Pham v. Beach Industries Ltd., 1987 CanLII 8544

Board of Inquiry Decision under the ONTARIO HUMAN RIGHTS CODE

Lana N. Pham Complainant

v.

Beach Industries Ltd. Respondent

Date of Complaint: May 18, 1984 Date of Decision: February 12, 1987 Place: Smiths Falls, Ontario Before: H. A. Hubbard Appearances by: Bella Fox, Counsel for the Ontario Human Rights Commission Lynn H. Harnden, Counsel for Beach Industries Ltd.

SETTLEMENT — settlement agreement breached when seniority rights lost — COSTS — human rights commission acting irresponsibly in pursuing complaint

Summary: The Board of Inquiry dismisses a complaint against Beach Industries Ltd. alleging that it breached the agreement settling an earlier complaint.

Lana Pham alleged that she was discriminated against because of a disability when she left her employment in May 1983 due to a temporary psychiatric disorder.

The complaint was settled and Beach Industries agreed to pay Ms. Pham $1000 in compensation for health benefits which she did not receive, and $750 in general damages, and to reinstate her with the same seniority she would have had had she not had an interruption of her employment.

Ms. Pham alleged that this settlement agreement was breached because she lost all her seniority rights and was called back to work in March 1984 as a new employee after other employees with less seniority had already been called back.

The Board accepts the respondent's argument that this did not constitute a breach of the settlement agreement, since a number of employees were laid off on July 7, 1983 and had Ms. Pham's employment not been interrupted she would have been laid off at this time. The collective agreement provided that employees lost their accumulated seniority after they had been laid off for six months. Employees began to be recalled in January 1984 but at this time the recall was not done on the basis of seniority because none of the laid off employees had any seniority to apply. The company argued that Ms. Pham was treated in the same way all employees laid off on July 7, 1983 were treated, and this is all her seniority, as reinstated under the settlement agreement, entitled her to.

The Board of Inquiry finds that the Commission acted irresponsibly in pursuing this complaint and awards costs to the respondent.

Introduction

1I was appointed on the 16th of December, 1986, as a board of inquiry under the Ontario Human Rights Code, 1981 (hereafter referred to as the Code), to hear and decide the complaint made by Ms. Lana N. Pham on the 18th day of May, 1984, against Beach Industries Ltd. (hereafter referred to as "the Company") and its president, Mr. Russell Beach. The hearing took place in Smiths Falls on January 12, 1987. As references will be made to the particulars of the complaint from time to time, it is convenient to reproduce its allegations at the outset:

1. On June 27, 1983, I filed a complaint of discrimination with the Ontario Human Rights Commission against Beach Industries Ltd.

2. The complaint alleged a violation of section 4(1) and 8 of [the Code] because of temporary handicap.

3. On December 7, 1983 a Memorandum of Agreement was signed by all the parties and the settlement was ratified by members of the Ontario Human Rights Commission.

4. Clause #2 of the said Memorandum of Agreement stated that "Mrs. Pham will be credited with full seniority from her last date of hire and be granted all rights pertaining to recall in accordance with such seniority."

5. I have reason to believe that persons with less seniority than I were rehired by the company before I was recalled to work.

6. On March 20, 1984 I was rehired by Beach Industries Ltd.

7. Following inquiries about my seniority status, Mr. Chris Grant, Vice-president of Production wrote to my lawyer and advised him that: "Lana began work on Tuesday March 20th and is one of a number of employees hired since mid-January to fill some vacancies created by an increase in demand for our products. All the employees that we have hired in this period are judged to be new employees in terms of seniority even though some of these individuals had worked for our company in the past. A new employee serves a probationary period and upon completion of this he or she becomes a permanent employee with seniority starting from their hiring date. In Lana's case the hiring date that appears on the records is March 20th, 1984."

8. Since returning to work I am being harassed by my employer with warnings and reprimands.

9. I believe these are unwarranted and are not given to other employees under similar circumstances.

10. I believe my seniority rights were not upheld as per the signed Memorandum of Agreement because of the complaint of discrimination I had filed against them.

11. I also believe I am being harassed into quitting my job because of the complaint I had filed against them.

12. By reason of the foregoing I allege that my right to claim and enforce my rights under [the Code] without reprisal have been infringed in contravention of Sections 7, 8 of [the Code].

13. I further allege that by the delay to recall me to work without loss of seniority, the above respondent company is in breach of the Agreement approved by the Commission, in contravention of section 42 of [the Code].

2At the commencement of the hearing the complaint was amended by the Ontario Human Rights Commission (hereafter referred to as "the Commission") by withdrawing the allegations of reprisal and harassment, and by deleting all references in the complaint to section 7 of the Code. The fact that such allegations were made remains of importance, however, because of the respondents' submissions as to costs. Thus, the complaint as amended is simply that the respondents, through their alleged breach of the terms of the settlement of the prior complaint have contravened section 42 of the Code, thereby infringing the complainant's rights under Part I of the Code.

3It was suggested by counsel for the Commission that this would appear to be the first hearing into a complaint alleging a breach of section 42 of the Code. That provision reads as follows:

Where a settlement of a complaint is agreed to in writing, signed by the parties and approved by the Commission, the settlement is binding upon the parties, and a breach of the settlement is grounds for a complaint under section 31, and this Part applies to the complaint in the same manner as if the breach of the settlement were an infringement of a right under this Act.

Exposition and Analysis of Facts

4Although the principal issue before me is whether the respondents' conduct constitutes a breach of the settlement, the resolution of that issue depends virtually exclusively on how that settlement is interpreted. As the respondents have asked for an order to be made against the Commission under section 40(6) of the Code, there is also an issue as to whether the complaint is trivial, frivolous, vexatious or made in bad faith, or caused undue hardship to the respondents in the circumstances. Thus, the evidence to be reviewed related to (a) the objective circumstances surrounding the making and possible breach of the settlement, (b) the understandings and intentions of the parties in so far as they may be relevant to the interpretation of the settlement and to the matter of bad faith, and (c) the possible hardship suffered by the respondents in the particular circumstances in which this complaint has been pursued.

(A) THE OBJECTIVE CIRCUMSTANCES RELATING TO THE MAKING AND POSSIBLE BREACH OF THE SETTLEMENT

5The complainant, Ms. Pham, was engaged by the respondent, Beach Industries Ltd. (hereafter referred to as "the company"), on May 27, 1981, to work as a machine technician operating a press in its "press room". In April of 1983 she was admitted to hospital for a number of days for treatment of a psychiatric disorder. Although not fully recovered, she returned to work early in May. On or about May 16th she signed a letter of resignation and left her employment at the company. On June 27, 1983, she signed a complaint under the Code alleging that her resignation had been improperly secured, and that the respondents had infringed her right to equal treatment in her employment through discriminating against her on the ground of her handicap.

6Although it was not the purpose of this hearing to determine whether the original complaint was well-founded, some evidence was adduced before me regarding the circumstances of that earlier complaint which, as will be seen, is relevant to certain aspects of the present matter. Following her return to work after ten days spent in the hospital under treatment for her psychiatric disorder, the complainant, by her own admission, was not well and did some "unusual things." Her work entailed the use of a machine that required care and attention in its operation for the sake of its operator's safety as well as that of fellow employees. The respondent, Mr. Beach, testified that the company had concluded that the situation was dangerous, and he said that one of the company's officers "convinced her that she should resign because it was no longer safe for her to be operating in the press room in her condition; and she signed the resignation." In her testimony Ms. Pham agreed that she had been treated courteously on that occasion, and that she had not been forced to do anything.

7It is to be noted that the initial complaint was not (nor has it ever been) investigated in the sense of the Commission's pursuing inquiries into the truth of the complainant's allegations of fact and the formulation of an objective view as to whether there had been discrimination. The investigating officer, Mr. Maurice Richard, who was called as a witness by the respondents, said that he sent a questionnaire to the respondents which was not returned, that their counsel contacted him with a view to settling the matter and that negotiations to that end were commenced and eventually completed "without prejudice." There has never been any admission by the respondents with respect to the merits of the original complaint.

8As it happens, the company had to lay off about forty employees on July 7, 1983, owing to lack of business and, had the complainant still been working on that date her seniority was such that she would have been amongst those who were laid off.

9The negotiations with respect to the original complaint resulted in a Memorandum of Agreement signed by or on behalf of all the parties on December 7, 1983. It is that agreement that the present complaint alleges to have been breached. The terms of that agreement, or settlement are as follows:

1. The respondent wishes to grant the complainant $1,750.00 representing $940.80 in health benefits (rounded off to $1,000.00) and $750.00 for general damages.

2. Mrs. Pham will be credited with full seniority from her last date of hire and be granted all rights pertaining to recall in accordance with such seniority.

3. Beach Industries will inform [the Commission] of the recall system and of the complainant's position on the recall list.

4. [The Commission] reserves the right to monitor the recall practices to ensure the regularity and full adherence to proposals 2 and 3.

5. The respondent company hereby assures the complainant and the Commission that no reprisal will be taken against Mrs. Pham for exercising her rights under [the Code] and that she will receive equal treatment from the company.

6. The respondent will provide [the Commission] with a letter of assurance affirming their adherence to [the Code] in their employment practices.

