2008 Decision Lewis vs Terrace Tourism Society

IN THE SUPREME COURT OF BRITISH COLUMBIA Lewis v. Terrace Tourism Society, 2008 BCSC 361 Date: 20080326 Docket: 15766 Registry: Terrace Between: Jennifer Lewis Plaintiff And Terrace Tourism Society Defendant

Before: The Honourable Mr. Justice Joyce

Reasons for Judgment The plaintiff appearing in person Counsel for the defendant Date and Place of Trial/Hearing:

Bruce B. Jordan March 5, 2008 Terrace, B.C.

2008 BCSC 361 (CanLII)

Citation:

Lewis v. Terrace Tourism Society

Page 2

NATURE OF THE APPLICATION The plaintiff is the former Executive Director of the defendant, Terrace

Tourism Society (“TTS”). She has sued TTS alleging that she was constructively dismissed from her employment on or around February 19, 2007 or, alternatively during late February or March, 2007 or, in the further alternative, on or around April 27, 2007. The plaintiff also claims damages against TTS based upon her allegation that on or about February 27, 2007 Mr. David Pernarowski, on behalf of TTS, made defamatory statements about the plaintiff to a number of individuals.

[2]

TTS denies that it constructively dismissed the plaintiff from her employment

without cause and says that it was the plaintiff who repudiated the contract of employment by suing the defendant for damages in the Provincial Court. The defendant denies that the words allegedly spoken or published concerning the plaintiff are defamatory and says further that if they are, they were spoken and published on occasions of qualified privilege.

[3]

TTS brought this application under Rule 18A seeking a dismissal of the

plaintiff’s action.

FACTS [4]

TTS is a society incorporated under the Society Act, R.S.B.C. 1996, c. 433,

whose aim was to promote tourism in and around Terrace, British Columbia.

2008 BCSC 361 (CanLII)

[1]

Lewis v. Terrace Tourism Society [5]

Page 3

TTS hired Ms. Lewis as its Executive Director effective May 3, 2004. On

December 31, 2006, Ms. Lewis began an unpaid maternity leave that was scheduled

[6]

Mr. David Pernarowski is the past president of the Terrace & District Chamber

of Commerce (“TDCC”). In late 2006, the Board of Directors of TDCC perceived there to be problems between several organizations within the City of Terrace having an interest in tourism, of which TSS was one. In or about October, 2006, the Board of Directors of TDCC asked Mr. Pernarowski to assist TTS. [7]

A number of the members of TTS were concerned about the direction in

which the Board of Directors of TTS was taking the society and on November 30, 2006, members of TTS sent the directors of TTS requisitions for a special general meeting of TTS. [8]

At a meeting of TTS held on January 15, 2007, all seven directors of TTS

resigned. At the same meeting, a committee was struck to determine the future of TTS. Mr. Pernarowski volunteered to sit on the committee and was appointed to it by the TTS membership. The other members of the committee were Annalee Davis, Rob Seaton, Bruce Martindale and Karlene Clark.

[9]

The committee set about exploring options for the future of TTS. A key issue

was the deterioration in the relationship between TTS and the City of Terrace, which was TTS’s major source of funding. The committee considered whether TTS could find a new source of funding or else they would have to dissolve.

2008 BCSC 361 (CanLII)

to run until January, 2008.

Lewis v. Terrace Tourism Society [10]

Page 4

At a meeting held January 24, 2007, the committee discussed the steps to be

followed under section 3 of the constitution of TTS in the event it was to be dissolved

committee decided to call a special meeting on February 19, 2007 to determine whether the membership wished to wind up TTS. The notice of the meeting advised the membership that if the motion to dissolve TTS was carried the Executive Director position would be terminated.

[11]

Mr. Pernarowski began to review the financial records of TTS, including

payroll records. He discovered that in the fall of 2006 Ms. Lewis had received full pay during an extended medical leave but could not find any records authorizing the payment. As a consequence, he sent an e-mail enquiry to Carol Fielding, who had been one of the directors, asking if she could clarify the situation. Ms. Fielding replied and advised that she was not on the board of directors at the relevant time but there should be a note in the minutes, approving the arrangement.

[12]

At the meeting of February 19, 2007, the membership voted in favour of

winding up the society and, for that purpose, established a committee (the “Dissolution Committee�), comprised of Mr. Pernarowski, Ms. Fielding and Mr. Seaton, to attend to the dissolution of the society. The Dissolution Committee was asked to provide a final report containing financial statements, which would be circulated to all former members.

