Adelia Pereira v. Designer Furniture and Art, Victor Brewda, Frank Falbo and Michael Brewda, 2014 HRTO 1590

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Adelia Pereira

Applicant

-and-

Designer Furniture and Art, Victor Brewda, Frank Falbo and Michael Brewda

Respondents

DECISION

Adjudicator: Keith Brennenstuhl

Date: October 28, 2014

Citation: 2014 HRTO 1590

Indexed as: Pereira v. Designer Furniture and Art

APPEARANCES

Adelia Pereira, Applicant

Wade Poziomka, Counsel

Designer Furniture and Art, Victor Brewda, Frank Falbo, and Michael Brewda, Respondents

No one appearing

Introduction

1This is a Contravention of Settlement Application filed under s. 45.9(3) of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”). The Application relates to Minutes of Settlement signed by the parties on March 17, 2014. The applicant alleges that settlement monies to be paid by the respondents were not made within the timeframes specified in the Minutes of Settlement.

2The hearing with respect to the Application for Contravention of Settlement took place by telephone conference on October 6, 2014. The Respondents failed to call into the telephone conference call. I am satisfied that the respondents received notice of the conference call. Notice of the telephone conference was mailed to the respondents at the address set out in their Response to an Application for Contravention of Settlement and was not returned to the Tribunal as undeliverable.

BACKGROUND

3The Minutes of Settlement, at paragraph 3, provide that settlement monies be paid by the respondents to the applicant in three equal payments. These payments were to “be paid on” April 17, 2014, May 17, 2014, and June 17, 2014. Three cheques payable to the applicant in the appropriate amount and dated April 17, 2014, May 17, 201,4 and June 17, 2014 were mailed to the applicant’s counsel on April 15, 2014, by the respondents’ counsel. According to the applicant, the posted cheques were only received by her counsel on April 23, 2014. On that date the applicant went to the respondents’ bank and had the cheque dated April 17, 2014 certified.

4The respondents do not dispute that the cheques were mailed on April 15, 2014; however, they claim to have no knowledge as to when the applicant’s counsel received them.

Applicant’s position

5The applicant maintains that the first payment to her was to be made on April 17, 2014, that she was only paid on April 23, 2014, and that this late payment amounts to a contravention of the Minutes of Settlement.

Respondents’ position

6The respondents, in their written submissions, submit that if the cheques were delayed in the mail, it was only two business days late. They indicate that all of their cheques were ultimately honoured and that, otherwise, they fully complied with the terms of the Minutes of Settlement.

Analysis

7The Settlement provisions contained in the Code provide as follows:

45.9(1) If a settlement of an application made under section 34 or 35 is agreed to in writing and signed by the parties, the settlement is binding on the parties.

45.9(3) If a settlement of an application made under section 34 or 35 is agreed to in writing and signed by the parties, a party who believes that another party has contravened the settlement may make an application to the Tribunal for an order under subsection (8),

a. within six months after the contravention to which the application relates; or

b. if there was a series of contraventions, within six months after the last contravention in the series.

45.9(8) 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 case, I find that there was a settlement agreement as evidenced by the Minutes of Settlement dated March 17, 2014 which, pursuant to paragraph 3, required the respondents to pay a portion of the settlement monies “on” April 17, 2014. I accept the applicant’s uncontradicted evidence that the settlement monies were only received on April 23, 2014, although mailed, according to the respondents, on April 15, 2014. The respondents’ written submissions point out that the delay in the mail may be attributed to the fact that the four day Easter weekend intervened between the day of mailing the cheques and the day of receipt of the cheques.

9I find that there was a contravention of settlement when the applicant was not paid settlement monies on April 17, 2014. However, in my view, the delay in receiving the monies was relatively minor and that this minor delay amounted to a de minimus breach of the Minutes of Settlement. The Tribunal has refused to order a remedy in situations where the breach was de minimus. See for example Adorgloh v. Sentrex Communications, 2010 HRTO 2524, and Budan-Hughes v. Clemmer Steelcraft Technologies, 2009 HRTO 1618.

