Okunbo v. Nadiscorp Logistics Group, 2010 HRTO 423

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Ebaita Okunbo Applicant

-and-

Nadiscorp Logistics Group Inc., Carol Little, Glenn Morton and Grant Hunt Respondents

INTERIM DECISION

Adjudicator: Brian Eyolfson Date: March 1, 2010 Citation: 2010 HRTO 423 Indexed as: Okunbo v. Nadiscorp Logistics Group

1This is an Application filed March 12, 2009, under section 34 of Part IV of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), alleging discrimination in employment. In his Application, the applicant indicated that the organizational respondent, Nadiscorp Logistics Group Inc. (“Nadiscorp”), was insolvent and under a court-enforced receivership.

2In an earlier Interim Decision, 2009 HRTO 370, the Tribunal found that the Application against Nadiscorp was stayed as a result of an Order of the Superior Court of Justice which stated, in part, as follows:

THIS COURT ORDERS that no Proceeding against or in respect of Nadiscorp or the Property shall be commenced or continued except with the written consent of the Receiver or with leave of this Court and any and all Proceedings currently under way against or in respect of Nadiscorp or the Property are hereby stayed and suspended pending further Order of this Court.

3In the earlier Interim Decision, the Tribunal noted that there may be an issue about whether the effect of the Order is to stay the Application as against the individual respondents as well as against Nadiscorp and whether the applicant must obtain leave of the Court or consent of the Receiver with respect to his claim against the individual respondents.

4The applicant subsequently filed a Request for Order During Proceedings (Form 10) (“the applicant’s Request”), asking that Nadiscorp be removed as a respondent and that the proceedings be continued against the individual respondents. He also requested that the Tribunal order the Receiver to provide personal contact information for two of the individual respondents who may not have received notice of the Application.

5In a second Interim Decision, 2009 HRTO 659, the Tribunal ordered the Receiver for Nadiscorp to provide the Tribunal with addresses for two of the individual respondents. The Tribunal indicated that once the Notice of Application and the applicant’s Request had been delivered to the individual respondents, the Tribunal would seek submissions from all individual respondents on the applicant’s Request to discontinue proceedings against Nadiscorp and continue proceedings against them individually.

6In a third Interim Decision, 2009 HRTO 1723, the Tribunal directed the individual respondents to serve and file a Response to the applicant’s Request. The individual respondents have now responded to the applicant’s Request, objecting to the proceedings continuing against them individually. More particularly, Glenn Morton submits that the matter should be discontinued as the claim is against Nadiscorp and not the individual respondents. Carol Little submits that she was not an actual director or officer of the business and, therefore, should not be personally liable for the decisions of the business. Grant Hunt also submits that the applicant’s claim is against Nadiscorp, which no longer exists, and that he and the other individual respondents were not officers of Nadiscorp and acted in good faith. He submits that the actions of the individual respondents were approved by officers of Nadiscorp.

7In reply, the applicant submits that he was the victim of various acts of blatant, systematic, and continuous harassment and discrimination by all three individual respondents. He asserts that the conduct of the individual respondents is a central issue in his Application which makes it appropriate to award remedies against the individual respondents if an infringement is found. He submits that he has claimed breaches of the Code by the individual respondents, not as agents or employees of Nadiscorp, but as individuals. He argues that, similar to the applicants in Johnson v. Yorkview Lifecare, 2009 HRTO 1338 and Rijal v. Distinctive Designs Furniture, 2009 HRTO 1337, he should be permitted to proceed with the Application as against the individual respondents as they are not covered by any stay.

8As in the present case, Johnson, supra addressed the effect of a court ordered stay in a receivership on a proceeding before the Tribunal. In that case, the Tribunal stated as follows:

[11] Stays 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.

[12] In 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.

[13] In 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.

[14] However, 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.

[15] Having 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.

9In Johnson, supra, the Tribunal referred to sections 46.3 and 5(2) of the Code, which specifically deal with individual liability, and determined 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.

The Tribunal held that, to the extent the applicant was alleging breaches of the Code by the individual respondents, not as an agent or employee of the organizational respondent, but as against them as individuals, the applicant should be allowed to proceed as the individuals respondents, as individuals, were not covered by any stay.

10I see no basis for departing from the reasoning in Johnson, supra in the present case. The stay applies to Nadiscorp and its property. It does not specifically stay proceedings against the individual respondents. The applicant is alleging that he was subject to various acts of harassment and discrimination by the individual respondents and asserts that the conduct of the individual respondents is a central issue in his Application. He submits that he has claimed breaches of the Code by the individual respondents, not as agents or employees of Nadiscorp, but as individuals.

11In the circumstances, the applicant is permitted to continue his Application against the individual respondents.

12As the Tribunal indicated in Johnson, supra, the individual respondents may wish to argue that, if there is any liability, it is that of the corporation. Also, 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 individual respondents may decide that it is in their interest to seek to lift the stay. Allowing the removal of Nadiscorp would preclude the individual respondents from bringing such a motion and would thus potentially prejudice them. Accordingly, the applicant’s request that Nadiscorp be removed is denied. However, as the Application to the Tribunal was made at a time when any proceedings against Nadiscorp were stayed, absent an Order of the Court lifting the stay and approving the Application, there is currently no valid Application against Nadiscorp before the Tribunal: see Johnson, supra at paras. 22 and 23.

13As all parties have indicated they are agreeable to attending mediation, the Registrar will schedule a mediation date for this matter.

14I am not seized.