Court file # ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN TIMOTHY (TODD) LANGLOIS Plaintiff and

THE CORPORATION OF THE CITY OF WINDSOR Defendant STATEMENT OF CLAIM

TO THE DEFENDANT(S)

A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the plaintiff(s). The claim made against you is set out in the following pages. IF YOU WISH TO DEFEND THIS PROCEEDING, you or an Ontario lawyer acting for you must prepare a statement of defence in Form 18A prescribed by the Rules of Civil Procedure, serve it on the plaintiff(s) lawyer(s) or, where the plaintiff(s) do(es) not have a lawyer, serve it on the plaintiff(s), and file it, with proof of service, in this court office, WITHIN TWENTY DAYS after this statement of claim is served on you, if you are served in Ontario. If you are served in another province or territory of Canada or in the United States of America, the period for serving and filing your statement of defence is forty days. If you are served outside Canada and the United States of America, the period is sixty days. Instead of serving and filing a statement of defence, you may serve and file a notice of intent to defend in Form 18B prescribed by the Rules of Civil Procedure. This will entitle you to ten more days within which to serve and file your statement of defence.

IF YOU FAIL TO DEFEND THIS PROCEEDING, JUDGMENT MAY BE GIVEN AGAINST YOU IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO DEFEND THIS PROCEEDING BUT ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL LEGAL AID OFFICE. Date: February , 2012 Issued by: 245 Windsor Avenue Windsor ON N9A 1J2

TO:

THE CORPORATION OF THE CITY OF WINDSOR 350 City Hall Square West Windsor, ON N9A 6S1

CLAIM 1. THE PLAINTIFF CLAIMS: a) A declaration that the defendant has breached its employment contract with the plaintiff; b) A declaration that the defendant breached its duty of good faith and fair dealing to the plaintiff; c) A declaration that the defendant breached its duty of good faith and fair dealing in the manner it dismissed the plaintiff; d) A declaration that the plaintiff was denied natural justice with respect to the decision of the defendant to terminate him; e) Damages estimated in the sum of $600,000.00 representing the salary due to the plaintiff over the term of his employment contract; f) Damages estimated in the sum of $1,400,000.00 representing the lost

opportunity of contract renewal the plaintiff suffered as a result of the unlawful termination of his employment g) Damages estimated in the amount of $100,000.00 representing the lost benefits as a result of the plaintiff’s unlawful termination; h) i) Aggravated and/or punitive damages in the sum of $300,000.00; Pre-judgment and post-judgment interest in accordance with the provisions of section 128 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended; j) k) Costs of this action on a substantial indemnity basis plus G.S.T.; Such further and other relief as this Honourable Court deems just.

The Parties 2. The Plaintiff resides in the Town of Amherstburg, in the County of Essex and is a

Certified Public Accountant (CPA), a Certified Internal Auditor (CIA) and a Certified Fraud Examiner (CFE) with extensive auditing experience. 3. The Defendant is a municipal corporation governed by the Municipal Act, S.O. 2001, c.

25 and was at all material times the employer of the plaintiff.

The Employment Agreement with the Plaintiff

4.

The plaintiff was hired by the defendant on or about January 5, 2011 in the position of

Auditor General. 5. The plaintiff’s employment was governed, in part, by an employment agreement dated

January 5, 2011 which provided for a term of employment for five years and was renewable subject to the plaintiff’s performance and the defendant’s need to maintain the position for further five year terms. 6. The plaintiff was to be paid the sum of $140,356.00 per year with annual pay increases in

accordance with the defendant’s policy for non-union employees. 7. The plaintiff was entitled to five weeks vacation per year, professional dues

reimbursement, health benefits, retiree benefits, pension benefits and five days off for “management overtime”.

