Federal Court Decisions

Date: 20041104

Docket: T-115-02

Citation: 2004 FC 1558

Ottawa, Ontario, the 4^th day of November 2004

Present: The Honourable Madam Justice Johanne Gauthier

BETWEEN:

LENCY TURNER

Applicant

and

THE CANADA CUSTOMS

AND REVENUE AGENCY

Respondent

REASONS FOR ORDER AND ORDER

[1]        Lency Turner is applying for judicial review of a decision by the Public Service Staff Relations Board dismissing her two grievances, one challenging her suspension and the other her dismissal by the Canada Customs and Revenue Agency (Revenue Canada).

Relevant facts

[2]        The applicant had worked at the Jonquière Taxation Centre since 1983. In 1998 and early 1999, Revenue Canada discovered anomalies in certain files. A public servant identified significant discrepancies between the Revenue Canada information and that of Revenu Québec. At the federal level, certain files included deductions for alimony or handicap claims which were not requested from the provincial authorities. The internal investigation found that these files had been altered to obtain fraudulent tax refunds.

[3]        The analysis of the computerized information indicated the intervention of three specific public servants, including Ms. Turner and her spouse Mario Boucher. All three were summoned on September 14, 1999 by Ms. Gagnon, the manager of the Taxation Centre. At that point, Mr. Boucher was absent (sick leave) and Ms. Turner met with Ms. Gagnon first. After the suspicions concerning her had been explained, the applicant denied any involvement and indicated that her password must have been stolen. She also said: [TRANSLATION] "I have done nothing, if someone admits they used my password, you should reinstate me".^[1] Ms. Turner was suspended without pay during the internal investigation.

[4]        On the afternoon of the same day, Mr. Boucher called Ms. Gagnon and admitted that he was the one who had himself falsified the files, and his spouse had not done anything.

[5]        The internal investigation was completed and Revenue Canada decided to dismiss Ms. Turner as well as the other two public servants concerned. The applicant challenged that decision.

[6]        At the adjudication before the Board pursuant to section 92 of the Public Service Staff Relations Act, R.S.C. 1985, c. P-35 (the Act), Revenue Canada called five witnesses. In addition to Ms. Gagnon, the respondent called the special investigator Mr. Pelletier, who examined 393 files, including that of the applicant's father (Gratien Turner) and brother (Dave Turner) and Alain Beaudry, one of her long-time friends.^[2] Then, Luc Gauthier, a taxpayer, admitted that he was a friend of Ms. Turner and had met her spouse at social gatherings, and in particular had paid Mr. Boucher a commission for his tax refund, giving him two cheques, one made out to Ms. Turner and the other to Mr. Boucher.^[3] Then, Mr. St-Laurent, the senior investigator who questioned the three suspected public servants in September 1999, explained the result of the investigation and filed a copy of his investigation report (E-9). Finally, David Burnside, data processing security analyst, commented on various exhibits such as the list of files consulted with Ms. Turner's password, that of the files consulted from her work station, the type of consultation and the length of the consultation.

[7]        For her part the applicant, in addition to testifying, called Mr. Boucher and filed various exhibits to establish the legitimate source of certain cash receipts as well as the file on her benefit application pursuant to the Employment Insurance Act, S.C. 1996, c. 23.

[8]        In its decision, the Board summarized this evidence and concluded that along the way, and especially from June 1996 onward, Ms. Turner had knowledge of certain of Mario Boucher's activities. She kept silent and, based on the evidence as a whole and the lack of mitigating circumstances, the dismissal was a justified penalty.

