[1993] 3 F.C. 756
T-2760-92
Victor Pierre (Plaintiff)
v.
Roseau River Tribal Council (Defendant)
and
The Bank of Nova Scotia (Garnishee)
Indexed as: Pierre v. Roseau River Tribal Council (T.D.)
Trial Division, Rothstein J.—Winnipeg, May 26; Ottawa June 15, 1993.
Labour relations — Plaintiff dismissed from employment at Indian reserve — Adjudicator finding unjust dismissal, ordering reinstatement — Order registered in Federal Court — Plaintiff never returning to work — Receiver/Manager, appointed to control defendant’s financial affairs, terminating plaintiff’s employment — Garnishing order not set aside — While reinstatement order not guaranteeing employee position indefinitely, employer’s obligation after reinstatement not at issue as no reinstatement — Reinstatement not inferred from termination letter or plaintiff’s complaint to CLRB — Right to reinstatement cannot be circumvented by notional reinstatement — Although Canada Labour Code overriding common law specific performance inapplicable to personal service contracts, reinstatement order appropriate only when clearly warranted — Adjudicator’s registered order continuing to operate as judgment upon which to base garnishing order.
Practice — Contempt of court — Plaintiff dismissed from employment at Indian reserve — Adjudicator finding unjust dismissal, ordering reinstatement — Order filed in Federal Court — Receiver/Manager appointed to control defendant’s financial affairs — Plaintiff never returning to work — Show cause order issued — Motion to dismiss contempt application based on lack of service on Chief, Councillors dismissed — Knowledge of Chief, Councillors of Adjudicator’s order inferred from solicitor’s knowledge — Defendant not in contempt — Elements of contempt must be proved beyond reasonable doubt — Necessity for proof defendant having power to comply with order — Unclear defendant having such power after Receiver/Manager appointed.
These were applications for contempt and to set aside a garnishing order to show cause. On February 13, 1991 the plaintiff’s employment as Education Director at the Roseau River Indian Reserve was terminated. A CLRB Adjudicator found that his employment had been unjustly terminated, ordered his reinstatement and payment of backpay. On October 26, 1992 a Receiver/Manager was appointed to control the defendant’s financial affairs. The Adjudicator’s order was filed in the Federal Court Registry on November 9. The plaintiff never returned to work, although he was prepared to do so as of August 17, 1992. On December 14, 1992 the Receiver/Manager wrote to the plaintiff terminating his employment as of December 11, 1992. The plaintiff filed another complaint with Labour Canada, commenced contempt proceedings and a garnishing order to show cause issued based on the Adjudicator’s order filed in the Federal Court. On January 8, 1993 the garnishing order to show cause was set aside and an order issued requiring payment of amounts calculated in accordance with the Adjudicator’s order. On March 18, the Adjudicator’s order was formally served on the Chief and Councillors of the defendant. On March 31 payment was made in full pursuant to the January 8 order. On April 16 a second garnishing order to show cause issued based on purported non-payment of the amount ordered by the Adjudicator from December 22, 1992 to April 27, 1993.
The plaintiff argued that the defendant’s refusal to reinstate him pursuant to the Adjudicator’s registered order was contempt of Court. The defendant moved to dismiss the contempt application because personal service on the Chief and Councillors had not been effected until March 18. There could be no contempt without personal service. The defendant also alleged that the appointment of the Receiver/Manager removed the defendant’s power to reinstate and comply with the Adjudicator’s order. As to setting aside the garnishing order, the Receiver/Manager argued that the plaintiff’s reinstatement satisfied the Adjudicator’s order. He argued that a reinstatement order cannot require an employer to continue to employ an employee indefinitely and that an employer always has the right to dismiss for cause or to dismiss without cause provided the employee is paid in lieu of notice.
Held, the applications should be dismissed.
The motion to dismiss the contempt application was dismissed. Although the common law has always required personal knowledge of a court order as a precondition to liability in contempt, knowledge may be inferred from the fact that the solicitor was informed. The defendant’s solicitor received copies of all relevant decisions and orders. He copied and kept the defendant informed throughout. Other correspondence indicated knowledge by the defendant. Therefore the inference was that the Chief and Councillors of the defendant had personal knowledge of the Adjudicator’s order. The defendant was not in contempt. The contempt proceedings were against the Tribal Council, not the Receiver/Manager. Therefore, the contempt had to arise from the failure of the defendant to reinstate the plaintiff after the Adjudicator’s order was registered (November 9). The elements of contempt had to be proved beyond a reasonable doubt. This required proof that the defendant had the authority and power to comply with the order (i.e. could reinstate the plaintiff at his annual salary of $40,202). A Receiver/Manager having been appointed, there were two equally consistent possibilities: the defendant had power to comply with the Adjudicator’s order or it did not. There is authority for the proposition that in such case contempt should not be found to have been established beyond a reasonable doubt. It was not proved beyond a reasonable doubt that the defendant remained in control of its financial affairs such as to be in a position to reinstate the plaintiff and compensate him once the Receiver/Manager was appointed. Council had not voluntarily given up its financial authority to avoid compliance with the Court order. The Receiver/Manager was put in control for default under an agreement with Indian and Northern Affairs.