The Defendant’s Obligations to the Plaintiff 8. that: “The Corporation will provide a lump sum payment of six-months pay inclusive of any termination and severance pay that may be required to be paid pursuant to the Employment Standards Act as amended if your employment is terminated by The Corporation of the City of Windsor in the first five years. This clause will continue to form part of any possible future renewable contracts. You will be required to provide a Full and Final Release upon receipt of payment.” 9. The plaintiff’s position was governed, in part, by sections 223.19 – 223.24 of the The written employment agreement between the plaintiff and the defendant provided

Municipal Act. 10. The statutory regulation of the plaintiff’s appointment and employment in s. 223.19 to

223.24 of the Municipal Act provided the following: (a) That the Auditor General reports to council; (b) That the Auditor General is responsible for assisting the council in holding itself and its administrators accountable for the quality of stewardship over public funds and for achievement of value for money in municipal operations; (c) That the Auditor General shall perform his responsibilities in an independent manner; (d) That the Auditor General shall perform duties as assigned to him by the defendant in respect of the defendant, its local boards and such municipally controlled corporations and grant recipients as the defendant may specify;

(e) That the defendant, its local boards and municipally controlled corporations and grant recipients as specified by the defendant shall give the Auditor General such information regarding their powers, duties, activities, organization, financial transactions and methods of business as he believes is necessary to perform his functions; (f) That the Auditor General is entitled to have free access to all books, accounts, financial records, electronic data processing records, reports, files and all other papers, things or property belonging to or used by the municipality, the local board or municipally controlled corporation that he believes to be necessary; and (g) That the Auditor General may examine any person on oath on any matter pertinent to an audit or examination he is conducting. 11. The powers of the Auditor General are extensive and are given to him independent of any

mandate of the defendant with the exception of the scope of his audit powers. 12. 13. The plaintiff was a public officer. Because the plaintiff’s employment contract included a provision with respect the

payment of severance pay in the event of termination, there was an implied duty of good faith and fair dealing toward the plaintiff in terminating him. 14. Apart from the severance clause the defendant owed a duty of good faith and fair dealing

to the plaintiff by reason of his holding a public office and the defendant exercising statutory powers. 15. The defendant owed the plaintiff a duty of good faith and fair dealing when terminating

his employment.

The Conduct of the Defendant During the Plaintiff’s Employment. 16. 17. 18. The plaintiff commenced employment with the defendant on April 19, 2011. The search for an auditor general took the defendant approximately 3 years to complete. During the term of the plaintiff’s employment his office experienced wholly inadequate

accommodations, inadequate funding, unreasonable delays in having plans and documents approved, interference in the scope of audit activities, refusal or unreasonable delay in disclosing information, general hostility to the plaintiff and his statutorily mandated duties and improper and unlawful reporting structures. Office Accommodations 19. On the plaintiff’s commencement date there was no office for the plaintiff and the Human

Resources department was unaware that the plaintiff was starting work. 20. The office space that was provided was located in a parking garage and did not have

proper security and did not have an office for the plaintiff. Unilateral Amendment of Employment Contract 21. 22. The plaintiff’s original employment contract was signed on or about January 5, 2011. Subsequent to the commencement of the plaintiff’s employment, a new and amended

employment agreement (“second agreement”) was given to the plaintiff for signature. The plaintiff was told he had to sign the new contract in order to continue his employment. It was dated May 16, 2011. The second agreement provided that the plaintiff was to prepare an outsourcing plan, a charter and protocols for his office. There was no new consideration for this agreement and accordingly it is of no force and effect.

Refusal of Council to Co-operate 23. 24. As part of the plaintiff’s duties he had to conduct a risk assessment. As part of the risk assessment, he needed to meet with councillors and the mayor

individually. Eight of the ten councillors refused to meet individually with the plaintiff. Inadequate Staffing 25. The plaintiff’s office was chronically short staffed having only one staff auditor with two

on sick leave. 26. Because of inadequate staffing it was virtually impossible to get work done in a timely

fashion. Failure of Council to Approve Documents 27. The second agreement required that the plaintiff prepare a request for proposal for

professional audit support from outside auditors (“RFP”). This RFP was completed on May 30, 2011 but never approved by council. 28. Notwithstanding that the second agreement was of no force and effect the plaintiff

complied with the requirement that he develop an outsourcing plan, a charter and protocols in his first 90 days. 29. The mayor of the defendant specifically acknowledged that the conditions had been

satisfied in an e-mail dated July 8, 2011. However the requested outsourcing plan, the charter and the protocols were never sent to the Audit Advisory Committee or council for approval. 30. The defendant directed that the plaintiff report to the Audit Advisory Committee, which

includes no members of council, and not council directly, contrary to s. 239.19(1) of the Municipal Act.

31.