Points at issue

[9]        Ms. Turner submitted that the Board's decision should be set aside on the following grounds:

            (i)         the Board erred "in law" regarding the applicable standard of proof and the employer's burden of proof;

            (ii)        the Board erred "in law" by disregarding without valid justification the board of referees' decision which allowed her claim for benefits under the Employment Insurance Act, because a reasonable doubt existed as to her participation in this fraud and it therefore could not conclude there had been misconduct;

            (iii)       the Board's conclusion that she was aware of the actions of her spouse Mr. Boucher is patently unreasonable, or at least unreasonable because it was based on a misinterpretation of the evidence, as in particular the Board disregarded or misunderstood her testimony on the following points:

                                    (a)        access to and viewing of her father Gratien Turner's file on June 12, 1996;

                                    (b)        the reference to "Robin Hood" to describe Mr. Boucher's actions;

                                    (c)        the relationship between Mario Boucher and the taxpayer Alain Beaudry;

                                    (d)        the meeting with Alain Beaudry in August 1996 and the conversation in spring 1999;

            (iv)       the Board erred in concluding that the dismissal was justified as its decision was based entirely on [TRANSLATION] "speculations, conjectures and suppositions".

[10]      Before the hearing, the Court asked the parties to make submissions on the fact that there was no transcript of the testimony at the hearing. The applicant then submitted that the Board had in fact breached the rules of natural justice, because the absence of a transcript in the case at bar made it impossible for the Court to adequately review the decision on the points she raised.

[11]      At the hearing, the applicant submitted a new argument to the effect that the Board erred by not considering in detail whether the penalty applied by the employer was justified in terms of Ms. Turner's misconduct. This argument was not raised in her memorandum and the respondent did not have an opportunity to reply to it. Nevertheless, the Court is satisfied that the Board did not make any error on this point. The following analysis will accordingly include a few comments in this regard.

Analysis

[12]      The applicant argued that the pragmatic and functional approach recommended by the Supreme Court of Canada in Law Society of New Brunswick v. Ryan, [2003]1 S.C.R. 247, requires that the standard of the correct decision be applied to the two errors of law and that of reasonableness simpliciter to questions (iii) and (iv) above.

[13]      According to her, it is especially significant that since 1993 there has been no privative clause protecting the Board's decisions. She further submitted that it is clear from the decision itself that the Board has no special expertise in the operation of Revenue Canada's data processing systems. Finally, she indicated that the decisions cited by the respondent should not be followed as in its judgment in Ryan, supra the Supreme Court of Canada altered the method to be used.

[14]      The respondent agreed as to application of the standard of the correct decision to points of law, but submitted that it was the standard of the patently unreasonable decision that should be applied to the Board's other findings. In this connection, it indicated that the Court is bound by the judgments of the Federal Court of Appeal in Desrochers v. Canada (Treasury Board) (T.D.), [2000] F.C.J. No. 505, affirmed by [2002] F.C.J. 1280 (C.A.) (QL),Barry v. Canada (Treasury Board), [1997] F.C.J. No. 1404 (C.A.) (QL) and Green v. Canada (Treasury Board), [2000] F.C.J. No. 379 (C.A.) (QL).

[15]      In Barry, supra, at paragraph 3, the Federal Court of Appeal dealt expressly with the impact of the repeal of the privative clause in the Act. It indicated that this does not justify alleviating the standard of review applicable to decisions made under section 92 of the Act.

[16]      In Ryan, supra, the Supreme Court of Canada did not alter its approach or the weight to be given to that test. At paragraph 29, it expressly adopted the observations of Bastarache J. in Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, at paragraph 30:

"The absence of a private clause does not imply a high standard of scrutiny, where other factors bespeak a low standard." The specialization of duties intended by the legislature may warrant deference notwithstanding the absence of a privative clause . . .

[17]      That is certainly the case here. It has been said many times that the Board has broad expertise in matters of labour relations and dismissal.

[18]      Accordingly, I will apply the standard of the patently unreasonable decision to questions (iii) and (iv) and that of the correct decision to question (i). As for question (ii), I do not think this is a question of law, but this designation is not critical in the case at bar since I conclude that the decision is correct in this respect. The Board made no error by deciding not to follow the reasoning used by the board of referees in its decision pursuant to the Employment Insurance Act. It clearly considered this evidence submitted by the applicant, correctly indicated that it was not bound by that decision and then gave its reasons for not using the same reasoning, inter alia that the standard of proof applied by the Board of referees was that of proof beyond a reasonable doubt and the employer had not presented any evidence to the Board. This reasoning is not only reasonable, it is completely fair.

