Roycroft v. Premier Salons Ltd., 2013 HRTO 573

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Karen Roycroft

Applicant

-and-

Premier Salons Ltd. and Brian Luborsky

Respondents

INTERIM DECISION

Adjudicator: Kathleen Martin

Date: April 8, 2013

Citation: 2013 HRTO 573

Indexed as: Roycroft v. Premier Salons Ltd.

WRITTEN SUBMISSIONS

Karen Roycroft, Applicant

Voula Michaelidis, Counsel

Premier Salons Ltd. and Brian Luborsky, Respondents

Jeff C. Hopkins, Counsel

1This is an Application filed under s. 34 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), alleging discrimination with respect to employment on the basis of disability as well as reprisal. This Interim Decision addresses whether the Application should be dismissed on the basis of s. 34(11) or deferred to a related civil proceeding.

BACKGROUND

2The Application was filed on November 18, 2011. The applicant has been employed with the corporate respondent for 33 years and occupies the position of senior vice president of operations. The individual respondent is the chief executive officer of the corporate respondent.

3In the Application, the applicant makes a number of allegations about the manner in which the respondents treated her following her return to work after a medical leave of absence in 2008. Among other things, the applicant alleges that she was excluded from meetings, repeatedly advised that her job was in jeopardy because of future plans to change the management and had an account removed from her. The applicant also states that she was denied a salary increase, bonus and review for the reason that the individual respondent had supported her medical leave and that she was demeaned in front of her co-workers. The applicant states that on October 25, 2010, she left work for medical reasons, and after doing so, the individual respondent refused to accept her doctor’s statement, demanded specifics of her medical condition, refused to provide her with sick benefits, denied her request for a Record of Employment, tried to force her to leave her employment and adversely interfered with her ability to apply for long-term disability benefits.

4The applicant states that based on the foregoing, she believes that the respondents penalized her for requiring a sick leave and exercising her right to the leave. The applicant further states that she believes that her right to equal treatment with respect to employment without discrimination because of disability and her right to freedom from reprisal or threat of reprisal were infringed by the respondents. As a remedy the applicant seeks $50,000.00 in damages for mental distress, lost wages in an amount to be determined and legal costs.

5A Response was filed denying the allegations. Among other things, the respondents state that the applicant is not disabled and that by taking a leave without establishing need, the applicant abandoned her employment.

6On July 17, 2012, the Tribunal issued a Notice of Rescheduled Hearing setting April 9 and 10, 2013 as hearing dates.

7On January 22, 2013, the respondents filed a Request for Order During Proceedings seeking dismissal of the Application on the basis of s. 34(11) (the “Request”). The respondents state that on October 23, 2012, the applicant commenced a civil proceeding against the respondents containing the same allegations made in the Application and seeking damages pursuant to the Code. A copy of the Statement of Claim is attached to the Request.

8The Statement of Claim is based on much of the same factual narrative as the Application although it includes additional factual allegations including that the applicant protested and expressed concerns about the material and fundamental changes to her employment and the harassment to which she was subjected, that it was a term of her employment that she would have indefinite tenure and not be terminated except with reasonable notice and that she was constructively dismissed from her employment without notice of termination or pay in lieu of such notice. The Statement of Claim includes a number of remedies including damages for constructive dismissal, damages for breach of the Code, punitive damages and damages for mental distress, interest and costs.

9On February 5, 2013, the applicant filed a response opposing the Request. The applicant states that she issued the Statement of Claim for the sole reason of preserving the two-year limitation period in which to commence a civil action with respect to constructive dismissal. The applicant states that the respondents have not been served with the Statement of Claim although they were advised of the same on October 30, 2012, along with being given reassurances that the Statement of Claim would be amended to proceed with only a constructive dismissal claim, thus suggesting that there is no concurrent proceeding. The applicant argues that there is no risk of inconsistent findings or waste of public and private resources due to duplicative litigation and conversely there would be significant prejudice to the applicant if the Request is granted given that the applicant would be required to serve and commence the civil litigation.

10On February 19, 2013, the applicant amended the Statement of Claim to remove the paragraph which alleged infringement of her right to equal treatment with respect to employment without discrimination and harassment because of disability and her right to freedom from reprisal or threat of reprisal. The applicant also removed the request for damages for breach of the Code.

11At the request of the respondents, the Tribunal provided an opportunity to file further submissions prior to considering the Request.