The second garnishing order (April 16, 1993) should not be set aside. While a reinstatement order does not guarantee an employee a position indefinitely, the question of an employer’s obligation after reinstatement did not arise in this case because there never was a reinstatement. Subsequent to the Adjudicator’s order, the plaintiff never actually resumed work, although he was prepared to do so. The closest the evidence came to indicating reinstatement was the “implied” reinstatement from the Receiver/Manager’s termination of the plaintiff and the plaintiff’s subsequent complaint to Labour Canada. Reinstatement could not be inferred from the termination letter or complaint. If that were the case, any employer could avoid effective compliance with the Adjudicator’s order by terminating an employee immediately after a reinstatement order was made. Parliament must have intended the right to reinstatement to be an effective one and not one that could be circumvented by a notional reinstatement by an employer merely for the purpose of formal compliance with an Adjudicator’s order only to effectively thwart it by a dismissal. The plaintiff’s complaint to Labour Canada simply described his understanding of the Receiver/Manager’s letter and was not an adoption of or acquiescence to any implied reinstatement solely for the employer’s purpose of subsequently terminating him. Although, at common law, specific performance did not generally apply to personal service contracts, the Canada Labour Code overrides the common law. The difficulties herein demonstrated that a reinstatement order should only be made when clearly warranted. The Adjudicator had regard to the considerations for determining whether to order reinstatement, and concluded that it was warranted. The Court was not acting in an appellate capacity in respect of the Adjudicator’s order and therefore had to accept that a valid reinstatement order was made and registered. There has been no reinstatement and the Adjudicator’s registered order continued to operate as a judgment upon which to base the April 16 garnishing order. Therefore it should not be set aside.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Canada Labour Code, R.S.C., 1985, c. L-2, ss. 240 (as am. by R.S.C., 1985 (1st Supp.), c. 9, s. 15), 242 (as am. idem, s. 16), 243, 244.
Federal Court Rules, C.R.C., c. 663, R. 355.
CASES JUDICIALLY CONSIDERED
APPLIED:
Bhatnager v. Canada (Minister of Employment and Immigration), [1990] 2 S.C.R. 217; (1990), 71 D.L.R. (4th) 84; 44 Admin. L.R. 1; 43 C.P.C. (2d) 213; 12 Imm. L.R. (2d) 81; 111 N.R. 185; In re Bramblevale Limited, [1970] Ch. 128 (C.A.); Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc., [1992] 2 S.C.R. 1065; (1992), 96 D.L.R. (4th) 376; 76 C.C.C. (3d) 289; 141 N.R. 281; Beloit Can. Ltée/Ltd. v. Valmet Oy (1988), 18 C.I.P.R. 1; 20 C.P.R. (3d) 1; 15 F.T.R. 240; 82 N.R. 235 (F.C.A.).
DISTINGUISHED:
Corneau v. Canadian Pacific Express and Transport Ltd., Roach, decision dated 9/2/82. C.L.R.B., not reported.
CONSIDERED:
Re Pierre and Roseau River Tribal Council, Order No. 092/282/080, Schulman A., order dated 31/7/92, C.L.R.B., 28 C.L.A.S. 36, not yet reported; United Nurses of Alberta v. Alberta (Attorney General), [1992] 1 S.C.R. 901; (1991), 71 C.C.C. (3d) 225; 135 N.R. 321; Canadian Imperial Bank of Commerce v. Boisvert, [1986] 2 F.C. 431; (1986), 13 C.C.E.L. 264; 68 N.R. 355 (C.A.).
AUTHORS CITED
Grosman, M. Norman. Federal Employment Law in Canada. Toronto: Carswell, 1990.
Sopinka, John, et al. The Law of Evidence in Canada. Toronto: Butterworths, 1992.
APPLICATIONS for contempt and to set aside a garnishing order to show cause. Applications dismissed.
COUNSEL:
Harvey I. Pollock and Robert B. Doyle for plaintiff.
Douglas N. Abra for defendant receiver-manager.
Jeffrey F. Harris for defendant.
Richard S. Literovich for garnishee.
SOLICITORS:
Pollock & Company, Winnipeg, for plaintiff.
Hill & Abra, Winnipeg, for defendant receiver-manager.
Keyser, Harris, Winnipeg, for defendant.
Buchwald Asper Gallagher Henteleff, Winnipeg, for garnishee.
The following are the reasons for order rendered in English by
Rothstein J.: This is an application for contempt under Rule 355 of the Federal Court Rules, C.R.C., c. 663. By agreement of counsel, heard contemporaneously with the contempt application, was an application to set aside a garnishing order to show cause which relates to the same matter as the contempt proceedings.
THE CONTEMPT APPLICATION
Rule 355 states:
Rule 355. (1) Anyone is guilty of contempt of court who disobeys any process or order of the Court or a judge thereof, or who acts in such a way as to interfere with the orderly administration of justice, or to impair the authority or dignity of the Court. In particular, any officer of justice who fails to do his duty, and any sheriff or bailiff who does not execute a writ forthwith or does not make a return thereof or, in executing it, infringes any rule the violation whereof renders him liable to a penalty, is guilty of contempt of court.
(2) Except where otherwise provided, anyone who is guilty of contempt of court is liable to a fine, which in the case of an individual shall not exceed $5,000, or to imprisonment for a period not exceeding one year. Imprisonment, and in the case of a corporation a fine, for refusal to obey any process or order may be repeatedly inflicted until the person condemned obeys.
(3) Anyone who is guilty of contempt of court in the presence of the judge in the exercise of his functions may be condemned at once, provided that he has been called upon to justify his behaviour.
(4) No one may be condemned for contempt of court committed out of the presence of the judge, unless he has been served with a show cause order ordering him to appear before the Court, on the day and at the hour fixed to hear proof of the acts with which he is charged and to urge any grounds of defence that he may have. The show cause order issued by the judge of his own motion or on application must be served personally, unless for valid reasons another mode of service is authorized. The application for the issuance of the show cause order may be presented without its being necessary to have it served.
(5) The procedure set out in paragraph (4) is without prejudice to an application for committal under Division I of Part VII. The two methods of proceeding are alternatives and when one has been acted on, the other cannot be invoked. The other provisions in this Rule are without prejudice to the inherent powers of the Court; and both this Rule and the inherent powers can be invoked on any appropriate occasion.
