Tamara Kennedy v. Appliance Canada, a Division of Leon’s Furniture and Linton Campbell, 2011 HRTO 384

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Tamara Kennedy

Applicant

-and-

Appliance Canada, a Division of Leon’s Furniture and Linton Campbell

Respondents

DECISION

Adjudicator: Michelle Flaherty

Date: February 22, 2011

Citation: 2011 HRTO 384

Indexed as: Kennedy v. Appliance Canada

APPEARANCES

Tamara Kennedy,Applicant Elsie Peters, Counsel

Appliance Canada, a Division of Leon’s Furniture and Linton Campbell, Respondents Kate McNeill-Keller, Counsel

OVERVIEW

1The applicant filed an Application under s. 34 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended, (the “Code”) in which she alleges discrimination on the basis of sex (sexual solicitation) in the context of employment.

2The respondents have filed a Response in which they deny the allegations of discrimination and request an early dismissal of the Application. The respondents state that the applicant has signed a full and final release with respect to the same matter. The respondents have provided a copy of a release executed by the applicant on December 4, 2008.

3Pursuant to an Interim Decision, 2010 HRTO 1231, the Tribunal held a telephone conference hearing on January 31, 2011 to determine whether the Application ought to be dismissed in light of the release. At the hearing, I heard submissions from counsel for the applicant and counsel for the respondents.

4In her oral submissions, counsel for the respondents referred to Tribunal jurisprudence. Counsel for the applicant had not been advised, in advance of the hearing, of the jurisprudence upon which the respondents intended to rely. At the request of counsel for the applicant, the hearing was adjourned and the applicant was given an opportunity to make written submissions regarding the jurisprudence referred to by the respondent at the hearing. I indicated to the parties that the applicant’s written submissions must be in the nature of a reply and were not an opportunity to raise new arguments or issues. The submissions were to be confined to submissions regarding the case law referred to by the respondent.

5The applicant filed written submissions. The respondent objected to the applicant’s written submissions, arguing that they were beyond the scope of reply submissions and raised arguments not relevant to the issues in dispute.

6It is not necessary for me to determine the respondent’s objection to the reply submissions. It may be that the applicant’s submissions are beyond the scope of a reply. However, even in light of these submissions, I am satisfied that it would be an abuse of process to allow the Application to proceed.

7The Application is dismissed.

THE FACTS

8The applicant was employed by the corporate respondent. She alleges that she was sexually harassed in the workplace and that her reporting of the harassment ultimately led to the termination of her employment.

9On December 4, 2008, following her dismissal, the applicant executed a release in favour of the respondents.

10The material portions of the release are as follows:

The undersigned, Tamara Kennedy (....) does hereby release, and forever discharge Appliance Canada, a Division of Leon’s Furniture LImited, Leon’s Furniture Limited, their officers, directors, employees agents, successors and assigns (the “Releasees”), from any and all actions, causes of action, suits, proceedings, claims, demands, damages (known or unknown), sums of money, promises and liabilities, whatsoever, both in law and in equity, which against the said Releasees, the undersigned ever had, now has, or which the heirs, executors, successors and assigns of the undersigned or any of them, hereinafter can, shall or may have, arising out of the length of service and the employment by the undersigned with any of the Releasees, the cessation of that employment and all maters arising out of that cessation of employment.

[...]

The undersigned acknowledges that he has read this Release carefully and has signed it of his own free will and without any form of duress being exerted upon him by the Releasees or anyone acting on their behalf.

11The applicant does not dispute that she signed the release. She argues, however, that the release is null and void and was signed under duress. She submits that it should not prevent her from proceeding with this Application.

12I note that there is a factual dispute regarding the circumstances in which the release was signed. The applicant contends that she was required to sign the release before leaving the corporate respondent’s premises and that she was not given an opportunity to get legal advice before signing the release.

13The respondents vigorously deny these allegations, stating that the applicant was encouraged to read and take time to understand the release. The respondents state that, in accordance with the corporate respondent’s usual practices, the applicant would have been given an opportunity to get advice had she so requested. The applicant was offered and ultimately received consideration in addition to the statutory notice in exchange for the signing of the release. The respondents state that she would have been paid statutory notice even had she refused to sign the release.

14At this stage of the proceeding and without hearing evidence from the parties, I am unable to resolve the factual dispute. In my view, it is not necessary for me to do so. The parties do not dispute that, whatever the circumstances in which she signed the release, the applicant did not, in fact, ask any questions about the content of the release, nor did she seek an opportunity to consult legal counsel. Rather, the applicant’s contention is that, in the circumstances and given that she was allegedly the victim of sexual harassment, the respondents had a positive and proactive obligation to offer her an opportunity to obtain counsel before signing the release.

ANALYSIS

15Section 23(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended, provides that a tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes.

16The Tribunal has held that filing a human rights application after signing a full and final release in respect of the subject-matter of the application may constitute an abuse of the Tribunal’s process and, where that is the case, such applications should be dismissed. See, for example, Perricone v. Fabco Plastics Wholesale, 2010 HRTO 1655 and Sinnett v. Orlick Industries, 2009 HRTO 916.

