A Tennant Windfall, Dismissal for Cause, and Future Earnings

 

Navigating the intricate legal terrains of landlord-tenant dynamics and employment controversies can be daunting. The recent podcast episode with Michael Mulligan offers a wealth of knowledge on these matters. Mulligan’s insights into a complex Duncan case involving a landlord’s notice to a tenant for personal occupancy highlights the significant monetary judgment that can ensue from disputes over repairs, renovations, and procedural fairness in Residential Tenancy Act hearings.

The shift towards telephonic hearings, spurred by modern technology, has introduced new challenges to the judicial process. These include issues of accessibility to documents for both parties during proceedings, which Mulligan notes as a critical aspect of ensuring procedural fairness. The case underscores the need for transparency and procedural fairness, especially when significant sums are at stake. It is an essential reminder of the evolving landscape of residential tenancy laws and the heightened scrutiny required in cases involving substantial monetary judgments.

Mulligan’s exploration into the realm of employment law, particularly the controversial narrative of a manager’s dismissal for falsified expense reports, serves as a stark warning of the potential consequences of workplace dishonesty. The episode details the criteria for just cause for dismissal, the wrongful dismissal, and the intricacies of appealing court decisions. Mulligan’s dissection of the manager’s attempt to introduce new evidence on appeal—rejected based on a stringent four-part test—provides a fascinating glimpse into the legal processes governing the professional world.

Moreover, the episode delves into a poignant story of a student’s fight for compensation following life-altering car accidents, juxtaposed with the current no-fault insurance landscape. The legal considerations of potential loss of future earnings and the assessment of compensation claims for future work prospects are examined in depth. This discussion not only offers insights into personal injury claims but also personalizes the struggle for fairness that often characterizes legal disputes.

In summary, the podcast episode serves as a comprehensive guide to understanding the complexities of residential tenancy and employment law. Through the lens of real-world cases and the personal experiences of those involved, it provides valuable legal knowledge for landlords, tenants, employers, and employees alike. Mulligan’s expertise underscores the importance of fairness in rentals, firings, and compensation claims, making it a must-listen for anyone seeking to navigate these legal labyrinths successfully.

 

Legally Speaking with Michael Mulligan is live on CFAX 1070 every Thursday at 10:30 a.m. It’s also available on Apple Podcasts or wherever you get your podcasts.

 

Transcript of the show:

 

Legally Speaking Jan 11, 2024

Adam Stirling [00:00:00] It’s time for a regular segment to with Barrister and Solicitor, with Mulligan Defence Lawyers. It’s Michael Mulligan and Legally Speaking on CFAX. Morning, Michael. How are we doing?

Micahel T. Mulligan [00:00:09] Hey. Good morning. I’m doing great. Oh, it’s good to be here.

Adam Stirling [00:00:11] Some interesting items on the agenda this week, including an interesting case, reasonably local that has to do with landlords, tenants and procedural fairness.

Micahel T. Mulligan [00:00:22] That’s exactly right. Uh, and I should start by saying this. Right. The the reason why only a vanishingly small percentage of contracts that people enter into ever wind up in court is that the basic nature of a contract is a free agreement between two people to do something they both want to do, right? Hey, do you want to buy my bike? Yes. Great. Right. You’re happy to get the bike? I’m happy to get your money. Uh, but we’ve moved provincially, further, and further away from that sort of free agreement between two people in the case of residential tenancy. And when you see the changes over the years and read these decisions that come out, it’s become, very apparent, that for political reasons, uh, the provincial government has modified, you know, sort of what people can agree to to the point where, often these agreements are not free agreements between two people entered into or they both think there’s some mutual benefit. But there’s something else, right, designed to achieve a social aim. And then as, often the landlord tries to escape that reality, the provincial government comes along and plugs various things into the dyke of, you know, water coming out the other side. And so that’s the broad background to this case that just came out that originated in Duncan. And the background of it is that, landlord who owned a home in Duncan wanted to move into the home and so gave notice, as they are permitted to do, under the Residential Tenancy Act and the those provisions in terms of,  when somebody can,  make use themself of a home that they own, that they’d previously been renting require a number of things, they require there to be, a longer notice period. They now require there to be one month’s free rent given to the tenant. And then the part which is sort of, the only way you could describe it would be sort of gamified the situation, is that if the landlord who gives notice doesn’t move into the unit themself within a reasonable period of time, the tenant, former tenant, can seek 12 months rent from the landlord. And so, it’s produced a circumstance where at reading these decisions, it’s apparent, you know, you’ve got former tenants trying to, you know, sneak by, knock on the door, and see is the person there. How long do they take to move in? because there’s some potential being paid day, if the person didn’t move, the landlord didn’t get into the house in a reasonable period of time.