I summarize the relevant events as follows. The plaintiff had been Education Director at the Roseau River Indian Reserve for a number of years. On February 13, 1991, his employment was terminated. Pursuant to subsection 240(1) of the Canada Labour Code, R.S.C., 1985, c. L-2 [as am. by R.S.C., 1985 (1st Supp.), c. 9, s. 15], the plaintiff filed a complaint with Labour Canada and pursuant to subsection 242(1) of the Canada Labour Code, an adjudicator was appointed to consider the dismissal. The Adjudicator issued his decision on July 31, 1992, and ordered the defendant to reinstate the plaintiff [Re Pierre and Roseau River Tribal Council (1922), 28 C.L.A.S. 36 (C.L.R.B.)]. An amended order was issued on October 23, 1992, but the amendment did not change the reinstatement portion of the order except to provide that the reinstatement was to have taken effect as of August 17, 1992, rather than August 1, 1992. On October 26, 1992, Colin Moncrieff, C.A., a Receiver/Manager, was appointed to control the financial affairs of the defendant. The Adjudicator’s order was filed in the Federal Court of Canada on November 9, 1992. The plaintiff never actually returned to work. However, on December 14, 1992, the Receiver/Manager wrote to the plaintiff terminating his employment as of December 11, 1992, and indicating that he would communicate with the plaintiff or his solicitor regarding severance compensation and other employment matters. Thereafter, settlement discussions took place but to date there has been no final settlement.
The detailed chronology of events is as follows:
1. February 13, 1991—Victor Pierre, the plaintiff, was terminated as Education Director by his employer and defendant, the Roseau River Tribal Council.
2. Later in 1991 or early 1992 the plaintiff brought a complaint of unjust dismissal under Division XIV of the Canada Labour Code.
3. March 25 to June 10, 1992—the complaint was heard by Adjudicator P. W. Schulman, Q.C. (now Schulman J. of the Manitoba Court of Queen’s Bench) at Winnipeg.
4. July 31, 1992—the Adjudicator’s decision was issued. Adjudicator Schulman found that the plaintiff’s employment was unjustly terminated and ordered that he be reinstated to his former employment at $40,202 per year effective August 1, 1992, and that he be paid back-pay and ancillary benefits, less other earnings received by him, plus damages of $1,000, interest and costs. The Adjudicator reserved jurisdiction to reconvene in order to determine the amount of any part of the award.
5. August 18, 1992—letter from counsel for the defendant to counsel for the plaintiff:
Re: Victor Pierre and Roseau River
Further to our discussion of August 14, 1992, I confirm that my instructions are to the effect that I am not to indicate my consent to your draft Order, as I am to file an application for judicial review of Mr. Schulman’s Order. Further, I am to advise you that it is not necessary that Mr. Pierre attend for work on Monday, August 17, 1992. We have agreed that this would be the first day Mr. Pierre would be prepared to return to work, but my client does not wish him to attend at that time or at all. Rather, we are prepared to agree that he was prepared to return as of August 17, 1992, and therefore any liability arising from my client’s failure to accept him back will flow from that particular date.
Should you have any questions or concerns, please feel free to contact me.
6. August 27, 1992—originating notice of motion for review and order to set aside the July 31, 1992 decision of the Adjudicator. The motion was not proceeded with.
7. October 15, 1992—supplementary decision issued by the Adjudicator.
8. October 23, 1992—an order as amended issued by the Adjudicator. The order provided:
1. IT IS HEREBY DECLARED that the employment of the Complainant by the Respondent was unjustly terminated on February 13, 1991;
2. IT IS ORDERED that the Respondent reinstate the Complainant in his job as education director of the Roseau River Tribal Council effective August 17, 1992, at his annual salary of $40,202.00;
3. IT IS FURTHER ORDERED that the Respondent pay to the Complainant the sum of $50,709.34 including interest to September 16, 1992;
4. IT IS FURTHER ORDERED that the Respondent shall pay to the Complainant the sum of $154.62 per weekday commencing the 18th day of August, 1992, until the Complainant is reinstated in the employment of the Respondent, less any monies earned by the Complainant in the interim;
5. IT IS FURTHER ORDERED that the Respondent pay to the Complainant $22,835.08 as costs inclusive of fees, disbursements and G.S.T.
9. October 26, 1992—Colin Moncrieff, chartered accountant, appointed Receiver/Manager of the defendant.
10. November 4, 1992—letter from counsel for the plaintiff to counsel for the defendant enclosing the October 23, 1992 order of the Adjudicator.
11. November 9, 1992—order of the Adjudicator dated October 23, 1992 filed in the Registry of the Federal Court of Canada pursuant to subsection 244(1) of the Canada Labour Code .
12. November 19, 1992—letter from counsel for the plaintiff to counsel for the defendant enclosing copy of the Adjudicator’s order as filed in the Federal Court of Canada.
13. December 14, 1992—letter from Colin Moncrieff to the plaintiff, which stated:
As you are aware the Roseau River Anishinabe First Nation was placed into receivership by Indian and Northern Affairs Canada. In reviewing the staffing requirements for the First Nation including the First Nation’s school, we have concluded that the individual currently employed as Education Director of the Roseau River Tribal Council is performing his duties adequately.
Therefore, effective December 11, 1992, in our capacity as Receiver Manager of the Roseau River Anishinabe First Nation, we hereby terminate your employment as Education Director of the Roseau River Tribal Council.
We will contact you or your solicitor with respect to severance compensation and other employment matters.
14. December 18, 1992—Colin Moncrieff and his lawyer, Mr. Dave Hill met with the plaintiff and his lawyer, Mr. Harvey Pollock, Q.C. and discussed the plaintiff’s termination as Education Director. Mr. Moncrieff advised the plaintiff and Mr. Pollock that he was prepared to pay a reasonable amount of money as severance to the plaintiff and made a specific offer to him at that meeting.
15. December 21, 1992—plaintiff filed complaint with Labour Canada pertaining to the actions of Colin Moncrieff in purporting to terminate the plaintiff as of December 11, 1992.
16. December 21, 1992—contempt proceedings commenced by plaintiff.
17. December 24, 1992—garnishing order to show cause issued based on the order of the Adjudicator as filed in the Federal Court of Canada.
18. January 8, 1993—order of Cullen J. setting aside garnishing order to show cause and requiring payment of amounts calculated in accordance with the order of the Adjudicator on terms satisfactory to the plaintiff.
19. January 26, 1993—show cause order issued in contempt proceedings.
20. January and February 1993—correspondence and communications between Colin Moncrieff and Labour Canada indicating that settlement discussions were taking place.