The plaintiff prepared two reports, both of which showed that outsourcing Auditor

General functions could triple the costs of the office. However, in both reports the plaintiff stated that he was prepared to outsource in accordance with council’s wishes. 32. 33. Neither report was considered by council or the Audit Advisory Committee. The RFP for outside staffing was never approved. The mayor and other senior executives

of the defendant, including the CAO and the chairperson of the Audit Advisory Committee maintained that council approval was required although the defendant’s Purchasing By-Law, 400-2004 does not require council approval of RFP’s. 34. Numerous times the consideration of the documents mandated by council in the second

agreement came up before council and was deferred.

Difficulty in Scheduling Meetings 35. The plaintiff encountered significant difficulties in scheduling meetings with either the

Audit Advisory Committee or the Executive Committee of Council during his entire tenure. Meetings were often cancelled or a quorum of members was not available.

The Proposed Audit of Enwin 36. There were continual disputes between the plaintiff and the City Solicitor, the mayor, the

Chief Administrative Officer and the chair of the Audit Advisory Committee concerning whether or not Enwin Utilities could be subjected to an audit by the plaintiff. 37. The plaintiff intended to conduct an audit of Enwin Utilities. He so informed the mayor

and the chair of the Audit Advisory Committee well before the work plan recommending an audit of Enwin was delivered to them in January, 2012.

38.

The chair of the Audit Advisory Committee is also President and CEO of Enwin Utilities

and would not allow the work plan, which included an audit of Enwin Utilities, to be released. 39. The plaintiff was of the opinion that this was a conflict of interest, although not a

violation of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50. 40. On January 26, 2012, the chair of the Audit Advisory Committee was advised by the

plaintiff that he should not consider the matter of whether Enwin should be audited. He was advised by the plaintiff that he should step down. The chair responded to the plaintiff; “be careful what you wish for”. The plaintiff took this as a threat to his continued employment. 41. The chair of the Audit Advisory Committee refused to recuse himself from consideration

of the work plan and the planned audit of Enwin. 42. The mayor advised the plaintiff that Enwin was “out of scope” and that it could not be

part of the plaintiff’s work, compromising the plaintiff’s statutorily guaranteed independence which is contrary to s. 223.19(3) of the Municipal Act. 43. The mayor had on two occasions stated to the plaintiff that Enwin was “out of scope” and

therefore not liable to audit by the plaintiff. 44. The CAO of the defendant also maintained that Enwin was not liable to audit by the

plaintiff. a) The Refusal to Produce Documents 45. The defendant’s CAO, refused to produce a police report concerning fraud at a City

location when requested to do so contrary to s. 223.20(2) of the Municipal Act on or about October 11, 2011. The report was never produced by the CAO. 46. The defendant’s mayor, the CAO and the Human Resources Department refused to

disclose a copy of a complaint made by Angela Berry, who previously performed the plaintiff’s

functions, and was currently on sick leave. The complaint concerned harassment and toxic workplace allegations. Ms. Berry reported to the plaintiff. By City policy the report ought to have been disclosed to the plaintiff as Ms. Berry reported directly to him. The Refusal to Consider Resourcing Recommendations 47. The plaintiff had prepared two resourcing reports for consideration by council. Both

reports strongly recommended hiring in-house staff as opposed to out-sourcing as it was significantly cheaper, provided for better control and monitoring, provided for continuity, and because he had concerns about outside staff being truly independent. 48. The chair of the Audit Advisory Committee refused to have the resource reports prepared

by the plaintiff considered at a public meeting of the Audit Advisory Committee. 49. In fact on January 26, 2012 the chair cancelled the public portion of the meeting where

the plaintiff intended to present the resourcing reports and the work plan which included Enwin as an audit target. Other Issues 50. The plaintiff had intended to follow up on the audit of 400 City Hall Square and to apply

its recommendations to the proposed Aquatic Center. Those reports were intended for release in March, 2012. Previously, a proposed risk assessment of the proposed Aquatic Centre was strongly discouraged by the Mayor and the Vice-Chair of the Audit Advisory Committee. 51. When the plaintiff asked the mayor to present the resourcing report to council the mayor

responded that if he did the plaintiff would be “in [the mayor’s] office asking what happened” afterward. The plaintiff took that to mean that his employment was in jeopardy. 52. The defendant excluded the plaintiff from any significant role in investigating allegations