Adam Stirling [00:02:55] Yeah.

Micahel T. Mulligan [00:02:56] And so this case, the landlord gave notice to the tenant. Tenant moved out after a couple of months and then the landlord, was doing some repair work on the house before moving into it. They took out the carpet and realised there had been water leaks in the house that required them to remove drywall, replace appliances, repair structural damage, do plumbing and electrical work, get permits to do these things. So that delayed moving into the house. Now, it got a little fuzzy because the landlord, in addition to fixing the problems that became apparent when the carpet that I removed, decided to do other things, like replacing windows, and ordering appliances. And I think, up doing another upgrade or two to their property. And I delayed moving into it. And so, the former tenants brought in an application to try to get 12 months rent, which produced a hearing under the Residential Tenancy Act. And that’s where things started to go a little haywire here. And how it eventually wound up in court. and the challenges and this would be something that would have been entrenched over the period of Covid is that these hearings are now conducted by routinely and presumptively telephone.

Adam Stirling [00:04:10] hmm.

Micahel T. Mulligan [00:04:11] Now, that’s okay, I guess, as far as it goes, it was a 20-minute hearing by telephone. But one of the requirements under the Residential Tenancy Act, and this would be a requirement of procedural fairness, is that the parties need to if they’re going to be relying on documents during the hearing, they need to give them to the other person. Right. That sort of fairness kind of dictates that, right?

Adam Stirling [00:04:33] Yeah.

Micahel T. Mulligan [00:04:33] YOu don’t get, uh, just like in court. You can’t sort of pass something secretly up to the judge without letting the other person see it. That’s not right.

Adam Stirling [00:04:40] No.

Micahel T. Mulligan [00:04:41] Um, so here, uh, there’s a requirement to do that. The problem is that when a hearing is conducted by telephone, it may not be apparent. Well, what exactly is being referred to here? Uh, and after the decision was made and the decision by the adjudicator was that those the additional work that the landlord did. Uh, apart from replacing the drywall and the struck, repairing the structural damage and the electrical work and so on from the water leaks, amounted to not just addressing a deficiency, but doing an upgrade on the property. And so, the language in the Residential Tenancy Act, when somebody hasn’t moved in in a reasonable period of time, is that there has to be an exigent circumstance which prevented them from moving in. And so, in any case, the adjudicator here said, well, I don’t think this was an exigent circumstance. I guess the adjudicator was interpreting it in a way to say, you have to live through your renovations. You have to be in there yourself. Tough it out.

Adam Stirling [00:05:45] Interesting.

Micahel T. Mulligan [00:05:47] In any case, it became after the decision where the adjudicator awarded the tenant $16,200 to 12 months rent, it became apparent that the former tenants had provided more material to the adjudicator. So, the adjudicator was looking at in making the decision that was not provided to the former landlord. And it wasn’t apparent during the hearing because it was on the phone. So, you’ve got the adjudicator looking at various things and making a decision about, you know, the repairs, the tenants talking about, think, you know, they were suggesting, oh, we don’t think that the mould damage was that bad. And, you know, we didn’t notice it in the kitchen, you knwo this kind of thing, and the adjudicator was going along looking at a bundle of documents that that turned out only later, the landlord was never given. So that’s the fact pattern that wound up, um, in court by way of a judicial review. And I should say this. These cases are becoming now, relatively common, whereas in the past it would be very rare for a residential tenancy decision to wind up in the Supreme Court for things like a judicial review, because it would be uneconomic. Right.

