A former Nanaimo chief financial officer who used a city credit card for thousands of dollars in personal expenses has lost a wrongful dismissal case in B.C. Supreme Court.
A key issue was whether Victor Mema had filed his notice of claim beyond the time allowed.
Mema was informed by the city in a March 1, 2018 letter that he was suspended with pay. Two months later, in May, he learned that council decided to end his employment with cause.
Mema filed a notice of civil claim in May of 2021.
He sued Nanaimo for breach of contract, breach of the duty of good faith and honest performance, intentionally inflicting mental suffering, wrongful dismissal and procedural failings related to the dismissal.
The city argued in court that the matter should be dismissed because Mema’s notice of claim was filed past the six-month time limit set out in the Local Government Act for such claims.
Mema disagreed, saying that limit did not apply to his claims.
But Judge Ian Caldwell ruled that it did apply to some claims, and dismissed the wrongful-dismissal claim in a judgment this week in B.C. Supreme Court in Abbotsford.
Caldwell said, however, that the limitation period did not apply to Mema’s allegations that the city breached the duties of good faith and honest performance and inflicted mental suffering.
He said that the question of whether those allegations have merit, and if so if would there be damages, could be determined at a trial.
Mema joined Nanaimo as the director of financial services in 2015 and received a municipal credit card for city expenditures. He signed an agreement that he would not use it for personal expenses, court heard.
However, Nanaimo acknowledged that there were “minor modifications” to that policy for certain personal expenses, such as paying for a spouse’s expenses at a conference, Caldwell said. There was no evidence that these modifications were communicated in writing at city hall.
In mid-2016, Mema became the city’s chief financial officer. Shortly before starting the job, he began charging personal expenses to the city credit card, the judgment said.
By late 2017, the total may have reached $14,148, Caldwell said, in reviewing the evidence. It included a $1,300 charge in Cancun, Mexico, while Mema was vacationing there. He would not say what the expense was for, the judgment said.
Mema’s position was that the signed credit-card agreement did not preclude using the card for personal expenses. He said cards were used for personal use in practice and there was no policy requiring that the personal charges be immediately repaid, the judgment said.
Not one told him in 2017 to stop using the card for personal charges, he said.
Caldwell noted that at the time, Mema, as chief financial officer, was one of the most senior staff members at the city when it came to decisions about using city funds.
“The accounting staff also presumably reported to the plaintiff and were under this authority while he was in this role.”
In December 2016, Mema gave the city a cheque to cover some expenses, but it was returned for insufficient funds, Caldwell said.
By mid-February 2017, Mema had arranged a repayment plan at a rate of $500 per month, but he continued to run up personal charges on the card, including the Cancun charge, the judgment said.
His municipal credit card was suspended in October 2017.
Nanaimo auditors KPMG provided a forensic report into personal use of municipal credit cards, finding there was a written policy against using them for personal costs. It said the policy had been modified in practice on an unwritten understanding that such expenses would be repaid in a timely manner.
Mema was one of two “outliers” who used a city-issued credit card for personal expenses “significantly more frequently and/or for higher amounts than other city employees,” the report said. It found that his charges were outstanding for extended periods of time, the judgment said.
In February 2018, a senior accountant with the city filed a “report of serious misconduct” with its human resources office about Mema’s actions, it said.
That complaint went to an in-camera session of council the following month. A motion passed to suspend Mema with pay, pending an additional auditor’s report and to turn the complaint and allegations of misconduct over to the RCMP, the judgment said.
By April 2018, all but $690 of Mema’s personal charges had been repaid. Council met that month to consider terminating his employment. Mema attended the May 11, 2018 meeting but alleged in court that the city did not follow procedures required and that there was not full disclosure.
Mema filed a complaint in July 2018 with the B.C. Human Rights Tribunal around, in part, circumstances related to his job termination. There has been no decision so far in the tribunal case.
