HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Joseph Modi
Complainant
-and-
Ontario Human Rights Commission
Commission
-and-
Paradise Fine Foods Ltd.
Sayed Ben Aycha, Muhamad Omarbach
Respondents
DECISION on application for costs
Adjudicator: David Mullan
Indexed as: Modi v. Paradise Fine Foods Ltd.
Human Rights Tribunal of Ontario
400 University Avenue, 7th Floor
Toronto ON M7A 1T7
Phone (416) 314-0004 Fax (416) 314-8743 Toll free 1-800-668-3946
TTY (416) 314-2379 / 1-800-424-1168
E-mail hrto.registrar@jus.gov.on.ca
Website www.hrto.ca
APPEARANCES
Ontario Human Rights Commission ) Anthony Griffin, Counsel
Muhamad Omarbach, Personal Respondent ) Louis Mostyn, Counsel
INTRODUCTION
1Muhamad Omarbach, a Respondent in his personal capacity to the hearing of a Complaint of discrimination contrary to the Ontario Human Rights Code, R.S.O. 1990, c. H.19 (“Code”), made an application to the Human Rights Tribunal of Ontario (“Tribunal”) under section 41(4) of the Code for costs.
DECISION
2The application is granted. The Tribunal awards costs against the Ontario Human Rights Commission (“Commission”) and in favour of the Respondent in the amount of $8000.
PROCEEDINGS
3On March 21, 2007, I made a decision (2007 HRTO 12) on a Complaint brought by the Commission and Joseph Modi alleging various forms of discrimination against two Personal Respondents, Sayed Ben Aycha and Muhamad Omarbach, and a Corporate Respondent, Paradise Fine Foods Ltd. I upheld the complaint against Sayed Ben Aycha and the Corporate Respondent but dismissed the complaint against Muhamad Omarbach.
4This prompted Counsel for Mr. Omarbach, who had acted for all parties at the hearing, to make an application for costs under section 41(4) of the Code. It provides:
(4) Where, upon dismissing a complaint, the Tribunal 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 Tribunal may order the Commission to pay to the person complained against such costs as are fixed by the Tribunal.
5The Commission moved to dismiss this application on the basis that the Tribunal could award costs under section 41(4) only where the Tribunal had dismissed a complaint of discrimination in its totality against all Respondents. I rejected that motion (2007 HRTO 15), holding that the Tribunal had jurisdiction to make an award of costs in favour of a successful Respondent even where there had been findings of discrimination against other Respondents. I then directed that the application under section 41(4) be heard on the merits. That hearing took place on August 16, 2007.
FACTS PERTINENT TO APPLICATION FOR COSTS
6Joseph Modi, the Complainant, alleged that the Respondents infringed his right under sections 1 and 9 of the Code to equal treatment with respect to services, goods, and facilities without discrimination because of ethnic origin, place of origin, and creed. The Complaint arose out of events that occurred in a food store and restaurant at 240-242 Parliament Street, Toronto, on January 27, 1999. The Corporate Respondent owned the store. Muhamad Omarbach was the director of the Corporate Respondent and involved in the day-to-day operations of the business. The other Personal Respondent, Sayed Ben Aycha, was employed as a butcher in the store.
7The Complainant claimed that when he went to the store, Paradise Fine Foods, on January 27, 1999 to purchase meat, Sayed Ben Aycha both insulted and assaulted him and another customer because of their ethnic origin, place of origin, and creed. He also claimed that Muhamad Omarbach became a party to the events and joined in the assault on him, and that, in any event, Muhamad Omarbach, as the director and owner of the Corporate Respondent and the operator of the business, was liable for the existence of a poisoned environment and the discriminatory acts of Sayed Ben Aycha and other unnamed employees who also joined in the alleged attack on the Complainant and the other customer. Finally, the Complainant sought to hold the Corporate Respondent liable for discrimination on the basis of section 45 of the Code deeming the actions of employees in the course of their employment to be those of the employing corporation.