21. March 18, 1993—return of show cause order. Proceedings adjourned to enable the defendant to retain counsel.
22. March 18, 1993—formal service of the Adjudicator’s order of October 23, 1992, on Lawrence Henry, John T. James, Martha Larocque and Charles Nelson, Chief and Councillors of the defendant.
23. March 31, 1993—payment in full made pursuant to the January 8, 1993 order of Cullen, J.
24. April 16, 1993—second garnishing order to show cause issued based on purported non-payment of amount ordered by Adjudicator for the period December 22, 1992, to April 27, 1993.
25. April 27, 1993—date scheduled for hearing of contempt motion. Motion adjourned to enable defendant to retain counsel.
26. May 26, 1993—hearing of contempt application and motion to set aside garnishing order to show cause dated April 16, 1993.
The provisions of Division XIV of the Canada Labour Code which are relevant in this case are as follows:
240. (1) Subject to subsections (2) and 242(3.1), any person
(a) who has completed twelve consecutive months of continuous employment by an employer, and
(b) who is not a member of a group of employees subject to a collective agreement,
may make a complaint in writing to an inspector if the employee has been dismissed and considers the dismissal to be unjust.
…
242. (1) The Minister may, on receipt of a report pursuant to subsection 241(3), appoint any person that the Minister considers appropriate as an adjudicator to hear and adjudicate on the complaint in respect of which the report was made, and refer the complaint to the adjudicator along with any statement provided pursuant to subsection 241(1).
(2) An adjudicator to whom a complaint has been referred under subsection (1)
(a) shall consider the complaint within such time as the Governor in Council may by regulation prescribe;
(b) shall determine the procedure to be followed, but shall give full opportunity to the parties to the complaint to present evidence and make submissions to the adjudicator and shall consider the information relating to the complaint; and
(c) has, in relation to any complaint before the adjudicator, the powers conferred on the Canada Labour Relations Board, in relation to any proceeding before the Board, under paragraphs 16(a), (b) and (c).
(3) Subject to subsection (3.1), an adjudicator to whom a complaint has been referred under subsection (1) shall
(a) consider whether the dismissal of the person who made the complaint was unjust and render a decision thereon; and
(b) send a copy of the decision with the reasons therefor to each party to the complaint and to the Minister.
(3.1) No complaint shall be considered by an adjudicator under subsection (3) in respect of a person where
(a) that person has been laid off because of lack of work or because of the discontinuance of a function; or
(b) a procedure for redress has been provided elsewhere in or under this or any other Act of Parliament [As am. by R.S.C., 1985 (1st Supp.), c. 9, s. 16.]
(4) Where an adjudicator decides pursuant to subsection (3) that a person has been unjustly dismissed, the adjudicator may, by order, require the employer who dismissed the person to
(a) pay the person compensation not exceeding the amount of money that is equivalent to the remuneration that would, but for the dismissal, have been paid by the employer to the person;
(b) reinstate the person in his employ; and
(c) do any other like thing that it is equitable to require the employer to do in order to remedy or counteract any consequence of the dismissal.
243. (1) Every order of an adjudicator appointed under subsection 242(1) is final and shall not be questioned or reviewed in any court.
(2) No order shall be made, process entered or proceeding taken in any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain an adjudicator in any proceedings of the adjudicator under section 242.
244. (1) Any person affected by an order of an adjudicator under subsection 242(4), or the Minister on the request of any such person, may, after fourteen days from the date on which the order is made, or from the date provided in it for compliance, whichever is the later date, file in the Federal Court a copy of the order, exclusive of the reasons therefor.
(2) On filing in the Federal Court under subsection (1), an order of an adjudicator shall be registered in the Court and, when registered, has the same force and effect, and all proceedings may be taken thereon, as if the order were a judgment obtained in that Court.
The plaintiff says that pursuant to the order of the Adjudicator he was entitled to be reinstated and that the defendant has refused to reinstate him. He says that the defendant is therefore in contempt of the order of the Adjudicator which was filed in this Court.
The defendant raises a number of defences:
1. The order of which the defendant is alleged to be in contempt was not personally served on the Chief and Councillors of the defendant until March 18, 1993. There can be no contempt without personal service of that order.
2. The appointment of the Receiver/Manager removed the defendant’s power to reinstate and comply with the Adjudicator’s order.
3. The plaintiff was, in effect, reinstated because the Receiver/Manager could not have terminated him effective December 11, 1992, unless he had been reinstated.
4. The wording of the order of the Adjudicator recognizes that the plaintiff may not be reinstated and therefore failure to reinstate does not constitute a breach of the order.
In view of my disposition of the contempt application, I need only deal with the first two arguments of counsel for the defendant in respect of this application.
Proceedings under Rule 355 of the Federal Court Rules have been held to have a criminal or quasi-criminal dimension, and therefore the elements of contempt must be proved beyond a reasonable doubt. In Bhatnager v. Canada (Minister of Employment and Immigration), [1990] 2 S.C.R. 217, Sopinka J. stated, at page 224:
It is well to remember at the outset that an allegation of contempt of court is a matter of criminal (or at least quasi-criminal) dimension: see Poje v. Attorney General for British Columbia, [1953] 1 S.C.R. 516, per Kellock J., at pp. 517-18; and In re Bramblevale Ltd., [1970] Ch. 128 (C.A.), per Lord Denning, M.R., at p. 137. In the present case, a finding of guilt could have subjected the appellants to a fine of as much as $5,000 and the possibility of imprisonment to a maximum of one year: see Rule 355(2). It is necessary, therefore, that the constituent elements of contempt be proved against the appellants, and proved beyond a reasonable doubt.
In In re Bramblevale Limited, [1970] Ch. 128 (C.A.), Lord Denning M.R. stated, at page 137:
That confession leaves two possibilities: either that he had them [the books] on that date in November, 1968, and wrongfully refused to deliver them; or alternatively, that he got rid of them before that time so that he could not deliver them. Those two possibilities are equally likely. It is not possible to say which of them is correct. The court cannot be satisfied beyond reasonable doubt that he still had the books in November, 1968. That would be conjecture rather than inference—surmise rather than proof. Where there are two equally consistent possibilities open to the court, it is not right to hold that the offence is proved beyond reasonable doubt. Mr. Hamilton’s conduct in telling lies was very reprehensible. But it is not sufficient ground for holding that he committed contempt of court about these two books.
