HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Wenxin (Wendy) Wang Applicant
-and-
Evertz Microsystems Ltd. Respondent
DECISION
Adjudicator: Mark Hart Date: April 25, 2013 Citation: 2013 HRTO 694 Indexed as: Wang v. Evertz Microsystems Ltd.
APPEARANCES
Wenxin (Wendy) Wang, Applicant Self-represented
Evertz Microsystems Ltd., Respondent Stuart Ducoffe, Counsel
1This Decision relates to an Application filed on October 22, 2012 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 because of race and sex.
2In its Response, the respondent raised as a preliminary issue that the Application should be dismissed as an abuse of process on the basis that the applicant had agreed to a settlement of the issues arising from her employment, including issues under the Code.
3By letter dated January 15, 2013, the parties were advised that, as s. 43(2) of the Code provides that this Tribunal shall not finally dispose of an application within its jurisdiction without affording the parties an opportunity to make oral submissions, the matter would be scheduled for a one-half day teleconference hearing to hear the parties’ submissions on the respondent’s request to dismiss.
4By letter dated February 1, 2013, the parties were notified that the teleconference hearing would be held on April 8, 2013.
5The teleconference hearing proceeded on April 8, 2013, and I heard the submissions of all parties on the preliminary issue. The applicant was assisted on the conference call by an interpreter.
Relevant Facts
6The facts relevant to the determination of this issue are relatively straightforward. The applicant was dismissed from her employment without cause on October 27, 2011, and was offered severance of seven weeks in exchange for the signing of a Release that included any Code issues. This severance offer was in excess of the applicant’s statutory entitlements, given that she had been employed by the respondent for three years and seven months.
7The applicant retained legal counsel, who engaged in negotiations with the respondent to increase the severance package. By e-mail correspondence dated January 4, 2012, applicant’s legal counsel offered to settle the matter on the basis that she would receive severance of eleven weeks, with three weeks allocated as wages subject to the usual withholdings and the remaining eight weeks allocated as a retiring allowance, subject to a flat 20% withholding for tax. In addition, certain specified tasks performed by the applicant during her employment were to be added to a draft reference letter.
8By e-mail correspondence dated January 6, 2012, respondent counsel accepted this settlement offer, subject to the applicant executing a Release in the form previously provided to applicant counsel. Respondent counsel also confirmed that the applicant already had received the three weeks’ pay that was to be allocated as wages. Finally, respondent counsel provided a draft letter of reference that had been updated to include the tasks as requested by the applicant. The January 6, 2012 e-mail correspondence from respondent counsel confirms that the monies would be paid and the final letter of reference sent once he had received the Release as signed by the applicant.
9Carriage of the matter for the applicant was transferred to another lawyer in the same firm, who expressed the view that the terms of settlement should be captured in one stand-alone document. While respondent counsel did not believe this was necessary, applicant counsel nonetheless provided a letter dated January 13, 2012 that summarized the terms of settlement and Release. These terms of settlement included what had been proposed in the January 4, 2012 e-mail, and also included terms regarding the applicant’s group benefits (health and dental) and a payment of $500 for legal fees. The terms as set out in the letter from applicant counsel also confirmed that the letter of reference would be in the form provided by respondent counsel on January 6, 2012. The e-mail from applicant counsel by which the letter setting out the settlement terms was transmitted to respondent counsel states: “Provided the attached is satisfactory to you, I will send you my client’s signed Release as soon as possible so that we may finalize this matter.”
10The form of Release was attached to the letter from applicant counsel, and expressly includes a release of the respondent from any and all claims, and confirms that the settlement is in full and final settlement of all existing, planned or possible complaints or claims against the respondent under the Code, among other things. The Release also includes the following statement: “I am aware of my rights under the Ontario Human Rights Code, and I confirm that I am not asserting such rights or advancing a human rights claim or complaint”.