[19]      Finally, as to whether there was a breach of the rules of natural justice, there is no need to consider the standard of review since if there was in fact a breach the decision should be set aside. I will deal with this question first.

Absence of transcript

[20]      The parties agreed that the absence of a record is not in and of itself a breach of the rules of natural justice, since there is no right to recording expressly conferred by the Act (Scheuneman v. Canada (Attorney General) (T.D.), [2000] 2 F.C. 365, at paras. 35 and 36, affirmed by (2000) 266 N.R. 154 (C.A.). They also accept that the Court sitting in review must determine whether it has sufficient information to address of the questions raised in the review application, or whether on the contrary the absence of a transcript does not allow it to adequately review the decision (A.G. Canada v. Valladolid, [2004] F.C.J. No. 601, at para. 3, (C.A.)).

[21]      I have before me the written reasons of the adjudicator, the entire file that was submitted to him and the affidavit of Ms. Turner, who after having an opportunity to read the decision indicated what she said at the hearing about the questions at issue. After considering in detail the file and the arguments raised by the parties, the Court is satisfied that it can decide the questions raised by the applicant based on the documents in the record and that the absence of a transcript is not in the case at bar an infringement of the rules of natural justice. In this regard, the Court notes that it was at its express request that the parties submitted representations on this point, since the applicant did not raise the point herself in her notice of application and memorandum.

Standard of evidence and burden of proof

[22]      The applicant submitted that the employer had the burden of showing on a balance of probabilities that she participated in the alleged fraudulent acts and this proof should be especially persuasive in view of the serious consequences for her of loss of employment (see Boulangerie Gadoue-St-Augustin inc. v. Laroque et al. J.E., [2000] R.J.D.T. 153 (S.C.) AZ-0021304, J.E. 2000-650).

[23]      She indicated that the Board referred several times to the concept of plausible evidence, especially at paragraphs 91 and 110. In the applicant's view, plausibility and probability are not the same thing and the employer could not discharge its duty of "persuading" the Board simply by setting out a plausible scenario.

[24]      The respondent submitted that it was clear from the decision that the Board applied the correct standard of evidence and that it properly understood the burden upon the employer. It added that in its ordinary sense, the word "plausible" refers to what is "likely" or "probable", and that even the authorities cited by the applicant use this expression. For example, in Travailleuses et travailleurs unis de l'alimentation et du commerce, section locale 503 v. Provigo Inc., division Maxi Fleur-de-Lys, AZ-02141180, TA 1020-4354, at pages 8, 9 and 10, the passages cited by the applicant as correctly expressing the rule to be used refer extensively to the concept of the most plausible evidence.^[4]

[25]      At paragraphs 89 to 91, the Board explained its reasoning as follows:

[TRANSLATION]

89     Regarding the burden of proof required in a dismissal case such as this one, I feel that unlike the criminal process this does not require proof beyond a reasonable doubt, rather a balance of probabilities.

90     I also accept the grievor's argument that a person cannot be dismissed on the basis of doubts or suppositions resulting from the fact that the grievor is the spouse of Mario Boucher, who admitted falsifying files.

91     In short, my decision has to be based on the facts and the most plausible explanation for them.

[26]      I am persuaded that the Board applied the correct standard of evidence, namely that of a balance of probabilities. That standard implies that the employer must show it was more than 50 per cent probable that Ms. Turner falsified files or was aware of her spouse's actions.

[27]      It is clear that the Board used the phrase [TRANSLATION] "the most plausible" in the sense of "probable". This phrase seems to be frequently used by grievance adjudicators in this sense.

[28]      The evidence submitted by the employer was circumstantial. Accordingly, the Board had to determine whether that evidence allowed it to deduce or infer that Ms. Turner had falsified files or had knowledge of her spouse's activities. That is exactly the approach taken by the Board.

Conclusions on misconduct

[29]      In view of the applicable standard of review, the applicant had to persuade the Court that the Board's findings were irrational or illogical. This is a difficult burden to discharge.