Adam Stirling [00:06:57] yes.

Micahel T. Mulligan [00:06:57] If people are feeding over a month’s rent or, you know, what about this or that, it’s not worth doing that. But when the act that has now been amended, trying to, you know, close off, uh, the way in which a tenancy could possibly be headed by a landlord, by producing the sort of gamified large possible award the cases are winding up in Supreme Court. And so here, the judge who left to review all of this concluded that, well, it’s perfectly acceptable that residential tenancy decisions be made in a summery fashion. Right? You want to have a process that kind of accords with how much people are fighting over. Right?

Adam Stirling [00:07:34] mmh hmm.

Micahel T. Mulligan [00:07:34] and so doing them by telephone makes sense. Or if you’re fighting over a few hundred dollars, you probably shouldn’t make everyone take the day off work and go to court and hire a lawyer. That’s just not going to work, right? That’s fine. But there has to be a high degree of procedural fairness, and that’s going to be even more carefully scrutinised when there’s a large amount of money involved. Which is part of what’s happening here. You’ve got the government creating what amounts to sort of penalty provisions, payable to the tenant if a landlord tries to end a tenancy.

Adam Stirling [00:08:06] yes.

Micahel T. Mulligan [00:08:06] so bear in mind, ordinarily, with a contract, people would be able to write up a contract to say, hey, I’m going to rent my house to you for two years. That okay. You agree I agree. Great. We agree. Right. Um, but those kinds of things are just not permitted any longer. Like once somebody gets in as a tenant there in, unless the landlord can somehow find some provision that would allow the thing to end. And then they also restrict, uh, of course, uh, how much rent can be charged. And so, you wind up with circumstances where in many cases there’s no longer some meeting of the minds where the two people agreeing for mutual benefit, that they want to exchange something for money.

Adam Stirling [00:08:44] Yeah

Micahel T. Mulligan [00:08:44] T’s a circumstance where the government is sort of effectively tried to sort of expropriate part of the value of people’s property to redistribute to a certain group of people, those being current tenants. Right. And I guess that’s a philosophical thing generally with, sort of rent control, efforts, whether that’s appropriate or not. I suppose I would say we’d be better off as a public policy if we want to subsidise rent for existing tenants, tax everyone, and give them a subsidy rather than trying to extract that value from people that happen to be existing landlords. Otherwise, of course, you’re going to wind up with all kinds of arguments about, you know, whether the person could possibly get out of, some unwilling agreement, which is what people have been forced into. And then you wind up with provisions like this trying to plug holes.

Adam Stirling [00:09:35] Yeah.

Micahel T. Mulligan [00:09:36] Some people are doing things improperly, and then even where nobody seems to, like, in this case, have been doing anything untoward, you wind up with this kind of a decision and reviews and court cases and so on. And so, it’s just an example of that. there’ll be a new hearing in this case where the landlord will get all of the material and get to go back and have another telephone hearing. And we’ll have to wait for the outcome here. But I think it’s worth people knowing about both in terms of that reality,  and no doubt this would fight this kind of a case and this kind of a circumstance is going to factor into people’s decisions about, do you ever want to be a landlord because you are now subject to potentially very large,  awards. You know, if it takes too long to, uh, fix up the rotten floorboards or whatever or get the appliances into the houses, but if you ever want to move back into it. So that’s the, that’s the cae out of Duncan.

Adam Stirling [00:10:29] Legally Speaking, we’ll continue in just a moment. Michael Mulligan for Mulligan Defence Lawyers after this.

[00:10:33] COMMERCIAL.

