HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Virginia Barter

Applicant

-and-

Bata Limited (now known as Athletes World Limited) and Sonja Bata

Respondents

INTERIM DECISION

Adjudicator: Mark Hart

Date: July 8, 2009

Citation: 2009 HRTO 995

Indexed as: Barter v. Bata

WRITTEN SUBMISSIONS BY

Virginia Barter, Applicant ) G. James Fyshe, ) Counsel

Bata Limited (now known as Athletes World ) Connie Reeve, Limited), Respondent ) Counsel )

Sonja Bata, Respondent ) Ronald J. McCloskey, ) Counsel )

Bata Limited (Canada Corporation No. 678234-5), ) Leslie Tennenbaum, responding to Applicant’s Request ) Counsel )

[1] This is an Application dated July 30, 2008 under section 53(3) of Part VI of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”). The underlying complaint was filed with the Ontario Human Rights Commission on March 31, 2005.

[2] This Interim Decision addresses a complex set of issues raised by the parties relating to the impact on this proceeding of: a corporate re-structuring that occurred in or about June 2007 which included the purchase of certain assets of the corporate respondent Athletes World Limited (formerly Bata Limited) (“AWL”) by Bata Limited (Canada Corporation No. 678234-5) (“New Bata”) and whereby certain employees were transferred from AWL to New Bata; proceedings that were commenced by AWL under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-35 as amended (the “CCAA proceedings”); and certain Minutes of Settlement entered into by the applicant and AWL.

[3] I will first set out the factual background relating to the complaint, the corporate re-structuring, the CCAA proceedings, and the settlement. I will then identify the issues arising out of this factual background. In the context of these issues, I will then determine the applicant’s request for production in relation to the corporate re-structuring and I will set out the next steps in this proceeding.

Factual Background

The Human Rights Complaint

[4] The applicant was hired by the respondent Bata Limited (which is now Athletes World Limited) (“Old Bata”) in September 1998 to be the executive assistant to the personal respondent Sonja Bata. In November 2003, the applicant went off work for an extended medical leave, initially receiving short term sick benefits and then qualifying for and receiving long term disability (“LTD”) benefits.

[5] In the fall of 2004, Old Bata’s LTD insurer, Sun Life, developed a graduated return to work plan that was presented to Old Bata. In response, Old Bata states that it asked Sun Life to determine if the applicant would be agreeable to return to work on a full-time basis in January 2005, with her disability benefits continued until then. However, the applicant’s physician did not approve of the applicant’s return to work on a full-time basis and instead recommended half-time work for the first three weeks.

[6] In the meantime, Old Bata had hired a replacement for the applicant in September 2004. Old Bata states that it was the respondents’ hope that if and when the applicant was able to return to work, there would be an alternative suitable position available to her. However, Old Bata states that there no such position existed as of late January 2005 when it understood that the applicant was able to return to work, and as a result, Old Bata terminated the applicant effective February 1, 2005.

[7] The applicant was offered a six month severance package, which she declined in consultation with counsel. There appears to be no dispute that Old Bata nonetheless continued the applicant’s salary for the six month period. Following attempts by the applicant’s counsel to negotiate a settlement, the complaint was filed with the Commission on March 31, 2005, alleging discrimination in employment because of disability and a failure to accommodate the applicant’s medical condition. The remedy sought is reinstatement to the applicant’s position with the necessary accommodation, together with compensation for all lost wages and benefits.

The Corporate Re-Structuring in June 2007

[8] In June 2007, New Bata was incorporated and Old Bata formally changed its name to Athletes World Limited (“AWL”). Also in June 2007, AWL sold certain assets which formed part of Old Bata’s business (the International Services business assets) to New Bata. As part of the sale transaction, New Bata offered employment to certain identified AWL employees without change to their compensation and benefit arrangements, working conditions or seniority. New Bata then commenced its business operations on July 1, 2007 with the employees it had hired from AWL.

[9] Counsel for New Bata submits that as a result of this re-structuring, as of July 1, 2007, AWL and New Bata co-existed as separate and distinct corporations, each carrying on their own respective businesses. It is submitted that New Bata did not assume any liabilities relating to the applicant or her human rights complaint, and that any responsibility for past and present employees of Old Bata remained with AWL, with the sole exception of those employees hired by New Bata as part of the asset sale transaction relating to the International Services business.