11In the material before me, there is no written confirmation from respondent counsel that the terms of settlement as set out in the January 13, 2012 letter were satisfactory. Nonetheless, by e-mail correspondence dated January 16, 2012, applicant counsel wrote again to respondent counsel to seek some minor changes to the settlement terms, namely that the remaining eight weeks’ pay would be allocated as wages instead of as a retiring allowance, and certain specific proposed changes to the draft letter of reference. By e-mail dated January 19, 2012, respondent counsel responded to confirm that the respondent was agreeable to the proposed changes to the reference letter and manner of payment, and to request that the signed Release be forwarded at earliest convenience.
12When the signed Release was not forthcoming, respondent counsel wrote to applicant counsel by e-mail correspondence dated February 15, 2012, stating that the respondent was still awaiting the signed Release so that it could carry out the settlement. Respondent counsel notes in this correspondence that, notwithstanding the applicant’s reluctance to sign the Release, she was nonetheless bound by the settlement agreement on the basis of the law respecting solicitor’s authority. When no response was received, respondent counsel followed up again on February 23, 2012. On February 27, 2012, applicant counsel wrote to advise that he no longer represented the applicant and that respondent counsel was to contact her directly to discuss the matter.
13By letter dated March 5, 2012, respondent counsel wrote directly to the applicant to confirm the terms of settlement as previously agreed with her former legal counsel, and to request that she provide the signed Release in order for the respondent to carry out its obligations under the settlement. In this letter, respondent counsel expressly cautioned the applicant that, if she refused to sign the Release and instead decided to pursue legal action, the respondent would immediately bring a motion enforcing the settlement on the basis of solicitor’s authority.
14The applicant did not respond directly to this letter. Instead, on October 22, 2012, she filed her Application with this Tribunal.
Analysis and Decision
15This Tribunal has found that it would be an abuse of process to allow an Application to proceed where the applicant has signed a full and final Release, in the absence of exceptional circumstances: O’Regan v. Firestone Textiles, 2010 HRTO 502, Perricone v. Fabco Plastics Wholesale, 2010 HRTO 1655, Cuba v. Global Egg Corporation, 2011 HRTO 1121.
16In Perricone, supra, this Tribunal recognized that parties to a settlement are prevented from litigating settled matters, stating (at para. 39):
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.
17Further, in Smith v. Peel Regional Police Services Board, 2010 HRTO 905, this Tribunal held that a formally signed document is not required to find that a settlement has been reached and is binding, stating as follows (at para. 30):
The law is clear that a binding agreement can exist when the parties agree on all of the essential terms to be incorporated into a formal document with the intention that their agreement shall become binding. The fact that a formal written document is not signed does not alter the binding nature of the original contract. However, when the original contract is incomplete because the essential terms have not been agreed upon; or the contract is too general to be valid and is dependent on the making of a formal contract; or the understanding or intention of the parties is that their legal obligations are to be deferred until a formal contract has been approved and executed, the original agreement cannot constitute an enforceable contract. In these circumstances, the “execution of the contemplated formal document is not intended only as a solemn record or memorial of an already complete and binding contract but is essential to the formation of the contract itself.”
18The respondent submitted authoritative caselaw from the civil courts which establishes that a party will be bound by a settlement entered into by her solicitor unless some limitation on the solicitor’s authority to negotiate a settlement has been communicated to the opposing party: Scherer v. Paletta, 1966 CanLII 286 (ON CA), [1966] 2 O.R. 524 (C.A.); Khouri v. London Transit Commission, 2012 ONSC 401. The civil courts also have found that, as long as the parties have agreed on the essential terms of a settlement, final documentation is not required for a settlement reached by a party’s legal representative to be found to be binding: CabCom Network Inc. v. Strategix Media Outdoor Inc., 2012 ONSC 4148.