[13]

Ms. Lewis attended for part of the meeting on February 19, 2007.

2008 BCSC 361 (CanLII)

and the fact that there were a number of outstanding bills that had to be paid. The

Lewis v. Terrace Tourism Society [14]

Page 5

Mr. Pernarowski deposed that the Dissolution Committee was always aware

that it would have to formally sever TTS’s employment relationship with Ms. Lewis.

per month, which differed from the salary of $2,800 per month that was described in a letter confirming her hiring dated April 27, 2004.

[15]

After the meeting of February 19, 2007, Mr. Pernarowski approached Mr.

Peter Gill, the former treasurer of TTS, to ask him about Ms. Lewis’ annual salary because he knew that the Dissolution Committee would have to discuss with Ms. Lewis a severance of her position. He also asked Mr. Gill about the extended medical leave for which he could not find any record authorizing the payment to Ms. Lewis. Mr. Pernarowski believed he should make these enquiries as part of the winding up process. Mr. Pernarowski did not hear back from Mr. Gill.

[16]

On February 21, 2007, Mr. Pernarowski sent an e-mail to the other members

of the Dissolution Committee setting out his concerns regarding the lack of records authorizing certain payments to Ms. Lewis, including an apparent discrepancy between the salary paid and the letter of employment, payment of salary during a medical leave, payments for cell phone and mileage, and payment for an accounting software program. The amounts for which Mr. Pernarowski could not find supporting documents authorizing payment was $21,967.41 and he felt the matter required investigation. He also felt that it was necessary to clarify Ms. Lewis’ salary to determine an appropriate severance payment.

2008 BCSC 361 (CanLII)

Mr. Pernarowski was aware that Ms. Lewis had been receiving a salary of $3,500

Lewis v. Terrace Tourism Society [17]

Page 6

On February 22, 2007, Mr. Pernarowski sent an e-mail to the other members

We will need to prepare a letter of termination for Jennifer based on the dissolving of the Terrace Tourism Society. By law we would need to pay her two weeks severance. I still have not heard back from Peter Gilll regarding the additional money paid out to Jennifer in the last three pay periods in 2006 ($7,200 over and above her regular salary of $4,350 in that time frame).

I guess the question is if we should pursue this. I’m not sure that we should pay severance if she has received all this extra money already.

[18]

At that time, Mr. Pernarowski was under the mistaken belief that TTS’s

obligations regarding severance pay were limited to those under the Employment Standards Act, R.S.B.C. 1996, c. 113 . At that time, he had not sought any legal advice on the matter.

[19]

Ms. Fielding replied to Mr. Pernarowski, indicating that she would go through

her files to look for any information concerning the Executive Director’s remuneration.

[20]

Mr. Seaton replied, stating that he had spoken to Ms. Lewis, who told him that

she was hired at $42,000 annually, that she was somehow underpaid at the beginning of 2006 and that the payments at the end of the year were to catch up.

He said that Ms. Lewis would provide a written explanation.

[21]

Mr. Pernarowski responded in an e-mail in which he said he had not seen any

minutes indicating a salary of $42,000 and that the accounting records did not indicate she was underpaid in the beginning of the year. He then stated:

2008 BCSC 361 (CanLII)

of the Dissolution Committee in which he said:

Page 7

Let’s wait for Jennifer’s email response before deciding if we need further clarification from the former President of the Society. Any correspondence with Jennifer at this point I think should be done in writing and copied to the other committee members. This initial response from Jennifer doesn’t make sense to me and not getting a quick reply on this important issue from Peter Gill concerns me.

I hope there is a reasonable explanation. I believe we will need to report this discrepancy if there is not. I will not feel comfortable closing the books on this Society with this issue not resolved.

[22]

It is apparent from the foregoing that Mr. Pernarowski was not yet satisfied

that the apparent discrepancy between the actual payments and the records of the Society had been explained. However, it is also apparent that he was waiting to hear directly from Ms. Lewis and was hopeful there was an explanation. In my view, that was a reasonable position for him to take.

[23]

On February 23, 2007, Mr. Pernarowski received an e-mail from Ms. Fielding

indicating that she had found the Board minutes authorizing the payments for cell phone and vehicle use, but had not found anything relating to salary.

