Maria Morley v. London Condominium Corporation #2, 2014 HRTO 371

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Maria Morley

Applicant

-and-

London Condominium Corporation #2

Respondent

DECISION

Adjudicator: Paul Aterman

Date: March 17, 2014

Citation: 2014 HRTO 371

Indexed as: Morley v. London Condominium Corporation #2

APPEARANCES

Maria Morley, Applicant

Elizabeth Ferris, Counsel

London Condominium Corporation #2, Respondent

Andrea Thielk, Counsel

background

1The applicant filed this Application on July 17, 2013 under section 45.9 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), alleging the respondents contravened Minutes of Settlement that had resolved an earlier Application brought by the applicant.

2The applicant is an owner of a condominium unit in the respondent’s corporation. In her original Application she had alleged that limitations on access to her unit constituted discrimination on the basis of disability. Following mediation the parties entered into Minutes of Settlement on August 24, 2012. Both parties were represented by counsel at the time. The Minutes of Settlement included two terms that are at issue in this Application.

3Paragraphs 4 and 5 of the minutes read as follows:

4. The parties agree that the negotiations leading up to and relating to this Agreement are strictly confidential, and that the Applicant, Maria Morley, shall [sic], without prior written approval of the Respondent, disclose the content of these negotiations and settlement documentation to anyone.

5. The parties also agree not to provide copies of the Agreement, or otherwise make the Agreement available to anyone. Nothing in this paragraph shall prohibit disclosure of information relating to the Agreement as follows: (I) to the counsel or accountants of the parties; (II) as may be required by law, or by judicial process or order or in response to an inquiry by a governmental agency.

4The parties agree that paragraph 4 should read “…Maria Morley, shall not, without prior approval…” and that “not” was inadvertently omitted in the drafting.

5On filing this Application the applicant had also alleged a breach by the respondent of a third term relating to the installation of a ramp outside the applicant’s condominium unit, but that allegation was withdrawn at the hearing of this Application, which took place by teleconference on January 27, 2014.

6The applicant alleges that the respondent breached the above confidentiality provisions of the settlement in June of 2013 in two ways.

7First, in advance of the condominium corporation’s annual general meeting on June 25, 2013 the respondent circulated a newsletter to the residents of the condominium. The relevant part of the newsletter reads:

2012 Fiscal Year

The upcoming annual general meeting will review the past year of operations. All of the necessary documents have been provided as part of the meeting package. The Corporation ended 2012 in a good financial position, with a surplus in operations. The Corporation installed a new entrance ramp at unit #14, and the previous Human Rights legal matter was resolved. The Corporation was able to re-coup all legal costs that were previously spent to defend the matter.[emphasis added]

8The applicant argues that the newsletter’s inclusion of a reference to the installation of a ramp at the applicant’s unit and the link established in the text between that fact and the settlement of the Application was a breach of the confidentiality provisions.

9The second alleged breach is that the respondent also included the minutes of the annual general meeting of the previous year, 2012, in the materials it sent to residents with the newsletter. That meeting was held on June 19, 2012, before the original Application had been resolved. Included in the minutes under the heading New Business is the following excerpt:

Ben Morley inquired about what the legal fees represented in the financial statement. It was explained that the legal fees were expended to defend a lawsuit that was filed against the Corporation by his wife Maria Morley. The lawsuit was seeking damages in excess of $45,000 and the Corporation will defend that suit as required.

10The applicant argues that the inclusion of the 2012 minutes of the annual general meeting in the package is also a breach of the confidentiality of the settlement. She says that the respondent could have edited out the passage I have cited above.

11The applicant maintains that the breach of the confidentiality of the settlement drew unwanted attention to her from the other residents and made her feel unwelcome in her own home. This is because the costs of the condominium corporation, including costs associated with litigation, are ultimately paid for by the residents. However, the applicant agreed that the reference in the newsletter to the fact that the respondent had recovered all of its legal costs had a mitigating impact on this concern.

12She also was distressed because the circulation of these materials drew attention to her disability and the fact that she had to resort to litigation to have her disability accommodated. The applicant requests that the Tribunal award $5,000 as compensation for the breach of confidentiality.