The CCAA Proceeding

[10] On October 31, 2007, AWL sought and obtained relief under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-35 as amended (the “CCAA”) pursuant to an order of the Ontario Superior Court of Justice. As part of this proceeding, on December 20, 2007, the Court granted a further order approving a procedure for submission of any claims against AWL and also setting a “claims bar date” of January 31, 2008 following which any claims which had not been submitted in accordance with the established procedure would be barred. There appears to be no dispute that the applicant did not file a claim under the approved procedure by the claims bar date.

[11] As a result, in November 2008, after the applicant’s human rights complaint had been effectively transferred to this Tribunal, AWL made a request that the Application be dismissed as barred and extinguished by the terms of the Court’s order in the CCAA proceeding.

The Minutes of Settlement

[12] Before the Tribunal was able to consider AWL’s request that the Application be dismissed, the Tribunal was notified in February 2009 that the applicant and AWL had entered into Minutes of Settlement, whereby the applicant agreed to withdraw the Application against AWL. To date, however, the Tribunal has only received Minutes of Settlement and a Release as signed by the applicant and has not received a copy of any fully executed Minutes of Settlement. Nor has the Tribunal yet received any request by the Applicant to withdraw her Application as against AWL.

[13] The Minutes of Settlement expressly state that such withdrawal “is without prejudice to any rights [the applicant] may have to bring or continue any complaint or application against [New Bata]”.

[14] As part of the settlement, the applicant also signed a Release and Indemnity whereby she released AWL and all of its “employees, officers, directors, agents (. . .)”. The Release and Indemnity also includes standard language whereby the applicant agrees “not to make any claim or take any proceeding against any person, partnership or corporation who might claim, pursuant to the provisions of any applicable statute or otherwise, contribution or indemnity from the Releasee”. Both of these terms are significant in the context of the personal respondent Sonja Bata’s continuing status in this proceeding.

The Issues arising out of the Factual Background

As against AWL

[15] As indicated above, as part of the settlement, the applicant agreed to withdraw her Application as against AWL. Also as part of the settlement, the applicant acknowledges that the “Bata Limited” against whom she commenced this Application “was a corporation incorporated under the laws of Canada as corporation no. 417592-1 (. . .) which is the corporation that changed its name to Athlete’s World Limited”.

[16] However, the Tribunal has not yet received a copy of Minutes of Settlement as executed by AWL or a request to withdraw the Application as against AWL. As a result, before the Application can be formally withdrawn as against Bata Limited, which was the applicant’s former employer and which changed its name to Athlete’s World Limited and which is the only corporate respondent to the Application, either fully executed Minutes of Settlement or a Form 10 signed by all parties to the settlement or a request to withdraw the Application as against AWL needs to be filed with the Tribunal.

[17] Accordingly, the respondent AWL and/or the applicant is directed to file the fully executed Minutes of Settlement or a Form 10 signed by all parties to the settlement or a request to withdraw the Application as against AWL within 14 days of the date of this decision.

As against New Bata

[18] Considerable confusion has been caused in this proceeding by the fact that the applicant’s former employer was called “Bata Limited” (the name used by Old Bata which then became AWL) and a new corporation created in June 2007 is also called “Bata Limited” (the name being used by New Bata). I agree with counsel for New Bata that the mere fact that New Bata has the same name as the applicant’s former employer is not a sufficient basis upon which to make New Bata a party respondent to this proceeding. I also agree with counsel for New Bata that the “Bata Limited” that was named as the corporate respondent to this Application is not the “Bata Limited” that was created in June 2007. As stated above, the “Bata Limited” that was the only corporate respondent to the original human rights complaint and hence to this Application was the “Bata Limited” that was the applicant’s former employer and that subsequently changed its name to Athletes World Limited.

[19] That, however, does not end the matter. At this point, what the applicant is attempting to do is to add New Bata as an additional party respondent to her Application. Several issues arise out of this. First, the applicant filed her Application pursuant to s. 53(3) of the Code, and as a consequence, this Application is governed by the Tribunal’s Rules of Procedure for Transitional Applications (the “Transitional Rules”).