[24]

On February 23, 2007, Mr. Pernarowski received an e-mail from Mr. Seaton

forwarding an e-mail response from Ms. Lewis, which read: Sorry there was no discrepancy. The money paid by TTS to myself was money paid due for wages for the 2006. My salary was 42 000.00 dollars per year. The bookkeeper Elaine Little made an error earlier in the year and base by bi-monthly salary on a wage of 32 000.00 dollars per year. As you can see by the payroll statements that I was paid 42 000 dollars this year and 42 000 dollars last year. My T4 has already been issued for this year.

2008 BCSC 361 (CanLII)

Lewis v. Terrace Tourism Society

Lewis v. Terrace Tourism Society [25]

Page 8

In an attempt to verify this information, Mr. Pernarowski contacted Ms. Little,

the former bookkeeper, who advised Mr. Pernarowski that she did not believe she

she was not comfortable with what Ms. Lewis had done with some payroll matters and that was the reason she left TTS. Mr. Pernarowski deposed that, as a result of this conversation, he was confused as to what payments had been authorized and was concerned “because it cast some doubt on the otherwise unsubstantiated assertions of Ms. Lewis regarding her salary entitlement”.

[26]

Mr. Pernarowski decided that the best way to clarify the matter was to contact

the former directors of TTS and request further information. He therefore sent an email to the former directors on February 27, 2007. I set out below the contents of the e-mail with those portions that Ms. Lewis alleges are defamatory of her underlined.

In winding down the operation of the Terrace Tourism Society, I have been reviewing the financial statements and the TTS Simply Accounting programs including the Employee Detail. This detail shows the gross payroll for each pay period for all employees. In my audit of the Executive Director position, there appears to be a number of discrepancies in the amount that this employee was paid between her start date in May 2004 to her final day on December 31, 2006. Her employment contract states: “You will commence working on May 3, 2004. Your starting gross monthly wage will be $2,666.00 paid semimonthly. During the first week of November 2004 you will be evaluated on your performance as Executive Director.

If the outcome of the evaluation is positive your gross monthly salary will increase to $2,800.00 paid semimonthly.”

I would like clarification on the following discrepancies:

2008 BCSC 361 (CanLII)

had made any errors with respect to the payroll. She also told Mr. Pernarowski that

Page 9

In November 2004 her semi-monthly gross pay should have been $1,400.00 per pay period ($2,800.00 monthly as per the employment contract), however she was receiving $1,846.15 per pay period from November 5, 2004 – May 31, 2005. On June 15, 2005 her pay decreased to $1,450.00. Then on December 31, 2005 she received an additional $2,369.68. I would like a reference to the Board minutes authorizing this pay increase in 2005.

In 2006, the Executive Director was paid $1,450.00 per pay period up to November 15, 2006. On the next three pay periods (November 30, December 15 and December 29, 2006) the Executive Director was paid $3,850.00 in each of those pay periods. These cheques were signed by the Executive Director and Peter Gill. I requested clarification from Mr. Gill after the February 19th TTS General Meeting on these cheque amounts. I was told he was going to check his records and get back to me, however, I have not heard anything further from Mr. Gill. I would like a reference to the Board minutes authorizing this pay increase in 2006.

In September 2006 a letter from the Medical Clinic signed by Dr. R. deWit states: “This letter is to certify that the above named patient is to remain off work due to medical reason from September 12 until October 12, 2006 when she will be reassessed.”

The Executive Director received full pay during this four week medical leave. I would like a reference to the Board minutes authorizing full pay during this extended absence.

In an email exchange between the Executive Director and Rob Seaton, one of the TTS Members, the explanation from the Executive Director for the pay discrepancy during 2006 was that the bookkeeper, Elaine Little, had made an error in payroll at the beginning of the year and the extra money that was paid in the last three pay periods of 2006 was to correct for that. I contacted Elaine Little to verify this statement and was told that it was not accurate. Ms. Little commented that the reason she left TTS was because she was not comfortable with what the Executive Director was doing with some of the payroll issues I’ve just brought to your attention.

This will be an easy matter to clear up with Board meeting minutes authorizing these changes to the Executive Director’s employment contract. I was expecting to find all of these minutes at the TTS office on the computer system, however the computer that was being used by the Executive Director had no data at all on the hard drive.