In so far as the standard of proof is concerned, no distinction appears to be made between civil contempt and criminal contempt. This is dealt with by Gonthier J. for the majority in Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc., [1992] 2 S.C.R. 1065. In that case, he found the matter to involve civil contempt (see page 1075) but, in his view, the more important consideration was the public law aspect of contempt rather than the distinction between civil and criminal contempt. At pages 1075-1076 he stated:
This definition [in article 50 of the Code of Civil Procedure of Quebec] clearly establishes the characteristics common to all types of contempt covered by the Code of Civil Procedure, characteristics which may be unduly masked by too great an insistence on the distinction between civil contempt and criminal contempt. The penalty for contempt of court, even when it is used to enforce a purely private order, still involves an element of “public law”, in a sense, because respect for the role and authority of the courts, one of the foundations of the rule of law, is always at issue ….
This public law aspect of contempt of court is of course reflected in the sanctions which are attached to it. Any contempt of court, even a civil contempt, may result in punishment by imprisonment for one year….
At page 1078 he states:
In summary, the special rules for contempt of court in Quebec law proceed from the following principle: contempt of court is strictissimi juris and quasi-penal in nature, given the possible consequences. In my opinion, it would be inconsistent at the least if a respondent cited for contempt could be compelled to testify. This would be contrary to a fundamental principle of Quebec penal law, which is expressly recognized in s. 33.1 of the Charter of Human Rights and Freedoms, R.S.Q., c. C-12. The effect of this would be to facilitate greatly the task of proving contempt beyond a reasonable doubt, a burden which the applicant must scrupulously discharge. I therefore conclude that the respondent must not be held to be compellable, in the context of the exceptional character of the contempt of court process in the Code of Civil Procedure.
This approach, moreover, corresponds to the approach adopted in common law, from which the Quebec law of contempt of court derives….
My consideration of the facts of the case at bar suggests that what is alleged here is civil contempt, but I do not have to categorize the contempt for purposes of this decision. Proof beyond a reasonable doubt is the standard of proof that I must apply in considering whether the constituent elements of the alleged contempt in this case have been proved.
Counsel for the defendant initially moved to dismiss the contempt application because personal service on the Chief and Councillors of the defendant had not been effected. I reserved my decision on this motion and deal with it now. In this case the only direct evidence of such service was an affidavit of service of Richard McRae, an articled law student with the offices of Pollock and Company, counsel for the plaintiff, in which Mr. McRae deposes that on March 18, 1993, he served Lawrence Henery, [sic] John T. James, Martha Larocque and Charles Nelson with the order of Adjudicator Schulman. Counsel for the defendant submits that such service is inadequate to support a finding of contempt in this case. Presumably, his position is predicated on the assumption that the only time that the defendant could have been in contempt was prior to the plaintiff’s implied reinstatement by the Receiver/Manager as of December 11, 1992. There had been no personal service of the order before that date.
In Bhatnager, (supra), Sopinka J. stated, at page 225:
On the cases, there can be no doubt that the common law has always required personal service or actual personal knowledge of a court order as a precondition to liability in contempt.
At page 226 he stated:
In my opinion, a finding of knowledge on the part of the client may in some circumstances be inferred from the fact that the solicitor was informed. Indeed, in the ordinary case in which a party is involved in isolated pieces of litigation, the inference may readily be drawn.
In this case the evidence is clear that the defendant’s solicitor at the time, Mr. Jeffrey J. Palamar, had received the Adjudicator’s orders and decisions. Mr. Palamar filed an originating notice of motion in this Court seeking to set aside the Adjudicator’s July 31, 1992, order. (The notice of motion was not proceeded with.) Adjudicator Schulman’s order of October 23, 1992, was approved as to form by Mr. Palamar. Mr. Pollock wrote to Mr. Palamar on November 4, 1992, enclosing a copy of Adjudicator Schulman’s order. On November 19, 1992, Mr. Pollock wrote to Mr. Palamar enclosing a copy of Adjudicator Schulman’s order as filed in the Federal Court of Canada on November 9, 1992.
In oral testimony Mr. Palamar testified that it was his practice to keep a client informed of orders affecting the client. On his correspondence filed in this matter, his letters indicate that copies were sent to “Councillor John James” or “Roseau River”.
In my view this is the “ordinary case” referred to by Sopinka J. in Bhatnager, supra. The defendant’s solicitor received copies of all relevant decisions and orders. On his correspondence, he appears to have copied the defendant and his viva voce testimony confirms that he kept the defendant informed throughout. Other correspondence in the record also indicates knowledge by the defendant. For example, in a letter of Colin Moncrieff to Labour Canada dated January 4, 1993, Mr. Moncrieff refers to discussions he had with the defendant pertaining to Adjudicator Schulman’s order. I therefore have no difficulty readily inferring that the Chief and Councillors of the defendant had personal knowledge of the order and amended order of Adjudicator Schulman. For these reasons, I dismiss this motion of counsel for the defendant.
Before counsel for the defendant made his motion to dismiss, counsel for the plaintiff attempted to require him to elect either to make the motion or to call evidence. Counsel for the plaintiff referred to an excerpt from Sopinka, Lederman and Bryant, The Law of Evidence in Canada, 1992, at page 131, which suggests that at least in civil matters, when a defendant moves to have a plaintiff’s claim dismissed, he may not later call evidence if the motion is denied.
Counsel for the defendant argued that in criminal proceedings an accused is not precluded from calling evidence after failing to succeed on a motion to dismiss and that the excerpt from Sopinka, Lederman and Bryant was not applicable to criminal proceedings.