[20] Rule 6.3 of the Transitional Rules, which applies to applications under s. 53(3) of the Code, states that “Applications made in accordance with these Rules must be based on the subject matter of the complaint . . . filed at the Commission and the Tribunal will not entertain preliminary requests to . . . add parties to the Application”. At the same time, Rule 4.3(c) gives the Tribunal the power to vary or waive the application of these Rules at any time on its own initiative or on the request of a party, with or without terms, in order to ensure the fair, just and highly expeditious resolution of an Application. Accordingly, the first issue that arises is whether the Tribunal should waive or vary Rule 6.3 in order to permit the applicant to add New Bata as a party respondent to the Application.

[21] Second, the new Part IV of the Code applies to an application under s. 53(3) of the Code: see s. 53(6). Under the new Part IV of the Code, s. 36 identifies the parties to an application as including “any person against whom an order is sought in the application” (s. 36(d)) and “any other person . . . if they are added as a party by the Tribunal” (s. 36(e)).

[22] In this regard, an issue arises regarding the basis upon which the applicant seeks to make New Bata a party respondent to this proceeding. If this is on the basis that the applicant seeks an order against New Bata, then s. 45.2 of the Code, which sets out the Tribunal’s power to make an order, needs to be examined. This power may only be exercised “if the Tribunal determines that a party to the application has infringed a right under Part I of another party to the application”. As a result, an issue arises as to whether the applicant can allege that New Bata infringed her rights under Part I when New Bata did not exist at the time the applicant’s employment was terminated.

[23] On the other hand, if the applicant asserts that it is sufficient to enable the Tribunal to exercise its powers under s. 45.2 as against New Bata if the Tribunal finds that Old Bata (now AWL) infringed the applicant’s rights, an issue arises as to whether any such finding as against Old Bata or AWL is barred either by the settlement or by the order in the CCAA proceeding. Alternatively, if the applicant is relying upon the Tribunal’s power to add a party under s. 36(e), then an issue arises as to what purpose is served in adding a party under this provision unless some order could be obtained against it.

[24] Third, even if the Tribunal waives the application of Rule 6.3 and has the jurisdiction to add New Bata as a party under s. 36, an issue arises as to whether there is any proper basis upon which to add New Bata as a party respondent. The applicant is relying upon the “common employer” doctrine to argue that liability flows through from Old Bata to New Bata.

[25] In addition, the applicant also asserts that, but for the termination of her employment which is alleged to have been in violation of the Code, the applicant would have been entitled to continue working for Old Bata as Ms. Bata’s executive assistant and may have been one of the employees who was hired by New Bata when it purchased the assets of the International Services business. As a result, New Bata may be liable for the remedy of reinstatement and for at least some portion of the compensatory damages for lost income. In this regard, I am aware of the position taken by New Bata that when it purchased the assets from AWL, it did not assume any responsibility for Old Bata or AWL employees and specifically did not assume responsibility for the applicant or her human rights complaint. Whether or not this position is correct depends upon the evidence relating to this assertion and the applicable law.

[26] In this context, I am aware of the parties’ submissions about whether there was anything improper about the corporate re-structuring that took place in June 2007. This raises an issue as to whether there is any requirement for the applicant to show “intent” or “impropriety” in order to support the addition of New Bata as a party respondent, or whether it is sufficient if the effect of not adding New Bata would be to deprive the applicant of access to a significant part of the remedy she is seeking.

As against Sonja Bata

[27] Counsel for Ms. Bata takes the position that the Application as against her is barred as a consequence of the Minutes of Settlement and Release and Indemnity signed by the applicant with AWL. I note again that, at this stage, the Tribunal does not yet have a fully executed copy of the Minutes of Settlement and until these have been provided, there may not be evidence of a fully concluded settlement between the applicant and AWL.

[28] If in fact there is a fully concluded settlement between the applicant and AWL on the terms of the documents filed to date, Ms. Bata takes the position that she has been released from any and all claims as one of the “employees, officers, directors, agents” of AWL who were released pursuant to the Release and Indemnity signed by the applicant. It has been stated in the materials that Ms. Bata was an employee and a former director of Old Bata. It is not clear, however, whether Ms. Bata was ever an employee, officer, director or agent of AWL, or whether she was an employee, officer, director or agent of AWL at the time of the settlement. I would need to receive evidence on this as well as submissions on the proper interpretation of the Release and Indemnity before I would be in a position to make a finding on this issue.