8At the conclusion of the hearing, while sustaining the Complaint against Sayed Ben Aycha and the Corporate Respondent and making an order for damages against them in favour of the Complainant, I dismissed the claims against Muhamad Omarbach. I held that the Commission had not established by reference to the standard of a balance of probabilities that Mr. Omarbach was present in the store during the events that gave rise to the complaint. In so doing, I preferred Mr. Omarbach’s account that he was not working at the store on the day in question (an account supported by other witnesses for the Respondents) to the testimony of Mr. Modi and Simon Ayumé that Mr. Omarbach was present and a participant in the assault. I also found that the Commission had neither pleaded any facts nor led any evidence to support the contention that there was a poisoned environment in the store for which Mr. Omarbach was personally responsible.
9Given that the Commission did nothing beyond asserting in its pleadings that there was a poisoned environment in the store for which Mr. Omarbach was personally responsible, little or no time was spent at the hearing dealing with this issue, though counsel for Mr. Omarbach did interview, brief and provide will-says for witnesses who were available to provide evidence as to the atmosphere that existed at Paradise Fine Foods. Nonetheless, as far as the application for costs was concerned, this was a relatively minor component. Much more significant were the time and costs spent both prior to and at the hearing dealing with the contention that Mr. Omarbach was both present and a party to the assault on Mr. Modi.
10It was only after a full hearing on that issue that I dismissed that aspect of the Complaint against Mr. Omarbach and then on the basis of findings of credibility founded on the relevant standard of proof. As will be seen below, costs are almost invariably unavailable under section 41(4) when the bases for the dismissal of a Complaint are findings of credibility. As a consequence, Counsel for Mr. Omarbach recognized that he needed to identify additional facts or special circumstances that would take this application outside the normal rules. He purported to find those facts and special circumstances in the history of the proceedings against Mr. Omarbach, and principally the Commission’s investigation of the Complaint and the way in which then Counsel for the Commission proceeded following an unsuccessful mediation of the Complaint conducted by a Member of the Tribunal.
11The “evidence” on which Mr. Mostyn relied in advancing the claim for costs consisted of certain findings in the main Decision, Commission documents pertinent to its investigation of the Complaint, and his own statements as to the actions of the Commission in the wake of the abortive Tribunal mediation of the Complaint. There was no viva voce testimony or formal introduction of written evidence. Nonetheless, Counsel for the Commission was content to allow the application to proceed on this basis and, though placing a different interpretation on at least some of the matters relied upon by Mr. Mostyn, conceded the basic facts as presented. While this did not produce anything like a full record of the course of the Commission’s investigations and the steps that were taken in the wake of the abortive mediation, I too was prepared to deal with the application on what essentially became an agreed statement of facts. It avoided what could have become a lengthy evidential hearing.
12In the course of the investigation, both Mr. Modi and his principal witness, Mr. Ayumé provided investigators with information to the effect that after Mr. Ben Aycha’s initial assault on Mr. Modi, other store personnel joined in. Neither identified any of those personnel by name and, apart from the cashier, by position. It was also apparent from notes of an interview with Mr. Modi conducted on June 26, 2002, some three years after the event, that Mr. Modi knew Mr. Omarbach both by name and by appearance. However, in none of the investigation documents did he make the claim that Mr. Omarbach was present at the events. The sole reference is to Mr. Omarbach as the owner of the store who at one point offered him a position. Subsequently, on September 9, 2003, the Amended Section 36 Case Analysis Report recommended that the Commission not proceed against Mr. Omarbach as a Personal Respondent because there was no evidence that he was present in the store that day.
13After the Commission referred the Complaint to the Tribunal, the parties agreed to mediation. That mediation took place on November 25, 2004. However, it was unsuccessful. Mr. Modi and Mr. Omarbach were both present and, at some point during the day, Mr. Modi identified Mr. Omarbach to then Counsel to the Commission as someone who had been present at the store during the events giving rise to the Complaint and as having participated in the assault against him.