of fraud. The defendant did not even inform the plaintiff of the new policy regarding fraud

investigation until the evening before the report concerning the new policy was due. The plaintiff attempted to schedule a meeting with the defendant’s deputy treasurer and one was scheduled for February 1, 2012. 53. 54. The plaintiff’s employment was terminated on January 31, 2012 without cause. The plaintiff was not permitted to address council at the in camera meeting held wherein

in the decision to terminate was made. 55. 56. The plaintiff was given no reasons for his termination. The plaintiff was not given any opportunity to respond to the allegations against him

which led to council terminating him. 57. The council itself became incapable of making an unbiased decision about the plaintiff’s

employment and the plaintiff therefore could not have received a fair hearing even had he been provided with the opportunity of having one. Misrepresentation

58.

The defendant represented to the plaintiff either expressly or impliedly that the defendant

had a fixed and present intention that he would be permitted to independently carry out the functions of the Auditor General as required by the Municipal Act in a reasonable and timely fashion. 59. The representation was to the knowledge of the defendant false, or alternatively the

defendant was careless as to whether it was true or not. 60. The defendant did not intend to permit the office of Auditor General to function in

accordance with its own policy or the Municipal Act.

61.

The plaintiff relied upon the defendant’s representation and entered into the employment

contract with the defendant. 62. 63. The plaintiff is, therefore, entitled to rescission of the contract of employment. The plaintiff is entitled to damages equivalent to the amount he would have been paid

over the five year term of his employment contract less any earnings he may secure over that period of time and damages representing the loss of the opportunity of securing the renewal. The Defendant’s Conduct in Terminating the Plaintiff 64. The plaintiff was asked to attend the City Solicitor’s office on the day of his termination.

When the plaintiff arrived the City Solicitor was present along with outside counsel. 65. The plaintiff was told he was being terminated by outside counsel and was handed a letter

to that effect. 66. The plaintiff asked for the reasons for his termination and was told by outside counsel

that the defendant was under no obligation to provide reasons for termination. 67. The letter the plaintiff was given stated that: “There have been numerous issues during

the term of your employment that have caused Council to decide that a change is necessary.” 68. Not on one single occasion was the plaintiff ever told that there were any issues

concerning his employment. The Defendant’s Post-Termination Conduct 69. On or about February 1, 2012 an unnamed source employed by the defendant or elected

to municipal office told Beatrice Fantoni of the Windsor Star that the plaintiff had been terminated because of his refusal to outsource his office and because there had been complaints from senior staff about his conduct.

70.

The allegations had never been put before the plaintiff and with respect to outsourcing the

allegation was patently false. 71. On or around February 2, 2012 the Mayor told Doug Schmidt of the Windsor Star that

“He’s trying to throw everything and the kitchen sink in to get more from the city.” 72. On or about February 3, 2012 the mayor of the defendant alleged that the plaintiff refused

to outsource his office at a press conference before all local media.

73.

On or about February 10, 2012 the mayor of the defendant told Dave Battagello of the

Windsor Star that “some people had reservations about his performance.”

74. On or about February 24, 2012 the vice-chair of the Audit Advisory Committee told the editorial board of the Windsor Star that he had sent an e-mail to the plaintiff and had a conversation with the plaintiff about his work performance. Those allegations are false.

75. At the same meeting with the Windsor Star editorial board the Vice-Chair stated that there had been problems with the plaintiff for months. The Chair of the Audit Advisory Committee stated that there were problems for even longer, since the early summer of 2011.

76.

On or about February 25, 2012 the chair or vice-chair of the Audit Advisory Committee

or the mayor of the defendant told Chris Vander Doelen of the Windsor Star that the plaintiff refused to outsource his office and that his plan for internal staffing would cost $7 - $20 million dollars. That allegation is false.

77.