[29] Counsel for Ms. Bata also submits that continuing the Application against her is barred by the provision in the Release and Indemnity that bars claims or proceedings against a person who may claim contribution or indemnity against AWL. Counsel for Ms. Bata asserts that she has made a written claim for indemnification against AWL, which is described as her “former employer”, and further asserts that the applicant is aware of this. However, no such written claim for indemnification has been filed with the Tribunal nor is it clear as to the basis for any such claim for indemnification or how it would survive the Court order in the CCAA proceedings.

Need for further evidence and submissions

[30] In light of the myriad of issues raised in this proceeding, there is a need for further evidence and submissions from the parties before these preliminary matters can be determined. There currently is a case resolution conference (hearing) scheduled for September 17, 2009, which will be used to hear evidence and submissions on these preliminary issues. The materials that are to be filed by the parties in advance of this hearing date will be addressed below under the heading “Next Steps”. However, before proceeding to set out these next steps, I need to address the request for production made by the applicant.

The Applicant’s Production Request

[31] By letter dated May 4, 2009, the applicant made an extensive request for production from New Bata. While New Bata is not currently a party to this proceeding as the Tribunal has not yet made a decision whether to add New Bata as a party respondent, the Tribunal nonetheless has the power under Rule 4.3(k) of the Transitional Rules to “require a party or other person to produce any document, information or thing”. This Rule gives the Tribunal the power to order production against a non-party: King v. Toronto Police Services Board, [2008 HRTO 33](https://www.minicounsel.ca/hrto/2008/33) at para. [22](https://www.minicounsel.ca/hrto/2008/33).

[32] The applicant has requested disclosure of “any agreement of purchase and sale or similar document which formed the basis of the transfer of certain business activities or transfer of assets between Bata Limited and Athletes World Limited”. In my view, the relevant documents as they relate to the transfer of assets or business activities would be any documents relating to the sale of the International Services business assets by AWL to New Bata in or about June 2007, and I order that these be disclosed to the applicant.

[35] The applicant has requested “any documents dealing with the permission given to the New Bata by Bata Limited or Athletes World Limited to continue operations under the name Bata Limited and any authorizations permitting the New Bata to continue operation or detailing the types of activities that the New Bata would be permitted to continue operating”. I do not understand that any authorization or permission would be required for New Bata to use the corporate name Bata Limited which had been given up by Old Bata when it changed its name to AWL, nor do I understand that any authorization would be required from Old Bata or AWL for New Bata to be permitted to conduct any operations. In my view, the production already ordered sufficiently responds to the documents that are relevant to the issues that arise from the re-structuring.

[36] Similarly, the applicant’s request for production of “any agreements between the New Bata and Athletes World regarding restrictions on competition or operations of the two companies” is already captured by my order for disclosure of any documents that speak to the relationship between these companies arising out of the June 2007 re-structuring.

[37] The applicant requests production of “the financial statements for the new Bata Limited for 2007 and 2008 or in the alternative, a detailed description of the various business activities conducted by New Bata during this period”. I do not see the relevance of New Bata’s financial statements or of a general description of New Bata’s business activities. The relevant material here relates to the International Services business assets sold by AWL to New Bata in or about June 2007, and that production has already been ordered.

[38] The applicant has requested disclosure of “the corporate records of directors and officers for the New Bata”. This documentation may have some relevance to the relationship between AWL and New Bata, and I order it disclosed.

[39] The applicant has requested disclosure of “the operating By-Laws of New Bata”. I do not see the relevance of this document to the issues that have arisen in this proceeding at this stage.

[40] The applicant has requested disclosure of “any contracts of employment, consulting agreements or other similar agreements relating to the employment or engagement of Sonja Bata by the New Bata or her position as a director or officer of the New Bata”. I do not believe that it is necessary or appropriate to require disclosure of Ms. Bata’s actual contract of employment or any other agreements. I do, however, believe that it is relevant for the Tribunal to better understand the relationship between Ms. Bata, Old Bata, AWL and New Bata, and I order disclosure by Ms. Bata of information relating to her role and responsibilities in relation to these companies during the period from 2003 to the present. The requirement to disclose this information will be addressed in the next section of this decision.