[30]      Further, it is clear that the Court cannot substitute its own view of the evidence for that of the Board. As the Federal Court of Appeal indicated in Green, supra, at paragraph 8, a decision is not patently unreasonable simply because it is based on evidence which is interpreted in a certain way when it could be interpreted in some other way, or if the reasons for decision do not address each point which could be argued.

(A) Access and viewing on June 12 ,1996

[31]      In her affidavit, the applicant said that she indicated in her testimony that she did not recall specifically the information her father had requested from her, but said clearly she did not view fraudulent refund transactions in any way whatsoever. Further, she explained that when the option (N) is used to access a file, [TRANSLATION] "you have access to part of the information only, and in order to have all the information covered by that option, you have to view each and every page, and in some cases these can be very numerous".

[32]      The applicant did not dispute the Board's finding that she in fact accessed her father's file on June 12, 1996, and that on that occasion she used option (N).^[5] She also did not say in her affidavit that the Board misinterpreted or misunderstood the testimony of Ms. Gagnon or the other witnesses in this regard. Instead, she said the Board should not have accepted Ms. Gagnon's testimony (para. 27 of memorandum).

[33]      At paragraph 39 of the decision, the Board indicated that Ms. Gagnon testified that the viewing on June 12, 1996 was a complete viewing, which according to her allowed the viewer to see that the applicant's father had received a fraudulent refund. Then, the Board indicated in paragraph 74 that according to Ms. Turner, even if she had used option (N), this did not mean she could have seen the entire file.

[34]      It is clear the Board did not ignore Ms. Turner's testimony, but it did not find that testimony more persuasive than the rest of the evidence before it.^[6] There was contradictory evidence before the Board and it therefore had the right, if not the duty, to weigh that evidence. Since there is evidence to support its finding, the Board did not make a reviewable error.

[35]      The applicant's other argument was that the Board did not really conclude that she had in fact noted a falsification in this file, only that she could have done so.^[7] In the applicant's submission, therefore, the Board could not conclude from this possibility that the employer had established on a balance of probabilities she was aware of her spouse's activities and his misconduct.

[36]      Clearly, the decision has to be considered as a whole. At paragraph 109, the Board said [TRANSLATION] "The other doings can only confirm that Ms. Turner had knowledge along the way of the activities of her spouse Mario Boucher, in particular from June 1996 onwards". This passage actually seems to indicate that the Board concluded that in fact Ms. Turner had knowledge of the falsification in the Gratien Turner file consulted in June 1996.

(B) Robin Hood

[37]      The applicant indicated in her affidavit that the Board misunderstood her testimony and took this expression out of context. She said she told the Board that it was Mario Boucher who, after admitting his fraudulent activities, described himself as "Robin Hood". However, she did not say that the Board misunderstood Ms. Gagnon's testimony on what she said during the internal investigation.

[38]      At the hearing, the applicant confirmed that the Board erred in its assessment of the evidence at paragraph 108. Nonetheless, it is clear that at that point the Board referred expressly to the applicant's comments made to Ms. Gagnon shortly after her suspension, and about which Ms. Gagnon testified (paragraph 36 of the decision).

[39]      Based on the evidence before it, it was not illogical to accept Ms. Gagnon's testimony and conclude that even if the expression originated with Mr. Boucher, the applicant had used it herself at her meeting with Ms. Gagnon.

[40]      The Court is not satisfied that the Board erred in accepting Ms. Gagnon's testimony.

(C) Relationship between Mario Boucher and Alain Beaudry

[41]      At paragraph 20 of her affidavit, Ms. Turner indicated that Mario Boucher was a friend of Mr. Beaudry and had known him for several years. That is what she said she told the Board in her testimony.

[42]      In its decision, at paragraph 106, the Board indicated that Mario Boucher was not a close friend of Mr. Beaudry.

[43]      The Board further indicated that the taxpayer Beaudry confirmed to Roland Pelletier that the person he knew at Revenue Canada was Ms. Turner (paragraph 57 of the decision). It also appears that the witness André St-Laurent confirmed that Ms. Turner's spouse told him Mr. Beaudry was a friend of Ms. Turner and that he had met him at a party in Chibougamau (paragraph 51 of the decision).