2008 BCSC 361 (CanLII)

Lewis v. Terrace Tourism Society

Page 10

I didn’t give you specific dollar amounts in this email for each of these discrepancies (I have that information available if you need it), however when you add it all up. The total “overpayment” in 2005 and 2006 is $18,000.00+. This does not include money paid to the Executive Director for a TTS cell phone or for mileage that was paid retroactive to the beginning of 2005. (I was able to find Board Meeting minutes authorizing this expense.).

As Mr. Dozzi requested at the February 19th TTS General Meeting, the Committee responsible for winding down the Society, want to be able to present an accurate closing financial statement to TTS to the membership.

Please get back to me as soon as possible. I’m sending this email from my home office and you can reply here, or you can email me at my work, [e-mail address deleted] or call me directly to discuss this matter. My cell phone number is [number deleted].

Thank you.

David Pernarowski TTS Committee Member

[27]

On February 28, 2007, when Mr. Pernarowski was checking the TTS e-mail

account, which was one of the tasks assigned to him, he discovered an e-mail sent

by Mr. Shkuratoff, the former president of TTS, to a number of persons, including Ms. Lewis. In his e-mail Mr. Shkuratoff accused Mr. Pernarowski of accusing Ms. Lewis of malfeasance and stating that the bookkeeper had made some gross mathematical errors.

[28]

On March 4, 2007, Mr. Pernarowski sent an e-mail to Mr. Shkuratoff advising

him that he had found this e-mail and stating: It is not the TTS Committee’s job to make accusations, but rather to report the status of the financial affairs to all interested parties. We are

2008 BCSC 361 (CanLII)

Lewis v. Terrace Tourism Society

Page 11

at this time requesting information and clarification from the former Directors of this Society regarding payroll issues that were outlined in my previous e-mail. You indicate that the former bookkeeper “screwed up” and that you were aware “the former bookkeeper did make some gross mathematical errors regarding some deductions”. What deductions are you referring to that you suggest were errors of the former bookkeeper?

[29]

Mr. Shkuratoff responded on March 5, 2007 expressing regret that Mr.

Pernarowski had received the e-mail and stating that it was sent in error. He said: “The aforementioned e-mail was purely a draft statement which in no fact reflects reality. Any statements made were purely a construct of my imagination and have no basis in fact.

I fully support the fine efforts of the TTS Committee and I appreciate you donating your valuable personal time to complete the required process as per the rules of the Society Act.”

Mr. Shkuratoff did not copy Ms. Lewis with this e-mail.

[30]

On March 6, 2007, Mr. Pernarowski met with Ron Poole and Denise Fisher,

who are administrators with the City of Terrace, to assure them that there would be an accounting of the funds received from the City. Mr. Pernarowski mentioned to them that the process had been delayed somewhat because the Dissolution Committee was seeking information confirming the salary of Ms. Lewis.

[31]

Following his meeting with the City administrators, Mr. Pernarowski received

information by e-mail from Mr. Seaton confirming that the TTS board had approved Ms. Lewis’ salary of $42,000 per annum sometime at the end of 2004 and that she had been paid the salary to which she was entitled.

2008 BCSC 361 (CanLII)

Lewis v. Terrace Tourism Society

Lewis v. Terrace Tourism Society [32]

Page 12

On March 7, 2007, Mr. Pernarowski immediately informed Mr. Poole, Ms.

Fisher and the other two members of the Dissolution Committee that he now had the

TTS were in good order.

[33]

Mr. Seaton in turn advised Ms. Lewis, on March 7, 2007, that the Dissolution

Committee was now satisfied that the payments had been properly authorized.

[34]

In an e-mail dated March 7, 2007, Ms. Lewis asked Mr. Seaton what her

severance would be and when it would be paid. Mr. Seaton responded the same day, advising Ms. Lewis that: Our first meeting we touched on severance, but did not discuss it in depth. I don’t know what TTS obligations should be. We will discuss it and get back to you. Was there an agreement or understanding when you started that covered severance?

[35]

On March 9, 2007, an on-line newspaper called www.terracedaily.ca

published an article concerning TTS, which disclosed some of the information contained in the e-mail of February 27, 2007. Mr. Pernarowski deposed that he did not authorize or intend public disclosure of the information.

[36]

Mr. Pernarowski continued to determine an appropriate severance payment

for Ms. Lewis. On March 16, 2007, he wrote to Mr. Seaton and advised him that a severance package was being prepared for Ms. Lewis and should be ready the following week. He also expressed his displeasure concerning the publication of the article.