[41] Finally, the applicant has requested disclosure of “documents from the personnel file for the personal assistant of Sonja Bata who replaced Virginia Barter, including any contract of employment, job description, wage and benefit amounts received by this assistant”. It is not relevant to require production of this individual’s full personnel file. However, it is relevant to require production of information about the executive assistant position at AWL and New Bata, including who filled this position from September 2004 to the present, whether this position or the individual who was in this position was hired by New Bata as part of the transfer of the International Services business assets in or about June 2007, and the wages and benefits that were received for this position or for any individual who was hired by New Bata out of this position, and I order that this information be disclosed.

[42] All of the documents and information that I have ordered be disclosed to the applicant shall be provided by no later than July 31, 2009.

Next Steps

[43] As stated above, the Case Resolution Conference scheduled for September 17, 2009 will be used to hear evidence and submissions on the preliminary issues raised in this proceeding.

[44] In order to ensure a fair, just and highly expeditious resolution of these issues, I find that it would be useful if certain evidentiary materials could be filed in advance of this hearing date. First, in my view, it would be useful to have someone from New Bata with direct knowledge of the June 2007 re-structuring provide an affidavit with supporting exhibits that addresses the reasons for and exact nature of the re-structuring, the sale of the International Services business assets by AWL to New Bata in or about June 2007, any other relationship that existed at that time and/or continues to exist between AWL and New Bata, and that identifies whether the individual who was in the executive assistant position at the relevant time was hired by New Bata and if so provide details as to this person’s tenure and compensation package.

[45] In addition, in my view, it would be useful to have an affidavit with supporting exhibits from Sonja Bata that sets out her relationship with Old Bata, AWL and New Bata and her role and responsibilities in relation to these companies during the period from 2003 to the present. Ms. Bata’s affidavit also should address and attach the written claim for indemnification she asserts has been made against AWL and set out the basis for any such claim for indemnification and how she believes it survives the Court order in the CCAA proceedings.

[46] If the parties wish to file the affidavits suggested above, these affidavits and supporting exhibits are to be provided to the applicant and filed with the Tribunal by no later than July 31, 2009. In addition, the deponents of these affidavits would need to appear at the hearing on September 17, 2009 and be available for cross-examination by applicant’s counsel and for any further questioning as may be required.

[47] In any event, I direct the parties to serve and file written submissions and authorities on the issues as identified above in accordance with the following schedule:

a. By no later than August 14, 2009, the applicant shall serve and file her written submissions and authorities;

b. By no later than August 28, 2009, the respondents and New Bata shall serve and file their written submissions and authorities;

c. By no later than September 4, 2009, the applicant shall serve and file any reply.

Order

[48] For all of the above reasons, I make the following Order:

1. the respondent AWL and/or the applicant is directed to file the fully executed Minutes of Settlement or a Form 10 signed by all parties to the settlement or a request to withdraw the Application as against AWL within 14 days of the date of this Interim Decision;

2. by no later than July 31, 2009, Bata Limited (Canada Corporation No. 678234-5) shall disclose to the applicant the following documents and/or information:

a. any documents relating to the sale of the International Services business assets by Athletes World Limited to Bata Limited in or about June 2007;

b. any other or further documents relating to the corporate re-structuring that took place in June 2007 that speak to the relationship between the former Bata Limited and/or Athletes World Limited and the new Bata Limited;

c. the corporate records of directors and officers for the new Bata Limited; and

d. information regarding who filled the position of executive assistant to Ms. Bata from September 2004 to the present, whether this position or the individual who was in this position was hired by the new Bata Limited as part of the transfer of the International Services business assets in or about June 2007, and the wages and benefits that were received for this position or for any individual who was hired by the new Bata Limited out of this position (if necessary, AWL is directed to assist the new Bata Limited in compiling and disclosing this information);

