Knibbs v. Brant Artillery Gunners Club, 2011 HRTO 2005

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Heather Knibbs

Applicant

-and-

Brant Artillery Gunners Club Incorporated, William Bourne and Elaine Bourne

Respondents

A N D B E T W E E N:

Stephanie Long

Applicant

-and-

Brant Artillery Gunners Club Incorporated, William Bourne and Elaine Bourne

Respondents

RECONSIDERATION DECISION

Adjudicator: Ken Bhattacharjee

Date: November 4, 2011

Citation: 2011 HRTO 2005

Indexed as: Knibbs v. Brant Artillery Gunners Club

WRITTEN SUBMISSIONS BY

William Bourne and Elaine Bourne, Respondents ) Self-represented

INTRODUCTION

1The purpose of this Reconsideration Decision is to address the individual respondents’ Request that the Tribunal reconsider and reverse its decision to impose personal financial liability on them.

BACKGROUND

2On May 30, 2011, the Tribunal issued its Decision, 2011 HRTO 1032, which upheld the Applications that Heather Knibbs and Stephanie Long filed under s. 34 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), against the Brant Artillery Gunners Club Incorporated (the “Club”), which was named as the organization respondent, and William Bourne and Elaine Bourne, who were named as individual respondents.

3The Tribunal decided that the respondents discriminated against Ms. Knibbs because of her disability and subjected her to reprisal with respect to employment. The Tribunal also decided that the respondents discriminated against Ms. Long with respect to employment because of her disability, sex, and association with a person identified by a Code ground.

4The Tribunal further decided that the respondents were jointly and severally liable for the above violations of the Code, and ordered them, among other things, to pay monetary compensation to the applicants totalling $55,167.99 plus applicable pre-judgment and post-judgment interest and an amount to be worked out between the parties for any loss of Employment Insurance maternity/parental benefits by Ms. Long.

5On June 24, 2011, the individual respondents filed a Request for Reconsideration of part of the Decision. Specifically, they requested that the Tribunal reconsider and reverse the Tribunal’s finding as they relate to the imposition of personal liability against them.

6The Request for Reconsideration was filed on behalf of the individual respondents by Ms. Holly Bourne. Although the representation section of the Request form was left blank, the Request appears to have been sent from a law office in London.

RELEVANT LAW, RULE AND PRACTICE DIRECTION ON RECONSIDERATION

7Section 45.7(1) of the Code provides that any party to a proceeding before the Tribunal may request that the Tribunal reconsider a final decision in accordance with the Tribunal rules.

8Rule 26.5 of the Tribunal’s Rules of Procedure states that reconsideration will not be granted unless the Tribunal is satisfied that:

a) there are new facts or evidence that could potentially be determinative of the case and that could not reasonably have been obtained earlier; or

b) the party seeking reconsideration was entitled to but, through no fault of its own, did not receive notice of the proceeding or a hearing; or

c) the decision or order which is the subject of the reconsideration request is in conflict with established jurisprudence or Tribunal procedure and the proposed reconsideration involves a matter of general or public importance; or

d) other factors exist that, in the opinion of the Tribunal, outweigh the public interest in the finality of Tribunal decisions.

9The Tribunal has also issued a Practice Direction on Reconsideration to provide guidance to the community on the nature of the reconsideration process. The Practice Direction states, in part:

Decisions of the Tribunal are generally considered final and are not subject to appeal. However, parties may request that the Tribunal reconsider a final decision it has made. Reconsideration is a discretionary remedy; there is no right to have a decision reconsidered by the Tribunal. Generally, the Tribunal will only reconsider a decision where it finds that there are compelling and extraordinary circumstances for doing so and where these circumstances outweigh the public interest in finality of orders and decisions.

Reconsideration is not an appeal.

REQUEST FOR RECONSIDERATION

10In the Request for Reconsideration, the individual respondents submitted that the Tribunal’s Decision should be reconsidered in accordance with Rule 26.5 (c) and (d).

11Specifically, the individual respondents submitted that the Tribunal should reconsider its decision to impose personal financial liability on them for the following reasons:

a) The Tribunal erred in coming to the conclusion that the individual respondents were “directing minds” of the Club.

b) The individual respondents were deprived of the opportunity to make any submissions on the issue of joint and several liability.

c) The Tribunal made an error of law in finding the individual respondents, as officers and employees of the Club, to be jointly and severally liable with the Club.

d) Imposing personal liability upon the individual respondents would cause extreme financial hardship.

12With respect to b), the individual respondents stated that the spectre of joint and several liability was never made apparent to them during the hearing. They stated that the Tribunal should have impressed the importance of this issue on them, and afforded them the opportunity to make submissions.

