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Supervisor's defamatory appraisal of dismissed employee protected by qualified privilege

In Dawydiuk v. Insurance Corporation of British Columbia, 2010 BCCA 353, the BC Court of Appeal addressed whether the contents of an email written by a dismissed employee's supervisor were defamatory and , if so, whether they were  protected by the defence of qualified privilege.

Background 

Ms. Dawydiuk began her employment with the Insurance Corporation of British Columbia ("ICBC") in 1988 as a clerk. At the time of her dismissal in 2004, she was 38 years-old and in a managerial position.

Ms. Dawydiuk had been off work since June 2003, first on a sick leave and then on a maternity/parental leave.  She was scheduled to return to work on October 4, 2004.

On July 5, 2004, while still on leave, Ms.Dawydiuk was phoned by her supervisor and advised of a restructuring that had resulted in her position being eliminated. Her supervisor advised her of two other available managerial positions, however, and asked her to let him know which one she would like.

On July 9, 2004, the supervisor sent an email to Ms. Dawydiuk confirming the restructuring and asking her again to advise of her preferred position.  Ms.
Dawydiuk did not respond to the email.

On July 29, 2004, the supervisor sent a registered letter to Ms. Dawydiuk advising her that he needed her response concerning the position, and that if he did not hear from her by August 4, 2004 he would be posting both positions.

On August 4, 2004, Ms. Dawydiuk sent an email to the supervisor advising that she needed more time and information and that she wanted to seek advice.

On August 24, 2004, the supervisor sent another email to Ms. Dawydiuk. Ms. Dawdyiuk responded two days later and stated she was considering her options.

On August 30, 2004, ICBC advised Ms. Dawydiuk that her employment was terminated effective October 4, 2004 because she had failed to select one of the two positions presented to her.

Appraisal Report

Following Ms. Dawydiuk's dismissal, her supervisor completed an internal report for the ICBC Human Resources department ("HR") describing the circumstances leading to the dismissal (the "Report").

In the Report, the supervisor selected three reasons for dismissing Ms. Dawydiuk: (1) she was "dissatisfied with change"; (2) she was "dissatisfied with work environment", and (3) her "inadequate performance". 

In addition, the supervisor advised that he considered Ms. Dawydiuk as "not re-hireable" and rated her as "unsatisfactory".

The supervisor then sent the Report by email to HR.

Trial Judge' Decision

The trial judge issued his decision on September 15, 2009 following a summary trial (2009 BCSC 1259).

The trial judge agreed with Ms. Dawydiuk assessment that she was entitled to 16 month notice period, after noting that pursuant to the BC Public Sector Employers Act, the maximum she could have received was 18 months.

The trial judge dismissed Ms. Dawydiuk's claims for mental distress/bad faith damages and also for aggravated and punitive damages, which had been based in large part on the contents of the Report prepared by the supervisor.

Defamation

Ms. Dawydiuk claimed that the following aspects of the Report were untrue and defamatory: (1) that she was dismissed; (2) that her rating was unsatisfactory, (3) that her performance was inadequate, and (4) that she was not re-hireable.

The trial judge noted that in order to prove defamation, Ms. Dawydiuk had to establish that the words complained of (1) were published,(2) concerned her; and (3) were defamatory.

(In a 1998 case, Color Your World Corp. v. Canadian Broadcasting Corp. 1998 CanLII 1983 - the Ontario Court of Appeal adopted the following definition of defamation:

A defamatory statement is one which has a tendency to injure the reputation of the person to whom it refers; which tends, that is to say, to lower him [or her] in the estimation of right-thinking members of society generally and in particular to cause him [or her] to be regarded with feelings of hatred, contempt, ridicule, fear, dislike, or disesteem. The statement is judged by the standard of an ordinary, right-thinking member of society. Hence the test is an objective one)

The trial judge agreed that the first two parts of the test were satisfied, but that the opinion expressed by the supervisor was not defamatory, stating:

...The words used by Mr. Rees [the supervisor] in framing his report with respect to Ms. Dawydiuk reflect his opinion based on his limited dealings with her. While his report expresses his honest opinion, the report does not fairly depict Ms. Dawydiuk's over-all performance as an employee during the 16 years she worked with ICBC.  The question is whether the opinion of Mr. Rees, which he construes as the truth based on the interaction he had with Ms. Dawydiuk, can be described as defamatory.  While I am concerned that leaving the report from Mr. Rees as it stands without further explanation is unfair, I am unable to conclude that the opinion expressed by Mr. Rees is defamatory (para. 36).

