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Former Vancouver police officer obtains $2 million out of court settlement in wrongful dismissal case

Jurisdiction: - British Columbia
Sector: - Public Safety

Both the Vancouver Sun and Globe and Mail newspapers carried stories this week about former Vancouver police officer Allen Dalstrom obtaining a $2 million out of court settlement in relation to a wrongful dismissal case.

This is a significant settlement in any wrongful dismissal case, particularly one involving a police officer who is reported to have been earning about $100,000 a year.

Although this week's media stories provide a lot of the colour about the case, I relied mainly on the decision in Dalstrom v. Organized Crime Agency of BC, 2008 BCSC 844, which dealt with a pre-trial application, for my summary of the facts and proceedings below.  


Dalstrom was a long term police officer with the Vancouver Police Department. In 2000, he was recruited to join the Organized Crime Agency of British Columbia ("OCABC").

The OCABC is responsible for combating organized crime in BC and Dalstrom was appointed supervisor of the Outlaw Motorcycle Gang Team.

In that role, he was involved in an investigation known as Project Phoenix. Project Phoenix, which ran from 1999 to 2002, targeted nine suspects, including three full-patch members of the Hells Angels.  However, although Project Phoenix was a multimillion-dollar investigation that led to significant drug seizures, it was never prosecuted.

In November 2002, Dalstrom was removed from his duties as supervisor and a letter of expectation was placed on his file. The letter of expectation referred to "inappropriate behaviours" and "management and leadership deficiencies", among other things. 

In 2002 and 2003, a series of investigations into the allegations against Dalstrom and the operations of Project Phoenix were commissioned, apparently by the RCMP, but no findings of misconduct were made against Dalstrom or the OCABC.  Dalstrom was not, however, reinstated to his former position.

In late 2003, the RCMP took effective control and supervision of the OCABC, and on December 17, 2003, Dalstrom "was relieved of all of his policing duties and sent home" (para. 15). 

In February 2004, Dalstrom was issued a letter that advised that he: (1) was being placed on paid administrative leave due to a lack of suitable work assignments available for him; (2) would remain on administrative leave while OCABC "explored other options".  The letter also stated that the OCABC would be prepared to discuss a severance package.

Dalstrom's appointment as an officer with OCABC was due to expire April 30, 2004.  On April 21, 2004, the OCABC signed a new appointment which was to run to April, 30 2009, or "on such earlier date as the appointment is revoked."

However, in July 2004, Dalstrom was advised by letter that his employment would be terminated effective July 30, 2004. No reasons were provided for the termination. The letter also contained an offer to continue Dalstrom's pay and benefits for a period of 12 months or until he obtained other employment, whichever occurred first.   

Legal Proceedings

Dalstrom declined the severance offer and in October 2006, commenced his wrongful dismissal action against the OCABC, its chief officer and the Director of Police Services for the Province.

It was not until the OCABC filed its statement of defence, did Dalstrom learn the reasons
he his employment had been terminated. Specifically, the OCABC alleged cause for dismissal based on numerous violations of the Police Act and the Code of Professional Conduct Regulation in respect of three matters:

(1) Dalstrom's management of Project Phoenix;

(2) his management of his relationships with two employees; and

(3) his participation in an interview with a journalist who wrote a book about.

In December 2007, Dalstrom also filed a judicial review application after the lawyer for the OCABC advised that, in his view, the remedy of reinstatement was not available through a wrongful dismissal lawsuit. In his judicial review application, Dalstrom sought, among other relief, a declaration that:  

  • the decision to terminate him was a nullity because (1) it was made without jurisdiction, and (2) in contravention of Part 9 of the British Columbia Police Act.
  • he continues to be a designated constable until his employment status has been reviewed in accordance with the procedures contemplated in the Police Act.

In Dalstrom v. Organized Crime Agency of BC, 2008 BCSC 844, the court ordered that the judicial review application be heard by way of a trial and that it would be heard at the same time as the wrongful dismissal trial, with the evidence in each being treated as evidence in both.

Out of Court Settlement

The joint trials commenced in September 2008, but were adjourned after a few days when an out of court  settlement was achieved. The details of the settlement were not released at the time, but became available to the media this week through the Crown Proceeding Act Report for 2009. The report details payments made by government in litigation.  

As reported by the Sun and Globe and Mail in their stories this week:

  • Dalstrom was paid a approximately $2 million consisting of a $1.3 million payment (presumably for general damages), plus six years of salary and benefits.
  • The Province contributed $550,000 to the settlement; the OCABC paid $750,000 plus the salary and benefits portions.
  • Dalstrom also received a letter of apology from the OCABC.

The media stories, which are based in part on various documents that had been filed or used in court by Dalstrom's lawyer, further stated that Project Phoenix was never prosecuted and Dalstrom's employment was terminated because of a "turf war" between the RCMP and the OCABC, attributable to the fact that the RCMP had its own parallel investigation going on and was upset that the OCABC/Dalstrom would jeopardize it.  The last minute out of court settlement was presented to Dalstrom because the "trial threatened to expose deep divisions between the RCMP and municipal police in B.C. and call some of the most senior officers in the province to the stand."


-Chad Skelton, "Fired B.C. biker cop wins $2 million out-of-court settlement" Vancouver Sun, (July 21, 2010)

-Gary Mason, "The Mounties got their man, and the taxpayer paid" Globe and Mail (July 21, 2010)