12In their further submissions, while the respondents acknowledge there can be a distinct application and wrongful dismissal action that does not engage s. 34(11), they argue that in this case, the clear overlap in facts, legal claims and remedies between the Application and Amended Statement of Claim bar the Application. The respondents state that the applicant’s Code-related allegations continue to form the basis of her claim for punitive damages and there remains overlapping claims for damages for mental distress in the Amended Statement of Claim and Application.

13The applicant disputes the characterization of the amended Statement of Claim. The applicant maintains that while there is factual similarity in the amended Statement of Claim and Application, the issues, legal theories and remedies are distinct. The applicant states that the civil action is based on breach of the implied term in her contract of employment to compensate her for reasonable notice, whereas the Application alleges discrimination on the basis of disability. The applicant also cites the respondents’ delay in raising this objection given that the respondents were aware of the issue for three months and only raised the argument when the hearing dates were imminent.

DECISION AND ANALYSIS

14Section 34(11) of the Code provides:

A person who believes that one of his or her rights under Part I has been infringed may not make an application under subsection (1) with respect to that right if,

(a) a civil proceeding has been commenced in a court in which the person is seeking an order under section 46.1 with respect to the alleged infringement and the proceeding has not been finally determined or withdrawn; or

(b) a court has finally determined the issue of whether the right has been infringed or the matter has been settled.

15Section 46.1 reads:

46.1 (1) If, in a civil proceeding in a court, the court finds that a party to the proceeding has infringed a right under Part I of another party to the proceeding, the Court may make either of the following orders, or both:

1. An order directing the party who infringed the right to pay monetary compensation to the party whose right was infringed for loss arising out of the infringement, including compensation for injury to dignity, feelings and self-respect.

2. An order directing the party who infringed the right to make restitution to the party whose right was infringed, other than through monetary compensation, for loss arising out of the infringement, including restitution for injury to dignity, feelings and self-respect.

(2) Subsection (1) does not permit a person to commence an action based solely on an infringement of a right under Part I.

16I begin first with the issue of whether or not a civil proceeding has been commenced. I find that, notwithstanding the absence of service to the defendants, a civil proceeding has been commenced by the issuing of the Statement of Claim. As highlighted by the respondents, Rule 14.01(1) of the Rules of Civil Procedure states that “a proceeding shall be commenced by the issuing of an originating process”. The documentation provided reflects that the Statement of Claim was issued on October 23, 2012 (CV-12-466110) and amended on February 19, 2013.

17Given that a civil proceeding has been commenced, the issue is whether or not s. 34(11) is otherwise engaged. Having carefully considered the submissions of the parties, I find that the Application is not barred pursuant to s. 34(11).

18As indicated above, the respondents acknowledge that there can be a distinct application and wrongful dismissal action that does not engage s. 34(11). However, the respondents argue that in this case, the clear overlap in facts, legal claims and remedies between the Application and Amended Statement of Claim bars the Application.

19To the extent the respondents submit that the overlap in facts in the Application and amended Statement of Claim supports a conclusion that the Application is statute- barred, I disagree. In a number of cases, the Tribunal has found that the fact that separate legal proceedings arise out of the same facts is not a basis on which to find that the Application is barred under s. 34(11): Moreland v. St. Michael’s Hospital, 2012 HRTO 2262, and Baker v. Sears Canada, 2009 HRTO 1014.

20Rather, in determining whether an Application is statute-barred pursuant to s. 34(11) of the Code the central question is whether a civil proceeding has been commenced in which the applicant is seeking a remedy for the alleged infringement of his or her rights under the Code.

21As stated in Beaver v. Dr. Hans Epp Dentistry Professional Corporation, 2008 HRTO 282 at para. 10:

Section 34(11) is intended to eliminate duplicate court and Tribunal proceedings alleging breaches of the Code. An applicant’s ability to bring an application at the Tribunal is removed where there is an ongoing court proceeding in which he or she has made a claim for remedies based upon the same alleged infringement of the Code, where a court has finally determined the issue of whether the right has been violated, or where the matter has been settled. Section 34(11) is triggered by the applicant’s decision to raise the Code and seek remedies for its violation in a court action [emphasis added].

22In this case, I agree with the applicant that the human rights Application is not barred under s.34(11) of the Code because the applicant is not seeking a remedy for an alleged infringement of the Code in her civil action against the respondent.

23The applicant in this case originally filed a civil claim against the respondents claiming that they had constructively dismissed her from employment and that they had discriminated against her contrary to the Code. However, the applicant subsequently amended her Statement of Claim to specifically remove the allegation that the respondents infringed her rights under the Code and her prayer for relief under the Code. What remains, the applicant submits and I agree, is a civil action for constructive dismissal and any remedies that may flow therefrom. Given that the applicant has withdrawn her request for a remedy under the Code, there is no basis upon which to dismiss the human rights Application under s. 34(11).