14Subsequently, a Student-at-Law at the Commission informed Counsel for Mr. Omarbach that the Commission would be adding Mr. Omarbach as a Respondent in his personal capacity. The justification for this step was that it was only at the mediation that Mr. Modi had been able put a name to Mr. Omarbach as one of those who allegedly had attacked him at the store, an explanation that is at odds with what Mr. Modi had told the Commission’s investigator in June 2002. Despite Mr. Mostyn’s protests and reiteration of the Respondents’ pleading to the effect that Mr. Omarbach had not been in the store that day and, apparently without further inquiry, the Commission amended its pleadings to assert that Mr. Omarbach was one of the personnel who had attacked Mr. Modi. Up to that point, Mr. Omarbach had been named as a Respondent in his capacity as employer and owner of Paradise Fine Foods Ltd. and as responsible for a poisoned environment in the store.
ANALYSIS
Governing Principles
15An award of costs against the Commission under section 41(4) is the exception, not the rule: Ontario Human Rights Commission v. Dofasco Inc., 2004 HRTO 17, at para. 6 (“Dofasco”). The Applicant bears the burden of establishing that the claim crosses the threshold established by either subclause 41(4)(a) or (b) of the Code. Even after either of those thresholds is crossed, the award of costs is still a matter of discretion. The Tribunal should take into account the conduct of the Commission, the conduct of the Respondent, and the nature of the issues raised by the Complaint: Ontario Human Rights Commission v. Transpharm Canada Inc., 2003 HRTO 3, at paras. 7 and 11 (“Transpharm”).
16The Tribunal (and its predecessor, the Board of Inquiry) has consistently accepted that, in cases that hinge on credibility, costs should be rarely available: Transpharm, supra, at para. 11, citing Abouchar v. Toronto (Metro) School Board (No. 5) (1999), 1999 CanLII 35168 (ON HRT), 35 C.H.R.R. D/185, at para. 9, and Bryan v. PMI Food Equipment (No. 3) (1999), CHRR Doc. 99-167 (Ont. Bd. Inq.), at para. 13. The principal reason for this is set out in Bryan, ibid.:
The task of the Commission is not to reach conclusions about credibility during the investigation stage. In my view, the Board is best qualified to make that assessment on the basis of the evidence of all the witnesses given under oath and subject to the scrutiny of cross-examination.
17Nonetheless, the Commission has a duty to conduct a responsible investigation, to assess the strength of the case in the light of that investigation, and not to proceed in the absence of “any reasonable ground upon which the case can be maintained”: Way v. Ontario Human Rights Commission, [2003] O.J. No. 599 (Ont. S.C.J. Div. Ct.) (Q.L.) (“Way”) (See also Dofasco, supra, at paras. 24-27; Grace v. 149468 Canada Inc. (c.o.b. as Mercedes Homes Inc.), [1996] O.H.R.B.I.D. No. 5, at paras. 53-60). While the situation changes to a certain extent when the Commission is in “litigation mode” having referred a complaint to the Tribunal, nonetheless, there are continuing duties to act responsibly: Potocnik v. Thunder Bay (City), [1997] OH.R.B.I.D. No. 18, at paras. 59-61 (“Potocnik”); Dofasco, supra, at para. 54. Even at that stage, the Commission is not entitled to
…have a policy of blindly pursuing any case once it reached the hearing stage, regardless of how weak it might be [Potocnik, supra, at para. 60].
That perspective has even greater force in situations where, after referral, the Commission is contemplating an amendment to a Complaint to include an allegation against a Personal Respondent that was not subject to an appropriate investigation or, of even more concern, rejected after investigation.