10That being said, I note paragraph 4 of the Minutes of Settlement, which reads as follows:

Failure to abide by the schedule set forth in paragraph 3 will result in the full and final amount becoming payable immediately upon default and the parties acknowledge that in the event of a breach of said Schedule the Applicant may return to the Human Rights Tribunal of Ontario with an Application for Contravention of Settlement and claim additional damages. The parties hereto agree that said additional damages shall be $5,000.00 as general damages in addition to the amount contained in paragraph 2 [that is, the full settlement monies] should the Respondents jointly or any one of them, breach the terms of these Minutes. The Parties agree this is not a penalty clause, but rather a reasonable assessment of the additional damages Pereira will suffer should the Respondents breach these Minutes.

11The applicant argues that in failing to pay the applicant settlement monies on time, even though the delay may be minimal in nature, the respondents triggered paragraph 4 of the Minutes of Settlement. In that paragraph, the respondents agreed to pay the applicant $5,000.00 as general damages if they failed to meet the schedule of payments as set out in paragraph 3 of the Minutes of Settlement.

12In her Application the applicant submits that:

…the only matter before the Tribunal is whether or not the settlement agreement was breached by the Respondents. In the event that the Tribunal finds there was a breach, the issue of remedy has already been resolved by settlement agreement between the parties in a provision contemplated for an anticipatory breach. Contract between the parties relieves the Tribunal of the necessity to determine the appropriate remedy.

13The respondents do not dispute the applicability of paragraph 4. They submit in their Response, however: “Further, if in fact the cheques were delayed in the mail, it was still only two business days late. This does not constitute a penalty of $5,000.00.” The respondents’ position is seemingly inconsistent, but I take from their written submissions that, in the circumstances, paragraph 4 is a penalty clause and therefore unenforceable by law.

14In fact in paragraph 4 the respondents agreed with the applicant that the provision was not a penalty clause, but rather a reasonable assessment of the additional damages the applicant would suffer should the respondents fail to abide by the timeline for payment of the settlement monies as set out in paragraph 3 of the settlement agreement. The Minutes of Settlement does not contain a provision that would allow for a reassessment of the additional damages based on a minor or de minimus breach of the Minutes. Accordingly, the applicant argues that the respondents are liable for the full $5,000.00. I take from this submission that it is the applicant’s position that the Tribunal must enforce the Minutes of Settlement and that it has no discretion in that regard.

15It is well understood that when parties to an application enter into minutes of settlement that resolve a dispute as between parties, that the parties forego the enforcement of their rights with a full hearing before the Tribunal. Moreover, it is well understood that in these circumstances there would be an expectation that the Tribunal would respect and enforce these minutes of settlement. However, irrespective of whether the relevant term of the Minutes of Settlement in this case is characterised as an assessment of damages or a penalty clause, and whether it is binding on the parties, there is nonetheless, in my view, a residual discretion on the part of the Tribunal contained in subsection 45.9(8) of the Code as to whether, in its discretion, it should award the amount for a contravention of a settlement.

16Subsection 45.9(8) of the Code reads: “If…the Tribunal determines that a party has contravened the settlement, the Tribunal may make an order it considers appropriate to remedy the contravention.” [Emphasis mine]. The language is clear that an award for a contravention of settlement is a discretionary matter for the Tribunal. In my view, given this language, the Tribunal’s remedial power is not to be fettered, limited or pre-determined by the simple agreement of the parties.

17I do not consider it appropriate to order a remedy for contravention of settlement. As stated earlier, I am of the view that the breach of settlement was de minimus. On the whole the respondents met their commitment with respect to the settlement monies and, in these circumstances, I do not consider it appropriate to order a remedy.

ORDER

18The Application for Contravention of Settlement is allowed but there is no order as to remedy.