7. The complainant agrees to execute the attached Release Agreement in consideration of this settlement.

10Article 5:06 of the collective agreement between the company and The Beach Employees Association for the period of November 3, 1980, to November 7, 1983, stipulated that "Seniority of an employee shall terminate if: (a) an employee voluntarily quits . . . (or) (c) due to lay-off because of lack of work, an employee on the seniority list is absent from the company's service for a period of three months or more." Article 5:07 states that "Any employee whose seniority has been broken in accordance with 5:06 shall, upon being rehired, be considered a new employee."

11During the course of negotiations, and having at no time admitted that the complainant's resignation was in any way defective or without effect, and without having ever treated it as though it were, the company considered it necessary to obtain the consent of its employees' association to any term of the proposed settlement that would be contrary to the provisions of their collective agreement. To that end, the company obtained from the association the following agreement, dated November 29, 1983, a copy of which was given to Mr. Richard before the settlement was reached (exhibit 6):

The Beach Employees' Association has no objection to the Company's proposal that Mrs. Pham be reinstated into the seniority listing of the Company's current and former employees. We also agree that if laid off employees on the seniority list are recalled to work Mrs. Pham will be subject to recall in accordance with her position on the seniority list.

12A new collective agreement was entered into on November 7, 1983, extending the lay-off period beyond which employees would lose their seniority from three to six months. It was agreed that that extension would apply to those employees who had been laid off the previous July 7th. However, on January 7, 1984, time ran out on all the employees who had been laid off the previous July, and they lost their rights of seniority, including the right to be recalled at all (let alone in any particular order) should the company subsequently begin to engage more employees.

13Towards the end of January business picked up, and the company began to hire (not recall) "new" employees. There was no obligation to "rehire" anyone who had been laid off on July 7, 1983, but in fact about half of them were re-engaged as new employees, in probationary positions in accordance with the terms of the collective agreement, and without retaining any of their erstwhile seniority rights. Six of them were hired on January 24th, two in early February, six on February 27th, and three on March 19th. The complainant was hired for a second time by the company on March 20, 1984, as a probationary employee without seniority rights. Of the former employees similarly rehired, only three had had less seniority than the complainant. (Of course, it is the respondents' position that, as of January 8th, none of them — including the complainant — had any better seniority rights than any of the others, since none of them had any such rights at all!) One of these three was hired on February 27th to work in the press room, the other two being hired later for an entirely different kind of work.

14As the complainant was on probation during the first three months of her second contract of employment with the company, she was paid slightly less than she had been receiving when she resigned some ten months previously but, in recognition of her actual experience, more than a probationary employee would normally have received. When her period of probation was up, her pay was increased to what it had been when she resigned. Her status as a new employee also affected certain holiday benefits she would have received had she been an employee temporarily laid off and recalled with full seniority.

15Approximately two months after the complainant started to work for the company once again, she signed the complaint that is the subject-matter of this hearing. For some unexplained reason, it was not until September 6, 1984, that the respondents were advised of this new complaint. Although a copy of the complaint form (No. 400931) was attached to the letter written on behalf of the Commission by Mr. Richard, no reference was made in the letter itself to any breach of the settlement. It was stated simply that "This letter is to advise you that the Ontario Human Rights Commission is in receipt of a complaint of reprisal against Beach Industries Ltd." (Exhibit 9.) The letter went on to indicate the necessity "to investigate the matter and endeavour to seek a settlement," and it then set out information as to what that entailed.

16It is to be noted that on May 10, 1984, just over seven weeks after the complainant started to work for the company again, Ms. Pham put something into her brake press the wrong way, breaking a die. She received a verbal warning from a supervisor. It was only eight days later that she signed the second complaint. By her own admission, Ms. Pham received no other warnings, either before or after this second complaint. There had been no reprimands at all. She was not being harassed into quitting her job because of her earlier complaint of discrimination. There was no harassment of any kind. These false accusations, though subsequently withdrawn, were serious and hurtful to the respondents.

17It is not clear whether the allegations of harassment through warnings and reprimands, supposedly amounting to reprisals, were ever investigated by the Commission. It would seem that it was agreed that the investigation of both aspects of the complaint would be conducted through a "fact-finding conference" that took place on July 9, 1985. However, "at the outset of the conference counsel for the complainant [who was then independently represented] advised that the allegations of on the job harassment were withdrawn." (See exhibit 16, p. 2, which is an eight page letter from Mr. Harnden, counsel to the respondents, to Mr. Richard, fully outlining the respondents' position with respect to the Agreement.) Thus, although the allegations of harassment were not formally removed from the complaint until the hearing commenced, for all practical purposes they had been dropped more than a year and a half before that. Nevertheless, how these allegations came to be inscribed in the complaint of May 18, 1984, raises serious questions since, according the the complainant's own testimony they were not made by her! The following is from pages 23 and 24 of the transcript:

Q. . . . was it someone with the Human Rights Commission that wrote up the complaint?

A. Ontario Human Rights.

Q. Was that Mr. Richard?

A. Yes.

Q. So, he helped you to draft or pick the words for the complaint.

A. Yes, with my ideas.

Q. But he chose the words.

A. Of course, because my English is very limited.

Q. . . . Can we agree to this: that except for that warning [over breaking the die], you were never given a warning or a reprimand by the Company?

A. Yes.

Q. And is that the only warning that you told Mr. Richard about?

A. After I was hired the second time, I was watched very carefully by the Company and they gave me a warning. I don't want that situation to happen, and that is why I went to meet Mr. Howard, my lawyer, and Mr. Richard, together in the meeting at the Human Rights. That is why the work seemed to be smoothly.

Q. Mrs. Pham, could you please listen carefully to my question: Was that the only warning that you told Mr. Richard about?

A. Yes.

18Since communication with Ms. Pham, even through an interpreter, was somewhat difficult, it is possible that what Mr. Richard wrote was the result of confusion. However, counsel for the Commission did not adduce any evidence to that effect either in her re-examination of this witness, or in her later cross-examination of Mr. Richard. Moreover, if these admittedly untrue allegations found their way into the form signed by the complainant simply because of a communications problem between her and Mr. Richard, having regard to all that they had gone through together in respect of the first complaint, surely that problem would have been apparent to them long before the second one was written up. If, indeed, confusion is the explanation, it can hardly be an excuse. The extremely serious nature of such charges would warrant the most careful and patient questioning of a complainant who is known to be difficult to communicate with in order to be satisfied that such a person fully understood what was being signed. If that kind of questioning took place in this case, and if Ms. Pham therefore understood the meaning and scope of the allegations contained in the complaint, then clearly either she or Mr. Richard, or both of them, acted in bad faith in making them.

(B) THE INTENTIONS OF THE PARTIES

19The remaining evidence that I wish to review relates to the parties' intentions and understandings that led to their signing of the Memorandum of Agreement on December 7, 1983.

20The complainant's understanding and expectations regarding the settlement were put by her as follows (transcript, p. 36):

Q. As I understand it, what you wanted when you settled the complaint was to be treated by the Company as if you had not resigned at all; is that not true?

A. Yes.

Q. You wanted to have the same rights as the other employees who were laid off; is that right?

A. Yes.

Q. So, if they had a right to get their job back because of their seniority, you wanted the same type of rights; correct?

A. Yes.

Q. And isn't it true that is what you told Mr. Richard at the Human Rights Commission: "I want to be treated in the same manner as the other employees who were laid off"?

A. Yes.

Q. You did not ask Mr. Richard for any special right greater than the other employees at the Company, did you?

A. No, I didn't.

21The understanding and expectations of the respondents were made crystal clear in a letter to Mr. Richard written by their counsel, Mr. Harnden, on November 16, 1983. That letter (exhibit 15) reads in part as follows:

We would propose that settlement be effected on the basis of a payment to the complainant of the amount of $1,000.00. This figure has been developed through application of the principle that the complainant should be placed in the identical position as would have been the case had the events of May 16, 1983 not occurred. In view of her disability, she would have been entitled to benefits under the Company health benefit plan commencing on May 16, 1983 equal to 60% of her weekly earnings. A medical certificate issued by Dr. Nguyen on May 25, 1983 indicated that she could return to work in six weeks' time, i.e. on or about July 7, 1983. Her health benefits for the period of May 16, 1983 to July 7, 1983 would have equalled $940.80. Since she would have been subject to lay-off on July 7, 1983, she would not have earned any wages. There was no severance pay made to laid-off employees. The Company is prepared to round off the amount to $1,000.00 in the interest of achieving settlement of the complaint.

The Company is prepared to place the complainant on the seniority/recall list and to credit her with full seniority from her last date of hire.

22It is beyond question that, had the resignation of May 16th not occurred, and had the complainant continued to work up until then, she would have been laid off on July 7th with the other employees. Mr. Harnden's letter states that the guiding principle agreed upon was to restore Ms. Pham to the position she would have been in had she not resigned, and that one of the consequences of her being in that position would be that she would have been laid off on July 7th. It was further proposed that Ms. Pham would be on the "seniority/recall list," which is a clear reference to the list of persons laid off on July 7th and their rights of recall in accordance with their relative seniority. Evidently, the Commission was not satisfied with this. The Commission wanted an additional sum of money to be given to the complainant in compensation for the injury to her dignity. Mr. Harnden, on behalf of the respondents wrote to Mr. Richard again on November 24, 1983, as follows (exhibit 18):

As counsel to the respondent in the above-noted matter, we submit on a without prejudice basis the following proposal for settlement of the complaint.

