HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Sharon Johnson
Applicant
-and-
Yorkview Lifecare Ltd., Virginia Agacaoili, Chris Robinson and Leonie Maguire
Respondents
INTERIM DECISION
Adjudicator: Andrew M. Diamond
Indexed as: Johnson v. Yorkview Lifecare
WRITTEN SUBMISSIONS BY
Sharon Johnson, Applicant | Glen Morrison, Representative Yorkview Lifecare Ltd., Virginia Agacaoili, Chris Robinson and Leonie Maguire, Respondents | Sven Poysa, Counsel
Introduction
1The issue addressed in this Interim Decision is the effect of a court ordered stay in a receivership on a proceeding before the Human Rights Tribunal of Ontario (the “Tribunal”). This Interim Decision is being released simultaneously with a companion Interim Decision in Rijal v. Distinctive Designs Furniture, 2009 HRTO 1337 (Rijal #2), which addresses similar issues in the context of a stay in a proposal under the Bankruptcy and Insolvency Act R.S.C. 1985, c. B-3, as amended (the “BIA”).
2Yorkview Lifecare Ltd. (the “corporate respondent”) was placed in receivership on November 13, 2002 with Ernst & Young (“E & Y”) appointed interim receiver. E & Y was appointed receiver and trustee in bankruptcy of the corporate respondent by order of Mr. Justice Farley of the Superior Court of Justice (Commercial List) in Bankruptcy and Insolvency on January 17, 2003. The corporate respondent was also adjudged to be bankrupt on January 10, 2003.
3The applicant originally filed her complaint with the Ontario Human Rights Commission (the “Commission”) on February 25, 2008 alleging that she had been discriminated against based on her colour, ethnic origin, place of origin and race in breach of her rights under the Ontario Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”).
4The Application is made not only against Yorkview Lifecare Ltd., the applicant’s employer, but was also against Virginia Agacaoili, Chris Robinson and Leonie Maguire (the “personal respondents”), who are or were employees of the corporate respondent.
5By letter dated May 16, 2008, counsel for E&Y provided written submissions to the Commission arguing that the complaint of Sharon Johnson was stayed under the terms of the Receivership Order. Paragraph 8 of the order of Mr. Justice Farley dated January 17, 2003 reads in part:
THIS COURT ORDERS that no demands, actions, motions, applications, steps, registrations, perfections, administrative proceedings, self-help remedies, grievances, or any other acts, proceedings or private remedies whatsoever in respect of the Property, or business conducted thereon by the Bankrupt or against the Bankrupt or the Receiver….or any of the Receiver’s agents…shall be taken or continued against the Bankrupt or the Receiver without prior written consent of the Receiver or leave of this Court…(emphasis added)
6Paragraph 11 of the order makes it clear that the “Receiver is not authorized to engage any or all of the employees or former employees of the Bankrupt.” From this, one must conclude that the applicant was employed by the bankrupt corporate respondent and not E & Y as employee or agent.
7The complaint to the Commission was abandoned and the applicant brought this Application to the Tribunal under the Code’s section 53 transitional provisions on December 18, 2008.
8On April 1, 2009, the Tribunal directed each of the parties to provide written submissions with respect to whether the Application before the Tribunal was stayed by the order of Mr. Justice Farley.
Argument
9In response to the Tribunal’s direction, the applicant, through her representative, advised the Tribunal that she was “seeking an order by the Tribunal removing the corporate respondents Yorkview Lifecare and E & Y, and seeks leave to continue against the personal respondents.” The applicant argues that:
The nature of the alleged conduct of the personal respondents is central issues in this matter, and far exceeded any “acts or thing done or omitted to be done in the course of their employment,’’ which makes it appropriate to award remedy specifically against these personal respondents if an infringement is found.
10In reply, the respondents argue that, “It is clear from the Application that the allegations against the personal respondents relate to their engagement by the Bankruptcy Trustee or the Operator and not to their personal capacity.” It is argued that as employees the personal respondents were conducting the business of the corporate respondents and are thus covered by the terms of the stay contained in the Receivership order of Mr. Justice Farley.
Discussion
Stay
11Stays arise in the context of insolvencies in a number of ways including: in a receivership, as in this case; or in favour of a company, which obtains court protection under the Companies’ Creditors Arrangement Act R.S.C. 1985 c. C-36, as amended (“CCAA”) by court order pursuant to section 11 of the CCAA. The breadth of the stay in a receivership or under the CCAA is determined by the court granting the stay order, and can be very broad or specifically narrow, depending upon the circumstances of the case. For example, court ordered stays can stay proceedings against officers, directors and/or employees of the insolvent company.
12In this case, the stay does not specifically stay proceedings against employees but does as against agents of the receiver and the business of the bankrupt. In contrast, a stay in the context of a bankruptcy or a proposal under the terms of the BIA is a statutory stay and, as set out in section 69 of the BIA, applies only to a creditor of the bankrupt or proponent debtor, and only stays proceedings against the bankrupt or proponent debtor.
13In general, the purpose of a stay in an insolvency, whether it is a bankruptcy, receivership or pursuant to the CCAA, is not to prevent parties with proper claims from prosecuting those claims in the appropriate forum; but rather, as I said in Rijal v. Distinctive Designs Furniture, 2009 HRTO 297 (“Rijal #1”):
[14] The purpose of the stay is not to “defeat legitimate assertions of provincially granted rights,” but to simply allow for a protocol and management of various claims against those seeking protection under the BIA. The claims process and stay provisions of the BIA provide a protocol to allow for the effective management of insolvent individuals.