3. if it decides to file an affidavit from someone with direct knowledge of the June 2007 re-structuring, Bata Limited (Canada Corporation No. 678234-5) shall provide to the applicant and file with the Tribunal such affidavit with supporting exhibits by no later than July 31, 2009;

4. if she decides to file an affidavit, Sonja Bata shall provide to the applicant and file with the Tribunal such affidavit with supporting exhibits by no later than July 31, 2009;

5. the parties shall serve and file written submissions and authorities on the issues as identified in this Interim Decision in accordance with the following schedule:

a. By no later than August 14, 2009, the applicant shall serve and file her written submissions and authorities;

b. By no later than August 28, 2009, the respondents and New Bata shall serve and file their written submissions and authorities;

c. By no later than September 4, 2009, the applicant shall serve and file any reply.

Dated at Toronto, this 8th day of July, 2009.

“Signed by”

Mark Hart

Vice-chair

Barter v. Bata, 2009 HRTO 995

Case Summary

[1] This is an Application dated July 30, 2008 under section 53(3) of Part VI of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”). The underlying complaint was filed with the Ontario Human Rights Commission on March 31, 2005.

[11] As a result, in November 2008, after the applicant’s human rights complaint had been effectively transferred to this Tribunal, AWL made a request that the Application be dismissed as barred and extinguished by the terms of the Court’s order in the CCAA proceeding.

[13] The Minutes of Settlement expressly state that such withdrawal “is without prejudice to any rights [the applicant] may have to bring or continue any complaint or application against [New Bata]”.

[17] Accordingly, the respondent AWL and/or the applicant is directed to file the fully executed Minutes of Settlement or a Form 10 signed by all parties to the settlement or a request to withdraw the Application as against AWL within 14 days of the date of this decision.

[38] The applicant has requested disclosure of “the corporate records of directors and officers for the New Bata”. This documentation may have some relevance to the relationship between AWL and New Bata, and I order it disclosed.

[39] The applicant has requested disclosure of “the operating By-Laws of New Bata”. I do not see the relevance of this document to the issues that have arisen in this proceeding at this stage.

[42] All of the documents and information that I have ordered be disclosed to the applicant shall be provided by no later than July 31, 2009.

[43] As stated above, the Case Resolution Conference scheduled for September 17, 2009 will be used to hear evidence and submissions on the preliminary issues raised in this proceeding.

[47] In any event, I direct the parties to serve and file written submissions and authorities on the issues as identified above in accordance with the following schedule:

a. By no later than August 14, 2009, the applicant shall serve and file her written submissions and authorities;

b. By no later than August 28, 2009, the respondents and New Bata shall serve and file their written submissions and authorities;

c. By no later than September 4, 2009, the applicant shall serve and file any reply.

[48] For all of the above reasons, I make the following Order:

1. the respondent AWL and/or the applicant is directed to file the fully executed Minutes of Settlement or a Form 10 signed by all parties to the settlement or a request to withdraw the Application as against AWL within 14 days of the date of this Interim Decision;

2. by no later than July 31, 2009, Bata Limited (Canada Corporation No. 678234-5) shall disclose to the applicant the following documents and/or information:

a. any documents relating to the sale of the International Services business assets by Athletes World Limited to Bata Limited in or about June 2007;

b. any other or further documents relating to the corporate re-structuring that took place in June 2007 that speak to the relationship between the former Bata Limited and/or Athletes World Limited and the new Bata Limited;

c. the corporate records of directors and officers for the new Bata Limited; and

3. if it decides to file an affidavit from someone with direct knowledge of the June 2007 re-structuring, Bata Limited (Canada Corporation No. 678234-5) shall provide to the applicant and file with the Tribunal such affidavit with supporting exhibits by no later than July 31, 2009;

4. if she decides to file an affidavit, Sonja Bata shall provide to the applicant and file with the Tribunal such affidavit with supporting exhibits by no later than July 31, 2009;

5. the parties shall serve and file written submissions and authorities on the issues as identified in this Interim Decision in accordance with the following schedule:

a. By no later than August 14, 2009, the applicant shall serve and file her written submissions and authorities;

b. By no later than August 28, 2009, the respondents and New Bata shall serve and file their written submissions and authorities;

c. By no later than September 4, 2009, the applicant shall serve and file any reply.