It should be noted that the parties had agreed that the contempt motion and the motion to set aside the garnishing order should be heard together and it was generally understood that the evidence in both applications could overlap. As I reserved my decision on the motion to dismiss the contempt application, and because there was no reason not to permit the defendant or Receiver/Manager to call evidence in respect of the motion to set aside the garnishing order, I allowed counsel for the defendant to call evidence.
Colin Moncrieff gave viva voce evidence for the defendant and Receiver/Manager. In addition, his affidavit dated April 22, 1993, was admitted into evidence as an exhibit. Paragraph 1 of Mr. Moncrieff’s affidavit, which outlines his appointment as Receiver/Manager, states in part:
1. On October 26, 1992 I was appointed Receiver Manager of the Defendant herein, Roseau River Indian Band by the Department of Indian and Northern Affairs Canada. Attached hereto and marked as Exhibit “A” to this my affidavit is a copy of a letter dated October 26, 1992 appointing me Receiver Manager. Attached hereto and marked as Exhibit “B” to this my affidavit is a letter from me to the Department of Indian and Northern Affairs Canada dated October 29, 1992 wherein I agreed to act as Receiver Manager. Attached hereto and marked as Exhibit “C” to this my affidavit is a letter to me from Indian and Northern Affairs dated October 29, 1992 pertaining to my appointment.
In his viva voce evidence, Mr. Moncrieff confirmed that he was appointed Receiver/Manager by Indian and Northern Affairs Canada, which provided the defendant with funding. The defendant also received funds from other sources such as Health & Welfare Canada. However, for all practical purposes, Mr. Moncrieff controlled all funds of the defendant. In its letter of October 26, 1992, to Mr. Moncrieff, Indian and Northern Affairs Canada states in part:
You are to take control of the operations of the band and assume responsibility for carrying out its obligations under the funding agreement.
According to Mr. Moncrieff, the defendant may still operate in the political and administrative realms and he has no control over these aspects of the defendant’s conduct. However, where funds are involved, he has control. Mr. Moncrieff testified that after he had become Receiver/Manager, he had never been asked to employ the plaintiff by the Chief or Councillors of the defendant. He further confirmed that he had assumed control of the matter affecting the plaintiff upon becoming Receiver/Manager of the defendant.
The contempt action in this case is against the Roseau River Tribal Council and not the Receiver/Manager. The show cause order of January 26, 1993, recites the following representation by counsel for the plaintiff:
And upon counsel for the Plaintiff confirming that the Plaintiff’s motion for contempt pertains to the Defendant and not the Receiver Manager of the Defendant.
The contempt in this case must pertain to the failure of the defendant to comply with the order of Adjudicator Schulman filed in this Court. The order was filed in the Court on November 9, 1992. Thus, the contempt must arise from the failure of the defendant after November 9, 1992, to reinstate the plaintiff.
When Mr. Moncrieff was appointed Receiver/Manager on October 26, 1992, he assumed control of the financial affairs of the defendant. The question arises whether, after that date, the defendant, of its own volition, could have reinstated the plaintiff as ordered by Adjudicator Schulman.
I appreciate that the officers of the defendant could have recommended to Mr. Moncrieff that the plaintiff be reinstated had they chosen to do so but that alone is not compliance with the Adjudicator’s order. In Beloit Can. Ltée/Ltd. v. Valmet Oy (1988), 18 C.I.P.R. 1 (F.C.A.), Pratte J. states in an explanatory endnote, at page 22 of that decision:
Respondent’s counsel also submitted that a defendant against whom an injunction has been pronounced is in contempt if he does not do everything in his power to cause companies under his control to comply with the injunction. In support of that submission he referred to an American decision: Rohm& Haas Co. v. Polycast Technology Corp., 174 U.S.P.Q. 293 (1972). The answer to that argument is that the proposition put forward by counsel is true only if the relationship between the defendant and the company under his control is such that it makes the defendant answerable for the acts of the company. That was the situation in the case referred to by counsel where the company that had actually breached the injunction was held, rightly or wrongly, to be the defendant’s agent. Whether that is the situation here is the question that I shall answer in a moment.
In the case at bar, I do not think it can be said that the Receiver/Manager is answerable for the acts of the defendant. Indeed, the contempt motion is expressly against the defendant and not the Receiver/Manager.
It was also suggested by counsel for the plaintiff that the defendant could have reinstated the plaintiff, even though it did not have the power to pay him. This theoretical type of action does not, in my opinion, constitute compliance with the order of Adjudicator Schulman. The order requires that the plaintiff be reinstated “at his annual salary of $40,202.00”. The evidence is that the defendant did not have the power after October 26, 1992, to commit to pay the plaintiff’s salary.
The plaintiff must prove the constituent elements of the alleged contempt beyond a reasonable doubt. This would include proving that the defendant had the authority and power to comply with the order. Such authority and power might be obvious or, in some cases, implicit; but not in a situation in which a Receiver/Manager has been appointed as in this case. In the case at bar, I am not satisfied, once the Receiver/Manager had been appointed, that the defendant had the authority and power to comply with the order of the Adjudicator. At the least, there are two possibilities open: that the defendant had the power or that it did not. In re Bramblevale, supra, Lord Denning M.R. held that where there are two equally consistent possibilities open to the Court, it is not right to hold that the offence of contempt is proved beyond a reasonable doubt.
Counsel for the plaintiff brought to my attention a number of authorities standing for the proposition that contempt powers of the Court are to ensure the smooth functioning of the judicial process and to advise the public at large that disobedience of a Court pronouncement brings about swift retribution and that nothing should be allowed to interfere with the good order and administration of justice. In United Nurses of Alberta v. Alberta (Attorney General), [1992] 1 S.C.R. 901, Madam Justice McLachlin states, at page 931:
The rule of law is at the heart of our society; without it there can be neither peace, nor order nor good government. The rule of law is directly dependent on the ability of the courts to enforce their process and maintain their dignity and respect. To maintain their process and respect, courts since the 12th century have exercised the power to punish for contempt of court.
I am in full agreement with such dicta. However, application of the contempt power of the Court must, in my view, be predicated upon a defendant having the legal authority to comply with the order made.