2008 BCSC 361 (CanLII)

information supporting the salary payments and was satisfied that the finances of

Lewis v. Terrace Tourism Society [37]

Page 13

On March 19, 2007, before TTS offered a severance payment to Ms. Lewis,

she commenced an action in the Provincial Court against TTS claiming damages for

[38]

TTS subsequently received correspondence from Ms. Lewis’ lawyer making

accusations that TTS was attempting to divest itself of assets in order to avoid its severance obligation and accusing TTS of defaming Ms. Lewis.

[39]

On or about April 27, 2007, TSS, through its solicitor, advised Ms. Lewis that

it was terminating its employment relationship with her.

ANALYSIS The wrongful dismissal claim [40]

Unless a employee is able to establish that his or her employer has expressly

dismissed him or her without reasonable notice or pay in lieu of notice or has constructively dismissed the employee, the commencement of an action by the employee against the employer alleging wrongful dismissal will amount to a repudiation by the employee of the contract of employment (Suleman v. British Columbia Research Council (1990), 52 B.C.L.R. (2d) 138 (B.C.C.A.).

[41]

Thus, unless by its words or action TTS either expressly or constructively

dismissed Ms. Lewis from her employment, Ms. Lewis’ action against TTS on March 19, 2007 amounts to a repudiation of the contract of employment, which TTS was entitled to accept and formally terminate the contract, which it did on April 27, 2007.

2008 BCSC 361 (CanLII)

wrongful dismissal.

Lewis v. Terrace Tourism Society [42]

Page 14

At the meeting of February 19, 2007, TTS decided to wind up the affairs of

the society. It knew that it would have to terminate the employment contract with

affairs of the society and to terminate the contract in the future does not amount to wrongful dismissal. TTS was entitled to terminate the contract of employment provided it gave reasonable notice or provided severance pay in lieu of reasonable notice. Since Ms. Lewis was on maternity leave and not due to return until January 2008, TTS was unable to give notice. It knew that it had to offer reasonable severance pay in lieu of notice.

[43]

The Dissolution Committee intended to offer severance once it had satisfied

itself of the situation concerning Ms. Lewis’ salary, which happened on March 7, 2007. Before TTS had an opportunity to present its offer of severance, Ms. Lewis took the pre-emptive strike and sued. In my view, however, she acted prematurely since TTS had not terminated the contractual relationship; rather TTS had simply determined that it would at some point in the near future terminate the contract and offer pay in lieu of notice. Unless the words or actions of TTS and its Dissolution Committee in some other way constructively dismissed Ms. Lewis prior to March 19, 2007, it is she who repudiated the contract.

[44]

Constructive dismissal occurs when an employer breaches a fundamental

term of an employment contract, or gives notice of its intention to do so. Such a breach entitles the employee to treat the contract as terminated and gives the employee the right to claim damages. The test for whether there has been a fundamental breach of contract by the employer is whether a reasonable person in

2008 BCSC 361 (CanLII)

Ms. Lewis as part of the winding up process. The mere decision to wind up the

Lewis v. Terrace Tourism Society

Page 15

the same situation as the employee would have felt that essential terms of the contract were being substantially altered (see Evans v. Listel Canada Ltd. (c.o.b.

63).

[45]

TTS may have made it clear to Ms. Lewis that it would terminate the

contract, but it had the right to do so as long as it provided pay in lieu of reasonable notice. Expressing the intention to exercise its rights under the contract is not a repudiation of it.

[46]

In this case, as late as March 7, 2007, Ms. Lewis apparently did not consider

that TTS had wrongfully dismissed her since she was enquiring what amount of severance she would be paid as a result of the termination of the contract of employment.

The effect of the February 27, 2007 e-mail and the claim in defamation [47]

It is not entirely clear from the pleadings whether Ms. Lewis alleges that the

actions of Mr. Pernarowski in sending his e-mail dated February 27, 2007 and his discussion of the salary issue concerning Ms. Lewis, which she alleges are actionable, constitute constructive dismissal.

[48]

It seems to me that it may well be that if an employer defames an employee,

particularly with regard to matters concerning the employee’s duties, that amounts to repudiation by the employer of the contract of employment, which enables the

2008 BCSC 361 (CanLII)

O’Doul’s Restaurant and Bar), 2007 BCSC 299, 2007 C.L.L.C. 210-018 at para.