Adam Stirling [00:10:33] Legally Speaking on CFAX1070. Michael Mulligan for Mulligan Defence Lawyers. As we continue our segment today, what’s next on the agenda, Michael?

Micahel T. Mulligan [00:10:42] Uh, next on the agenda is a case we spoke about, back at the trial stage. This now has an appeal and it’s got a local element to it as well. It’s a case that involves the former manager of Galaxy Motors, which is a chain of, uh, several used car dealerships, or lots on Vancouver Island. It was a wrongful dismissal claim brought by a former manager of Galaxy Motors. First thing that was notable about it, I think both the trial decision and the Court of Appeal decision is that that’s a pretty good line of work to be in, it would seem, as the fellow’s income in the year that he was terminated was between $750,000 and $1 million.

Adam Stirling [00:11:26] hmm.

Micahel T. Mulligan [00:11:26] Uh, so don’t feel bad if you’re leaning into the used car dealership for a bit of a discount on the truck you’re buying. It would seem that they are doing pretty well. So, the background of it was that this fellow, the manager, well paid manager, went on a business trip up to Parksville and brought his wife. And according to the judge, they found that, uh, well, staying in Parksville,  the manager had dinner with his wife, but wrote the name of two employees on the dinner receipt, and the next morning had breakfast at the same restaurant and wrote another employee name on the receipt and submitted them for reimbursement.

Adam Stirling [00:12:01] Mhm.

Micahel T. Mulligan [00:12:02] that got spotted on an audit. He was confronted with it and denied doing it. Uh, and as a result of that, he was fired. He sued for wrongful dismissal. And that case went to trial unsuccessfully, uh, for the former manager. And so, he appealed that. and one of the grounds of appeal was arguing that, what the judge found to be dishonesty surrounding the restaurant expenses should not have standing alone been sufficient to provide just cause for dismissal, because the way it works is that if an employer has just cause to fire somebody, they could do exactly that, right?

Adam Stirling [00:12:41] YEs.

Micahel T. Mulligan [00:12:41] You’re fired and they’re not. You’re not entitled to any compensation. But if you’re fired without just cause, a person could be, entitled to it would presumptively be entitled to either notice or pay in lieu of notice, depending on, you know, how long did they work there for and how specialised was the job. Did the person find other employment? And so, the central issue in wrongful dismissal cases is can often was something just cause for firing.

Adam Stirling [00:13:08] Hmm.

Micahel T. Mulligan [00:13:08] And the former manager argued that, uh, the uh, it’s the single instance of, uh, the writing the employees names on the receipt for the two meals with the wife, should not have amounted to just cause because the car dealership, had, alleged other things as well, a broader pattern of misconduct.

Adam Stirling [00:13:29] Hmm.

Micahel T. Mulligan [00:13:29] and the Court of Appeal found that that was not, uh, a ground of appeal, found that the fact that the fellow had, submitted the receipts improperly and then not acknowledged it when confronted with it. It’s found that the act relied upon by the judge, those things, according to the Court of Appeal, went to the heart of the employer/employee relationship and that it was sufficient cause for dismissal.

Adam Stirling [00:13:54] hmm.

Micahel T. Mulligan [00:13:54] And so that’s one takeaway there is sort of how, uh, you know, dishonesty in that regard can be the end of employment without any compensation. Then the other thing, which was, I think, worth noting, the unsuccessful former manager submitted an affidavit on the appeal, setting out that he had other expenses, that he could have claimed but that he didn’t claim, arguing that. Well, I haven’t really profited from this because I had other legitimate expenses that I didn’t claim for, so I was reimbursed for less than really to what I was entitled. Even if, those two meals shouldn’t have been paid for by the car dealership. And that raised the first issue which people should know about, which is a test for fresh evidence on an appeal. And the idea there is that you can’t just sort of argue your case at trial, not succeed, and then come along later and say, well, look at this evidence. It’s all very compelling. and so, there’s a four-part test you need to satisfy if you want, on an appeal, the Court of Appeal to look at something new. And the first part of it is you have to show that if by, that you could not, if you were duly diligent, have found whatever it is you’re trying to rely upon at the time of your trial. Right? next you have to show that it would be relevant. next, you have to show that it’s potentially credible or reasonably capable of belief. And then finally, you have to show that it could reasonably be expected to have affected the outcome of the trial.