13I disagree that the spectre of joint and several liability was never made apparent to the individual respondents during the hearing, and that they were deprived of the opportunity to make submissions on this issue.

14On the first day of the hearing, I informed all the respondents that I expected them to respond to the applicants’ position on liability and remedy. I also informed them that, although I could not provide legal advice to them, I would provide them with information on the process, and answer their questions at any time during the hearing.

15On the last day of the hearing, Michael White appeared and identified himself as recently retained legal counsel for the newly elected Officers of the Club. I allowed him to make oral and written submissions in which he stated, among other things, that the individual respondents, who were alleged to be the main perpetrators of the acts of discrimination and reprisal, had a motive to share liability with the Club, and that the Club should have had an opportunity to provide defences that pertain to its vicarious liability as distinct from the liability of the individual respondents.

16I also heard closing submissions from the parties. In their submissions on remedy, the applicants explicitly requested that the Tribunal find that the Club and Mr. and Mrs. Bourne were jointly and severally liable for the acts of discrimination and reprisal against the applicants. They also submitted that the fact that there was corporate liability did not shield Mr. and Mrs. Bourne from liability.

17The individual respondents provided oral and written submissions in response to Mr. White’s submissions, and oral closing submissions in response to the applicants’ closing submissions. As such, the allegation that the spectre of joint and several liability was never made apparent to the individual respondents during the hearing, and that they were deprived of the opportunity to make submissions on this issue, is simply wrong. Whether they fully understood the issue of joint and several liability is a separate issue, which I will address below.

18In their submissions, the individual respondents stated that they did not make any decisions independently of the Executive of the Club, and that the consecutive Presidents of the Executive (Ray Paine and Jim Calder), who were named as individual respondents in the Applications but removed as respondents during the hearing, were ultimately responsible for the actions of the Club and should not have been removed as individual respondents. They also stated that two other Officers of the Executive (Linda Conrad and Claude Alain), who were named as individual respondents in the Applications but removed as respondents prior to the hearing, were also responsible for the actions of the Club and should not have been removed as individual respondents.

19My impression at the time was that the individual respondents understood the issue of joint and several liability, and their argument was that any liability should also be spread to other individuals, specifically, the consecutive Presidents and other Officers of the Executive, who had initially been named as individual respondents to the Application along with themselves.

20The individual respondents have now provided submissions in their Request for Reconsideration, which clearly indicate that they did not understand the issue of joint and several liability at the time of the hearing, and would have provided more extensive submissions if they had.

21In view of the fact that the individual respondents were not represented by counsel, and their submissions on the issue of joint and several liability were brief, I am willing to give them the benefit of the doubt that they did not fully understand the issue of joint and several liability at the time of the hearing. I am also cognizant of the fact that the imposition of personal financial liability is an extremely serious matter.

22Accordingly, pursuant to Rule 26.5 (d), I am willing to reconsider my decision on the narrow issue of whether personal liability should be imposed on the individual respondents pursuant to the principle of joint and several liability. In my view, the factors set out in the above paragraph outweigh the public interest in the finality of the Tribunal’s Decision.

23In reconsidering this issue, I will consider the submissions by the individual respondents in their Request for Reconsideration, as well as the submissions by the other parties during the hearing.

RECONSIDERATION: JOINT AND SEVERAL LIABILITY

24The applicants submitted that the individual respondents should be personally liable because corporate liability does not act as a shield or defence to personal liability for agents or officers of corporations (Cunanan v. Boolean Development Ltd., 2003 HRTO 17, at paras. 73-74). They further submitted that the ultimate test of liability is not whether it is practically necessary, but whether the facts support joint and several liability, including whether the individual respondents played a central role in the discriminatory conduct, were directing minds, and acted alone or independently (Cuanan, supra, at para. 73 and Epstein v. York Condo Corp 67, 2003 HRTO 14, at paras. 28-30).

25In applying these principles to the case at hand, the applicants submitted that Mr. and Mrs. Bourne should be personally liable because they played a central role in the discriminatory conduct, were directing minds of the Club, and acted alone or independently to a significant extent.

26The Club’s submissions on this issue are somewhat confusing because for the first seven days of the eight-day hearing, the Club was formally represented by Mr. Bourne, who was assisted by Mrs. Bourne, Mr. Paine and Mr. Calder. As mentioned in paragraph 18 above, Mr. and Mrs. Bourne both stated that neither of them made any decisions independently of the Executive of the Club. On the other hand, Mr. Bourne also stated at the hearing that the Club had no money to pay the applicants if it was found liable for discrimination and reprisal. Mr. White’s submissions on behalf of the newly elected Officers of the Club were set out in paragraph 15 above.

