No free lunches: B.C. Court of Appeal upholds termination of car dealership president who lied about expensing two meals with his wife

A credit card with a receipt for a business lunch. Photo: Canva

The Court of Appeal for British Columbia has upheld a lower court ruling that a car dealership was justified in firing its president after he expensed two meals — worth about $250 — with his wife and later lied about it.

The case centered on TM, former president of operations at Galaxy Motors, who appealed the dismissal of his claim for damages following his termination for alleged wrongful dismissal. The trial judge initially found that TM had submitted false expense claims and was dishonest about it, justifying his dismissal. (Original story here.)

Challenging this decision, TM argued that the judge erred in concluding that the submission of false business expense receipts alone constituted just cause for dismissal.

Core of the appeal

TM said that the judge’s credibility assessment was flawed, particularly in evaluating the testimony of one of the co-owners of Galaxy Motors. He also questioned the judge’s decision on the costs order and sought to introduce new evidence — his affidavit concerning the disputed expenses.

Ruling of the court of appeal

The Court dismissed both the application to introduce new evidence and the appeal itself. The judges emphasized the deference owed to the trial judge’s credibility assessments and found no reviewable error in the judge’s conclusions.

They underscored that the dishonesty concerning the expense claims, even if relatively minor in monetary terms, struck at the heart of the trust essential in TM’s senior management role.

Analysis

The judges highlighted that TM, in his capacity as the most senior non-owner employee, held a position of substantial authority and trust. His actions in falsifying expense records and being untruthful when confronted were seen as a fundamental breach of the obligations inherent in his role.

“There is no principled basis upon which this Court could or should interfere with the judge’s conclusions, in particular that (TM’s) conduct was such that Galaxy Motor’s loss of trust and faith in him was justified,” it said.

“The judge correctly applied the contextual analysis which was required in considering (TM’s) position and level of responsibility. He assessed the severity of the misconduct, that is submitting false expense receipts and being untruthful when given a chance to explain and found that in all the circumstances, termination of employment for cause and without notice was a justifiable response by the employer,” it said.

Fresh evidence and adverse inference

The Court refused to admit TM’s new affidavit, citing a lack of due diligence in presenting it during the trial and its irrelevance to the outcome. Additionally, the Court found no merit in his argument that the trial judge should have drawn an adverse inference against Galaxy Motors for not calling certain witnesses.

For more information, see Mechalchuk v. Galaxy Motors (1990) Ltd., 2023 BCCA 482 (CanLII)

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