The respondent will pay to the complainant the sum of $1,750.00. This represents payment of all health benefits which the complainant would have received had the respondent not relied upon her resignation of May 16, 1983 . . . The $750.00 component of the settlement proposals represents payment for the alleged injury to the dignity, reputation and feelings of the complainant as a result of the alleged discriminatory act . . .

The respondent is also prepared to place the complainant on the seniority/recall list and to credit her with full seniority from her last date of hire. The respondent will have such action approved by the trade union representing the employees in the bargaining unit.

23The reference in the letter of November 24th to the trade union, together with that Association's agreement of November 29th (set out earlier), shows clearly that it was understood by the respondents (as well as by the Association of which the complainant was a member) that Ms. Pham was to be treated as though she had been laid off on July 7, 1983. The $1,000.00 that she received in respect of health benefits was also predicated on (1) her re-instatement as of May 16, 1983, (2) her inability to work from May 16th to July 7th because of her illness, and (3) her being laid off as of July 7th.

24There can be no doubt that this was also the Commission's understanding, as the following exchange between Mr. Richard and counsel for the respondents reveals (transcript, pp. 62–63):

Q. Mr. Richard, we just discussed the fact that it was the complainant's objective that she be given the same rights as the other people that were laid off in July, 1983.

A. Yes.

Q. Did you not share that objective in 1983?

A. Based on my knowledge at the time, yes. My knowledge was then changed following the discussion with you in March [of 1984].

Q. To be clear: prior to entering into the Memorandum of Settlement, it was your objective, on behalf of the Commission, to provide the complainant with the identical seniority rights as those other employees who had been laid off; is that correct? It was only later that you reached a new objective.

A. Yes, because of my understanding of what these seniority rights were at that time. I had no reason to question the seniority rights at the time of the signing of the Memorandum of Agreement.

Q. At the time that the Memorandum of Agreement was entered into, that being December 7th, 1983, your objective was to put the complainant, with respect to seniority, where she would have been had she not resigned. Is that correct?

A. No; my objective at the time of the signing, on December 7th, was that Mrs. Pham would, for all intents and purposes, not have been laid off in May; would have been laid off in July; and would have been recalled, based upon her seniority, whenever the Company began recalling employees. Had I known that there were clauses in the collective agreement at that time that would have made that impossible, I would not have entered into that negotiation, or into that agreement. [Emphasis added. It is to be noted that the clause in question does not make that which I have emphasized impossible.]

Q. I am having trouble. I understand that you received information later that changed your view of the Agreement . . . But before the Agreement was entered into, was your objective to give the complainant the identical seniority she would have had had she not resigned in 1983?

A. Yes.

25It was not until the company's business picked up and it began taking on more employees that Mr. Richard's misunderstanding of the Agreement surfaced. Ms. Pham apparently assumed that she would be "recalled" in these circumstances and, when some former employees with less seniority than she had had were taken back by the company, she concluded that the respondents were in breach of their Agreement. She contacted Mr. Richard. He, in turn, contacted Mr. Harnden who tried to explain to him the effect of article 5:06 of the collective agreement. It was about a week after this that Ms. Pham accepted a new contract of employment and returned to work for the company.

26As has been seen, the present complaint was then prepared on behalf of the complainant by Mr. Richard, signed by her on May 27, 1984, and brought to the attention of the respondents on September 6, 1984. Of course, that second complaint required investigation as well, and the investigating officer was, once again, Mr. Richard. Despite the respondents explanations and protestations, it was decided by the Commission to go forward with the complaint. Mr. Harnden's letter to Mr. Richard of July 22, 1985 (exhibit 16, to which reference has already been made), begins this way: "In a letter dated January 8, 1985, the Chairman of the Ontario Human Rights Commission advised the employer in the above-noted matter that the Commission had directed its staff to proceed with the normal procedures of investigation and conciliation." The letter then quotes the reasons that were given to the employer for that decision as follows:

1. The terms of settlement under the Code supercedes the Collective Agreement. The settlement does not mention the Collective Agreement and the wording of the settlement indicates a clear intention that Ms. Pham would be returned to her original position without loss of seniority.

2. The additional allegations of on the job harassment have not been investigated and cannot be regarded as trivial, frivolous or in bad faith without further information than the Commission has at present.

27The first of these reasons appears to involve questions of law, not of fact, and the second seems to have been asserted in consequences of information that the Commission ought to have known was false because, unless the complainant was untruthful both to him and in her evidence at this hearing, the Commisison's investigating officer did not receive any information that could conceivably justify these damaging allegations which were inserted into the complaint in words of his choosing. It is to be noted that, unintended though it may be, one of the likely effects of such allegations is to render a respondent's position more burdensome, thus adding to pressure on that respondent with respect to other allegations, such as the present contention that these respondents breached the terms of settlement.

28The continued pursuit of this complaint seems to have been based on Mr. Richard's perception that, somehow, he had been fooled. The importance of Mr. Richard's personal perception is brought out in a letter sent by Mr. Harnden to Ms. Legault, the Eastern Region Supervisor for the Commission, on December 17, 1985 (exhibit 17), which reads in part as follows:

we thank you for the opportunity afforded to us . . . to respond to the contents of the Officer's Report.

The Officer seems to assign importance to the fact that a copy of the collective agreement was not provided to the Commission until after the filing of the reprisal complaint. This is the document which governs all of the terms and conditions of the complainant's employment. The writer had assumed that the Commission had obtained a copy in its investigation of the initial complaint. It now seems that no copy was requested. The employer categorically rejects the innuendo in the Officer's Report that it withheld the document from the Commission. The fact that the complainant was covered by a collective agreement was disclosed from the outset. It was the employer which suggested that the Employees' Association should approve the granting of seniority rights to the complainant. The innuendo in the Officer's Report that the collective agreement was improperly withheld from the Commission is grossly unfair both to the employer and the writer.

29Not surprisingly, since their understanding of the Memorandum of Agreement did not correspond with his expectations, the respondents had not in fact acted in conformity with Mr. Richard's understanding of that Agreement. As investigating officer with respect to the question whether the Agreement had been breached, his report would have to be based in large measure on evidence gathered with respect to the intentions of the parties. His view in that regard was bound to be prejudiced, and it would seem to have been quite improper for the Commission to have appointed Mr. Richard to conduct that investigation.

30In deciding to proceed with a complaint, I would suppose that the Commission would usually act in accordance with its investigating officer's report. There would seem to be nothing untoward in that. However, what is not acceptable, in my opinion, is the appointment of an officer to investigate a complaint that relates to a matter in which he or she has been closely involved as an active participant. It is not unlikely that, but for Mr. Richard's improper involvement in the second complaint, that complaint might not have been proceeded with.

31When the Agreement was signed, Mr. Richard was satisfied with its terms, which he had understood in exactly the same way as did the respondents, with one exception. He did not know that there was a collective agreement with a loss of seniority clause. Had he known that, he now says (and presumably told himself when he investigated the matter), he would never have agreed to the settlement in the first place.

32Mr. Richard cannot be heard to deny that he knew before the agreement was signed that there was a trade union involved, that there was workers who had been laid off, that there was a "seniority/recall" list, that the trade union "approved" of Ms. Pham's being placed on that list, and that that approval would be redundant unless the union had an agreement relating thereto. While I am prepared to accept that Mr. Richard did not know of the existence of article 5:06 of the collective agreement (a not unusual kind of provision in such agreements, it may be noted), if he did not know that there even was such an agreement (as he asserted in his testimony), I would find that ignorance culpable. Although one could hardly expect that point to have been made in Mr. Richard's report, that conclusion ought to have been apparent to an objective and competent investigating officer. Had such a conclusion been included in an investigator's report, it might have made a considerable difference in the Commission's assessment of the respondents' submissions and might have altered the decision to pursue the complaint.

33Mr. Richard acted for the Commission in this employment matter and, with its knowledge and consent, he undertook to act on behalf of the complainant as well. He knew, or he ought to have known, that there was a collective agreement. In my submission, his failure to request a copy of that agreement, and to obtain a legal opinion in respect of it if necessary, was clearly negligent. If one does not know that there might be a collective agreement between a "trade union" and the employer, and that such an agreement might have something to say about seniority rights, then one has no business undertaking to act for another whose rights might thereby be affected; and, if one is aware that such might be the case, then one has an obligation to find out.

34Some months after the settlement was reached Mr. Richard discovers what he should have known from the start, and he then seeks to blame the respondents for his own shortcoming. Although counsel for the respondents assumed that Mr. Richard would have obtained a copy of the collective agreement when dealing with the initial complaint, Mr. Richard's view is that the respondents should have provided him with a copy of the agreement. Indeed, he seems to have suggested that the respondents and their counsel deliberately withheld that information! That is an astoundingly damaging accusation, and one to which counsel for the respondents reacted with remarkable resraint (exhibit 17).