18Section 41(4)(a) depends on a finding that the Complaint was ”trivial, frivolous, vexatious or made in bad faith”. For these purposes, the focus of inquiry is on the actions of both the Complainant and the Commission, even though the threshold may be crossed without proof of any irresponsibility on the part of the Commission: Dofasco, supra, at paras. 9-10. There have been various articulations of the meaning of the relevant terms. The following elaboration from Potocnik, supra, (at para. 17) represents an appropriate distillation of their essence:
I also favour using the ordinary meaning of the words "trivial", "frivolous", and "vexatious", rather than the more esoteric definitions contained in Black's Law Dictionary. Thus, for the complaint to be trivial or frivolous, the issues must be unimportant, petty, silly, or insignificant enough to be a waste of the tribunal's time. In addition, a complaint completely without factual or legal basis might be considered trivial or frivolous. A vexatious complaint is one that aims to harass, annoy or drain the resources of the person complained against. A complaint made in bad faith is one pursued for improper reasons — a vexatious complaint is an example of one made in bad faith.
19It is consistently accepted that, for the purposes of section 41(4)(b), undue hardship involves more than “the ordinary effects of an unsuccessful human rights complaint” (Shreve v. City of Windsor, No. 3 (1993), CHRR Doc. 93-097 (Ont. Bd. Inq.), at para. 30). However, in at least two instances, the Board of Inquiry and the Tribunal have accepted that hardship may be undue when the Respondent is exposed to unwarranted allegations that stem from inadequate investigation and assessment by or bad faith on the part of the Commission: Potocnik, supra, at para. 65 and Dofasco, supra, at para. 30. In other words, in considering what is “undue”, the Tribunal is entitled to consider not just the financial, emotional and reputational impact of the proceedings (the externalities) on the Respondent but also the conduct of the Commission in subjecting the Respondent to proceedings for which there was inadequate foundation in the evidence and the law.
Application to the Facts
20Given that background, has the Respondent/Applicant brought himself within the exceptional circumstances that would justify an order for costs against the Commission? It is my finding that he has.
21The decision to proceed against Mr. Omarbach on the basis that he was present in the store that day and party to the assault on Mr. Modi did not emerge out of a Commission investigation and a decision by the Commission as part of its responsibilities for determining whether to refer a Complaint to the Tribunal. Rather, that step was taken as a litigation decision in the aftermath of an unsuccessful mediation at the Tribunal. At this time, there was no further investigation. Rather, the decision was taken simply on the basis of Mr. Modi’s apparent realization for the first time and almost six years after the event that Mr. Omarbach, the “owner” of the store, had been present and participated in the fracas of January 27, 1999.
22For the Commission, Mr. Griffin argued that, at that stage, the time for investigation had ended and that the matter was in the control of Counsel with carriage of the Complaint before the Tribunal. He also argued that further investigation would not have provided other than the information that Mr. Modi and, presumably, Mr. Ayumé would have placed Mr. Omarbach at the scene and involved in the fracas, and that Mr. Omarbach and his witnesses would have told an investigator that this was not true and that Mr. Omarbach was elsewhere at that time. Perhaps that is the case.
23Nonetheless, Mr. Modi’s very belated identification of Mr. Omarbach was never subjected to the normal processes of investigation, despite the vigorous protests of his Counsel that the proposed amendment to the Commission’s pleadings was without justification or foundation in fact. Indeed, it should have been apparent to Counsel for the Commission that acting simply on Mr. Modi’s identification of Mr. Omarbach at the unsuccessful mediation was a questionable course of action. Mr. Modi’s statements during the June 26, 2002 interview clearly undercut his November 2004 contention that it was only at the mediation that he realised that the owner of the store was among those who had attacked him. In June 2002, he was perfectly aware of Mr. Omarbach’s identity and physical characteristics and he did not place him at the scene in contrast to the cashier whom he did identify as both being present and involved in the alleged assault. This and the earlier assessment by the Commission’s investigators that Mr. Omarbach was not present at the events giving rise to the Complaint should have indicated to Counsel that proceeding to amend the pleadings to allege his involvement was a perilous course of action.
24Given all of these considerations, I accept that this is one of those admittedly rare situations where costs are potentially available even though the finding in favour of Mr. Omarbach depended on an issue of credibility. My finding is that there never was a realistic assessment whether the Commission could successfully establish that Mr. Omarbach was present at the store at the relevant time.