On or about February 17, 2012 five unnamed city councillors told Dave Battagello of the

Windsor Star that they had been told that the plaintiff was “rude” and that he couldn’t get along with senior administrators and attempted to circumvent them. They were told by the mayor that the plaintiff refused to outsource his office. The councillors told Battagello that senior

administrators said they could not get along with the plaintiff. The councillors repeated to Battagello what the vice-chair of the Audit Advisory Committee said; that the plaintiff was uncoachable. 78. The mayor told Batagello that the plaintiff was terminated based on allegations from the

Audit Advisory Committee implying there was cause for his dismissal. 79. All of the statements described in paragraphs 69 to 78 were made to members of the

media in Windsor and written accounts of the statements were published in the Windsor Star. 80. Further statements may have been made to the Windsor Star or other media of which the

plaintiff is unaware at this time. The plaintiff will disclose particulars of any further statements to the media as they are discovered. 81. The defendant’s post-termination conduct amounts to a concerted attempt to discredit the

plaintiff and create the impression that there was cause for his dismissal, in order to deflect any criticism away from the defendant, its elected representatives, its committee members and administration. It amounts to a breach of the defendant’s duty of good faith and fair dealing toward the plaintiff as described below.

The Plaintiffs’ Remedies 82. It was an implied term of the plaintiff’s contract of employment that he would be treated

fairly by the defendant and that the defendant would act in good faith toward the plaintiff during the course of the plaintiff’s employment. 83. It was an implied term of the plaintiff’s contract of employment that he would be

permitted to carry out his statutory functions in a timely and reasonable manner without interference on the part of the defendant’s employees, agents and representatives. 84. By reason of the conduct of the defendant described herein the defendant is in breach of

its employment contract with the plaintiff. 85. As a result to the defendant’s breach of the plaintiff’s employment contract, the plaintiff

is entitled to damages equivalent to the wages he would have earned to the completion of his contract of employment and for the lost opportunity of a renewal(s) of the said contract. 86. As a result of the defendant’s misrepresentation described above the plaintiff is entitled

to damages equivalent to the amount he would have been paid over the five year term of his employment contract less any earnings he may secure over that period of time and damages representing the loss of the opportunity of securing the renewal.

87.

The defendant had an obligation to act fairly in the decision making process regarding the

plaintiff’s dismissal. The plaintiff was entitled to know the reasons if any for his recommended dismissal and was entitled to be heard by council before a decision to terminate his employment was made.

88.

The defendant breached its obligation of procedural fairness by failing to disclose the

reasons, if any, for the plaintiff’s dismissal and its failure to provide the plaintiff with an opportunity to be heard. 89. As a result of the failure of the defendant to act fairly the decision of the council of the

defendant to terminate the plaintiff’s employment should be quashed or alternatively the plaintiff is entitled to an award of damages equivalent to the wages he would have earned to the completion of his contract of employment and for the lost opportunity of a renewal(s) of the said contract. 90. The termination clause described in paragraph 8 herein imposed a duty of good faith and

fair dealing on the defendant. 91. The defendant breached its duty of good faith and fair dealing as described in the

preceding paragraphs including the breach of the plaintiff’s right to procedural fairness. 92. As a result of the defendant’s breach of its duty of good faith and fair dealing, the

termination clause of his employment contract is of no force and effect and the plaintiff is entitled to an award of damages equivalent to the wages he would have earned to the completion of his contract of employment and for the lost opportunity of a renewal(s) of the said contract. 93. The defendant had a duty of good faith and fair dealing in the manner it dismissed the

plaintiff. 94. The defendant breached its duty of good faith and fair dealing as described in the

preceding paragraphs including making false or misleading statements to the media, implying that there was cause for dismissal of the plaintiff and denying the plaintiff procedural fairness.

95.

As a result of the defendant’s breach of its duty of good faith and fair dealing in the

manner of the dismissal of the plaintiff, the plaintiff is entitled to an award of aggravated damages. The Place of Trial 34. The plaintiffs propose that this action be tried at the City of Windsor, County of Essex, in

the Southwest Region.

Date: February 29, 2012

DUCHARME FOX, LLP Barristers and Solicitors 800 University Avenue West Windsor ON N9A 5R9 JAMES H. COOKE Tel: (519) 259-1818 Fax: (519) 259-1830 LSUC#: 25733P

Langlois v. City of Windsor

Court File No. SUPERIOR COURT OF JUSTICE

PROCEEDING COMMENCED AT WINDSOR

Statement of Claim

James H. Cooke Ducharme Fox LLP 800 University Ave. West Windsor, ON N9A 5R9 P- 519-259-1818 F- 519-259-1830

Law Society Member Number – 25733P