35Mr. Richard's evidence amounts to this: had he and the complainant known of article 5:06 of the collective agreement when they signed the Memorandum of Agreement then, admittedly, the respondents could not be said to have breached that settlement. He seems to be saying that the respondents are in contravention of section 42 of the Code, not because they have failed to conform to the terms of the Agreement, but because they failed to conform to certain expectations shared by him and the complainant in consequence of their mutual ignorance. That being so (and not to suggest that it might have succeeded), it might have been expected that Mr. Richard's approach would have been to attack the validity of the agreement because of some fundamental mistake, so as to revive the first complaint. Instead, he suggests that the Agreement should be interpreted in light of his ignorance of the provisions of the collective agreement by which the company and all of its employees (including Ms. Pham) were legally bound. Because he did not know of article 5:06, the Agreement is to be treated as though that article had not existed — even though the company acted in good faith, could not legally have entered into an agreement free of that provision, and would not have done so. The Agreement must be read to say that when a suitable position came to be filled at any future time (however remote that might be, it would seem) the company would be obliged to "recall" Ms. Pham in preference to hiring any other former employee whose seniority had been less than hers. Since such a position was filled by such a person (on February 27th, actually — i.e., just three weeks before Ms. Pham rejoined the company), the respondents are in breach of the Agreement.

36It would also seem to be Mr. Richard's contention that, whenever Ms. Pham might be "recalled," she was to be accorded full seniority. (Theoretically, this could be years in the future, given the open-ended character of her rights as conceived by him!) Thus, unlike the other members of her bargaining unit whose seniority was lost by the operation of article 5:06, Ms. Pham would not be on probation. She would be entitled to earn more than they. She would retain certain prior holiday rights that they would have lost. Moreover, in case of any future lay-offs, she would have seniority dating back to her first hiring in 1981. (It is interesting to compare what is thus proposed for Ms. Pham with the situation of another lady who began in the press room in 1972 and whose second hiring was a day earlier than that of Ms. Pham. She would earn less, have an inferior holiday entitlement, and be subject to being laid off before the complainant, should lay-offs become necessary.)

37A fundamental premise of Mr. Richard's position was that he would never have agreed to the settlement had he known of the existence of article 5:06 of the collective agreement by which the company was bound. Counsel for the respondents sought to test the validity of that premise by asking Mr. Richard what terms he would have insisted be in the settlement instead. I found Mr. Richard's response quite astounding. The negotiations proceeded in accordance with what appeared to be the Commission's own guiding principles, which were to restore the complainant as nearly as possible to her former position, secure compensation for any actual loss and secure further compensation for any injury to the complainant's sensibilities. All of this was agreed to, incorporated in the Agreement and faithfully carried out by the respondents. However, Mr. Richard now says that, had he known of article 5:06 he would have insisted that Ms. Pham be given greater seniority rights than those enjoyed by the other employees. I found this position rather surprising, and it led to the following exchange between Mr. Richard and me (at pp. 85–86 of the transcript):

Q. So that, in your view, it would have been perfectly legitimate for her to have had seniority rights greater than others who were laid off, and who, prior to being laid off, had seniority rights higher than hers. All of a sudden she would have been vaulted ahead of them, and that would be all right. Is that basically correct?

A. You are asking me after the fact, you know. But that is probably how I would have looked at it.

Q. . . . You have indicated that there were perhaps two principles involved in your attempt to resolve the situation at the time you negotiated with the lawyer for the Respondent. One was that, assuming that there had been a breach of the Code resulting in Ms. Pham leaving when she did leave, then she ought to be put back in the position that she would have had had that never occurred; and in addition, there might well be general damages for what you referred to as pain and suffering . . . [and] . . . Ms. Pham in fact did receive some compensation in the nature of general damages.

A. Yes, she did.

Q. So, what you are saying is that you either did not negotiate a sufficient amount of compensation for general damages or, in addition to general damages and putting her back in the situation in which she would have been, you want to put her back in an even better position than she would have been. You see, my understanding of it is that had she not been dismissed — if I could put it that way — in the first instance, she would have been laid off in any event on July 7th.

A. We assume she would have been, yes.

38Mr. Richard is an officer of the Commission. Apparently, he investigates signed complaints. Sometimes he assists complainants to prepare the signed complaints which he subsequently investigates. He arranges fact-finding conferences in almost all the cases he handles. He attempts to get the parties to settle their differences, and this, one presumes, is the "conciliation" referred to in the correspondence (see above). Is it the objective of human rights officers to act as the complainant's advocate in "the normal procedure of investigation and conciliation"? Is it their purpose to secure for complainants the most advantageous arrangement that can be had regardless of the rights and interests of respondents, and of others as well whose interests might be affected? Do human rights officers perceive the role of a conciliator as being to pursue the interests of one party at the expense of the other? Do they really attempt "conciliation," or have they come to regard complainants as though they were clients?

39While it may not be entirely germane to the question whether the settlement was breached, it does not seem inappropriate to observe that there would be something unseemly in the Human Rights Commisison of this province, through its officers and agents, seeking on behalf of complainants to obtain more from respondents than justice either demands or would countenance. Upon what principle can one rationalize the quest for more than full compensation by way of special and general damages and reinstatement?

40There is absolutely no doubt that, had Mr. Richard informed himself of the existence of the collective agreement and its terms and then sought to exempt the complainant from its application, there would have been no settlement of the first complaint. It was not within the company's power to grant such an exemption, and Mr. Beach testified that he would not have approached the union with such a request. Moreover, it is inconceivable to me that, with some forty of its members laid off (some of whom had seniority dating back to 1972), a union would agree to such a proposal.

41As will be seen presently, the arguments made by counsel for the Commission were not entirely consistent with Mr. Richard's assessment of the Memorandum of Agreement. If one rejects her argument that no extrinsic evidence of the parties' intentions may be used to interpret this particular agreement, then Mr. Richard's evidence is of considerable importance in construing that document. In any event, his evidence may be regarded as relevant to the respondent's submission that this second complaint is trivial, frivolous, vexatious or made in bad faith.

42For reasons that I will come to, I find the legal arguments advanced on behalf of the Commission so devoid of merit, that I have serious doubts as to whether the Commission, armed with a fair and unbiased investigative report and an appropriate legal opinion based thereon, would have persisted in pursuing this complaint. Thus, it would appear to me to have been Mr. Richard's intransigent insistance throughout this whole affair upon the position he asserted before me which persuaded the Commission to continue in its pursuit of this complaint. In fact, as the following exchange indicates, the respondents' counsel attempted to arrange to discuss with someone authorized to act as counsel to the Commission the legal implications upon which this matter largely turns (transcript, pp. 75–76.):

Q. I will come right to the point: is it true that I asked to be able to speak to the legal counsel with the Commission so that I could try to explain the application of seniority rights?

A. Yes.

Q. And what was the response to that request?

A. I don't honestly recall. The only part I do recall is that legal counsel had advised me to continue the process. It seemed to me that we were just going to continue into the fact-finding conference.

Q. Was the opportunity ever given to me, as Counsel for the Company, to speak to legal counsel for the Commission for that purpose?

A. Not that I am aware of. I don't know, Mr. Harnden. You may have spoken to legal counsel on your own: I don't know.

Q. But, so far as you are aware, that opportunity was not given.

A. No.

43This sensible approach, which might well have obviated this hearing, was not taken. Instead, the second complaint, drawn up by Mr. Richard, and containing allegations of dishonourable conduct that either were, or ought to have been, known to the complainant and Mr. Richard to be spurious was "investigated" by him. Although the allegations of other misconduct eventually were dropped, the allegation that there had been a breach of the settlement was not. It is to be presumed that, as the human rights officer appointed for the purpose, Mr. Richard made a report of his investigation of this particular allegation of the complaint as well. That investigation would appear to have required the gathering of information as to the intentions of the parties when they entered into the Agreement and, presumably, the report would indicate the investigator's findings in that regard. There was no evidence to suggest that Mr. Richard's report was rejected, or that it was of no significance in the Commission's decision to pursue that allegation.

44Mr. Richard negotiated the Agreement, investigated its alleged breach and made a report of his investigation on the strength of which, ultimately, it was decided to appoint a board of inquiry to hear and decide upon this complaint. Apparently, it did not occur to anyone in the Commission that there was a conflict of interest, and that Mr. Richard might be biased (as in my view he clearly was), or might be seen to be biased, since it was he who negotiated the settlement on behalf of the complainant and the Commission, and his signature appears on that document.

(C) HARDSHIP SUFFERED BY THE RESPONDENTS

45The impact that the pursuit of this complaint had upon the respondents was addressed by Mr. Beach. The following is taken from the transcript of his evidence during examination-in-chief (at pp. 111–112):

Mr. Beach: . . . when Mrs. Pham came back on staff [in March] we thought that was the end of the case, that it was finalized, and we thought that everybody should be really excited and happy about it. It came as a complete bombshell to us that another complaint had been launched, and we did not receive it, for whatever reason, for six months after she had come back into our employ. What was more frustrating was the fact that the complaint was dated way back shortly after she had come back on staff. So, it had been lost in the bowels of the Human Rights Commission for six months with no apparent action taken on it at all.