13The respondent argues that there was no breach because the minutes of settlement only bind the applicant to respect confidentiality and not the respondent. Paragraph 4 clearly stipulates that it is the applicant who is not to disclose the content of the negotiations and settlement documentation unless the respondent first agrees. The respondent argues that the Minutes of Settlement were deliberately drafted in this manner so as to enable the respondent to fulfil its obligation to report on condominium business to residents.

analysis

14The issues I have to determine are whether the Minutes of Settlement bind the respondent to respect their confidentiality. If so, I then need to determine whether the respondent breached their confidentiality when it circulated the newsletter and the minutes of the 2012 annual general meeting to the residents of the condominium.

Is the respondent bound by confidentiality?

15The Minutes of Settlement make clear that they are to be referred to as “the Agreement”. They also stipulate that the Release, which binds the applicant only and is appended to the Agreement, forms part of the Agreement.

16The wording of the Agreement in relation to the issue of confidentiality is confusing. Paragraph 4 opens by stating that both parties agree that the negotiations leading to agreement are “strictly confidential”. However it then goes on to only bind the applicant to respect the confidentiality of the content of both the negotiations and the settlement documentation.

17What follows in Paragraph 5 is a commitment by both parties “not to provide copies of the Agreement, or otherwise make the Agreement available, to anyone”. Then there are exceptions set out to this general rule – disclosure can be made to the parties’ lawyers or accountants or as required by law.

18I conclude from the explicit reference to the applicant only that Paragraph 4 binds her and not the respondent. She is bound not to communicate the content of the negotiations and “the settlement documentation”.

19However there is overlap between Paragraphs 4 and 5 in that “the settlement documentation” referred to in Paragraph 4 is the same as “the Agreement” in Paragraph 5. This is because there is no “settlement documentation” other than the Agreement. The effect of this is redundancy in drafting: the applicant is twice bound to respect the confidentiality of the content of the Agreement, once in Paragraph 4 and then again in Paragraph 5.

20But the respondent is also bound to respect the confidentiality of the Agreement. The plain meaning of Paragraph 5 is that it applies to both parties. In addition, the applicant has a valid interest in protecting the confidentiality of the Agreement. The subject matter of the Agreement involves a sensitive issue to do with her living arrangements and that has an impact on how she gets on with her neighbours in her community. Despite the confusing drafting, I conclude that the parties intended that both parties be bound not to disclose the content of the Agreement, not just the applicant.

21The fact that the applicant is singled out in Paragraph 4 does not relieve the respondent from the obligations imposed on both parties in Paragraph 5. These obligations are not to circulate copies of the Agreement or to otherwise make it available.

22I interpret the words “or otherwise make the Agreement available” in Paragraph 5 to prohibit disclosing a part of the Agreement, as it would make no sense to prohibit disclosing the Agreement in its entirety by preventing the parties from circulating copies of it, yet then allowing them to excerpt and reproduce key terms that speak to the content of the settlement.

Did the respondent breach the confidentiality of the Agreement by circulating the newsletter?

23Although the statement made by the respondent in the newsletter does not spell out explicitly that the applicant had initiated a legal process regarding her human rights, that it had been resolved and that the installation of a ramp outside the applicant’s unit was a term of the settlement, the statement nonetheless has the effect of communicating all of those elements of information. The sentence that follows and refers to the recovery of the respondent’s legal costs is ambiguous, in that it could be taken to mean that the corporation’s legal costs were covered by the applicant or that they were covered by a third party, such as an insurer.

24Had the respondent simply referred to the fact that the applicant had initiated litigation and that it had later been settled, there would have been no breach of the confidentiality provisions, as the fact that litigation had started and then been resolved is not prohibited by Paragraph 5 of the Minutes of Settlement. However, the newsletter links the initiation and resolution of litigation to the content of the settlement through its reference to the installation of the ramp outside the applicant’s unit at the respondent’s expense.

25Even though all residents of the complex can tell just by looking that there is a new ramp outside the applicant’s unit, they may not have known who paid to have it installed – the applicant or the respondent – and they may not have known on what terms it was installed. The newsletter divulged that it was the respondent who installed it and that it did so – at least in part – to settle a dispute with the applicant. By communicating this information the respondent breached the Agreement’s confidentiality provision.

Did the respondent breach the confidentiality of the Agreement by circulating the minutes of the 2012 annual general meeting?

26The minutes of the 2012 annual general meeting constitute a record of what was discussed by the condominium’s residents and board of directors on June 19, 2012. The record shows that 31 of 94 owners were present in person and by proxy.