17The applicant does not deny that she signed the release or that it relates to the subject-matter of the Application. However, she argues that the release should not prevent her from pursuing the Application because:

a. the release does not specifically refer to rights under the Code;

b. the release uses male pronouns and, therefore, does not refer to the applicant, who is female;

c. no party can waive a right under the Employment Standards Act;

d. a party cannot waive her human rights through a release, at least not when the allegations involve sexual harassment;

e. the respondents had an obligation to explain the nature and contents of the release and offer her an opportunity to obtain legal advice;

f. she did not read the release and ought not to be held to its terms because she was in shock, had just been dismissed, and had allegedly been the victim of sexual harassment; and

g. the release was signed under duress because the applicant was in a difficult financial situation and needed the money that would be paid to her if she signed the release.

18I am not persuaded by any of these arguments. As the Tribunal explained in Perricone, supra:

When two parties contract to settle legal matters between them, the principle of finality demands that the contract be given effect and prevents parties from litigating settled matters, unless there are compelling reasons to set the contract aside altogether. Thus, in determining whether it would be an abuse of process to permit the Application to proceed, the question is not whether the applicant filed her Application in bad faith, but whether the contract (i.e. Release) she entered into is legally binding, and final.

The party alleging duress has the onus of establishing that the circumstances surrounding the conclusion of the agreement amount to duress. The legal threshold is an exacting one, which recognizes the strong public interest in the principle of finality.

19In the circumstances of this case, there are no compelling reasons to set aside the release. First, while the release does not explicitly refer to the Code, the language it contains is very broad and captures all claims for money or damages. In my view, it is clear that the language of the release encompasses applications before the Tribunal. See Kailani v. Securitas Canada, 2009 HRTO 1183 at para. 26, where the Tribunal reached a similar conclusion.

20Second, the gender of the pronouns used in this release has absolutely no bearing on the release’s effect or enforceability. There can be no mistaking the identity of the releasor: the applicant’s name appears clearly in the first sentence of the release and it is typed below the signature line. In any event, the applicant does not deny executing the release.

21Third, the applicant’s arguments regarding the Employment Standards Act are not relevant to the issues before me. It may be that she is arguing that the release could not bar a claim under the Employment Standards Act. However, this has no bearing on whether the applicant has released or can release against the claims she has made in the Application filed under the Code.

22Fourth, there is no merit to the argument that releases do not apply to allegations of sexual harassment. See, for example, Sinnett v. Orlick Industries, supra.

23Fifth, even based on the submissions made on behalf of the applicant, there is no suggestion that she asked any questions about the content of the release or that she requested additional time to review it or to obtain advice. I do not accept that, in the absence of any inquiries or requests by the applicant, the respondents have a positive obligation to explain the nature and contents of the release or to offer an opportunity to obtain legal advice. The applicant’s failure to make reasonable attempts to understand the release before she signed it is not a basis for setting it aside: Perricone, supra and Sinnett, supra. I note that the applicant has not argued that there was any disability or literacy or other factor that would have prevented her from understanding the release had she read it.

24The applicant’s remaining arguments essentially raise the issue of duress, both economic and emotional. The Ontario Court of Appeal described the elements of duress as follows in Taber v. Paris Boutique & Bridal Inc., 2010 ONCA 157 at paras. 8-9:

There is no doubt that economic duress can serve to make an agreement unenforceable against a party who was compelled by the duress to enter into it. Nor is there any doubt that the party can have the agreement declared void on this basis.

However, not all pressure, economic or otherwise, can constitute duress sufficient to carry these legal consequences. It must have two elements: it must be pressure that the law regards as illegitimate; and it must be applied to such a degree as to amount to “a coercion of the will” of the party relying on the concept.

25Parties entering into settlement agreements generally face a number of pressures and often make decisions in difficult circumstances. Pressure and difficult circumstances alone are not enough to meet the exacting threshold set out by the Court of Appeal. To establish duress, the applicant has the onus of establishing a coercion of the will. She has not met this test in the circumstances.

26While she certainly was under stress at the time of her dismissal and while she states that she was upset by the alleged sexual harassment, there is no basis for me to conclude that this stress impacted her ability to enter into a settlement agreement and release or that it was of such a degree as to constitute a coercion of the will.

27In regards to economic pressure, the case law is clear: most parties face economic pressure when concluding agreements and economic pressure alone is not sufficient to set aside a release. See Sinnett, supra. The applicant has not established that, in the circumstances, the pressures she faced amounted to a coercion of the will or warrants the setting aside of the release.

28The corporate respondent entered into an agreement with the applicant and complied with its terms. In my view, the respondents must be entitled to rely upon a settlement agreement and release. To set aside the agreements and allow the Application to proceed would be an abuse of process and unfair in the circumstances.

29For all of these reasons, the Application is dismissed.