Q. Can you tell us about the effect that that complaint had had on you and, to the extent of your knowledge, on other officials of the Company?

A. Well, we don't have a whole lot of depth; we don't have much of a bureaucracy in our organization. We all work hard, and we all get there pretty early in the morning because we all do a pretty full day's work. So, we don't have specialists and experts that we can dump problems on right and left like the President of the United States, and say, "Don't bother me with the details." We all get involved in it. When something like this happens, we certainly all get involved in it. I can assure you, as I said earlier, I think that we are in a deficit position as far as pain and suffering is concerned. Just yesterday, Sunday afternoon, Chris Grant and I were in the office spending a couple of hours going over our file and the background of this thing; and this is the way it has been. Burt Attaway has almost had a nervous breakdown over his involvement in it; he has been so wrapped up and concerned about it. When something like this hits an organization such as ours, it is a pretty traumatic experience.

Application of Law

46In support of her conclusion that the complainant was entitled to resume her job in January of 1984 with full seniority, counsel for the Commission offered three arguments. Firstly, the Memorandum of Agreement clearly so provides, and no extrinsic evidence to the contrary may be admitted. Secondly, the interpretation advanced by the respondents leads to an absurdity and must therefore be rejected. Thirdly, the respondents are in any case estopped from relying on the loss-of-seniority clause in the collective agreement.

47Counsel for the Commission submitted that, in construing the Memorandum of Agreement, the intention of the parties must be gathered from the written document, and that the function of the board is to declare and apply what is written, not to discover what the parties might have intended to have written:

Any evidence that was led with respect to the intention of the parties prior to the signing of the Memorandum of Agreement on December 7, 1983, is totally irrelevant and should not be considered by this board in determining the proper interpretation to be given to the Agreement. The Agreement stands on its own. (Transcript of argument, pp. 9–10.)

48The argument then presented by counsel for the Commission begins with the assertion that "there is nothing in the Memorandum of Agreement to suggest that Ms. Pham was retroactively reinstated as an employee as of May 16, 1983." The argument continues in this way: "She [Ms. Pham] did not work in the plant from May 16, 1983 to July 16, 1983 . . . [and] there is nothing to suggest that she was deemed to be laid off on July 7, 1983." Having regard only to what is written in the Memorandum of Agreement, it is argued, the earliest date on which Ms. Pham could be considered to have been reinstated was December 7, 1983, the date the Agreement was signed. That is also the date on which she may be considered to have been laid off as well. Thus, the argument goes, the six months provided for in the collective agreement that came into effect on November 7, 1983, began to run for Ms. Pham on December 7, 1983, and not on the previous July 7th. It follows that her right to be recalled had not only not expired when she returned on March 20, 1984, but that she possessed that right on January 24, 1984, when the company began to take on more employees. She should have been recalled at that time. Not having done this, and having dealt with her as a new and probationary employee when she returned on March 20th, the respondents are, therefore, in breach of the terms of the settlement and in contravention of section 42 of the Code.

49The law relating to the interpretation, or construction, of contracts is clear, however difficult of application it may at times be. Assuming that this Memorandum is an instrument that can be properly characterized as a contract, the following passages, reproduced from Professor G. H. L. Fridman's book on The Law of Contracts (2d ed., 1986), set out the principles that govern its interpretation, and there is no need to repeat the various authorities that he cites in respect of these rather fundamental propositions (at pp. 433–436):

The fundamental rule is that if the language of the written contract is clear and unambiguous, then no extrinsic parol evidence may be admitted to alter, vary, or interpret in any way the words used in the writing . . . Parol extrinsic evidence may not be admitted where the effect of such evidence would be to contradict the written contract. It is otherwise where the purpose and result of allowing such evidence to be given would be to explain or interpret the true intentions of the parties, where such are not clear from the document.

It has been suggested that the parol evidence rule is intended to avoid injustice. Hence the existence of some exceptions to the rule: (a) to explain incomplete documents; (b) to prove that a condition precedent has been unfulfilled; and (c) to assist in ascertaining the intentions of the parties. In all those situations, the implication may be drawn, injustice would be perpetrated if the written document were accepted as the sole source of the contractual obligations of the parties.

Where the contract as written is ambiguous, extrinsic evidence can be admitted to resolve such ambiguity. But it must be an ambiguity that exists in the language as it stands, not one that is itself created by the evidence sought to be adduced.

[W]hile it is not possible to admit parol or other extrinsic evidence to alter the contract by adding to or subtracting from its terms as written, such evidence may nonetheless be introduced to explain, without contradicting, the language of the contract, for example, by showing the true nature of the transaction or legal relationship of the parties, or by adding a term where to do so is necessary to give effect to the obvious intention of the parties.

50Having regard to these propositions of law, it is readily apparent that the principal fallacy in the first argument advanced by counsel for the Commission is its underlying assumption that the Memorandum of Agreement is a complete, self-contained and unambiguous contract. In fact, the Agreement is neither complete nor self-contained, and it is certainly not unambiguous. It cannot be understood without reference to the external circumstances to which it relates. This seems so evident to me from the bare inspection of the document, that to assert otherwise is, or borders on, the "frivolous", having regard to the various meanings attributed to that word. (See, for instance, Black's Law Dictionary, Rev. 4th ed.)

51The Agreement begins with these words (which were not quoted earlier): "Memorandum of Agreement re: Pham, Lana M. and Beach Industries CASE NO: 400808". (Curiously, since the agreement does not purport to involve Mr. Beach, personally, the Commission's argument would appear to have the effect of rendering the complaint against him totally unfounded.) The document continues as follows: "Further to telephone conversations and correspondence from both the complainant, Ms. Pham and respondent representative, Mr. Lynn H. Harnden with human rights officer Richard, the following proposals are agreed to as a means of resolving the above-cited matter." The document ends with the words "The undersigned agree to the above as a satisfactory resolution of this complaint". Surely these references to external considerations are intended to serve some purpose.

52Counsel suggests that only paragraph 2 of the Agreement is in issue and we should restrict our examination of the document to that proposal alone. She says that it is clear and requires no external evidence in order to be understood. Both those assertions are plainly wrong. But, even if we look at this paragraph alone, we must ask, What is "full seniority"? The Agreement does not say. How are we to determine whether the provision has been complied with without leaving the Agreement in order to find out what that "full seniority" is and whether it was accorded? What was the complainant's "last date of hire"? The Agreement does not say. What are "all [the] rights pertaining to recall," and to what does the word "recall" relate? The instrument is silent.

53Counsel looks at paragraph 2 and says we cannot read into it that Ms. Pham is to be deemed to have been reinstated as of May 16, 1983, and laid off as of July 7, 1983. Those dates are not mentioned. But, because the Agreement is dated December 7, 1983, we are to read into that paragraph that she is to be deemed to have been reinstated on December 7, 1983, and laid off that same day!

54It is beyond question that paragraph 2 can only be given meaning in the light of the conversations and correspondence referred to in the Agreement's preamble, and in the context of the complaint to which it makes reference in its conclusion — and in respect of which complaint the Agreement is a compromise. Furthermore, one is not entitled to isolate one paragraph of a contract with the insistence that it be read free from external evidence (even if it could be so read) where that contract as a whole cannot be read without reference to such extrinsic evidence. In that regard, let us consider for a moment some of the other proposals in this Agreement.

55Paragraph 3 refers to the complainant's "position on the recall list." What "recall list"? What "position"? The Agreement does not tell us. We are driven outside the Agreement to find out. Obviously, the recall list must be the list existing at the time the agreement was signed. The only such list referred to in the evidence was the list of employees who were laid off on July 7, 1983. The complainant's "position" must be on that list. If the complainant has a position on a recall list of employees laid off on July 7, 1983, it must follow that she is deemed thereby to be amongst the employees laid off on that date.

56Paragraph 4 also refers to "recall practices" that are to be monitored. What "recall practices", pray tell? The Agreement sheds no light on this.

57There is further uncertainty and ambiguity in paragraph 1 as well. That proposal provides Ms. Pham with the sum of $1,750.00, intended expressly to represent "$940.80 in health benefits (rounded off to $1,000.00) and $750.00 for general damages." The reference to specific sums of money provided for specific purposes must have some meaning, otherwise the proposal ought simply to have read: "The respondent wishes to grant the complainant $1,750.00," full stop. The reference to "health benefits" is pointless and meaningless without resort to the conversations and correspondence referred to in the Agreement's preamble. Obviously the "health benefits" are related to a period of time the ascertainment of which requires us to look outside the document, as we can and must do. The sum of $940.80 is the sum that Ms. Pham would have received as an employee on sick leave from May 16 to July 7, 1983. It has no correspondence with anything else. It is expressly given as a sum separate and apart from the $750.00 expressly assigned for general damages, and it can only have been intended for actual or special damages: that is to say, a sum given in compensation for the actual loss following naturally from the alleged wrong. As already indicated in another context, the sum of money that Ms. Pham received in respect of health benefits could only have been calculated on the basis of three agreed-upon postulates: (1) her re-instatement as of May 16, 1983, (2) her inability to work from May 16 to July 7, 1983, owing to illness, and (3) her being laid off on July 7, 1983, thereby going off the payroll as of that date. If those postulates do not hold true, then the sum attributed to actual or special damages makes no sense.