19In my view, there is no reason not to follow and apply these principles from the civil courts in the context of this Tribunal’s proceedings. Where an applicant has engaged legal counsel to negotiate a settlement of legal claims on her behalf, the opposing party should be entitled to rely upon counsel’s authority to do so. Otherwise, a party could hide behind its legal counsel to extract concessions from the opposing party in exchange for what is believed to be a final and binding settlement, only to have that party emerge out from behind legal counsel to attempt to extract even further concessions. In my view, for all of the same reasons as articulated by the civil courts, such a prospect would not serve the interests of any party before this Tribunal and would create a chilling effect on the ability of counsel to negotiate and resolve human rights matters.
20In my view, at least by the time respondent counsel agreed to the revised terms of settlement proposed by applicant’s then counsel on January 19, 2012, there was a fully realized and binding settlement between the parties. All of the essential terms of the settlement had been agreed upon by the parties through their legal counsel. Further specific revisions to the draft letter of reference had been communicated on behalf of the applicant and accepted by the respondent. And significantly, the specific form and language of the Release had been agreed upon.
21The applicant takes the position that, because she did not actually sign the Release, she therefore is not bound by the terms of the Release. That submission does not accord with the law. By retaining legal counsel to act on her behalf in relation to matters arising from her employment with the respondent, the applicant gave legal counsel the authority to communicate the applicant’s settlement offer which the respondent was entitled to and did accept on the basis of counsel’s authority. Moreover, applicant’s then legal counsel were clearly expressing that they were acting on the basis of the applicant’s express authority in settling the matter. For example, in the e-mail correspondence dated January 4, 2012, applicant’s then counsel states “Wendy is prepared to settle on the following terms”. In e-mail correspondence dated January 16, 2012, applicant’s then legal counsel commences her request for certain revisions to the settlement terms by stating “my client has just advised me that she has changed her decision . . .” These communications clearly convey that, as is typical during the course of settlement negotiations, the applicant was an active participant and understood and agreed to the terms of settlement. If in fact there is any issue that the applicant did not in fact authorize her legal counsel to propose or agree to the terms of settlement as discussed between counsel, that is an issue as between the applicant and her former legal counsel and should not be visited upon the respondent who reasonably relied upon the authority of applicant’s former legal counsel. In any event, there is no evidence before me to support that the applicant failed to instruct her own legal counsel to take the actions they did.
22The applicant further takes the position that her legal counsel were retained only to settle the matter of her severance package and were not retained with regard to her human rights issues. Whether or not that is the case, no such limitation on the authority of applicant’s former counsel was communicated to the respondent. As stated in Scherer, supra and Khouri, supra, a party is entitled to rely upon the authority of opposing counsel to enter into a binding settlement unless some limitation on the solicitor’s authority to negotiate a settlement has been communicated. There is no evidence before me to indicate that any limitation on the authority of applicant’s then legal counsel was communicated to the respondent. Indeed, the form and language of the Release that was agreed to on the applicant’s behalf expressly included reference to the full and final settlement of all claims including claims or complaints under the Code. Moreover, in December 2011, applicant’s then counsel sent e-mail correspondence to respondent counsel stating that the applicant had asked him to forward an attached letter “which outlines various incidents of unfair and discriminatory treatment she experienced at [the respondent]”. The attached letter, which is in the applicant’s name, raised many of the same allegations that form the basis of the Application she subsequently filed with this Tribunal. As a result, it is clear from the material before me that potential issues under the Code were at the forefront of the minds of both parties and their respective legal counsel at the time the settlement was reached.
23Finally, the applicant takes the position that she refused to sign the Release because the respondent had communicated to HRSDC that her employment had been terminated for performance issues, which she believes to be inconsistent with having been dismissed without cause. First of all, these are not, in fact, inconsistent positions. The concept of “just cause” in the common law, which entitles an employer to dismiss an employee without any notice or pay in lieu of notice, is a relatively high standard for an employer to meet, especially where the reason for termination arises from concerns about the employee’s work performance. In many cases, even where an employer decides to dismiss an employee because of their work performance, the employer will decide to dismiss on a without cause basis both due to concerns about meeting the “just cause” standard and that asserting cause and then not being able to prove cause may increase an employee’s claim in court. Further, the issue for HRSDC relates to an employee’s ability to claim E.I. benefits and whether the termination was due to any wilful misconduct. In that context, HRDSC may ask an employer to explain why it made the decision to terminate an employee, even where an employer is not asserting cause, in order to be able to assess whether or not there was wilful misconduct.