Lewis v. Terrace Tourism Society

Page 16

employee to terminate the relationship and sue for damages for wrongful dismissal

[49]

Ms. Lewis alleges in paragraph 18 of her amended statement of claim that the

words that I have underlined in the passage set out in paragraph 26 “referred to or were understood to refer to the plaintiff and implied and were intended to imply that the plaintiff had been involved in wrongdoing while an employee of TTS. They further implied and were intended to imply that the plaintiff’s explanation for the allegedly discrepancy, namely that the bookkeeper had made an accounting error, was false.

Are the words in the February 27, 2007 e-mail defamatory of the plaintiff?

[50]

The threshold test for determining whether words are defamatory is quite a

low one. In Cherneskey v. Armadale Publishers Ltd. [1979] 1 S.C.R. 1067, Dickson J., while dissenting on the issue, which concerned the defence of fair comment, expressed at p. 1095, his view of what constitutes a defamatory statement: The law of defamation must strike a fair balance between the protection of reputation and the protection of free speech, for it asserts that a statement is not actionable, in spite of the fact that it is defamatory, if it constitutes the truth, or is privileged, or is fair comment on a matter of public interest, expressed without malice by the publisher. These defences are of crucial importance in the law of defamation because of the low level of the threshold which a statement must pass in order to be defamatory. The virtually universally accepted test is that expressed by Lord Atkin "after collating the opinions of many authorities" in Sim v. Stretch [(1936), 52 T.L.R. 669.], at p. 671.

He stated that the test of whether a statement is defamatory is: "Would the words tend to lower the plaintiff in the estimation of right-thinking members of society generally?" In the earlier case of O'Brien v.

Clement [(1846), 15 M. and W. 435.] at p. 436 Baron Parke said that,

2008 BCSC 361 (CanLII)

as well as damages for defamation.

Page 17

subject to any available defences, "[e]verything printed or written, which reflects on the character of another" is a libel. It is apparent that the scope of defamatory statements is very wide indeed. In particular, a great deal of what is printed in the Letters to the Editor columns of newspapers unquestionably has the effect of lowering the subject's reputation in the estimation of right-thinking people generally. In all cases, nevertheless, the statement is not actionable if it is the truth, or fair comment, or protected by privilege. This is the reason why most defamation actions centre on the defences of justification, fair comment, or privilege. It is these defences which give substance to the principle of freedom of speech.

[Emphasis added.].

[51]

The test is an objective one, whether the words would have the effect of

lowering the plaintiff’s reputation in the mind of a reasonable person. Further, the defendant’s intention is not relevant to the determination of whether the words are defamatory (see Stopforth v. Goyer (1979), 8 C.C.L.T. 172 (Ont. C.A.)).

[52]

Judged by this low standard, I am of the opinion that the words complained of

are defamatory. They tend to leave the impression that the Executive Director received salary or other benefits to which she was not entitled and conducted the society’s affairs in a manner that caused its bookkeeper to quit. The persons to whom the e-mail was sent were all former directors who knew the identity of the Executive Director. There is no question that the words referred to Ms. Lewis.

[53]

The defendant submits however, that even if the words are defamatory, they

were published, without any malice on the part of Mr. Pernarowski, on occasions of qualified privilege and are therefore not actionable.

2008 BCSC 361 (CanLII)

Lewis v. Terrace Tourism Society

Lewis v. Terrace Tourism Society [54]

Page 18

The defence of qualified privilege is described in Raymond E. Brown, The

Law of Defamation in Canada, 2nd ed., (loose-leaf) (Toronto: Carswell 1999,) at p.

There are certain occasions on which a person is entitled to publish untrue statements about another, where he or she will not be liable even though the publication is defamatory. One such occasion is called a conditional or qualified privilege. No action can be maintained against a Defendant unless it is shown that he or she published the statement with actual or express malice. An occasion is privileged if a statement is fairly made by a person in the discharge of some public or private duty, or for the purpose of pursuing or protecting some private interest, provided it is made to a person who has some corresponding interest in receiving it. The duty may be either legal, social or moral.

The test is whether persons of ordinary intelligence and moral principal, or the great majority of right-minded persons, would have considered it a duty to communicate the information to those to whom it was published.