58Counsel for the Commission stated that "the position taken by the respondent would lead to the absurd result that the Memorandum of Agreement would only be in effect for one month, that is, from December 7, 1983 to January 7, 1984." This alleged absurdity is another reason why the Agreement should be interpreted so as to treat the complainant's erstwhile seniority rights as though they had been unaffected by the loss-of-seniority clause in the collective agreement.

59(It may be noted parenthetically that, at this point, counsel's argument does coincide with Mr. Richard's assertions. He would not have settled had he believed that the seniority rights would have had only one month to run. That would have been absurd. Counsel for the Commission, in adopting that same view in respect of her second argument, reveals that Mr. Richard's stance throughout the entire affair has been of great significance in the decision to pursue the complaint.)

60It seems to me to be inaccurate and misleading to say that, if the respondents' interpretation is right, then the Agreement would only have been in effect for one month. In any event, that the seniority provision would have only one month to run is certainly not an absurd consequence.

61The payment of $1,750.00 was made pursuant to the Memorandum of Agreement. That is a significant benefit that ought not to be lost sight of. The fact that the company secured the union's consent to the complainant's reinstatement and to her being put on the seniority/recall list at all was a benefit, even if by the time the agreement was signed (as opposed to negotiated) it had but one month to run. But, of course, the Agreement was not thought up on December 6th and rushed into print on the 7th, in consequence of which the Commission and the complainant unwittingly signed something "good for only a month." Counsel's argument loses sight of the fact that negotiations commenced quite early in respect of this matter — in fact, early enough to have obviated any investigation of the complaint that was compromised. The Agreement signed on December 7th was but the written confirmation of terms that were worked out over a period of months. It looked back six months in order to rectify a past occurrence; it did not look ahead with a view to providing windfall benefits. Had it been possible to have resolved all the issues and to have signed an Agreement earlier, the seniority clause would have had longer to run from the date of that Agreement. It would not then have been seen as "good for only a month." But it would still have expired on January 7, 1984! It was the delay in reaching an agreement that foreshortened the period between the signing of the Agreement and the expiration date for the seniority rights in question. But the character of the benefit sought and conferred did not change at all from the time the negotiations commenced until the signing of the Agreement. The Commission's argument seems to suggest that the longer the delay in reaching an agreement, the more advantages it would be entitled to seek on behalf of Ms. Pham. Clearly, the Agreement was intended to remedy the situation that came into existence on May 16, 1983, and the terms that were being negotiated to that end could not have been meant to be chimerical, changing with the passing days and the expanding expectations of the complainant and Mr. Richard.

62The unarticulated premises from which, logically, must be drawn counsel's assertion that the respondents' interpretation is absurd and to be rejected would cast a lamentable reflection on our system of human rights, if those premises were espoused by the Commission — as I am sure is not in fact the case. The major premise is the proposition that the Commission's agent, Mr. Richard, would not have agreed to a settlement that did not, in addition to giving the complainant full compensation by way of special and general damages, place her in a far better position than she would have been in had the alleged wrong not occurred. The thrust of counsel's argument on this point is that it is absurd to interpret the Agreement as providing everything that fairness to everyone could possibly require because, ex hypothesi, the Commission would have wanted more. The suggestion is that it would be absurd to expect that the Commission and the complainant would have agreed to a settlement based on the equitable principle of full reinstatement and full compensation. We are to conclude that it is so obvious that they would have wanted more than a fair and equitable settlement that it would be absurd to suppose otherwise and, therefore, the Agreement ought not to be given an interpretation that would lead to that absurd result. That argument is not only wrong; its implications are outrageous!

63While I hasten to acknowledge that, undoubtedly, "the Commission" would disassociate itself from these suggestions when expressed so plainly, these were in fact the views indicated by the Commission's officer to have inspired his negotiation of the settlement, and these are the inarticulate and inescapable premises upon which rests one of the legal arguments urged on its behalf.

64Of course, counsel for the Commission is correct in this respect: a document ought not to be interpreted so as to produce an absurd result if it is capable of being construed otherwise. That being so, let us consider the possible absurdities flowing from the Commission's interpretation of the Agreement. If the principal argument made by counsel for the Commission is accepted, the complainant is to be considered to have been reinstated on December 7, 1983, and she is also to be considered to have been laid off that same day, December 7th. Leaving aside the undoubted oddity of such an arrangement, what then would be the effective date of her reinstatement? There would seem to be only two possible dates: either her reinstatement was retroactive to May 16, 1983, or else she was reinstated both on and as of December 7, 1983. Assuming it to have been the former, would it not follow that the complainant should have received by way of special damages an additional sum for the five months that (ex hypothesi) she would have been entitled to work between the day she got well (July 7th) and the lay-off date of December 7, 1983? Given the zeal with which this complainant's interests seem to have been pursued, if what counsel now asserts had been the intention, how is it that no claim has ever been made on her behalf to such a sum of money?

65If, however, we assume that her reinstatement was not meant to be retroactive, Ms. Pham could not be considered to have been in the employ of the company, actually or constructively, between May 16th and December 7, 1983, including the period from May 16th to July 7th for which the respondents assumed they had provided health benefits. Rather, it would follow, she was in the company's employment (however fleetingly) on, and only on, December 7, 1983. The hypothesis is that she was reinstated both on and as of December 7th, and then laid off that same day. But she is not deemed to have gone to work that day. She is deemed to have been ill. That is why she got health benefits. She was not entitled to a full day's regular salary, of course, but only to 60 percent of a day's salary, that is to say, $940.80 rounded up to $1,000.00! Otherwise, she might have claimed over $1,500.000 for that day's work.

66If the Agreement is to be interpreted so as to avoid absurdity, in my view it can only be interpreted in the manner suggested by the respondents.

67Finally, it was argued on behalf of the Commission that the respondents should be estopped from relying on the terms of the collective agreement in their defence of this complaint. After providing a number of references to estoppel, and to equitable estoppel, in the context of labour relations, counsel said this (transcript of argument, p. 14):

It is our submission that, in this case, there was a representation by way of Memorandum of Agreement; that it was intended to be relied upon and in fact was relied upon by the complainant, and she has suffered detriment as a result therefrom.

68If the main argument of counsel for the Commission is correct, then there is no need or room for the application of any doctrine of estoppel (equitable, or otherwise). If that argument is wrong, then it follows that there was no provision of the Agreement that was held out as some sort of promise that the complainant would have greater seniority rights than she was legally entitled to. Without such a holding out the doctrine of estoppel cannot apply.

69Although her argument as to the absurdity of the respondents' interpretation of the Agreement coincided with Mr. Richard's basic position, counsel for the Commission did not adopt his position in order to argue that the respondent should be estopped from relying on the collective agreement because of their conduct prior to the signing of the settlement. Had that argument been made, I would have rejected it categorically. The respondents did not conceal the existence of the collective agreement, much less hold out anything inconsistent with any of its provisions, and the ignorance of the Commission's officer and the complainant cannot be visited upon the respondents, even assuming that they would have held out for an unjustifiable advantage the loss of which they might now seek to characterize as the suffering of a detriment.

70For these reasons, I have concluded that this complaint is without foundation and must be dismissed. It now remains to deal with the respondents' submission as to costs.

The Matter of Costs

71The jurisdiction of a board of inquiry under the Code to award costs to a respondent is provided for in section 40(6), and some of the grounds upon which that jurisdiction may be exercised are such as to enable the Commission to exercise its discretion under section 33 of the Code to decide, prior to the appointment of a board, to not deal with the complaint. These provisions read as follows:

33. (1) Where it appears to the Commission that,

(b) the subject-matter of the complaint is trivial, frivolous, vexatious or made in bad faith;

the Commission may, in its discretion, decide to not deal with the complaint.

(2) Where the Commission decides to not deal with a complaint, it shall advise the complainant in writing of the decision and the reasons therefor and of the procedure under section 36 for having the decision reconsidered. 1981, c. 53, s. 33.

40.(6) Where, upon dismissing a complaint, the board of inquiry finds that,

(a) the complaint was trivial, frivolous, vexatious or made in bad faith; or

(b) in the particular circumstances undue hardship was caused to the person complained against,

the board of inquiry may order the Commission to pay to the person complained against such costs as are fixed by the board.

