THE QUEEN'S BENCH Winnipeg Centre. MARLENE BILES and SHAWNA PAULSEN, - and - AMENDED STATEMENT OF CLAIM

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1 File No. CI THE QUEEN'S BENCH Winnipeg Centre BETWEEN: MARLENE BILES and SHAWNA PAULSEN, plaintiffs, - and - MUNICIPALITY OF OAKLAND-WAWANESA, defendant. AMENDED STATEMENT OF CLAIM TAYLOR McCAFFREY LLP Barristers and Solicitors 9th Floor St. Mary Avenue Winnipeg, Manitoba R3C 4K5 JEFFREY J. PALAMAR. Tel Fax jpalamar@tmlawyers.com Client File No

2 THE QUEEN'S BENCH Winnipeg Centre BETWEEN: MARLENE BILES and SHAWNA PAULSEN, plaintiffs, - and - MUNICIPALITY OF OAKLAND-WAWANESA, defendant. AMENDED STATEMENT OF CLAIM TO THE DEFENDANT A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the plaintiffs. The claim made against you is set out in the following pages. IF YOU WISH TO DEFEND THIS PROCEEDING, you or a Manitoba lawyer acting for you must prepare a statement of defence in Form 18A prescribed by the Queen's Bench Rules, serve it on the plaintiffs' lawyer or, where the plaintiffs do not have a lawyer, serve it on the plaintiffs, and file it in this court office, WITHIN 20 DAYS after this statement of claim is served on you, if you are served in Manitoba. 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 40 days. If you are served outside Canada and the United States of America, the period is 60 days.

3 2 IF YOU FAIL TO DEFEND THIS PROCEEDING, JUDGMENT MAY BE GIVEN AGAINST YOU IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU PAY THE PLAINTIFFS' CLAIM, and $750 for costs, within the time for serving and filing your statement of defence, you may move to have this proceeding dismissed by the court. If you believe the amount claimed for costs is excessive, you may pay the plaintiffs' claim and $750 for costs and have the costs assessed by the court. July 13, ( Signed by L.C I C Deputy Registrar 100C York Avenue Winnipeg, Manitoba R3C OP9 TO: Municipality of Oakland-Wawanesa, c/o Greg Tramley McCandless Tramley 668 Corydon Avenue Winnipeg, MB, R3M 0X7 Solicitors for Municipality of Oakland-Wawanesa rt- 1-.) - J. LONSDALE DEPUTY REGISTRAR COURT OF QUIN'S BENCH FOR MAN1TOBA

4 3 CLAIM 1. (a) (b) (c) (d) (e) (f) (g) (h) The plaintiffs claim against the defendant, the following: a declaration that they have been wrongfully dismissed; general damages for the wrongful dismissal of the plaintiff Shawna Paulsen ("Paulsen") and general damages for infliction of mental distress, loss of reputation and loss or damage to career and employment opportunities in respect of both plaintiffs; special damages to be quantified at the trial of this action, including expenses incurred in mitigation; punitive, aggravated and/or exemplary damages; pre-judgment interest; post-judgment interest; solicitor and client costs; and such further and other relief as this Honourable Court may deem just. 2. The plaintiff Marlene Biles ("Biles") is an administrator and resides in the Municipality of Oakland-Wawanesa, Manitoba. 3. The plaintiff Shawna Paulsen ("Paulsen") Paulsen is an administrator and resides in the Municipality of Grasslands, Manitoba. 4. The defendant is a municipality pursuant to the laws of Manitoba. 5. At all material times, Morley Dennis Rome ("Rome") has been and remains an elected municipal council member of the defendant and his actions were either actually on behalf of the defendant, or would reasonably be seen as being on behalf of the defendant. 6. of Rome. At all material times the defendant was legally responsible for the actions 7. In or about June 1999, and pursuant to an agreement with the defendant, made orally, by the actions of the parties, in writing and through implication of law (the "CAO Employment Contract") Biles commenced employment with it as its Chief Administrative Officer. It was an express or implied term of the CAO Employment Contract, and in the contemplation of the parties at the time the CAO Employment Contract was entered, that inter alia: (a) (b) (c) the CAO Employment Contract would be for an indefinite duration; at all times the defendant would provide a safe and respectful workplace, and ensure that Biles was free from workplace violence, harassment and bullying; the defendant could only terminate Biles' employment:

5 4 (d) (e) (f) i) for just cause; or ii) with reasonable notice or pay in lieu; as of June 2014, reasonable notice became defined as follows: Council of the Municipality may terminate the employment of the CAO at any time before January 1, 2019 without just cause by providing the CAO with 5 months' written notice of termination of this agreement ("additional notice/pay") together with 1 month's written notice for each year of employment, or payment of 5 months' base salary together with 1 month's base salary for each year of employment in lieu of such notice. The CAO shall also be entitled to receive the Municipality's portion of any municipal pension benefit and Health Care Spending Account contributions that would have been contributed by the Municipality in respect of this period and the retirement severance to be paid to retiring employees as set out in and calculated in accordance with section 8 of the non-unionized staff agreement. After January 1, 2019, the CAO will not be entitled to the additional notice/pay; if the defendant terminated the CAO Employment Contract in a manner not in accordance with these conditions, or otherwise did not act in good faith with respect to Biles, her employment and/or its termination, the defendant would compensate Biles for all damages suffered, including inter alia mental distress, loss of reputation and lost or damaged career and employment opportunities suffered by Biles; and Biles would be paid as compensation for her work an annual salary (which as of January 1, 2016 was $73,732.55) and also enjoyed coverage in a group insurance plan and pension offered by the defendant. 8. In or about May 2012 and pursuant to an agreement with the defendant, made orally, by the actions of the parties and through implication of law (the "ACAO Employment Contract") Paulsen commenced employment with it as its Assistant Chief Administrative Officer. It was an express or implied term of the ACAO Employment Contract, and in the contemplation of the parties at the time the Employment Contract was entered, that inter alia: (a) (b) (c) (d) the ACAO Employment Contract would be for an indefinite duration; at all times the defendant would provide a safe and respectful workplace, and ensure that Paulsen was free from workplace violence, harassment and bullying; the defendant could only terminate Paulsen's employment: i) for just cause; or ii) with reasonable notice or pay in lieu; if the defendant terminated the ACAO Employment Contract in a manner not in accordance with these conditions, or otherwise did not act in good

6 -5 (e) faith with respect to Paulsen, her employment and/or its termination, the defendant would compensate Paulsen for all damages suffered, including inter alia mental distress, loss of reputation and lost or damaged career and employment opportunities suffered by Paulsen; and Paulsen would be paid as compensation for her work an annual salary (which as of January 1, 2016 was $52,012.50) and also enjoyed coverage in a group insurance plan and pension offered by the defendant. 9. Further, or in the alternative, the defendant as an employer owed a duty to Biles and Paulsen as its employees, independent of the contractual relations: (a) (b) (c) (d) to take reasonable care not to act in a manner which could cause Biles or Paulsen to suffer mental distress, loss of reputation, and loss or damage to career and employment opportunities; not to willingly or recklessly, with disregard as to whether or not damage would ensue, act so as to cause Biles or Paulsen harm, including mental distress, loss of reputation and loss or damage to career and employment opportunities; to at all times provide a safe and respectful workplace, and ensure that Biles and Paulsen were free from workplace violence, harassment and bullying; and to act in good faith with respect to Biles and Paulsen, their employment and/or its termination. 10. The defendant owed further duties to Biles and Paulsen pursuant to a Council Code of Conduct policy dated on or about February 11, 2015, which stated in part that: In carrying out the duties, members of the Council of the Municipality of Oakland-Wawanesa are expected to conduct themselves in such a way as to promote public trust and public confidence in the Council and the municipality... Every member of Council is expected to conduct himself or herself in public, and in respect to the public, in such a way as to reflect the decorum and dignity of the office that he or she holds. No member of Council shall intimidate or threaten his or her colleagues, members of the public, or employees or volunteers of the municipality. 11. Throughout the course of their employment, Biles and Paulsen proved themselves to be valuable and reliable employees, and performed their duties faithfully, diligently and in a highly competent manner.