27In their Request for Reconsideration, the individual respondents submitted that both the common law and the Tribunal’s jurisprudence stand for the proposition that, in the absence of fraud or dishonesty, it is improper to hold officers or employees of a corporation or entity personally liable for actions while those individuals are acting within the course and scope of their employment (ScotiaMcLeod Inc. v. Peoples Jewellers Ltd., (1995), 1995 CanLII 1301 (ON CA), 26 O.R. (3d) 481 (C.A.); Budd v. Gentra Inc., (1998), 1998 CanLII 5811 (ON CA), 111 O.A.C. 288 (C.A.); Normart Management Ltd. v. West Hill Redevelopment Co. Ltd., (1998), 1998 CanLII 2447 (ON CA), 37 O.R. (3d) 97 (C.A.); ADGA Systems International Ltd. v. Valcom Ltd., (1999), 1999 CanLII 1527 (ON CA), 43 O.R. (3d) 101 (C.A.), leave to appeal to S.C.C. ref’d [1999] S.C.C.A. No. 124; and Xerox Canada Finance Inc. (Canaplan Leasing) v. Wilson's Industrial Auctioneers Ltd., (1999), 1999 CanLII 18667 (ON CA), 122 O.A.C. 97 (C.A.).)

28The individual respondents stated that this proposition was set out by the Ontario Court of Appeal in ScotiaMcLeod Inc., supra, as follows:

The decided cases in which employees and officers of companies have been found personally liable for actions ostensibly carried out under a corporate name are fact-specific. In the absence of findings of fraud, deceit, dishonesty or want of authority on the part of employees or officers, they are also rare. Those cases in which the corporate veil has been pierced usually involve transactions where the use of the corporate structure was a sham from the outset or was an afterthought to a deal which had gone sour…. Absent allegations which fit within the categories described above, officers or employees of limited companies are protected from personal liability unless it can be shown that their actions are themselves tortious or exhibit a separate identity or interest from that of the company so as to make the act or conduct complained of their own.

None of the conduct alleged against the respondent directors falls within the broad categories I have outlined above. Their exposure, if there is any, is narrowly focussed on their formal decision making in the name of Peoples. A corporation may be liable for contracts that its directors or officers have caused it to sign, or for representations those officers or directors have made in its name, but this is because a corporation can only operate through human agency, that is, through its so-called "directing mind"…. To hold the directors of Peoples' personally liable, there must be some activity on their part that takes them out of the role of directing minds of the corporation.

There was a good deal of discussion in this court and before the motions judge regarding what conduct of the directors would be sufficient to cause the directors to shed their identity with the corporation and expose themselves to personal liability for the corporation's alleged wrongdoing…. I do not think this type of discussion is useful when there are no allegations whatsoever as to the personal conduct of the directors qua directors.

29In applying these principles to the case at hand, the individual respondents submitted that personal liability should not be imposed on them because there is no evidence that the corporate structure of the Club was in any way a sham, or that the applicants would be left without a remedy if personal liability was not imposed on them. The individual respondents also submitted that there is no evidence that they were not acting within the course and scope of their employment.

30The individual respondents also submitted that the Tribunal erred in finding that they were “directing minds” of the Club. They stated that the Tribunal found that Mr. Paine and Mr. Calder were the consecutive Presidents of the Club, and the fact that the individual respondents supervised the applicants and other employees did not make them “directing minds”.

31The individual respondents further submitted that the Tribunal erred in law when it relied on several cases (Curling v. Torimoro, [2000] O.H.R.B.I.D. No. 16, Reed v. Cattolica Investments Ltd., [1996] O.H.R.B.I.D. No. 7, and Robichaud v. Canada (Treasury Board), 1987 CanLII 73 (SCC), [1987] 2 S.C.R. 84) to support the proposition that there should be personality liability against individual respondents under the concept of joint and several liability. The individual respondents stated that those cases stand for the opposite proposition: imposed liability against the corporation or organization based on the acts of its members.

32I now turn to my analysis and decision. I will deal first with the individual respondents’ argument that I erred in law in relying on Curling, Reed and Robichaud, supra. I disagree. I agree that those cases stand for the proposition that liability may be imposed against a corporation or organization based on the acts of its members, but they also stand for the proposition that in discrimination cases an organization can be solely liable, an officer/director/employee can be solely liable, or an organization and its officers/directors/employees can share liability. I cited the cases to reflect this latter proposition.

33I will deal next with the individual respondents’ submission that they were not “directing minds” of the Club. Again, I disagree. It is undisputed that Mr. and Mrs. Bourne were Officers of the Club and members of the Executive of the Club, as well as the supervisors of employees (see, for example, paras. 11 and 12 of the Decision). In addition, the evidence clearly established they took the lead in dealing with employer-employee issues and other important matters at the Club.

