HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Lorraine Harvey
Applicant
-and-
Newtek Automotive Distribution Inc. and Jane Wu
Respondents
DECISION
Adjudicator: Kevin G. Cleghorn
Indexed as: Harvey v. Newtek Automotive Distribution Inc.
1This is an Application for Contravention of Settlement (the “Application”) filed under section 45.9(3) of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”). The respondents have failed to file a Response, notwithstanding having received notice of the Application. As a result, the Tribunal will proceed without the participation of the respondents.
2The Application was filed on June 5, 2012 and sent to the respondents on June 6, 2012. Because the respondents did not file a Response within 14 days as required by the Tribunal’s Rules, the Tribunal issued a “no response decision” 2012 HRTO 1959 directing that a response be filed by October 30, 2012 and advising of the consequences for failure to respond. The respondents did not file a Response as required by the Rules or as directed in that decision.
3In a further Interim Decision dated December 11, 2012, this Tribunal made the following Order:
The respondents are deemed to have accepted all of the allegations set out in the Application;
The respondents are deemed to have waived all rights to notice or participation in these proceedings; and
Within 3 weeks of the decision the applicant may submit any additional document she wishes the Tribunal to consider in deciding this Application.
4The applicant did not submit any additional documents. The applicant was asked to advise the Registrar by December 31, 2012 whether she wished to make oral submissions, and whether she wished to offer those submissions by way of teleconference or in person. No request for submissions by any means was made to the Registrar.
5In the Application, the applicant seeks the following relief:
“An Order against Newtek Automotive Distribution Inc. and Jane Wu severally to pay the sum of $20,000.00 plus post judgment interest under (sic) Courts of Justice Act from May 4, 2012 onwards, plus $2,000.00 in legal fees due to the enforcement of this settlement.”
6The Application brought under HRTO file number 2010-05683-I (the “original Application”) was resolved as between the parties by way of Minutes of Settlement. The Minutes of Settlement were executed by the respondents on April 27, 2012. A second copy of the Minutes of Settlement, identical in all respects, was executed by the applicant on May 1, 2012. I am satisfied that there was a binding agreement made between the parties for resolution of the original Application. The crux of the settlement involved a payment by the respondent, Newtek Automotive Distribution Inc., to the applicant of $20,000.00 by May 4, 2012 in return for a general release of all claims by the applicant in favor of both respondents. The respondent, Jane Wu, had no requirement to meet any obligation or, indeed, to pay anything to the applicant pursuant to the Minutes of Settlement, save and except to maintain the confidentiality of the settlement. In the Minutes of Settlement, both respondents deny any and all liability in relation to the subject matter of the original Application. There is no allegation that the respondent, Jane Wu, has breached the settlement in any way whatsoever i.e. that she has not fulfilled the confidentiality requirement of the settlement. The breach of the settlement relates solely to the failure of the respondent, Newtek Automotive Distribution Inc., to pay settlement funds as required, or at any subsequent time thereafter. I am further satisfied that the requisite payment required by the Minutes of Settlement has not been made notwithstanding the binding agreement.
7The powers of this Tribunal on an Application for Contravention of Settlement are set out in s. 45.9 (8) of the Code as follows:
“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.”
8In this instance, the applicant seeks to enforce a settlement involving a significant monetary payment as against a party, namely the respondent Jane Wu, who was not required to pay it. While the powers to make an order under s. 45.9 (8) appear broad, such powers must be exercised judiciously, fairly and bearing in mind the necessity of procedural fairness. The requirements of procedural fairness are directly related to the significance of the remedy being sought; the more dramatic the remedy, the greater are the procedural safeguards that must be put in place prior to awarding that remedy: see Baker v. Canada (Minister of Citizenship and Immigration) 1999 CanLII 699 (SCC), [1999] 2 S.C.R. 817. While the respondent, Jane Wu, may have been served with the Application, she may not have contemplated that she might be liable for payment of the $20,000.00 amount where the Minutes of Settlement itself did not provide for that possible outcome. This Tribunal is not aware of any authority that permits enforcement of a settlement except in accordance with the precise terms of the actual agreement made between the parties.
9In addition, the Application seeks payment of “$2,000.00 in legal fees due to the enforcement of this settlement.” This Tribunal is not empowered to award costs: see Seguin v. Great Blue Heron Charity Casino, 2009 HRTO 940, 2009 HRTO 940; Tulul v. King Travel Can, 2011 HRTO 438, 2011 HRTO 438; Lopetegui v. 680247 Ontario, 2009 HRTO 1248, 2009 HRTO 1248; Farris v. Staubach Ontario Inc., 2011 HRTO 979, 2011 HRTO 979, Clennon v. Toronto East General Hospital, 2010 HRTO 506, 2010 HRTO 506; M.O. v. Ottawa Catholic District School Board, 2011 HRTO 1174. The lack of power to award costs is no different on an Application for Contravention of Settlement; see, for example, Glover v. 571566 Ontario Inc. 2011 HRTO 1563. This Tribunal, however, may award damages for breach of a settlement over and above any interest award which may accrue on unpaid settlement funds: see Sleiman v. The Participation House Project (Durham Region) 2012 HRTO 345. The respondents did not contest this application and were aware that they faced, jointly and severally, the prospect of an award of some kind arising from the breach of the settlement, albeit characterized as “legal costs” in the Application. This Tribunal can exercise its discretion to award a reasonable amount of damages for breach of the settlement in the face of a blatant and continuing failure of a respondent to abide by the terms of a settlement, particularly in the absence of an explanation for that breach. The damages can amount to an award which recognizes that there is some cost, inconvenience and aggravation involved with the enforcement of the settlement. The award, however, should be made solely as against the party who has breached the settlement in a material respect and always in an amount that is appropriate under the circumstances.
ORDER
10For the reasons set out above, I hereby order that the respondent, Newtek Automotive Distribution Inc., shall pay to the applicant forthwith:
(a) the sum of $20,000.00;
(b) pre-judgement interest on the above-mentioned amount in accordance with the Courts of Justice Act from May 4, 2012 to April 8, 2013;
(c) post-judgement interest on the above-mentioned amount in accordance with the Courts of Justice Act from April 8, 2013 to the date of payment; and
(d) $1,000.00 as damages for breach of the settlement.
Dated at Toronto, this 23rd day of April, 2013.
“signed by”
Kevin G. Cleghorn
Member