Adam Stirling [00:15:21] hmm.

Micahel T. Mulligan [00:15:22] It’s going to be important, not just some minor point.

Adam Stirling [00:15:24] mm hmm.

Micahel T. Mulligan [00:15:24] And so looking at that, the Court of Appeals doesn’t even get past the first test. If you had some receipts you didn’t claim. You could easily have found those at the time of the trial. You didn’t. And so, this is not something fresh or new that you could have found without, if you exercise due diligence, which doesn’t even get past the first hurdle. And then, moreover, the Court of Appeal found that the evidence not only that, but it was not relevant and could not have affected the result. Right. Because the the basis for finding that there was just cause to fire the fellow, was or was that this conduct and his response to it sort of undermined the trust relationship with the senior employee. and so, the fact that he may not have claimed other things that he could have claimed, that just would not have affected the outcome of the case. And so that ground of appeal was dismissed as well. And so, the outcome from the Court of Appeal is no compensation. The restaurant receipts with the employees’ names and the response to it, those things together amounted to just cause for the dismissal. And so that’s the, that’s the life lesson from Galaxy Motors.

Adam Stirling [00:16:31] All right. We have 5.5 minutes left to see a couple of stories on the agenda, which would really prefer.

Micahel T. Mulligan [00:16:36] Sure. Well, why don’t we talk about the Court of Appeal decision, involving a person who wanted to be a doctor?

Adam Stirling [00:16:43] Sure. All right.

Micahel T. Mulligan [00:16:44] And so the background of that, this is also a local case. it was a woman who was going to university, the University of Victoria, doing a bachelor’s degree in science. Um, and she was very unfortunate, it would appear from that decision. She wound up in a total of four car accidents between 2014 and 2020.

Adam Stirling [00:17:03] Wow.

Micahel T. Mulligan [00:17:04] Not all the details are set out here, but at least one of them wasn’t her fault. She was a passenger in a car that got rear ended. So fair enough. She’s very unfortunate in terms of car accidents. Now, this case predates no fault, which is important to note, and that’s important to know because prior to no fault, one of the things that could be considered,  in a case where somebody was injured and it affected their ability to work in the future,  is that a court could need to consider, like, well, what were your future prospects? How are things likely to work out for you? And how did the accident impact that? Right. Did the accident make it less likely you would have pursued your career as a, I don’t know, belly dancer or a in this case, doctor. And the woman’s argument was that she wanted to go to medical school. And the effect of these all these car accidents, which did appear to have a significant effect on her physically and psychologically, she had, I think, mild traumatic brain injury, flowing from these things, um, affected her ability to become a doctor. And so, one of the things she was asking for, in terms of compensation, was the difference between how much she would make as a nurse, which, as she went through nursing school, and how much you would have made if she’d become a doctor. And her argument was, well, my ability to become a doctor was impaired by these car accidents. And so that’s what the trial judge had to wrestle with and what ultimately the Court of Appeal had to sort out. And that’s complicated. Even the Court of Appeal judges couldn’t agree on the proper result here. It was a split decision. It was 2 to 1.

Adam Stirling [00:18:41] Yeah.

Micahel T. Mulligan [00:18:42] Court of appeal. And the background of it is the trial judge concluded, based on the evidence, that, she had was that she concluded that there was a 75% chance, that this woman would have gotten into medical school, and then looked at how much money she would be making,working for the rest of her life as a registered nurse and how much money she would have made had she succeeded in getting into medical school.  and then awarded to the difference. Right.

Adam Stirling [00:19:11] yes.