Qualified Privilege

The trial judge went on to note, however, that even the Report had been defamatory, it was protected by the defence of qualified privilege. The trial judge noted that this defence is characterized as follows:

  • The essence of it is that the defendant has an interest - legal, social, or moral - to communicate the defamatory statement and the recipient has a corresponding duty or interest to receive it;
  • It attaches to the occasion that the communication was made, and not to the communication itself. The reciprocity or mutuality between the defendant and the recipient is essential to the defence;
  • The burden rests on the defendant to prove each element of it.

(Although not expressly addressed by this trial judge, previous case had established that the person making the communication must have an "honest belief" that what he is saying is true).

Finally, after stating that case law had established that "the defence of qualified privilege applied to communications between company personnel with respect to the
company's business affairs", the trial judge concluded that:

...ICBC's policy required that a report be filed advising of the reasons for an employee's termination in order to complete the employee's work record. I conclude that Mr. Rees [the supervisor] had an obligation to prepare the report and that ICBC's human resources personnel had a corresponding duty to receive it.  Further, I am satisfied that there was no actual or express malice or any other indirect motive on the part of Mr. Rees which conflicts with the sense of duty created by the occasion.  Malice may be established by showing that the defendant either knew that he was not telling the truth or was reckless in that regard. There is no evidence from which I am prepared to conclude that Mr. Rees knew he was not telling the truth or was reckless in that regard. I find that Mr. Rees believed that he was giving an honest appraisal about Ms. Dawydiuk.  Unfortunately it was an appraisal resting on a narrow and poorly defined base, that being the scant knowledge which he possessed of Ms. Dawydiuk's employment history with ICBC.

Even if the opinion expressed by Mr. Rees about Ms. Dawydiuk was false, it was prepared without malice.  I conclude Mr. Rees had a duty to prepare the report and publish it by delivering same to the ICBC's human resources department, the staff of which had a corporate duty to receive it and place it in their records. I find the contents of the report did not exceed the limits of the duty or the interest in preparing and receiving the report and that the contents of the report are protected by the defence of qualified privilege (paras. 39-40).

BC Court of Appeal's Decision

Ms. Dawydiuk appealed the trial judge's decision to not award aggravated or compensatory damages, as well as his decision to deny the defamation claim.

In relation to the latter issue, the Court of Appeal disagreed with the trial judge on the issue of whether the the contents of the Report were defamatory. Specifically, the Court of Appeal stated that in light of the findings of fact made by the trial judge concerning the contents of the Report, the Report was indeed defamatory.

The Court of Appeal then considered whether the Report was protected by the defence of qualified privilege. In this regard, the Court first noted even if the person making the comment was careless in forming their honest belief, the carelessness does not take away the defence. Further to this point, the Court adopted the following statement of the law from a previous case:

In summary, carelessness in forming an honest belief does not take away the defence of qualified privilege.  The honest belief can be formed on the slimmest of evidence.  The questions are whether it is honestly held and whether there is a duty to make the statement.  But carelessness in the publication of the statement so that it does not express the honest belief, or shows that the honest belief was never formed, takes away the defence of qualified privilege (para. 25).

Applying the law to the trial judge's decision, the Court of Appeal ruled that:

  • there was evidence that the trial judge had accepted that the supervisor's comments were made honestly and in good faith.
  • it was clear that the trial judge was satisfied that the supervisor had an interest in making the statement and that HR had a corresponding duty to accept it.
  • accordingly, the defence of qualified privilege applied in relation to the Report being sent to HR.

This, though, was not the end of the Court's analysis.

Specifically, the Court found that there was evidence that the Report had been sent to one named individual, but that no evidence had been presented to the trial judge as to her position or status within ICBC. That is, it wasn't clear that this individual was employed in HR and thus the trial judge had no evidence to conclude that this person had a duty to receive the Report.

The Court, however, went on to conclude that the evidence of injury to Ms. Dawydiuk from the publication of the Report to this one indivdidual was so minimal that it deserved only a nominal amount of damages, being $1,000.