[55]

At pp. 13-74 to 13-75, Professor Brown describes situations in which qualified

privilege may attach to, such as occasions when businesses and companies share information concerning their operations with others: Businesses and companies have an obligation to their employees and customers to inform them with respect to matters affecting their business; their employees and customers in turn may have an equal responsibility to keep the company informed about such matters.

Thus, the directors of a company have an obligation to keep shareholders informed regarding rumors detrimental to the company, or to advise them regarding reports critical of their officers or agents, ‌ or the wrongful conduct of someone with regard to his business and fiduciary relationship with the company ‌ Company officers should advise supervisory staff of accusations against an employee in the company. ‌

2008 BCSC 361 (CanLII)

13-4 as follows:

Lewis v. Terrace Tourism Society

Page 19

When company personnel are investigating a theft, shortage of accounts, misappropriate of property, or failure to follow company accounting procedures, other officials of the company who have an interest in the matter may share in that information and the investigators may exchange information with each other. ‌ (p. 13-97) A person’s interest in receiving information may be business or financial. It is generally accepted ‘that the law does, in the general interests of society, extend the protection of privilege to communications made in bona fide (though erroneously) about a third person, where the parties making and receiving them have a legitimate business interest in the communication.

[56]

In this case, Mr. Pernarowski and the other members of the Dissolution

Committee were charged with the responsibility for winding up the affairs of TTS and providing a final financial report. In the course of that engagement, Mr. Pernarowski discovered certain payments that appeared to be at odds with the records that he had. It was in that sense that he described them as discrepancies. He had an obligation to delve into those matters and to try to find an explanation. Indeed, he believed an explanation would be found and did not jump to the conclusion that there had been any wrongdoing.

[57]

TTS clearly had an interest in ensuring that its financial affairs were properly

attended to. Mr. Pernarowski made some enquiries looking for an explanation for the apparent discrepancies, but was still left with unanswered questions. He decided to seek further information from the former directors of the society by sending a confidential e-mail to them. Those persons, in their capacity as former

2008 BCSC 361 (CanLII)

(p. 13-95)

Lewis v. Terrace Tourism Society

Page 20

directors and as members of the society, had a corresponding interest in the matters

[58]

There is no evidence to suggest that Mr. Pernarowski had any malice towards

Ms. Lewis. His reaction to and concern regarding the publication of parts of his confidential e-mail in www.terracedaily.ca is clear evidence to the contrary.

[59]

The plaintiff alleges that Mr. Pernarowski repeated the statements contained

in the February 27, 2007 confidential e-mail to the administrators of the City of Terrace but there is no evidence to establish precisely what he said and that he repeated the statements contained in the e-mail. In his affidavit, Mr. Pernarowski deposed that he mentioned to Mr. Poole and Ms. Fisher that the accounting with respect to the funds provided by the City had been delayed somewhat because the Dissolution Committee was seeking information concerning Ms. Lewis’ salary.

[60]

There is no evidence from Mr. Poole or Ms. Fisher as to what Mr.

Pernarowski told them. Ms. Lewis submitted that I should decline to decide the case under Rule 18A so that she would have the opportunity to obtain evidence from them at trial. I am not satisfied that it is unjust to dispose of the action on the evidence now before the Court. Even if Mr. Pernarowski repeated to Mr. Poole and Ms. Fisher all of what he set out in his e-mail, I am satisfied his discussions with the City administrators were also an occasion of qualified privilege. TTS felt it had an obligation to provide a full accounting to its major provider of funds and the City had a corresponding interest in receiving a report and in being made aware of what steps TTS was taking to provide complete and accurate information.

2008 BCSC 361 (CanLII)

raised in the e-mail. I am satisfied that this was an occasion of qualified privilege.

Lewis v. Terrace Tourism Society [61]

Page 21

I am of the view that the plaintiff’s action based on defamation must fail and

that Mr. Pernarowski’s actions in sending the e-mail and discussing the matter with

[62]

The plaintiff’s action is dismissed.

[63]

The defendant is entitled to its costs from the plaintiff if it insists on pursuing

them.

[64]

I would add this observation. It is unfortunate that the members of the

Dissolution Committee and Ms. Lewis did not sit down together and discuss this matter, face to face, when the issue first arose. I believe that if they had done so, this litigation would have been avoided.

B.M. Joyce, J.

2008 BCSC 361 (CanLII)

the City administrators did not constitute constructive dismissal.