Magistrate Valdis Foldats on Friday ordered Champion House Ltd. to pay a $500 fine and $10,689 in wages that the restaurant owed to a former employee since at least October 2014.
However, no conclusion was reached in the matter of Champion House failing to make more than $177,000 in pension payments on behalf of 32 employees from 1999 to 2008. That matter has been in the court for some 10 years.
Attorneys and Magistrate Foldats spent most of Friday’s hearing discussing how best to resolve the long-outstanding pensions case.
Magistrate Foldats pointed out that by law, he has the right to fine Champion House $500 per day for each day the pension payments were in arrears. The magistrate calculated that this could add up to a fine of more than $1.8 million.
Crown counsel Greg Walcolm said government is not interested in penalizing the company as much as it is recovering the owed pension payments so that the former employees can be compensated for their losses.
But even without a fine, Champion House owes more than $249,000 as of May when interest payments are added on to the principal amount owed, according to statements made in court. Mr. Walcolm said that while the Crown is not pushing for a heavy fine, it wants to see at least some interest paid on the principal.
“This brings to the fore how serious government takes this by legislating such a serious interest component,” Magistrate Foldats said of his power to tack on the 5 percent above prime rate.
These discussions led to the issue of how Champion House is supposed to pay what it owes.
Defense attorney Graham Hampson described the Champion House restaurant as a “shoe-string operation” that is struggling to make ends meet. Co-owner Dorothy Scott never intended to cheat her employees out of benefits, he said, but simply did not have the funds to meet her legal obligations.
Matters were further complicated by the fact that a trusted former employee embezzled some $16,000 of funds that were supposed to go toward pension contributions, he said.
Ms. Scott works 12-plus hour days to keep the restaurant afloat, and a significant penalty in this case would jeopardize her business, according to Mr. Hampson.
“She’s told me, ‘Graham, I’m not even sure I can keep things going at the moment,’” he said. “But she has, and her intention has never been to treat people badly. She has not become rich as a result of what’s happened.”
Mr. Hampson proposed that a plan could be put in place to pay off at least the principal sum of what’s owed.
The problem, responded Magistrate Foldats, is that he has “zero confidence” that such a plan would be adhered to.
The magistrate asked whether any mortgage or sale of assets could be made to repay the employees. Unfortunately, said Ms. Scott, her business leases the property it operates on.
Before he makes his judgment, Magistrate Foldats said he wants to assess the financial state of Champion House Ltd.
While the law does not give him a power to order an assessment, both parties agreed that an assessment should be undertaken.
Mr. Hampson said he wanted Champion House to undergo a financial assessment at the outset, but Ms. Scott said she did not have the money to pay the accountants. It was therefore suggested that financial law enforcement investigators may be the ones making the assessment.
Magistrate Foldats adjourned the case for one more week for the assessment to be made.
“It will be finalized the next time. If you can’t find a way to assess the company, I’ll make my orders anyway,” he said.
Champion House has until March 29 to pay the fine and $10,689 in owed wages.