72It was submitted by counsel for the respondents that "the record gives support for the proposition that this report was brought forward in bad faith, and perhaps it might be characterized as vexatious." (See p. 32)

73Although Ms. Pham drew the attention of Mr. Richard to only one warning, the complaint itself refers to warnings, reprimands, reprisals and harassment. "We are advised today, several years later, that no, no, there is no evidence to support that there was such reprisal." (p. 32) The complainant testified that all she wanted (with respect to seniority) was to be put in the same position as she had been in. "We hear today that the Commission, seeking more, is forcing this employer to explain why it did not give more, why it did not give additional, super seniority rights to the complainant when, in fact, that wasn't even what she was attempting to gain in the complaint." (p. 33) Counsel for the respondent sought to speak with counsel for the Commission "to try to explain the operation of a seniority clause and how, because of the loss of seniority, there was not a breach of the Memorandum of Agreement." (p. 33) That opportunity was not given. "This employer has gone to great lengths to try to clear up the misunderstanding that existed. Nevertheless, he has been forced to come here before you to explain the matter further." (p. 33)

74In support of his argument that the respondents suffered "undue hardship," counsel submitted that "that has to be considered in the context of the fact that the respondent may be an employer . . . like Beach Industries Ltd . . . with limited managerial resources who may be tied up in a matter of this nature for an extended period of time, whose officials may be upset by the allegations that they have breached an agreement that they entered into in good faith." (pp. 33–34)

75In reply to the respondents' submissions in respect of this issue, counsel for the Commission argued as follows (p. 37 ff.):

We are dealing here with the interpretation of a document, an agreement. The only reason we are here is that there were conflicting interpretations of an agreement. We are not sitting here with a regular or usual human rights complaint where there are all kinds of allegations with respect to one or two different types of discrimination, where we have evidence going on for days and days about allegations, that could be frivolous or vexatious.

We are simply dealing here with a document that was signed among the parties, and with the proper interpretation of that document.

Obviously, there are different interpretations given to the document by the Commission, the Complainant and the Respondents, and that particular circumstance can arise with respect to any contract or Memorandum of Agreement between parties.

The fact that the parties themselves cannot resolve the issue as to the proper interpretation of the document should not be a reason to award costs under that section of the Code.

That section is a new section that is not found in the old Code. But uf you look at the words in that section with respect to "trivial", "frivolous", "vexatious", "bad faith", "undue hardship", in my submission, there has been absolutely no evidence today to show that the Complaint was filed in bad faith, or was frivolous or vexatious. And, with respect to "undue hardship", it is my submission that there is no evidence showing that there was undue hardship on the Company . . .

No company is going to open its doors to the Ontario Human Rights Commission to come in to investigate a complaint. No company wants to receive a complaint from the Ontario Human Rights Commission.

But the Code is the law of Ontario, and if a complaint is filed, the Commission has the obligation to accept the complaint and investigate it. And that is exactly what was done in this particular case.

So, if we are talking about hardship, there is hardship on any Respondent when a complaint has been filed. But the Code talks about "undue hardship", and in my submission there has been no evidence that the hardship was undue, in this particular case . . .

Again, referring to the matter of costs for one month: my friend referred to the fact that the reprisal paragraphs were not dealt with in this particular hearing. I wish to refer back to the evidence given by Ms. Pham that, at the time that the negotiations were going on between her lawyer at the time, Mr. Howard, and the Respondent, her evidence was that there was some reprisal, but after these negotiations commenced, the reprisal discontinued. Accordingly, the Respondents were advised in July of 1985 by Mr. Howard of the fact that the reprisal issues were not going to be put forward at that particular time.

So, it was no big surprise today to the Respondents to learn that, in fact, we were not going to be dealing with the reprisal sections of the complaint.

76Neither counsel for the respondent, nor for the Commission, referred to any authorities with respect to the meanings of the words "trivial, frivolous, vexatious, or made in bad faith," or causing "undue hardship." Very little authority is to be found in this regard in the context of sections 33 and 40(6) of the Code. Indeed, of the few cases to be found, most deal with whether the complainant should be awarded costs in addition to damages. In general litigation these terms are used primarily in relation to pleadings, as the definitions found in standard law dictionaries show. The following definitions, taken from Black's Law Dictionary, are typical:

FRIVOLOUS An answer is "frivolous" where it appears from bare inspection to be lacking in legal sufficiency, and, where in any view of the facts pleaded, it does not present a defense. Any pleading is called "frivolous" when it is clearly insufficient on its face, and does not controvert the material points of the opposite pleading, and is presumably interposed for mere purposes of delay or to embarrass the opponent.

"Frivolous pleas" are those which are so clearly and palpably bad as to require no argument to convince the court thereof, and which would be pronounced by the court indicative of bad faith in the pleader on a mere inspection.

A frivolous demurrer has been defined to be one which is so clearly untenable, or its insufficiency so manifest upon a bare inspection of the pleadings, that its character may be determined without argument or research.

A "frivolous appeal" is one presenting no justiciable question and so readily recognizable as devoid of merit on face of record that there is little prospect that it can ever succeed.

A sham plea is good on its face, but false in fact; it may, to all appearances, constitute a perfect defense, but is a pretense because false and because not pleaded in good faith. A frivolous plea may be perfectly true in its allegations, but yet is liable to be stricken out because totally insufficient in substance.

TRIVIAL Trifling; inconsiderable; of small worth or importance. In equity, a demurrer will lie to a bill on the ground of the triviality of the matter in dispute, as being below the dignity of the court.

VEXATIOUS Without reasonable or probable cause or excuse.

77In Cousens v. Canadian Nurses Association (1981), 1981 CanLII 4331 (ON HRT), 2 C.H.R.R. D/365, Professor E. J. Ratushny (at D/365) concluded that "the written complaint is not, therefore, in the nature of an information or indictment in a criminal case. Rather, it serves as a general notice to a party in an administrative hearing". The complaint is made in a form approved by the Commission, and it is subject to not being dealt with by the Commission. Thus, it would not appear to be some sort of pleading, and definitions and explanations that relate primarily to pleadings are not entirely apt.

78It is to be observed, as well, that, whereas in section 33 of the Code, those words are predicated on the "subject-matter" of the complaint, in section 40(6) they are used in reference to the complaint inself. In my view, if the subject-matter of the complaint is trivial, frivolous, vexatious or put forward in bad faith, then the complaint is itself so tainted.

79In support of her submission that this is "the least likely case for costs to be awarded," counsel for the Commission focussed exclusively on the allegation that was not withdrawn. The issue at the hearing was solely the construction of an agreement, and the assertion of a particular interpretation of an agreement, counsel appears to be suggesting, is not susceptible of characterization as being trivial, frivolous, vexatious or made in bad faith. Beside, the Commission has no choice but to proceed with complaints — at least that is the inference it seems intended be drawn from the statement that "the Code is the law of Ontario, and if a complaint is filed, the Commission has the obligation to accept the complaint and investigate it."

80That argument assumes that, in deliberating upon the matter of awarding costs, a board is restricted to a consideration of the allegations that remain in the complaint after it has been amended at the start of the hearing. In my opinion, that assumption is wrong; but even if it were right, it is not clear that the circumstances of this case would not bring it within the scope of section 40(6) of the Code. It should be noted as well that the Commission does have an obligation to assess complaints when they are made, during the course of investigating them, and as the result of that investigation, in order to determine whether there are grounds for the exercise of discretion under section 33 of the Code to "decide to not deal with the complaint." Amongst the grounds upon which its discretion rests will be found the grounds upon which a board's discretion to award costs to the respondent also rests. (See above.)

81The Commission's interpretation of the Agreement was in large measure (if not entirely) based on the biased report of an improperly appointed investigating officer. The "conciliation" process did not involve the meeting of counsel for both sides as requested by the respondents in order to discuss the legal implications of the Agreement. It is virtually self-evident that the Agreement could only be interpreted in the light of extrinsic evidence. There is no reason to suppose that the evidence that emerged at this hearing relating to the parties intentions would not have been uncovered by an unbiased and competent investigator and formed part of his report. Had a meeting of counsel been arranged so that the legal implications of the Agreement in light of that extrinsic evidence could have been discussed, it is difficult to see how a decision could have been taken to continue with the allegation that the terms of the settlement had been breached.

82The complaint that was sent to the respondents on September 6, 1984, as a formal notice of a process of investigation, conciliation and possible adjudication under the Code contained a series of allegations. These allegations were not of a trivial character, nor could one conclude simply by examining that document that the allegations were frivolous or vexatious. However, if the complaint contained allegations that were known to the complainant or the Commission to be false, then that complaint would certainly seem to have been made in bad faith.

83The evidence adduced by counsel for the respondents established that the allegations of harassment and reprisals were false, that the complainant knew that to be the case, and that the Commission's investigating officer must have known that as well, since the complainant did not tell him that there had been warnings and reprimands other than the one innocuous (and merited) warning over the breaking of equipment. It should be noted that this evidence came out in cross-examination of the complainant, who was the Commission's only witness. When counsel for the Commission queried the relevance of this line of questioning, since these allegations were no longer being pursued, counsel for the respondents explained exactly what its purpose was. Counsel for the Commission did not question either the complainant, on re-examination, or the Commission's investigating officer on cross-examination, in order to refute, clarify or qualify that evidence.

84It may be noted that, contrary to the assertion made by counsel for the Commission, the evidence of Ms. Pham was not that there was some reprisal that discontinued after these "negotiations commenced", unless the one warning is that reprisal. Having withdrawn these allegations unconditionally at the commencement of the hearing, the insinuation in the course of argument that they were well-founded, but withdrawn for reasons about which we are left to speculate, seems improper.

85I do not think that I am entitled to ignore the clear thrust of the evidence relating to bad faith upon which counsel for the respondents has based his submission for an award of costs simply because of my retrospective speculation that these false allegations might have found their way into the complaint through confusion. That explanation did not occur to counsel for the Commission, who could have pursued it and other relevant lines of questioning in examining the witnesses. The respondents are not called upon to prove beyond a reasonable doubt that there was bad faith, and I find that these allegations, which were the principal allegations in the minds of the parties when the complaint was received by the respondents, were made in bad faith.

