Woman on the hook for $15K in unpaid wages at Ontario funeral home she says she never owned

August 15, 2024 Canuck

A woman says the Ontario government is forcing her to pay more than $15,000 to unpaid workers at a funeral home she insists she never owned.

“I don’t know what to do. I’m lost,” Stephanie Brown, 30, told CBC Hamilton.

Brown said Adam McDowell, her former husband and owner of the funeral home, added her name as a director without her knowledge or consent. The funeral home is no longer operating.

Brown said she’s done everything possible to show the Ministry of Labour that she shouldn’t be liable. Her efforts included sending the ministry a judge’s decision that states McDowell should pay Brown.

However, she said, the province is still waiting for her to pay the money.

“As a single mom, I don’t have that money.… I’m feeding my kid f–king cereal for dinner every night,” Brown, who has a four-year-old daughter, said while holding back tears.

“It’s scary … someone that’s supposed to protect you does this behind your back and totally ruins your life and disappears.”

Brown and the paralegal representing her, Holly Robertson, feel there should be more safeguards to prevent others from ending up in the same situation. But an expert who spoke to CBC Hamilton said this is a one-of-a-kind situation.

“The employees in this matter deserved to be paid.… It’s who they should be paid by that is the question here,” Robertson said. “It’s unconscionable. This shouldn’t be able to happen.”

Wife added as director without consent, docs show

McDowell declined an interview and wouldn’t answer questions on the record.

To gather evidence to convince the province she’s not responsible for the lost wages, Brown started a civil case against McDowell.

CBC Hamilton obtained court documents in that small claims case that detail Brown’s circumstances.

Brown and McDowell lived in Hamilton when he opened Brown Funeral Services.

The Bereavement Authority of Ontario states the now-defunct company was on Britannia Road East in Mississauga. Federal corporation information shows the company formed in 2018, but Brown notes the funeral home opened between 2020 and 2021.

Brown said she wasn’t involved with the business. McDowell was making money with it at the start, she added, but things quickly fell apart.

The couple officially separated in November 2021, according to court documents. Brown now lives in Hanover, Ont.

A judge's decision. — In January, Deputy Judge Claude Leduc ruled Brown’s ex-husband owed her $28,409 and another $5,000, but she says she hasn’t received any money. (Submitted by Holly Robertson)

By the spring of 2022, two workers submitted claims to the Ministry of Labour for unpaid wages. Those workers didn’t respond to interview requests from CBC Hamilton.

One claim was for $20,092.64 and the other was for $6,815.38, according to the court documents and the ministry.

But Brown only learned of them on Feb. 6 2023, when she received letters from the province with orders to pay up.

The letters gave her until Feb. 13 to appeal. Brown said she missed the appeal date amid all the confusion.

In text messages filed as exhibits in court, McDowell appears to tell Brown he added her as a director.

“I had no idea … I was just this stay-at-home mom trying to raise the kids through COVID,” Brown said in the interview.

McDowell also appears to say he would remove her as a director. He sent screenshots to Brown’s cellphone that appear to show Brown and McDowell’s father had been added, but were then removed. He backdated their removal to November 2021.

In the texts, McDowell also appears to tell Brown he was handling the debt.

“He said he and his father were taking care of it.… I had nothing to worry about,” Brown said.

But in May 2023, Brown got another letter saying she was found liable and had to pay up.

It also said she could have the Ontario Labour Relations Board review the situation, if she filed an application within 30 days and paid the full debt.

Brown said she didn’t have the money to file an appeal.

In an effort to prove her innocence, Brown had McDowell write and sign a notarized letter in June that stated he “informally” added Brown and his father as directors “without proper knowledge or consent.”

“Therefore, I, Adam McDowell, take full responsibility for any actions, debt or consequences, as sole director,” reads the letter filed as an exhibit in court.

But in August, Brown got a letter informing her the debt was sent to the Ministry of Finance for collections. The ministry also added a non-negotiable collection fee of $4,728.17, according to the court documents.

In October, the company dissolved for not filing its last two annual reports, according to Innovation, Science and Economic Development Canada (ISED).

In November, Brown said a lien was put on her car. Robertson said Brown also can’t own a home or any other possessions until the debt is paid.

This January, Deputy Judge Claude Leduc ruled McDowell owed Brown $28,409 and another $5,000, but Brown says she hasn’t received any money. The court documents show McDowell wasn’t present for the decision and Robertson said he didn’t participate in the proceedings.

Despite the ruling, Brown said she hasn’t received any money from him. Robertson also said the province has refused to consider the letter and evidence.

“It changes nothing,” said Robertson, Brown’s paralegal.

Settlement got 1 director off the hook: province

While McDowell made the changes to the company through Corporations Canada, ISED spokesperson Cheyenne Daly said this case falls under the province’s process.

The Ministry of Finance didn’t respond to questions from CBC, deferring to the Ministry of Labour.

Anuradha Dhar, spokesperson for the Ministry of Labour, didn’t answer questions about why Brown has to pay despite the judge’s decision.

One of the orders, for almost $7,000, wasn’t paid or appealed within the appeal period and was sent to collections, Dhar said.

But the second order, for roughly $20,000, was appealed by the employer and settled on April 15 for $8,000, Dhar said.

“The director paid this directly to two employees … [and] is no longer liable,” Dhar said, without identifying the director.

The other two directors (the province wouldn’t name them either) had $8,000 deducted from the original order amount — which means the province is still waiting on $15,640.83, according to Dhar.

Brown said she was never told about the settlement, but has since learned the director who settled was McDowell’s father.

In a text message, he told CBC Hamilton he couldn’t comment because he’s “not involved” in the company’s operation.

If you needed to get consent signed by every single individual every time a board member changed, it would be a huge bureaucracy.– David Brown, Governance Solutions

Robertson said if a company wants to add someone as a director, that person should be notified and should have to provide verification.

David Brown, executive vice-president of the consulting company Governance Solutions, said companies can add or remove people from corporations without those same people offering verification.

“If you needed to get consent signed by every single individual every time a board member changed, it would be a huge bureaucracy,” Brown said.

He said that in his over 30 years of experience working with boards, it’s the first time he’s heard of a case like this.

This case seems to be a rare one, Brown added, because submitting a fraudulent filing is illegal and a “really serious offence.”

“I think that’s the safeguard.”

Daly, with ISED, said Corporations Canada requires people making changes to director information to certify that someone who has relevant knowledge of a corporation, and is authorized by directors, provides a signature.

She said Corporations Canada “makes it clear” making a false statement is an offence and summary conviction. A person who does so is liable to serve six months behind bars, pay up to $5,000 or both, according to the Canada Business Corporations Act.

Daly said safeguards in place for a filing include the corporation key — a password a company gets when it is first incorporated. There’s also a two-step verification for ISED accounts and identity verification.

She added the act is “primarily intended to be a self-enforcing statute” and “provides aggrieved parties with direct access to remedial action.”

For now, Brown said she and her paralegal are trying to find a way to get the province to take another look.

“I feel helpless.… It’s all I think about,” she said. “I’m not going to have anything for my daughter.”

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