Schenk v. Nixon, 2011 HRTO 1312

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Kristine Schenk Applicant

• and-

Gregory Nixon Respondent

DECISION

Adjudicator: Michael M. Lerner Date: July 13, 2011 Citation: 2011 HRTO 1312 Indexed as: Schenk v. Nixon

APPEARANCES

Kristine Schenk, Applicant ) Self-represented Gregory Nixon, Respondent ) Self-represented

INtroduction

1The applicant filed an Application for Contravention of Settlement Agreement (Form 18) (“the Application”) on August 10, 2010, pursuant to Section 45.9(3) of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), alleging a breach of settlement. In the Application, the applicant alleges that the respondent has not complied with Minutes of Settlement dated March 11, 2010 (“the Minutes of Settlement”) arising from the human rights Application in Tribunal file number 2009-01714-I, which required the respondent to pay the applicant the sum of $25,000.00 as settlement monies on or before June 11, 2010.

2The respondent did not file a Response to the Application.

3In the Application, the applicant indicates that she is represented. All of the Tribunal’s correspondence to the applicant was sent to her representative.

4The Tribunal sent a Confirmation of Hearing Notice dated November 22, 2010 to the parties scheduling a hearing on February 1, 2011.

5On January 28, 2011, the Tribunal sent the parties another Notice of Confirmation of Hearing, rescheduling the hearing to March 16, 2011.

6By e-mail dated February 16, 2011, the personal respondent wrote to the Registrar, with a copy to the applicant’s then-representative, to request an adjournment of the scheduled date. The Tribunal issued an Interim Decision granting the respondent’s request on March 8, 2011.

7A Notice of Confirmation of Hearing dated April 7, 2011, was sent to the parties. The Notice of Confirmation of Hearing scheduled the matter to proceed on May 13, 2011.

8The hearing was held on May 13, 2011 and both parties attended. Both the applicant and the respondent were self-represented.

9At the outset, the applicant advised that she had only received notice of the hearing on May 12, 2011. Although the Notice of Confirmation of Hearing was sent to the applicant’s representative, the applicant advised that her legal representative was no longer acting in this matter and had failed or neglected to advise the applicant of the scheduled hearing date. The applicant declined an opportunity to request an adjournment and elected to proceed with the hearing.

10At the commencement of the formal hearing, the applicant presented executed Minutes of Settlement signed by the parties on March 11, 2010 and stated that she had not received any payment in accordance with the terms of the Minutes of Settlement. The respondent agreed that he had executed the Minutes of Settlement and admitted that he had breached the Minutes of Settlement by failing to pay the applicant the settlement monies. The parties confirmed that, to date, none of the settlement monies have been paid.

the minutes of Settlement

11The relevant portions of the Minutes of Settlement state:

The Respondent shall pay the Applicant $25,000.00 as general damages. Payment is due in full on or before June 11, 2010, and may be made in a single payment or by instalments, subject to the respondent’s sole discretion. Payment shall be in the form of a personal cheque(s), made out to “Cézanne Charlebois in trust” and delivered to the applicant’s solicitor.

THE APPLICANT’S SUBMISSIONS

12The applicant submits (and the respondent does not dispute) that although minutes of settlement were signed, no settlement funds have been paid. The applicant produced the signed Minutes of Settlement and confirmed that she has not received any payment in accordance with those Minutes from the respondent. The applicant maintains that the respondent was given three months in which to make the payment due and at the time confirmed his ability to do so. The applicant submits that the respondent willfully refuses to pay the sum due and owing to her and suggests that the respondent entered into the Minutes of Settlement in bad faith.

13The applicant disputes the respondent’s argument that he is impecunious. The applicant conducted a search in the name of the respondent and discovered that he was the “owner at Substance Management of Abuse and Required Testing” and President and CEO at “External Brain Intervention”. The applicant was unable to offer any evidence as to the respondent’s current employment or sources of income. The applicant maintains that the respondent lives in a manner that is inconsistent with the income he alleges. The applicant believes that the respondent has commenced civil actions against his former employer and its principals and in those proceedings has advanced claims totalling in excess of $500,000.

14The applicant seeks monetary compensation for the breach of the Minutes of Settlement in addition to an Order that the settlement monies be paid to her. The applicant notes that the respondent has been in breach of the Minutes of Settlement for approximately 11 months and has made no effort to pay any amount against the total amount due. The applicant asks the Tribunal to provide her with some security that should the respondent prevail in either of the actions he has commenced that the debt due and owing to her be paid from any settlement or award of the Court.

THE RESPONDENT’S SUBMISSIONS

15By way of explanation for his failure to pay the sum owing pursuant to the Minutes of Settlement, the respondent claims that he is impecunious. He claims that he has no ability to pay as his sole source of income is from a business he established and subsequently sold under the name of “Substance Management of Abuse and Required Testing”. The respondent’s position is that he is now an employee of that company. The respondent states that he has no other source of income that can be used to discharge a financial obligation to the applicant. The respondent offered no proof of his employment and income.

16The respondent acknowledges that he signed the Minutes of Settlement dated March 11, 2010 between the parties. He claims to have no money or substantial source of income advising that External Brain Intervention never operated. He states that his sole source of income is from Substance Management of Abuse and Required Testing and that employment is irregular and sporadic and barely allows him to support himself.

17The respondent offered no financial information to assist the Tribunal in arriving at a decision. He acknowledged that he had commenced two separate proceedings against OSAD Inc. and Dave Woodwark and William Nixon. In those proceedings he was initially represented by counsel. He is now self-represented. Examinations for Discovery have been concluded. The respondent advises that all Defendants are represented by Andrew F. Camman of the Polishuk, Camman & Steele Law Firm in London, Ontario. The respondent intends to pursue his claims against the corporate and personal Defendants. One claim alleges wrongful dismissal. The second claim is for oppression.