Micahel T. Mulligan [00:19:12] Because of some contingencies, the majority of the Court of Appeal, interestingly, didn’t agree with the trial judge. And part of the analysis was looking at what is this person’s actual chances of getting into medical school?

Adam Stirling [00:19:25] Yeah.

Micahel T. Mulligan [00:19:25] You know, saying I want to go to medical school doesn’t mean you’re going to medical school. and so, they were right into the weeds looking at things like, well, what were her transcripts like? What were her marks? How many people get into medical school? What’s the acceptance rate? How many sports are there all across the country?

Adam Stirling [00:19:40] Yeah.

Micahel T. Mulligan [00:19:41] and one of the very interesting tidbits there, and this maybe is a comment on grade inflation. Apparently, the woman had not that great grades for the first few years of university, but then really buckled down. Was doing very well.

Adam Stirling [00:19:53] Yes.

Micahel T. Mulligan [00:19:53] And in fact, in her nursing program, uh, which she had transferred over to, I think, yeah, UBC, she was in the A to A+ range. Uh, although this was not point, her transcripts indicated that was the average in her class. So, I’m not sure what that looks like, but apparently the nursing programs got a pretty high, uh, pretty high grading scheme. Now, the other the other factor, which was not in her favour and so found by the majority of the Court of Appeal is that she had not written the mCAT. The mCAT is.

Adam Stirling [00:20:25] Ahh yea.

Micahel T. Mulligan [00:20:25] the test you write that plays into whether you’re going to get into medical school.

Adam Stirling [00:20:30] Yes.

Micahel T. Mulligan [00:20:30] And so the majority of the Court of Appeal said, look, I appreciate she’s done very well into her last, you know, her nursing program and she’s keen and wants to go to medical school. But you haven’t written the mCAT. Very few people get into medical school. The acceptance rate is really low and so effectively, what the majority did was to find that the accidents diminished her chances of getting into medical school by 10%. Not that she had a 75% probability of getting in. And look what the income would have been, and just subtract one from the other and calculate an amount. The majority found that no, this did have an effect, right? Your chances of getting in may have been better, but for these various car accidents, but concluded that rather than there being a 75% chance she would have gotten in concluded, there was only a 20% probability she actually would have been admitted, and then found that the accidents reduced that. And so, the proper amount would be you had a 20% chance your accidents reduce that. And then this was the amount that you would get. And the difference at the end of the day was $450,000. But it’s a really interesting insight into how that works.

Adam Stirling [00:21:39] Yeah.

Micahel T. Mulligan [00:21:40] The other thing to note is that under no fault, none of this occurs. What happens is you get a percentage of the income you’re making at the time you’re disabled in the accident. And so, if you’re a medical student, say your last year.

Adam Stirling [00:21:53] Of course.

Micahel T. Mulligan [00:21:53] Work part time, you work part time at the coffee shop.

Adam Stirling [00:21:56] Yeah.

Micahel T. Mulligan [00:21:57] And your disabled completely. You cannot work for the rest of your life. You get a portion of what you make at the coffee shop and that’s it. No consideration is given to what was almost certain to happen next year as soon as you graduated. You’re just considered a part time coffee shop employee for the rest of your life.

Adam Stirling [00:22:12] That’s awful.

Micahel T. Mulligan [00:22:13] And so really interesting case. But, you know, well, it’s, imagine that outcome now.

Adam Stirling [00:22:20] wow.

Micahel T. Mulligan [00:22:20] So, yeah, that’s one local case of a woman who wanted to be a doctor.

Adam Stirling [00:22:23] Important example, Michael Mulligan. Appreciate your time, as always. Until next week.

Micahel T. Mulligan [00:22:27] Thank you so much. Have a great day.

Adam Stirling [00:22:28] And so Michael Mulligan Mulligan, Mulligan Defence Lawyers, Legally Speaking, during the second half of our second hour on the program every Thursday. News is next.

Automatically Transcribed on January 12, 2024 – MULLIGAN DEFENCE LAWYERS