[44]      At page 5 of André St-Laurent's investigation report (Exhibit E-9), it states that at her interview with Ms. Gagnon on September 14, 1999 Ms. Turner admitted knowing Mr. Beaudry for some 20 years, and that her spouse Mario Boucher had in fact seen Mr. Beaudry two or three times, indicating that he had only seen him at the home of friends.

[45]      Ms. Turner's testimony was thus not the only evidence on this point in the record. The Court is satisfied that there was evidence supporting the Board's finding. Its finding was not patently unreasonable.

(D) August meeting with Alain Beaudry and discussion in spring 1999

[46]      In its decision the Board indicated that every time a question was raised about Mr. Beaudry's file, Ms. Turner's replies were evasive or contradictory. It noted the contradictory replies by Ms. Turner and Mario Boucher regarding their absence from work on August 22 and 23, 1996 and concerning the meeting with Mr. Beaudry. At paragraph 104 in particular, it said:

[TRANSLATION]

At the meeting with Diane Gagnon, the manager, in September 1999 Ms. Turner replied that she could not recall what she did on her leave on August 22 and 23, 1996. She said she did not accompany her spouse. Mario Boucher, for his part, remained vague when questioned by André St-Laurent about this (Exhibit E-9, page 11). At the hearing, he said that Ms. Turner had accompanied him, but to go to a "corn roast" party where he could discreetly meet with Alain Beaudry.

[105] Neither Ms. Turner nor Mario Boucher, her spouse, could say just where the 1996 roast took place, even at the hearing in 2001.

[47]      The applicant argued that there were no contradictions in the testimony. In her affidavit, she said she had not told Diane Gagnon she had not accompanied her spouse on August 22 and 23, 1996, but rather that she did not recall what she was doing on those days. However, the applicant did not say she mentioned this in her testimony before the Board. She also did not say that the Board misunderstood Ms. Gagnon's testimony on this point.

[48]      At paragraph 19 of her affidavit Ms. Turner said that it was only after thinking about these matters that she recalled she went with Mario Boucher [TRANSLATION] "to visit Mr. Beaudry and take part in a corn roast". In her view, this statement clearly indicated that the roast took place at Mr. Beaudry's home and that the Board was wrong to say she could not indicate exactly where the event occurred.

[49]      The applicant did not say in paragraph 19 that she testified to this effect before the Board. If that were the case, the testimony would be entirely contrary to that of her spouse, who said the roast took place at the home of a mutual friend at Mr. Beaudry's suggestion (paragraph 68 of the decision and page 11, paragraph 7 of Exhibit E-9) and confirmed the Board's assessment. If she did not say this at the adjudication, the Board was right to say that on this important point the applicant was unable to establish the place of the meeting.

[50]      The applicant further submitted that the Board erred in concluding in paragraph 112 that her conversation with Mr. Beaudry in spring 1999 about a letter received from Revenue Canada was related to the falsification of files in 1996.

[51]      In her affidavit (paragraphs 9 to 11 and 23) she indicated that her discussion concerned Mr. Beaudry's civil status, and she referred him to the Child Tax Benefits Department.

[52]      It appeared that the fraudulent refund in the Beaudry file was in fact related to his civil status, since if he was not divorced how could he deduct alimony (Exhibit 11, pages 3 and 4, reason)? It further appears that it was after receiving a copy of a letter verifying his civil status and child allowance from Mr. Beaudry that Mr. Boucher accessed this taxpayer's file and realized that the file was under investigation (page 13 of investigation report Exhibit E-9).

[53]      It was therefore not illogical or irrational for the Board to conclude that Revenue Canada's letter was related to the falsification of the file, and so that in speaking of this letter with Ms. Turner Mr. Beaudry was speaking to her about something related to the falsification of his file.

[54]      The Board clearly indicated that in the case of the Alain Beaudry falsification, the weight of evidence was against Ms. Turner (paragraph 106) and that it [TRANSLATION] "felt certain that Mr. Beaudry spoke to Ms. Turner in June 1999 about the letter sent out by Revenue Canada because he knew she was aware of Mario Boucher's actions, at least in his case" (paragraph 113).