18It was apparent to the Tribunal that the relationship between the applicant and the respondent is acrimonious. Both parties made accusations against the other that were not relevant to the issues in this proceeding.

19Although the respondent claimed to have sold Substance Management of Abuse and Required Testing he provided no evidence as to who the purchaser was, under what circumstances this sale was effected, what amount of money he obtained from the sale or otherwise what terms may have attached to that sale that may have benefited him. The respondent acknowledges that he has commenced two separate actions in the Ontario Superior Court of Justice that are currently pending. His inability to retain counsel has forced him to self-represent in both actions. He expresses some optimism that the pending matters will resolve either by way of settlement or after trial with a substantial amount of money being paid to him.

analysis

20Subsections 45.9(1), (3) and (8) of the Code provide:

(1) If a settlement of an Application made under Section 34 or 35 is agreed to in writing and signed by the parties, the settlement is binding on the parties;

(3) If a settlement of an Application made under Section 34 or 35 is agreed to in writing and signed by the parties, a party who believes that another party is contravened to settlement may make an application to the Tribunal for an Order under Subsection (8);

(8) If, on an Application under Subsection (3), the Tribunal determines that a party has contravened the settlement, the Tribunal may make any Order that it considers appropriate to remedy the contravention.

21In this case, I find that there was a settlement of an Application agreed to in writing and signed by the parties as evidenced by the Minutes of Settlement. In this respect the requirements of Subsection 45.9(1) are met.

22Paragraph 1 of the settlement required the respondent Nixon to pay the settlement monies in the sum of $25,000 to the applicant on or before June 11, 2010. The respondent has voluntarily admitted he has not complied with his obligations to pay the applicant as he agreed to do. I find that the respondent is therefore in breach of the settlement.

23The Courts have long recognized the distinction between simple breaches of contract and fundamental breaches. See Saunders v Toronto Standard Condominium Corp. No. 1571, 2010 HRTO 2516 at paragraph 41. In the facts of this case, I find that the breach is a fundamental breach and, further, that the Minutes of Settlement have not been satisfied.

24The respondent has acknowledged that he has commenced two actions in the Ontario Superior Court of Justice against a corporate Defendant, OSAD Inc., and the two personal Defendants, Woodwark and Nixon. Each of those claims are still pending before the Court.

25The respondent admits that he believes that he will be successful in one or both of the claims being advanced and that his expectation is that he will receive a sizable award or settlement.

26Respect for terms of a settlement is not only a legally binding, contractual obligation, it also promotes essential Code values. A contravention of settlement can undermine the administration of justice by discrediting the human rights system and generating wrong disincentives to negotiation. The uncertainty created by a contravention of settlement potentially undermines the substantive and procedural provisions of the Code.

27I have no hesitation in ordering that the full amount owing under the terms of the settlement be paid forthwith and in taking the necessary steps to ensure that if the respondent is successful in either of the civil claims he has advanced that prior to him receiving the fruits of any award or settlement he is compelled to honour the agreement reflected by the Minutes of Settlement dated March 11, 2010.

28This Tribunal has previously considered whether, in addition to ordering compliance with the terms of the settlement, Section 45.9(8) permits me to award damages as a remedy for the contravention. Such an award might discourage any party that enters into an agreement in human rights’ proceedings to reflect seriously on the implications of contravention. It is imperative that when called upon this Tribunal reflect both the private and public importance of complying with settlement terms.

29This Tribunal has done so before, see Whitesman and Burns 2011 HRTO 818, I find it is appropriate in this case to award damages to the applicant for the respondent’s breach of the Minutes of Settlement. This award is to reflect the principle that non-compliance with a settlement agreement is a serious matter calling for serious consequences.

30In the circumstances of this case, I order the respondent to pay to the applicant $1,000.00 as a remedy for the contravention of the settlement.

Order

31I therefore make the following order:

a. The respondent shall forthwith pay to the applicant the principal sum of $25,000.

b. In the event that the respondent does not pay the sums owing to the applicant by July 31, 2011, he shall deliver on July 31, 2011 an irrevocable direction to Andrew F. Camman, Barrister and solicitor of the Polischuk, Camman and Steele law firm located at 535 Talbot Street, London, Ontario N6A 2S5 authorizing and directing that Mr. Camman pay to the applicant the amount due and owing pursuant to this Decision. A copy of the irrevocable direction, if required, shall be forwarded to the applicant at Kristine Schenk, c/o Anne Sloman, 480 Grandview Avenue, London, Ontario N6K 2T5.

c. The amount to be paid to the applicant by the respondent shall come from the proceeds, if any, from the lawsuits the respondent has commenced in the Superior Court of Justice against OSAD Inc, David Woodwark and William Nixon alleging oppression and wrongful dismissal.

d. The applicant in addition to the remedy in accordance with paragraph (b) shall retain all other rights and remedies available to her to collect the sum due and owing pursuant to paragraph 31.

e. The respondent shall pay to the applicant the sum of $1,000 as a remedy for the contravention of the settlement agreement.

f. Post-judgment interest in accordance with the Courts of Justice Act on amount of any amount unpaid after July 31, 2011.

g. A copy of this Decision shall be forwarded as follows to Andrew F. Camman, Polischuk, Camman and Steele, 535 Talbot Street, London, Ontario N6A 2S5.

Dated at Toronto, this 13th day of July, 2011.

”Signed by”

Michael M. Lerner

Member