25Indeed, even beyond this, as I pointed out in my Decision (at paragraph 40), even if Mr. Modi’s identification of Mr. Omarbach at the mediation is taken at face value, there was the further difficulty of establishing a nexus between Mr. Omarbach’s alleged intervention in the fracas and a violation of the Code. There was nothing in the investigative reports to support a contention that the involvement of the other personnel was in any way the product of discrimination on their part. Neither in the investigative reports nor at the hearing was there any suggestion that their joining the engagement was motivated by other than a desire to assist Mr. Ben Aycha in his struggles with Mr. Modi. There seemed little chance of establishing that they were aware of the discriminatory conduct that had precipitated the events in which they intervened. Similarly, though it was never advanced seriously at the hearing, there was no basis for the pleading that there was a poisoned environment at Paradise Fine Foods for which Mr. Omarbach was personally responsible.
26The statutory language is, however, critical to any decision on costs. In terms of section 41(4)(a), I am not prepared to hold that this component of the Complaint was “vexatious” (at least in the sense of being calculated to harass or annoy) or “made in bad faith” on the part of either the Complainant or the Commission, despite my considerable doubts as to the motivations of Mr. Modi when he made the identification of Mr. Omarbach at the failed mediation. However, I do find that this aspect of the Complaint was “trivial [or] frivolous” in terms of the elaboration of those terms in Potocnik, supra. It was almost “completely without factual or legal basis”. When considered in terms of the Commission’s obligation (as expressed by the Divisional Court in Way, supra), to
…determine whether there is any reasonable ground upon which the complaint can be maintained,
this understanding of what constitutes a “trivial [or] frivolous” Complaint justifies an award of costs against the Commission in this instance.
27Given this finding, I do not need to consider whether the application can also succeed on the basis of section 41(4)(b). Leaving aside the conduct of the Commission, these proceedings did not expose the Personal Respondent to anything beyond the normal incidents of defending a Complaint of discrimination contrary to the Code. However, if the Commission’s conduct of the proceedings is a relevant consideration in considering not only whether a complaint is trivial, frivolous, vexatious or made in bad faith but also whether the Respondent has endured “undue hardship”, then, I would also find that this application has crossed the threshold. However, Counsel for the Commission indicated that the Divisional Court may deal with this issue in its reserved decision on the application for judicial review in Dofasco, supra. I therefore express no concluded judgment on the issue whether the conduct of the Commission may be relevant in determining whether section 41(4)(b) has been triggered.
28As the Tribunal noted in Transpharm Canada Inc., supra, even when the Applicant crosses the threshold for an award of costs under section 41(4), the Tribunal still has a discretion. That discretion is exercised with regard to the conduct of the Commission, the conduct of the party seeking costs, and the nature of the issues in the case. Indeed, it appears as though the Tribunal (or its predecessor, the Board of Inquiry) has never exercised the discretion to award costs without a finding of wrongdoing on the part of the Commission. My reasons for finding this aspect of the Complaint “trivial or frivolous” speak to the actions of the Commission. While I would hesitate to describe it as “wrongdoing” in any wilful sense, the amendment of the pleadings to assert a personal claim against Mr. Omarbach based on his participation in the events at the store verged on the irresponsible and was not taken on the basis of an appropriate assessment of whether there was any possibility of establishing this aspect of the case. It was also the case that the allegation of Mr. Omarbach being responsible for a poisoned environment was “over pleading” at least in the sense that the Commission at no point adduced any evidence in support of this claim. Indeed, there appears to have been no warrant for it in the various investigators’ interview notes and reports or the Case Analyses. As against that, there were aspects of this Complaint that were novel and it was clearly not an easy case to prosecute. Nonetheless, I do not accept that that factor outweighs the other considerations relevant to the exercise of the Tribunal’s discretion.