27The minutes record a question asked by the applicant’s husband and the answer of the respondent. These constitute an exchange that took place before negotiations to resolve the original Application began. At the time of the meeting in June of 2012 the exchange was made public to about one third of the condominium community. By circulating the minutes a year later and including in it a report of the exchange, the respondent essentially repeated the exchange to the entire condominium community. This took place after the settlement had been reached.

28However, the content of that exchange – the fact that the applicant had initiated litigation, the remedy that she was seeking and the fact that the respondent could be incurring expenses to defend the litigation – is not covered by the Agreement. While the fact that the applicant had initiated litigation and the respondent defended it were ultimately what triggered negotiation, these facts did not form part of the content of the negotiation itself nor of the content of the settlement. There is no prohibition in the Agreement to making reference to the fact that litigation was initiated nor to the remedy sought in the initial pleadings. Both parties were represented by counsel and could have included such terms in the Agreement, but they did not. For these reasons I conclude that the respondent did not breach the confidentiality provisions of the Agreement when it circulated the minutes of the 2012 annual general meeting.

remedy

29Section 45.9(8) of the Code sets out the Tribunal’s power to remedy contraventions of settlements and states that the Tribunal may make “any order that it considers appropriate to remedy the contravention.” The object of the Code is to remedy the breach and not punish or penalize the contravening party. As noted in Matos v. Transplay, 2010 HRTO 2527 at para. 17, “the power to remedy a contravention of settlement is tied to the harm caused as a result of the contravention.”

30The Tribunal has compensated parties for a breach of the confidentiality of settlement terms in Tremblay v. 1168531 Ontario Inc., 2012 HRTO 1939 (“Tremblay”) and Shaw v. York Condominium Corporation No. 73, 2013 HRTO 1565 (“Shaw”).

31In Tremblay the applicant posted messages on her Facebook account both during and after a mediation which resulted in settlement. The posts revealed that she had received money as part of the settlement although the posts did not set out the amount. When the respondent learned of the applicant’s actions, it did not pay her the amount agreed upon in the settlement. The Tribunal directed the respondent to pay, but reduced the amount payable to the applicant by $1,000 because of her breach. It noted that a breach of confidentiality is irreversible and that it can have a damaging effect if the confidential information is circulated in a small community.

32Shaw involved a breach of confidentiality in the context of a small community. In that case the applicant was a resident of a condominium and brought an Application against the condominium corporation, a number of personal respondents and a property management corporation. The Application was settled on terms which included payment of some money to the applicant and a confidentiality clause that bound all the parties.

33The Tribunal found that the respondent condominium corporation had disclosed some information about the settlement, including the fact that the applicant was paid money, to a third party. This person then made remarks at an annual general meeting of the condominium corporation which disclosed that the Application had been settled and that the applicant had been compensated. The Tribunal found that while there was no disclosure of the actual amount paid to the applicant, disclosure of the fact that settlement was contingent upon payment of some money to the applicant amounted to a breach of confidentiality. Citing Tremblay, it noted that the breach occurred in a setting where the recipients of this information were the applicant’s neighbours and awarded compensation of $1,000 to the applicant.

34Applying the reasoning in Tremblay and Shaw to this case, I find that disclosure by the respondent in its newsletter that the Application was settled on terms which included the installation of a ramp by the respondent at the applicant’s unit communicated a part of the content of the settlement to the condominium community. While some residents may already have been aware of some facts relating to the original Application, circulating the newsletter had the effect of “connecting the dots” for the whole community. This was unnecessary and avoidable. Its impact was to draw unwanted attention to the applicant from her neighbours. As it took place in a small community where she lives, there was nothing she could do about the disclosure except to wait for the effect of it to subside.

35The impact of the breach is mitigated somewhat by the fact that residents were also told in the newsletter that the respondent had recovered its legal costs, the implication being that the residents (many of whom live on limited and fixed incomes) would not be paying for the litigation. Nonetheless, the readers of the newsletter are left with the indication that the respondent (and therefore the residents) paid for the installation of the ramp. As I note above, this unnecessarily drew the focus of the community’s attention to the applicant, her disability and her dispute with the respondent. In the circumstances I find it appropriate to award the applicant $1,000 as compensation for the breach of confidentiality by the respondent.

order

36The Application is allowed in part.

37The respondent is ordered to pay the applicant $1,000 as compensation for contravention of the confidentiality provisions of the Agreement within 30 days of the date of this Decision.

38In the event that the respondent fails to make the payment within 30 days of the date of this Decision, the respondent shall pay post-judgment interest calculated at 3% in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43.