14However, this must be contrasted with the recognition that there are cases in which individually named respondents may be individually and personally liable for breaches of the Code. Neither the statutory stay under the BIA, nor a court stay in either a receivership or pursuant to the CCAA, is designed to shield financially solvent individuals from prosecution for acts for which they may be found to be personally liable.
15Having said that, the difficult questions are how such a determination is to be made and by whom? The short answer is: if the stay does not apply to individual respondents, the application can proceed. This, however, can only be determined once the evidence on the merits with respect to the personal respondents has been heard. The difficulty with this, in the context of the Code, is that if it is determined after the hearing that there is no personal liability on the part of the personal respondents, then the stay should have prevented the process in the first place.
Removal of Corporate Respondent
16In both this case and in the companion matter, in the face of a stay against the corporate respondent, the applicant has asked the Tribunal to simply remove the corporate respondent as a party. This request is based on the assumption that they are already a proper party. As a point of clarification, in neither the complaint to the Commission, nor the application to the Tribunal did the applicant name E & Y (in either its role as receiver or trustee in bankruptcy) as a respondent. Therefore, there is no need to consider the request to remove them as they were never a party.
17The applicant cites the Tribunal’s decision in Persaud v. Toronto District School Board, 2008 HRTO 31, as setting out the appropriate test for the removal of a party where the Tribunal found at paragraph 5 that:
Applying these principles to the Tribunal’s power to remove a personal respondent from a proceeding, the following non-exhaustive list of factors may be helpful in assessing whether a personal respondent should be removed:
Is there is a corporate respondent in the proceeding that also is alleged to be liable for the same conduct?
Is there any issue raised as to the corporate respondent’s deemed or vicarious liability for the conduct of the personal respondent who sought to be removed?
Is there is any issue as to the ability of the corporate respondent to respond to or remedy the alleged Code infringement?
Does any compelling reason exist to continue the proceeding as against the personal respondent, such as where it is the individual conduct of the personal respondent that is a central issue or where the nature of the alleged conduct of the personal respondent may make it appropriate to award a remedy specifically against that individual if an infringement is found?
Would any prejudice be caused to any party as a result of removing the personal respondent?
18However, Persaud is a case dealing with the removal of a personal respondent and not a corporate respondent, and while some of the factors are applicable, I am of the view that one cannot simply replace the word “corporate” with “personal” and apply the above test in its entirety. However, having said that, there are general principles which should be considered when contemplating the removal of any respondent.
Analysis
Stay Against Individuals
19In Rijal #1 at paragraph 19, I held that:
If it is the intention of the applicant to seek any monetary relief from any of the respondents (as the individual respondents may be entitled to contribution or indemnity from Distinctive), the applicant would be a contingent creditor of Distinctive, and, as a result, this Application would be stayed by operation of section 69 of the BIA.
This was predicated upon the Tribunal’s understanding that personal respondents were acting, at all times, within their capacity as employees. In this case, and in Rijal #2, the allegation has been made that the personal respondents participated in “various acts of blatant, systematic harassment and discrimination.’’
20The Code sections 46.3 and 5(2) specifically deal with individual liability and stipulate that:
46.3(1) For the purposes of this Act, except subsection 2 (2), subsection 5 (2), section 7 and subsection 46.2 (1), any act or thing done or omitted to be done in the course of his or her employment by an officer, official, employee or agent of a corporation, trade union, trade or occupational association, unincorporated association or employers’ organization shall be deemed to be an act or thing done or omitted to be done by the corporation, trade union, trade or occupational association, unincorporated association or employers’ organization.
5(2) Every person who is an employee has a right to freedom from harassment in the workplace by the employer or agent of the employer or by another employee because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, age, record of offences, marital status, family status or disability.
These sections of the Code indicate that in the case of harassment in the workplace, the Legislature intended to permit an applicant to allege a breach of their rights under the Code as against, not only their employer, but also fellow employees.
21Therefore, to the extent that the applicant is alleging breaches of the Code by the personal respondents, not as an agent or employee of the corporate respondent, but as against them as individuals, the applicant should be allowed to proceed with those applications as the individuals as an individual are not covered under any stay.
Removal of corporate respondent
22The Application to the Tribunal was made at a time when any proceedings against the corporation was stayed. Therefore, I am of the view that, absent an order of the Ontario Superior Court lifting the stay and approving the application nunc pro tunc, there is currently no valid Application against the corporate respondent before the Tribunal.
Decision
23As outlined above, the purpose of the stay is not to prevent a proceeding going forward; it is designed to give the supervising court in the insolvency control of the proceedings. While it may be that the applicant believes that she has a good case against the personal respondents, those respondents may wish to argue that if there is any liability it is that of the corporation. While the applicant has elected not to bring a motion to lift the stay, it may well be that, faced with the Application proceeding against the individual respondents only, the personal respondents may decide that it is in their interest to seek to lift the stay. Allowing the removal of the corporate respondent would preclude the individual respondents from bringing such a motion and would thus potentially prejudice them.
24The applicant is permitted to continue her Application against the personal respondents.
25I am not seized of this matter.
Dated at Toronto, this 27th day of August, 2009.
“Signed by”
Andrew M. Diamond
Member