86I must say that, had the evidence supported the conclusion that the false allegations were the result of confusion, I would have inferred that Mr. Richard's questioning of the complainant must have been incompetent and irresponsible; but I would not then have found them to have been made in bad faith. Since the evidence does not lead to that conclusion, however, I am satisfied, on a balance of probabilities, that these false allegations were made in bad faith.

87It is to be noted that counsel for the Commission did not argue that there was no element of bad faith involved in the making of the false allegations of harassment and reprisals. Rather, her argument was, first, to insinuate that the allegations were not false (which I consider to have been rather inappropriate), and then to say that it does not matter anyway. It had become apparent in July of 1985 that these allegations were not going to be pressed and she says that the complaint (which was not formally amended until the hearing began) stands free from those allegations and cannot be said to have been made in bad faith. Moreover, it is argued, the respondents were not surprised by not having to deal with those allegations at the hearing.

88When the complaint was delivered to the respondents, it contained separate allegations asserting breaches of two distinct provisions of the Code, one of the assertions having been made in bad faith. It may be that the other assertion is not thereby to be struck down, and that the Commission and the complainant are entitled to continue to pursue the complaint in order to have that other allegation disposed of. But that does not mean that the complaint was not made in bad faith. Suppose, for instance, that the false allegations had not been withdrawn, but that they were found as a fact to have been false and made in bad faith. Would it follow that the respondents were disentitled to costs because the other allegation was not made in bad faith? I think not.

89Although the words "a complaint" and "the complaint" are used throughout the Act, they are not defined. Counsel offered no opinions in that regard. However, section 31 of the Code says that a person who believes that his or her right has been infringed "may file with the Commission a complaint in a form approved by the Commission." Section 31 is the first section in Part IV, in which Part section 40 also appears. It is clear that, at least apart from section 40(6), the word "complaint" as used throughout this Part refers to a complaint filed in a form approved by the Commission, and not to each of the specific allegations that such a complaint may contain. I should think that the word "complaint" could be given a different meaning in section 40(6) only if some other meaning were clearly necessary.

90There is only one argument that occurs to me that might have been made on behalf of the Commission as to a different meaning to be given the word "complaint" in section 40(6). The authority under section 40(6) to award costs arises only "upon dismissing a complaint." The allegation that section 7 of the Code had been breached having been withdrawn, that which I have dismissed is simply the allegation that there had been a breach of section 42 of the Code. The words "the complaint" in clause (a) of section 40(6) refer to the complaint that was dismissed, namely that section 42 was breached. Unless "the complaint that section 42 was breached" was trivial, frivolous, vexatious or made in bad faith, then I have not dismissed "a complaint" that was so tainted, and I have no jurisdiction under section 40(6) to award costs.

91Had such an argument been made, I would not have been persuaded by it. The authority under section 40(6) is discretionary. The argument that I have outlined would result in that authority arising only in cases where it would be manifestly unjust not to exercise it. Unless a discretion may be exercised capriciously or unjustly, there would not really be any discretion under this provision, since costs would have to be awarded in every case in which the jurisdiction to do so arises. I believe the jurisdiction under the section to award costs exists precisely to enable a board of inquiry to take into account all of the circumstances relating to a "complaint filed in an approved form" that was "trivial, frivolous, vexatious or made in bad faith," including such circumstances as the withdrawal from the "complaint filed in an approved form" of allegations that were so tainted. The circumstances of withdrawal may or may not be such as to persuade the board to deny costs.

92I feel bolstered in this view by the words of the preamble of the Code which indicate that the aim of public policy in Ontario is "the creation of a climate of understanding and mutual respect for the dignity and worth of each person" including, one supposes, respondents against whom harmful allegations have been made in bad faith. This point was addressed by counsel for the respondents in these words:

I submit that there has to be some balance achieved between the rights of complainants under the Code and the rights that are given to respondents.

The Human Rights Commission has extensive public resources to bring these complaints forward, where they have properly done so. The only way to have any balance is through application of section 40(6), so that at least the monetary costs suffered by the respondent are repaid.

93While I am satisfied that I have the authority under section 40(6)(a) to award costs, that authority is discretionary and its exercise depends on all the circumstances of the particular case. In that regard, the early withdrawal of allegations inserted in bad faith into a complaint would be a matter of considerable relevance. Were they withdrawn before causing any significant harm? Complaints under the Code are purposely publicized, and it may be relevant to inquire as to the extent that such allegations were circulated in the community, and whether the withdrawal was similarly publicized.

94To suggest, as counsel for the Commission seems to do, that there is no real harm in making false allegations, provided they are withdrawn by, or at, the start of the hearing, appears specious. These allegations of shameful conduct were not revealed to the respondents until months after they had been made. The respondents were then left agonizing and fretting over them for nearly a year. After this protracted period of embarrassment, they were then "dropped" at a private meeting. But they were left on the public record until the very day of the hearing. Did the Commission pursue its policy of publicity so as to bring to the attention of the community in July 1985 that these charges had been dropped? Apparently not. The Commission did not rescind the complaint filed in the approved form, dated May 16, 1984, and numbered 400931, substituting for it a different complaint in the approved form and containing only the allegation of a breach of the settlement. It did not even do anything to alter that form until counsel spoke to the matter at the start of the hearing. The complaint that I was appointed to hear and decide contained the false allegations.

95I find cavalier the suggestion that these respondents have nothing to complain about concerning these false accusations knowingly made and publicized simply because they were dropped privately months later and then withdrawn publicly without explanation at the start of this hearing, with some insinuation in argument, but not in evidence, that there might be something to them after all. What damage to the respondents' reputations may have occurred, and whether that damage can ever be fully eradicated is a matter of speculation. But the injuries to the sensibilities of the respondent, Mr. Beach, and to those of the supervisory staff who were implicated, might be as severe as the injury to this complainant's dignity for which she received general damages by way of settlement. While the provision of an award of costs is not an award of damages in respect of injuries caused through the pursuit of a complaint, and while many exonerated respondents may well suffer similar injuries for which they may recover nothing, the fact of injury caused by false allegations made in bad faith is surely relevant in determining whether to exercise the discretion in question.

96Another factor that appears to be relevant to a decision to exercise the discretion given by section 40(6) is the manner in which the Commission is found to have discharged its responsibilities. In that regard, the situation before me appears to be the reverse of that with which the board was faced in Hyman v. Southam Murray Printing (1984), 1984 CanLII 5039 (ON HRT), 5 C.H.R.R. D/2254, (J. D. McCamus). In deciding not to award costs the Board in that case said (at D/2267–8):

As far as the Commission's role in proceeding with these complaints is concerned, there has been no evidence before this Board of Inquiry concerning the manner in which the Commission discharged its responsibility to investigate these complaints. I am reluctant to conclude, therefore, that the Commission discharged its responsibilities in an unsatisfactory manner.

In the absence of evidence that the complainant has brought forward a complaint in bad faith or frivolously and in the absence of evidence that the Commission has discharged its mandate irresponsibly, it is my view that it would be inappropriate to make an award of costs. I draw some support for this view from the nature of the discretion to impose costs conferred in the amendments to the Code first enacted in 1981 which are, however, inapplicable to these proceedings [which were brought under the old Code].

97The respondents argued as well that they had suffered "undue hardship", suggesting alternatively that an order for costs might be made pursuant to paragraph (b) of section 40(6) of the Code.

98I would agree with counsel for the Commission that, for the purpose of section 40(6)(b) of the Code, hardship caused to the person complained against is not "undue" simply because the complaint is dismissed. Otherwise, the discretion would arise in every case where the complaint is dismissed, and that is clearly contrary to the intention of the provision. However, hardship suffered through the making of false allegations in bad faith would appear to me to be undue. Such hardship occurred here. Thus, even if I am wrong in finding that I have jurisdiction under paragraph (a) of the provision to award costs to the respondents, I am satisfied that I have the requisite jurisdiction under paragraph (b). "The particular circumstances" to which I must have regard include the finding of bad faith and the irresponsible way in which the Commission through its officers and agents discharged its mandate in respect of this matter. Consequently, I find that "in the particular circumstances undue hardship was caused to the person complained against," namely Beach Industries Ltd. and its President Mr. Russell Beach. Having regard (inter alia) to the difference in wording between subsections (1) and (6) of section 40 of the Code, "that hardship is not compensable by an award in the nature of damages, as respondents' counsel suggested, the authority of the board of inquiry being restricted to the making of an order as to costs as are fixed by it.

Conclusion

99For all of the foregoing reasons it is my decision to dismiss the complaint in this matter and to order the Commission to pay to the respondents their costs. It is the intention of this order that the respondents recover from the Commission all of their actual solicitor's costs, as if costs were awarded on a solicitor and client basis in the Supreme Court of Ontario, such costs to include reasonable travel expenses (if any) of the respondents, their witnesses and their counsel. If the parties are unable to agree as to the amount so ordered, they should make brief written submissions to me as to those items upon which they cannot agree.