to his right, the lawyer for the plaintiff to his left. At the very beginning of the trial, Whalley’s lawyer, Blair Mitchell of the Halifax firm Mitchell, Ferguson & Associates, asked Justice Murray’s permission to have Whalley join him at the table. Permission was granted and Whalley sat next to Mitchell for the duration of the trial. The representative of the CBRM, on the other hand, Regional Solicitor Demetri Kachafanas, sat behind the CBRM’s solicitor, on one of the benches. Mozvik shared his table with an articling clerk from his firm.

Both lawyers wore heavy, black, sleeved gowns but no wigs. (I have been watching too many British legal dramas, it seems.)

Everyone else sits in the public gallery (on the aforementioned benches), which is separated from the rest of the court room by the “bar” — in this case, a low half-wall with a gate in the middle directly behind the lawyers’ tables. (As I have learned just this minute from Wikipedia, this bar between the parts of the court room reserved for the public and those reserved for lawyers and judges serves as a metonym for the entire legal institution in a phrase like “admitted to the bar.”)

There are three rows of benches behind the defense lawyer’s table and four behind the plaintiff’s lawyer’s table. I sat in the third bench back behind the plaintiff with the reporters from the CBC and the Cape Breton Post (who know how to cover court and were very helpful to me.)

Two entire walls of the court room — the one behind the judge and the one to his left — are taken up by windows. The view of the North End is downright distracting.

A sheriff sits at the back of the court room and calls people in when court goes into session, warns people when their cell phones go off and escorts witnesses out when the judge needs to decide some question of evidence or settle a solicitor’s objection out of their hearing.

Other than media, I counted 10 spectators over the course of the week, including District 6 Councilor Ray Paruch and District 11 Councilor Kendra Coombes, but all 10 didn’t attend every session, every day.

Random additional observations:

The password for the wi-fi changes daily. In fact, they have a bunch of guest accounts, each with its own username and password, all of which change daily. I’m not sure what purpose this serves, other than to ensure the plaza out front is not clogged with cruise ship passengers and crew using the court house wi-fi

The acoustics are terrible.

 

The suit

Whalley, as noted above, is suing the CBRM for constructive dismissal.

So, what is that?

Writing in Canadian Employment Law Today in 2015, Ryan K Smith defined constructive dismissal this way:

Constructive dismissal arises when an employee who has not been expressly terminated claims the employer’s actions amount to a repudiation of the employee’s employment contract.

Citing the Supreme Court of Canada decision in Potter v. New Brunswick Legal Aid Services Commission, Smith said the constructive dismissal can take two forms:

  • a single unilateral act by the employer that breaches an essential term of an employee’s employment contract; or
  • a series of acts by the employer that, taken together, show the employer no longer intends to be bound by the employment contract.

At the very end of the trial, in his summation, Whalley’s solicitor referenced these two forms of constructive dismissal, leading Justice Murray to ask Mitchell if he intended to rely on both for assessing constructive dismissal in Whalley’s case. Mitchell said he did.

Proving the first form of constructive dismissal, according to Smith:

…requires an analysis of the employee’s contract, and typically arises when the employer unilaterally changes an employee’s compensation, duties or place of work. When this occurs, the employee must prove on a balance of probabilities that: (i) the employer breached an express or implied term of the employee’s contract, and (ii) the breach substantially altered an essential term of the contract.

The second form (or “branch”) of constructive dismissal, on the other hand:

…occurs when the employer’s actions indicate the employer no longer intends to be bound to the employment contract. The second branch does not involve a breach of the contract; rather, it arises when the employer’s conduct makes continued employment intolerable for the employee. The courts must take a retrospective approach and consider the cumulative effect of past employer actions on the employee. The test to be applied is whether, in light of all the circumstances, a reasonable person would conclude that the employer no longer intended to be bound by the terms of the contract.

As you can imagine, much attention was focused on the terms of Whalley’s contract with the CBRM (in fact, much attention was focused whether such a contract even existed, as neither Whalley nor the municipality was able to produce it) and the description of Whalley’s responsibilities.

 

The remedy

A remedy is a means of resolving a civil case. There are three different types.

  • Monetary remedies, called damages, are the most common. The judge or jury who decides the case fixes the amount of damages. The judge or jury will take into account the expenses incurred by the plaintiff. Where the law permits, they can also award an additional sum to compensate the plaintiff for the loss suffered as a result of the wrongdoing of the defendant. The judge or jury is not required to award the plaintiff the amount he or she asks for. They might even award less than that amount. In Canada, a judge or jury may occasionally award “punitive” damages. This is a larger award that expresses the disapproval of the community. These damages are meant to punish the defendant because the defendant’s behaviour was so offensive. — How do civil cases work? Department of Justice Canada

I have to tread very carefully here, because I am not entirely sure I understand the remedy Whalley is seeking (and I stand ready to be corrected).

I believe Whalley is arguing he is entitled to 18 months’ severance, which he says he was promised by then-CAO Jerry Ryan when he was hired and which he always believed was in his contract.

Late in the trial, Justice Murray and Mitchell had an exchange about damages, during which Mitchell stated that he and his “friend” Mozvik had agreed on the calculation of damages, should they be awarded.

If I am understanding this correctly (and there is no guarantee that I am) then if Justice Murray agrees that Whalley was constructively dismissed, and if he agrees that Whalley had an employment contract that included severance, then he had no “duty to mitigate” (i.e. reduce) his losses, and his severance would not be reduced by his earnings at New Dawn. In making his case, Mitchell referenced a 2012 Canadian decision, Bowes vs Goss Power Products, which Toronto employment lawyer Phil White discussed on the Employment Law 101 blog:

The practical impact of Bowes is momentous. A significant number of employees in Toronto and the rest of Ontario have employment contracts that contain termination clauses that are silent with respect to mitigation. Previously it was presumed that the severance or termination payments set out in these employment contracts were subject to the duty to mitigate. Bowes has inverted this presumption.

Mozik argued that there was no contract other than the letter of hire which did not mention severance. He also, of course, argued that Whalley was  not constructively dismissed, that he quit of his own free will, so severance is not in any way an issue.

If the judge agrees with Mozvik that there was no fixed-term severance but still finds that Whalley was constructively dismissed and therefore entitled to common-law damages, Mitchell told Justice Murray they would admit Whalley had mitigated “one month out” (he was hired by New Dawn a month after leaving the CBRM) and look for one month’s salary.

There were some other complications surrounding “lump sum” payments versus payments over time, but I am going to leave that for Justice Murray to sort out.

Not being a lawyer, I have little of value to say about the merits of Whalley’s case and as I mentioned, my interest in the trial was chiefly in the glimpse it provided into the goings-on at the CBRM during the period. Therefore, what I propose to do is consider the testimony of each of the five witnesses at the trial, noting anything that seems relevant in terms of Whalley’s constructive dismissal case, but focusing on what we learned about issues of public interest like the McKeil deal.

 

 

 

 

The Cape Breton Spectator is entirely reader supported. Please consider subscribing today!