Obviously, if a defendant were to try to avoid complying with a Court order by voluntarily relinquishing control of his affairs, he could still be guilty of contempt. But in this case the facts are that the defendant lost control of its financial affairs to the Receiver/Manager for other reasons, default under an agreement with Indian and Northern Affairs Canada, and not for the purpose of avoiding compliance with the Adjudicator’s order.
On the evidence, I have no doubt that the defendant did not want to reinstate the plaintiff. Its officers should have recommended to the Receiver/Manager that the plaintiff be reinstated because that is what the Adjudicator’s order, as filed in this Court, required. However, they appear to have taken the opposite course. But this is of no consequence since their breach of the Adjudicator’s order was in not reinstating the plaintiff. Had the defendant remained in control of its financial affairs and continued to refuse to reinstate the plaintiff, I think it clearly would have been in contempt of the Adjudicator’s order. However, it has not been proved beyond a reasonable doubt that the defendant remained in control of its financial affairs such as to be in a position to reinstate the plaintiff and compensate him once the Receiver/Manager was appointed. I therefore cannot find the defendant to be in contempt.
Under the circumstances, I must dismiss the application for contempt.
APPLICATION TO SET ASIDE THE GARNISHING ORDERS
In addition to the contempt proceedings in this case, the chronology of events indicates that two garnishing orders to show cause had been issued. The first such order was issued on December 24, 1992. On January 8, 1993, that garnishing order was set aside and was substituted by an order of Cullen J. This latter order required payment of $89,224.74 plus interest to the plaintiff, being the amount owing to the plaintiff up to December 21, 1992, pursuant to the Adjudicator’s order in accordance with arrangements satisfactory to the plaintiff. The amount of $91,442.51 has now been paid in full.
On April 16, 1993 Denault J. signed a garnishing order to show cause requiring the Bank of Nova Scotia, garnishee, to pay up to the amount of $14,070.42 which the plaintiff deposed was owing to him pursuant to the order of Adjudicator Schulman for the period from December 22, 1992 to April 27, 1993.
The Receiver/Manager now asks that this garnishing order be set aside. His position is set out at paragraph 9 of his affidavit of April 22, 1993:
9. It is my position as Receiver Manager that the Order of Adjudicator Schulman was satisfied by Mr. Pierre’s reinstatement as education director and my eventual payment to him of the sum of $91,442.51 as referred to paragraph 4 in Mr. Pierre’s affidavit. Subsequent to reinstatement, Mr. Pierre’s employment was again terminated by my letter of December 14, 1992. That termination can be compensated by payment of money in lieu of notice to Mr. Pierre. I am and have always been ready, willing and able to negotiate and pay reasonable severance to Mr. Pierre.
Counsel for the Receiver/Manager argues that a reinstatement order cannot require an employer to continue to employ an employee indefinitely and that an employer always has the right to dismiss for cause or to dismiss without cause provided the employee is paid in lieu of notice. He says the order of Adjudicator Schulman has been satisfied by the plaintiff’s reinstatement, as he has described it, and by payment of $91,442.51, and as there is therefore no underlying judgment upon which to base the April 16, 1993 garnishing order, the garnishing order should be set aside.
While I am satisfied that a reinstatement order does not guarantee an employee a position indefinitely, the question of an employer’s obligation after reinstatement does not arise in this case because, in my view, there never was a reinstatement.
The evidence discloses that subsequent to Adjudicator Schulman’s order, the plaintiff never actually resumed work as Education Director for the defendant although he was ready, willing and able to do so. Mr. Palamar’s letter to Mr. Pollock of August 18, 1992, states:
… my client does not wish him to attend at that time or at all … any liability arising from my client’s failure to accept him back will flow from that particular date.
In Mr. Moncrieff’s letter to Labour Canada of January 4, 1993, he states in part:
2. It is our understanding Mr. Pierre attempted to return to his job as Education Director but was refused to be reinstated by the current Chief and Council.
3. Upon appointment as Receiver Manager we discussed the situation with the Chief and Council and they reiterated their position that Mr. Pierre would not be allowed to resume his position as Education Director.
The closest the evidence comes to indicating reinstatement is the “implied” reinstatement from Mr. Moncrieff’s termination of the plaintiff as set forth in his letter to the plaintiff of December 14, 1992, and the plaintiff’s subsequent complaint to Labour Canada referring to being terminated on December 11, 1992. However, I do not infer that there has been a reinstatement from Mr. Moncrieff’s letter or the plaintiff’s complaint. If Mr. Moncrieff’s termination of the plaintiff could constitute an “implied” reinstatement, any employer could avoid effective compliance with an adjudicator’s reinstatement order by terminating an employee immediately after a reinstatement order was made. I do not think the reinstatement power given to an adjudicator under the Canada Labour Code was intended to be rendered ineffective by such a unilateral action of an employer. In Canadian Imperial Bank of Commerce v. Boisvert, [1986] 2 F.C. 431 (C.A.), Marceau J.A. explains the implication of subsection 242(4) of the Canada Labour Code, at pages 439-440:
It is commonplace that the introduction of the remedy pursuant to section 61.5 [now subsection 242(4)] of the Code in 1978 was a very major step in the transformation undergone by labour law applicable to federal undertakings since the time it was still founded on purely liberal concepts based on the theory of freedom of contract. Certainly the employer’s right to terminate the contract of an employee was already far from being unfettered (prior notice, severance pay) and the common law courts no longer hesitated to apply the theory of abuse of right to penalize the excessive use of the right of dismissal by an employer. However, once the section 61.5 remedy was in place it was no longer possible, as it had been formerly, to treat the right of dismissal as being of the very essence of an indefinite contract of employment; it also was no longer possible to speak of freedom of contract in this connection, as the new legislation was said to be a matter of public policy and as such unaffected by the language of the contract of employment. Even more dramatic was the fact that not only could the employer no longer consider terminating its employee’s contract at will, it might even in future be compelled to have an employee it did not want. Any unjustly dismissed employee (unless a member of management within the meaning of subsection 27(4)) now had a means of ensuring reinstatement in his or her employment in addition to full monetary compensation.