[55]      It is thus clear that the Board did not accept the credibility of the applicant's testimony that she was not involved in this file and had never discussed the falsification with Mr. Beaudry or Mr. Boucher.

[56]      The Court is satisfied that the Board had sufficient evidence to reject the applicant's testimony in this regard and that its decision was not patently unreasonable. The Court does not intend to substitute its own view of the evidence for that of the Board.

[57]      Finally, the applicant submitted that there was nothing strange about Mr. Boucher's admission and that the Board erred in treating this fact as a basis for concluding she was guilty of misconduct.

[58]      Considering Ms. Turner's remarks at her interview of September 14, 1999, to the effect that if someone made an admission she would have to be reinstated, the Court is not persuaded that it was illogical to regard this admission as one of the many points which taken together led to the conclusion that Ms. Turner knew of certain of her spouse's activities before those activities were put to her by Ms. Gagnon on September 14, 1999.

[59]      After reviewing all the evidence in the record and considering all the arguments submitted by Ms. Turner, the Court is satisfied that the Board could reasonably conclude that the employer had discharged its burden of showing that she was aware of certain of her spouse's activities and did not inform her employer of them.

[60]      The general conclusion that there was misconduct contains no reviewable error that would justify the setting aside of that decision.

Nature of penalty

[61]      At the hearing, the applicant submitted that the Board had erred by not considering in detail whether the action taken by the employer was justified in terms of Ms. Turner's misconduct.

[62]      At paragraph 18(e) of the decision, the Board clearly indicated that after considering the applicant's conduct it would have to examine what disciplinary penalty should be imposed upon her. It then noted, at paragraphs 115 and 116 [TRANSLATION] "That leaves the question of what penalty is most appropriate in the circumstances. The employee did not speak of mitigating penalties as the body of evidence was intended to establish her innocence. The fact remains that most of the employee's evidence dealt with mitigation of the penalty". It is clear that here the Board was referring inter alia to the cross-examination of Ms. Gagnon summarized at paragraphs 41 to 45 of the decision.

[63]      These comments confirm that the Board took the right approach.

[64]      Ms. Turner said that the Board erred in describing the nature of the activities in question at paragraph 122 of the decision. It is true that the Board did not conclude that she was directly responsible for [TRANSLATION] "repetitive falsification of files" which [TRANSLATION] "involved several taxpayers". It is clear from reading the decision as a whole that here the Board was referring to the fact that Ms. Turner knew of the activities of her spouse, not to her direct participation in the falsification. It is true that the word [TRANSLATION] "several" is something of an exaggeration, when we consider that the Board concluded Ms. Turner knew of two cases, those of Gratien Turner and Alain Beaudry. However, that exaggeration is not a sufficient error to set aside the decision, since the Board's conclusion that the penalty was justified is supported by other evidence in the record, such as the nature of the employment, the relationship of trust and the absence of any mitigating circumstances explaining the applicant's silence.^[8]

ORDER

THE COURT ORDERS the following:

THE APPLICATION is dismissed with costs.

Certified true translation

Jacques Deschênes, LLB

                                                             FEDERAL COURT

                                                      SOLICITORS OF RECORD

DOCKET:                                                                   T-115-02

STYLE OF CAUSE:                                                   LENCY TURNER v. CANADA CUSTOMS AND REVENUE AGENCY

HEARING BY VIDEO TELECONFERENCE:       October 20, 2004

REASONS FOR ORDER BY:                                  Johanne Gauthier J.

DATED:                                                                      November 4, 2004

APPEARANCES BY VIDEO TELECONFERENCE:

Éric LeBel                                                                     FOR THE APPLICANT

Jennifer Champagne                                                       FOR THE RESPONDENT

SOLICITORS OF RECORD:

FRADETTE, GAGNON, TÊTU, LEBEL,                     FOR THE APPLICANT

STE-MARIE

CHICOUTIMI, QC.

MORRIS ROSENBERG                                              FOR THE RESPONDENT

DEPUTY MINISTER AND DEPUTY

ATTORNEY GENERAL OF CANADA

OTTAWA, ON.