24In any event, the receipt of information about what the respondent may have told HRSDC about its reason for terminating the applicant’s employment is not a proper basis upon which the applicant is entitled to resile from the settlement as agreed to by her former legal counsel. As stated in O’Regan, supra (at para. 20):
It is well-established at common law that in certain limited circumstances, a false representation can have the effect of invalidating a signed legal document: see Corfax Benefit Systems Ltd. v. Fiducie Desjardins Inc., (1997) 37 O.R.(2d) 50. However, there are certain elements that must be proven in order to establish this result, including that the representations were made by the respondents, that they were false in fact, that they were known or should have been known to be false, and that they induced the applicant to enter into the agreement to her prejudice.
25For the reasons stated above, it is not clear to me that any misrepresentation was made by the respondent. The respondent proceeded to treat the applicant’s dismissal from employment as a dismissal without cause. But there is no evidence before me to indicate that the respondent ever stated in the context of the negotiation that there were no performance concerns relating to the applicant, or that the applicant relied upon any such representation.
26At the hearing, I raised with the respondent the issue of whether receipt of the signed Release could be regarded as a condition precedent to the parties entering into a settlement, such that a settlement had not in fact been reached. For example, in Smith, supra, it was held that the respondent was not entitled to enforce a settlement that the complainant had verbally agreed to but refused to sign, on the basis that the settlement had not yet been approved by the respondent police services board. This was regarded as a true condition precedent to the reaching of a settlement. In contrast, in the instant case, the respondent submitted that the receipt of a signed Release before conveying the settlement funds and reference letter was more properly regarded as part of the implementation of a settlement that the parties had already reached, as opposed to being a condition precedent to a settlement that had not yet been fully realized. Respondent counsel raised the example that, if the agreement had provided first for the payment of monies by the respondent before the Release was to be provided, it would be untenable to think that the respondent could resile from the settlement simply by not paying the money. I agree. In practice, once a settlement has been reached, one party has to go first to fulfil its obligations before the other party completes its end of the bargain. Where counsel are involved on both sides, this is typically accomplished by one party providing the signed documents and/or monies in trust or escrow to the other party, pending fulfilment of the other party’s obligations. I agree with the respondent that this is a matter of implementation of a concluded settlement rather than a true condition precedent to the forming of a settlement.
27Accordingly, for all of the foregoing reasons, I find that there was a settlement reached through legal counsel to the parties, which included the release and settlement of the applicant’s human rights claims under the Code that she has raised in her Application. As a result, I find that it would be an abuse of process to allow this Application to proceed and the Application is hereby dismissed.
28I raised with the parties whether under s. 23 of the Statutory Powers Procedure Act, I had the authority to actually enforce the settlement as agreed between the parties as opposed to merely dismissing the Application. Whether or not I have any such authority, I decline to exercise it in the specific circumstances of this case. On the basis of the terms of the settlement, the respondent is entitled to receive the Release as signed by the applicant before it conveys to her the settlement funds and the reference letter. The applicant made it very clear in her submissions that she has no intention of signing the Release, even if I were to order her to do so. Whether or not I have the authority to do so, I will not make any order requiring the applicant to sign a document that she clearly does not wish to sign. However, if the applicant wishes to gain the benefit of the settlement as agreed to on her behalf by her former legal counsel, I understand that the respondent remains willing to convey the settlement funds and reference letter upon receipt of the signed Release. So I will leave that as the applicant’s choice to make.
29The Application is dismissed as an abuse of process.
Dated at Toronto, this 25th day of April, 2013.
”signed by”
Mark Hart Vice-chair