If, as explained by Marceau J.A., subsection 242(4) of the Canada Labour Code gives an unjustly dismissed employee the right of reinstatement, Parliament must have intended the right to be an effective one and not one that could be circumvented by a notional reinstatement by an employer merely for the purpose of formal compliance with an adjudicator’s order only to effectively thwart it by a redismissal. In my view, that is the substance of the argument alleging that the plaintiff had been reinstated and I do not accept it.
As to the plaintiff’s complaint to Labour Canada, I am of the view that he was simply describing his understanding of Mr. Moncrieff’s letter and not adopting or acquiescing to any implied reinstatement solely for the employer’s purpose of subsequently terminating him.
Counsel for the defendant and Receiver/Manager referred to Corneau v. Canadian Pacific Express and Transport Ltd., a February 9, 1982 [unreported] decision of Adjudicator Joseph E. Roach. At page 16 of that decision the Adjudicator states:
In the present case in reinstating the Complainant there is no doubt that it will necessitate the termination of employment for one of the Terminal Supervisors. However, I am of the view that such decision should be made by the Employer and not by the adjudicator hearing a dismissal complaint.
Counsel argued that this passage stands for the proposition that even when an employee is ordered reinstated, an employer has the right to terminate after reinstatement. Upon my review of this decision, I have come to a different conclusion. In that case, there had been three terminal supervisor positions when the complainant was dismissed but as a result of restructuring, there were only two positions when the complainant was ordered reinstated. In my view, the Adjudicator in that passage was referring to the employer’s right to decide which of the existing terminal supervisors should be dismissed in order for the employee who was ordered reinstated to be able to return to work.
There was an indication by Mr. Moncrieff in his viva voce testimony that the position of Education Director of the defendant had been combined with that of school principal and that there was no position to which the plaintiff could return. While the positions may have been combined, the reasons given for the refusal to reinstate the plaintiff in Mr. Moncrieff’s letter of December 14, 1992, and in his April 23, 1993 affidavit, referred to another person occupying the position of Education Director and performing the job adequately and there being no need for two education directors. This does not suggest that there is no position to which the plaintiff may return, although reinstatement may necessitate the displacement of the current incumbent.
At common law, specific performance generally did not apply to personal service contracts because of the impracticality of the Courts overseeing the employer-employee relationship. However, as indicated by Marceau J.A. in Boisvert, supra, the statutory provisions of the Canada Labour Code override the common law. These provisions include the registration of an adjudicator’s order in the Federal Court and the Federal Court processes that are then available to enforce it.
The wisdom of requiring reinstatement generally or as it applies in this case, is not for me to decide, although in view of the difficulties demonstrated by this case, I would observe that a reinstatement order should be made only when clearly warranted by the circumstances. In Grosman’s Federal Employment Law in Canada, 1990, Carswell, the learned author speaks of the difficulty of reinstatement orders at pages 180-181:
Reinstatement may be granted by an adjudicator, either with or without compensation for the period intervening between the dismissal and the effective date of reinstatement. Since 1984, roughly 15 percent of unjust dismissal decisions have ordered the employee reinstated. This statistic concerns employers. An employer who has undertaken the far-reaching act of dismissal, almost always for some genuinely perceived shortcoming or misconduct on the part of the employee, is loath to see that same employee reinstated to the workplace. The employer’s distaste for the remedy is even greater having been “dragged” through an expensive, time-consuming and likely highly adversarial hearing process at the instance of that same employee. From a business perspective reinstatement is rarely a satisfactory remedy. On the other hand, reinstatement is a perfect remedy from a legal theory viewpoint. If the act of dismissal was, in fact, unjust, why should the employee suffer for his employer’s error in judgment? Why should the employee not be placed back in the same position he would have occupied “but for” the unjust act of his employer? In legal theory the answer is simply that he should be.
In practical and business terms, however, reinstatement is a highly unsatisfactory remedy. The problem does not lie in the finding of unjust dismissal, but rather in policing the artificially re-established relationship between the employee and employer after reinstatement. Following the making of an order for reinstatement the adjudicator gracefully bows out of the picture leaving the (often) bitter parties to forge a new relationship upon the foundation of existing ill will. The impracticality of overseeing the employer and employee relationship after reinstatement is precisely why, at common law, the courts as a matter of public policy refuse to make such an award. It is submitted that the remedy of reinstatement must, in order to be effective, be limited in its application to rather unique circumstances where there exists the real prospect of a viable future working relationship between the parties. Reinstatement, at present, is viewed as a primary form of remedy available to the aggrieved employee seeking its application. The 15 percent rate of application may indeed be deceptively low as it does not account for those employees who have been unjustly dismissed but declined to seek reinstatement. The powerful remedy of reinstatement is overused under the Canada Labour Code and ought to become the guarded exception to the rule, rather than the rule itself.
In this case, the learned Adjudicator had regard to the considerations enunciated at page 182 of Grosman’s text in determining whether to order reinstatement. In his view, reinstatement was warranted. I am not acting in an appellate capacity in respect of the Adjudicator’s order and therefore must accept that a valid reinstatement order was made and was registered in the Federal Court of Canada. On the evidence, I conclude that there has not been reinstatement of the plaintiff and Adjudicator Schulman’s order as registered in this Court continues to be operative as a judgment upon which to base the April 16, 1993, garnishing order. I therefore decline to set aside the April 16, 1993, garnishing order.
CONCLUSION
In the result, the plaintiff has failed to prove that the defendant is in contempt of Court. However there has not been reinstatement in accordance with the order of Adjudicator Schulman and the Receiver/Manager is not entitled to have the April 16, 1993, garnishing order set aside. The motion for contempt is dismissed as is the application to set aside the garnishing order.
I will retain jurisdiction with respect to the matter of the garnishing order so that upon the application of any party proposing any alternative means of handling the funds attached by the said garnishing order, that matter may be addressed and dealt with.
The defendant is entitled to costs of the contempt motion. The plaintiff is entitled to costs against the Receiver/Manager in respect of the application to set aside the garnishing order.