29However, focussing on the conduct of the Respondent, I do accept that there should be a discounting of the award of costs in his favour. As noted in my Decision, during the luncheon adjournment on one of the days of the hearing, Mr. Omarbach stalked and then pursued a fleeing Mr. Ayumé, who that day was testifying. This conduct caused considerable distress to Mr. Ayumé, was completely without justification, and took up the Tribunal’s time both in dealing with the matter following the luncheon break and in writing an Interim Decision providing directions as to the future conduct of the proceedings.
QUANTUM OF COSTS
30The Ontario Court of Appeal has specified (Stellarbridge Management Inc. v. Magna International (Canada) Inc. (2004), 71 O.R. (3d) 262 (C.A.), at para. 97, with reference to Zesta Engineering Ltd. v. Cloutier, 2002 CanLII 25577 (ON CA), [2002] O.J. No. 4495 (C.A.) (Q.L.)) that, in awarding costs under the Rules of Civil Procedure, a court should
…ascertain an amount that is a fair and reasonable sum to be paid by an unsuccessful litigant, rather than an exact measure of the actual costs to the successful litigant.
That principle provides authoritative guidance to the assessment of costs under the Code. It has also been stated in later cases that, for these purposes, the “reasonable expectations of the paying party are also a factor to be considered”: Cecilio v. Tarion Warranty Corporation, 2007, at para. 9 (and see also Maystar General Contractors Inc. v. International Union of Painters and Allied Trades, Local Union 1819, 2007 CanLII 29665).
31In amending the pleadings to include the allegations of personal involvement on the part of Mr. Omarbach and in earlier asserting his responsibility for a poisoned environment, the Commission should have been aware that it was courting the risk of an award of costs against it for the additional burdens this put upon Mr. Omarbach and his Counsel: finding and interviewing witnesses on both issues; taking time to urge the Commission to re-evaluate its position on Mr. Omarbach’s presence at the incident; preparing for the hearing with respect to both these aspects of the Complaint; and leading evidence and conducting cross-examination at the hearing to refute the contention that Mr. Omarbach was present. Subsequently, there were the time and disbursements associated with the application for costs.
32The hearing took place over nine days. Of those nine days, on my review of my notes, my best estimate is that in total one day was devoted to the issue of Mr. Omarbach’s presence at the scene. Mr. Omarbach testified for a day but only half of his time on the witness stand involved this aspect of the Complaint. However, the issue was canvassed during the testimony of the other witnesses who were present that day, and Mr. Omarbach’s barber testified exclusively on this question. The Commission presented no evidence at the hearing to support its assertion that Mr. Omarbach was personally responsible for a poisoned environment at the store, and I ruled that there was no basis for admitting the testimony of witnesses that Mr. Mostyn was proposing to call to establish the atmosphere that existed at the store.
33I have also reviewed Mr. Mostyn’s statement of account relating to the hearing in order to ascertain approximately how much prehearing time went into these aspects of the case, and, in particular, the work that Mr. Mostyn and his colleagues performed after the pleadings were amended. Here, my best estimate is that Mr. Mostyn and his colleagues spent a further day to day and a half locating and interviewing witnesses, making representations to the Commission, and preparing to deal with these issues at the hearing.
34In addition, Mr. Mostyn expended time and resources preparing the application for costs, developing a written response to the Commission’s application that the Tribunal strike out that application as beyond its jurisdiction, and preparing for, providing written materials in support of, and participating in the half day hearing on the application for costs. In sum, this involved approximately a day and a half of work.
35Factoring in an amount of $1000 for disbursements, and using a measure of $2500 a day for preparation, $3500 a day for attendance at the hearing with a law clerk, and $3000 a day for attendance alone on the hearing of the application for costs, I assess the actual costs incurred on these aspects of the case as $11,000. However, having regard to the conduct of the Respondent at the hearing and the reasonable expectations of the Commission in a case that raised novel issues, my considered judgment is that the appropriate amount of costs is $8000.
ORDER
36The Tribunal orders the Commission to pay the Respondent, Muhamad Omarbach costs of $8000.
Dated at Toronto, this 28th day of August 2007.
David Mullan
Member