34I will deal next with the individual respondents’ reliance on a series of Ontario Court of Appeal cases in paragraphs 27 and 28 above. I agree that those cases set out useful common law principles, but they deal with personal liability within the context of breach of contract, tortious conduct, breach of fiduciary duty, and/or oppressive conduct issues. None of them deal with personal liability within the context of discrimination and reprisal issues under the Code.

35In Cartwright v. Rona and another, 2011 BCHRT 65, the British Columbia Human Rights Tribunal (the “BCHRT”) found that the corporate respondent and the individual respondent, who was a part owner and general manager of the corporate respondent, were jointly and severally liable for the damages ordered. The BCHRT explained at para. 185:

Mr. Millsap was named as an individual respondent in this matter. He did not argue that the complaint should be against the corporate respondent alone or that the corporate respondent assumed liability for all actions of its managers. Nevertheless, I have considered the principles for individual liability set out in Daley v. B.C. (Ministry of Health) and others, 2006 BCHRT 341. I find that Mr. Millsap was, at all relevant times, the directing mind for the corporate respondent and bears individual culpability respecting Mr. Cartwright’s treatment; therefore the complaint remains against both Respondents.

36In Daley, supra, the BCHRT set out the specific principles for individual liability at paras. 60-62:

In my view, there are circumstances in which it would not further the purposes of the Code to name individual respondents. In particular, where the complainant names the corporate or institutional employer as a respondent, and that respondent has the capacity to fulfil any remedies that the Tribunal might order, little useful purpose may be served by also naming the individuals who were involved in the events in issue on behalf of that respondent. A significant factor to be taken into account is whether the institutional respondent, as in Marc, and in the present case, has acknowledged the acts and omissions of the individual in question as its own, and has irrevocably acknowledged its responsibility to satisfy any remedial orders which the Tribunal might make in respect of that individual’s conduct.

Also significant will be the nature of the conduct alleged against the individual. Without attempting to provide an exhaustive list, consideration should be had as to whether the conduct alleged was within the course of that person’s employment or whether there is anything in the allegations made against that person which would take his or her conduct outside of the normal scope of his or her duties. It may also be relevant to consider whether the person is alleged to have been the directing mind behind the discrimination alleged or to have had the ability to influence substantially the course of action taken.

Finally, it may also be appropriate to consider whether the conduct alleged against the individual has a measure of individual culpability. The clearest example of such conduct is where an individual is accused of sexual harassment or other similar behaviour. In such a case, no plausible argument can usually be made that the harasser was acting within the scope of his or her authority. While the employer is, in such cases, still liable for the harassment engaged in, as it occurred in the course of the harasser’s employment, broadly defined, the individual harasser also has a measure of individual culpability. Such a person is not merely performing the duties of their employment, albeit in a manner which is ultimately found to have resulted in discrimination. It tends to further the purposes of the Code in such circumstances for the individual harasser to be subject to individual liability.

37This Tribunal set out similar principles in Persaud v. Toronto District School Board, 2008 HRTO 31, at para. 5:

a) Is there is a corporate respondent in the proceeding that also is alleged to be liable for the same conduct?

b) 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?

c) Is there is any issue as to the ability of the corporate respondent to respond to or remedy the alleged Code infringement?

d) 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?

e) Would any prejudice be caused to any party as a result of removing the personal respondent?

38Although Persaud, supra, was decided in the context of a request to remove an individual respondent prior to the hearing, this Tribunal has also found the above principles may be applicable in deciding whether to impose individual liability (Williams v. Children’s Aid Society of Toronto, 2011 HRTO 265, at para. 180).

39In my view, it would not be correct to reverse my finding that the organization respondent and the individual respondents are jointly and severally liable for the violations of the Code. Mr. and Mrs. Bourne were directing minds of the Club, and were personally and centrally involved in all the acts of discrimination and reprisal. In fact, they were the directing minds of the acts of discrimination and reprisal. In addition, several of their acts were clearly done alone and independently, and were outside the scope of their employment duties (see, for example, paras. 65, 68, 107, 130, 131, 149, 159 and 180 of the Decision).

40Furthermore, although the Club is vicariously liable for the acts of discrimination and reprisal by Mr. and Mrs. Bourne, there is clearly an issue as to the ability of the Club to remedy the Code violations. Mr. Bourne himself stated that the Club had no money to pay the applicants damages, and the new Executive of the Club is taking the position that the Club should not be liable for the conduct of Mr. and Mrs. Bourne. Mr. and Mrs. Bourne have also argued that imposing personal liability upon them would cause extreme financial hardship. Circumstances such as these, where both the organization respondent and the individual respondents have raised issues about their ability to pay monetary damages to the applicants, constitute a further reason to impose joint and several liability.

ORDER

41The individual respondents’ Request that the Tribunal reverse its decision to impose personal financial liability on them is dismissed.