24In coming to this conclusion, I have considered the respondents’ argument that an application may be dismissed under s. 34(11) even when a statement of claim does not explicitly reference the Code. I agree that the Tribunal in Beaver concluded that it would be overly technical to find that the bar under s.34(11) applies only where s.46.1 of the Code (i.e. the section on remedy) has been specifically pleaded in the civil action. However, the Tribunal went on in Beaver to hold that the bar in s. 34(11) of the Code was triggered in that case because “this plaintiff has asked the court to find an infringement of her rights under the Code and sought damages based on that alleged infringement.” (Beaver, above, at para. 11). In this case, the plaintiff in the civil action has not asked the court to find an infringement of her rights under the Code and sought damages based on that alleged infringement. On the contrary, she has specifically amended her Statement of Claim to remove the Code claim from the proceeding before the court, leaving only her claim for a remedy arising from her alleged constructive dismissal.

25In addition, I have considered the respondents’ specific submissions about particular paragraphs in the Amended Statement of Claim. The respondents argue that the fact that the Amended Statement of Claim pleads that the respondents penalized the applicant for taking a sick leave and that she suffered emotional, mental and financial losses as a result means that the human rights Application is barred under s. 34(11). In my view, the fact that the civil claim contains this pleading is not a sufficient basis upon which to find that the Application is statute-barred. The allegation that the respondent treated the applicant in a certain way in relation to sick leave and/or that such treatment had a negative impact on the applicant may be part of the factual foundation for both the civil action and the human rights Application. However, as noted above, the existence of overlapping factual allegations, which is how I regard the pleading in question, is not a basis upon which to find the Application barred under s. 34(11) of the Code. The key fact remains that the applicant is not seeking a finding in the civil action that her rights under the Code have been infringed or a remedy for such infringement. This is evident not only from the amended Statement of Claim but also from the applicant’s submissions in respect of the s. 34(11) issue. Of course, it goes without saying that any issue about the relevance of the above-noted pleading to the applicant’s constructive dismissal action and/or the applicant’s entitlement to a remedy is for the judge in the civil action to determine.

26Nor am I persuaded that the Application is barred under s. 34(11) because of the inclusion of a claim for punitive damages in the civil action. In the pleadings of the Amended Statement of Claim, the claim for punitive damages is based on alleged mental distress which is linked to the applicant being forced to take a medical leave and undergoing treatment for health issues related to incidents at work. The applicant through her counsel has represented that this claim is related to constructive dismissal and “specifically unrelated to the Code”. Given this express representation by the applicant’s counsel and the withdrawal in the amended Statement of Claim of any reliance on the Code and request for a remedy under the Code, the statutory bar does not apply. In reaching this conclusion, I am also mindful that punitive damages may be sought as a potential remedy in a wrongful dismissal case. In any event, as indicated above, the relevance of such a pleading and/or the applicant’s entitlement to a remedy for the same is for the judge in the civil action to determine.

27I have also considered the other cases relied on by the respondents in their submissions but do not find it necessary to review the cases in detail. Suffice to say each case depends on the adjudicator’s decision of whether or not there is a concurrent proceeding in which the applicant seeks a remedy for an alleged violation of the Code. In this case, I accept that the applicant has commenced a civil claim for constructive dismissal which has been specifically amended to remove any allegation that the Code has been breached and/or a claim for a remedy under the Code. In the result, I do not find that the Application is barred under s. 34(11).

28The respondents’ request is therefore dismissed.

29I also do not find that it would be fair, just or expeditious to defer this Application pending the conclusion of the civil proceeding.

30Deferral of an application ensures that proceedings dealing with the same facts and/or issues do not run concurrently, thereby raising the possibility of inconsistent decisions on facts or law (a concern identified by the respondents). The Tribunal has stated that deferral is not automatically invoked simply because the parties are involved in other legal proceedings. Deferral is a discretionary measure that the Tribunal exercises in considering what is fair, just and expeditious in the circumstances of each case.

31Here, the Application was filed November 18, 2011 and the civil suit was not issued until October 23, 2012. Based on the material filed, I understand that the latter has not yet been served.

32In these circumstances, I do not find it appropriate to defer. While it is apparent that the Application and civil proceeding will address similar factual issues, the Application is scheduled for hearing this week, whereas the civil proceeding is in an early stage. The hearing will proceed as scheduled subject to addressing the respondents’ request to adjourn. I will hear any further submissions on the request to adjourn at the outset of the hearing.