7 6 12. Starting in or about April of 2015 and continuing thereafter, Rome engaged in a course of conduct that either was intended or if unintended would reasonably be expected to have the result of causing the plaintiffs harm and driving them out of the workforce. This conduct included inter alia a series of public, inappropriate and defamatory communications to and/or about the plaintiffs, which have been humiliating and embarrassing to the plaintiffs, damaged the plaintiffs' sense of self-worth and selfesteem and poisoned the work environment. 13. In recognition of such wrongdoing, in or about August 2015 the defendant passed a resolution (the "Resolution") which stated as follows: WHEREAS Council of the Municipality of Oakland-Wawanesa adopted a Council Code of Conduct policy on February 11, 2015; AND WHEREAS Council values and respects their employees and volunteers, and the work that they do; AND WHEREAS Council values the working relationships and respect of the suppliers and contractors of the Corporation; AND WHEREAS Council has received complaints from employees and volunteers of the corporation in respect to the conduct, comments and actions of Councillor Morley Dennis Rome towards these individuals; AND WHEREAS Council has concerns regarding the conduct and interactions with suppliers and contractors of the corporation by Councillor Morley Dennis Rome; THEREFORE BE IT RESOLVED that Councillor Morley Dennis Rome is hereby prohibited from: 1. Personal contact (phone or in person), including the sending of s and text messages to employees and volunteers of the Municipality of Oakland- Wawanesa; 2. Personal contact (phone or in person), including the sending of s and text messages to suppliers and contractors of the Municipality of Oakland-Wawanesa; and 3. Posting municipal related topics on social media sites (ebrandon, Twitter, Facebook, etc.). AND FURTHER BE IT RESOLVED that Councillor Morley Dennis Rome is hereby required to direct all comments, concerns and requests for municipal information, in writing, to Head of Council David B. Inkster, which will then be brought forward to the next regular meeting of council and dealt with by the entire council. 14. Despite and in breach of the Resolution, and despite the repeated efforts of the plaintiffs both to have Rome cease and desist and the defendant to cause Rome to cease and desist, Rome has continued his actions and the defendant has failed to cause Rome to cease and desist. The plaintiffs state that accordingly, the defendant has breached the obligations and duties owed to them as set out in this Claim, and is liable both for such breach and also as a result of the consequent constructive dismissal.

8 7 15. In or about January, 2017 the defendant provided payment to or on behalf of Biles of those moneys required to be paid to her as pay in lieu of reasonable notice as required by the CAO Employment Contract. Accordingly, while Biles was wrongfully dismissed the defendant has subsequently compensated Biles for failing to provide reasonable notice or pay in lieu and Biles no longer has a claim for that As a result of the defendant's conduct and breach of contract, the plaintiffs have suffered and continue to suffer damages in respect of loss of income, loss of reputation, lost or damaged career and employment opportunities and mental distress. Further, the plaintiffs have been injured in their credit, character and reputation. 17. As a result of the defendant's conduct and breach of contract, Paulsen has suffered and continues to suffer damages in respect of loss of income As a further result of the defendant's conduct and breach of contract, the plaintiffs have incurred and will continue to incur various out-of-pocket expenses in attempts to mitigate damages. July 13, 2016 TAYLOR McCAFFREY LLP Barristers and Solicitors, 9th Floor St. Mary Ave., Winnipeg, Manitoba R3C 4K5 JEFFREY J. PALAMAR Tel