HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Peter Sgambelluri
Applicant
-and-
CIBC Mortgages Inc.
Respondent
DECISION
Adjudicator: Keith Brennenstuhl
Indexed as: Sgambelluri v. CIBC Mortgages Inc.
APPEARANCES
Peter Sgambelluri, Applicant
Self-represented
CIBC Mortgages Inc., Respondent
Elisha Jamieson-Davies, Counsel
Introduction
1This Application alleges discrimination with respect to employment because of disability contrary to the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the "Code"). The allegations in the Application concern the applicant's employment with the respondent and the ultimate termination by the respondent of that employment.
2The respondent seeks early dismissal of the Application on the basis that the applicant signed a full and final release (the "Release"), releasing the respondent from, among other things, any claims under human rights legislation. This was part of a settlement in which the applicant received termination monies in consideration for him executing the release.
3The applicant takes the position that his Application should not be dismissed on the basis that he was under economic duress at the time he signed the Release, that when he signed the Release he did not have the capacity to see or understand the Release and that the respondent made a fraudulent misrepresentation which caused him to sign the Release.
4The respondent alleges that the decision was made to terminate the applicant as part of a restructuring which resulted in the elimination of all of the roles within the applicant's team, including the applicant's position. The applicant alleges that the decision was made for discriminatory reasons.
5In any event, on September 5, 2013, the respondent advised the applicant that his employment was being terminated effective October 2, 2013. At that time, the applicant was offered a severance package, which was conditional upon signing a "Full and Final Release". The severance package consisted of the following: a severance payment of up to $22,600.00 (i.e. 7 months of pay) with a choice of receiving those monies by way of a salary continuance or a discounted lump sum; financial assistance to obtain independent legal advice to a maximum of $250.00; and, financial assistance to obtain independent financial advice to a maximum of $250.00. The severance package was open for acceptance until October 2, 2015.
6The applicant accepted the severance offer and executed the agreement and the Release on September 9, 2015. He accepted the severance payment.
7It is evident that the applicant came to regret his decision to execute the agreement and the Release.
analysis and decision
8Section 23(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended provides that a tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes. This Tribunal has held that filing a human rights application after signing a full and final release in respect of the subject-matter of the application may constitute an abuse of the Tribunal's process and when that is the case, such applications should be dismissed.
9It is not in dispute that the Release on its face prohibits the applicant from making a claim under the Code. Paragraph 8 of the release makes specific reference to human rights claims:
IT IS UNDERSTOOD AND AGREED that, by executing this Release the Employee hereby undertakes to not make or continue any claim, complaint, demand, action, or suit, whether at common law, at equity, or under any federal, or provincial legislation, including those pertaining to employment standards, privacy regulations, occupational health and safety and/or human rights, including any rights to further compensation or reinstatement.
10In light of the clear language in the Release, the Tribunal must consider whether there is some reason for not requiring the applicant to be bound by what would otherwise appear to be a binding promise to not bring an application before the Tribunal. Some of the reasons discussed in the Tribunal's jurisprudence include economic duress, fraudulent misrepresentation on the part of the respondent and the lack of capacity by the applicant to understand the terms of the release.
Duress
11It is not unusual for parties before the Tribunal to allege that they entered into written settlements because of financial hardship, and that such agreements should be set aside for the reason that they were entered into under economic "duress". However, entering into an agreement because it will help alleviate financial difficulties, even when those difficulties are significant, does not necessarily mean that the agreement has been entered into under duress.
12Where duress is put forward as the basis for vitiating a settlement agreement, what the party is really claiming is that he or she entered into the agreement against his or her will.
13Black's Law Dictionary, 8^th^ ed. (St. Paul, MN: Thomson West, 1999) gives the following as one of the definitions of "duress":
Broadly, a threat of harm made to compel a person to do something against his or her will or judgment, especially a wrongful threat made by one person to compel a manifestation of seeming assent by another person to a transaction without real volition.
14The Ontario Court of Appeal described the elements of economic duress in Taber v. Paris Boutique & Bridal Inc. (Paris Boutique), 2010 ONCA 157 at para. 9:
...[N]ot all pressure, economic or otherwise, can constitute duress sufficient to carry these legal consequences. It must have two elements: it must be pressure that the law regards as illegitimate; and it must be applied to such a degree as to amount to "a coercion of the will" of the party relying on the concept. See: Stott v. Merit Investment Corp.(" Stott"), 1988 CanLII 192 (ON CA) 63 O.R. (2^nd^) 545 (Ont. C.A.), at para. 89.
15In Stott, the court held that in order for economic duress to be found, the party whom is being illegitimately pressured must be put in a position where he has no "realistic alternative".
16In this case, I am not satisfied that the circumstances outlined by the applicant amount to the type of economic duress that would render the release unenforceable. In essence, on termination the applicant had serious concerns about being without an income and how he would pay his bills and that this motivated him to sign the Release.
17It is apparent that the test for economic duress is high. Most people who have had their employment terminated are faced with economic difficulties. I accept that the applicant had financial difficulties as a result of the loss of his employment and faced a difficult choice when he was presented with the Release. However, he presented no evidence to establish that his need was so serious that he had no other choice but to sign the Release. The applicant had realistic alternatives. For example he could have chosen to not sign the release and then pursue his claim at the Tribunal or the Courts.
18There is nothing about the manner in which the respondent conducted itself that would suggest that there was a "coercion" of the applicant's will. The company put the description of the package in writing and gave the applicant almost a full month to consult with anyone about its terms. The company offered the applicant financial assistance to pay for legal and financial assistance. It was the applicant who decided to sign the release four days after it was presented to him.
Capacity
19The applicant alleges that because of his limited vision he could not clearly see the Release and nor did he really understand the release. The applicant did not call any evidence to support his claim that he was incapable of understanding the Release. Indeed, I observed in his testimony that he understood what was at issue.
20The applicant filed a September 2008 doctor's note which confirmed that the applicant is visually impaired but it does not confirm that the applicant could not see a document. It indicated that the applicant can read text but that it needs magnification.
21In any event, if the applicant was having difficulty seeing the Release or understanding the effect of the Release, he had the opportunity to ask someone to help him appreciate what he was giving up by signing the Release. The issue of whether the applicant had the capacity to understand is distinct from the issue of whether he actually understood the release. In this case the applicant suggests, that he did not appreciate what he was giving up at the time he signed the Release. I adopt the statement made by the Tribunal in Perricone v. Fabco Plastics Wholesale, 2010 HRTO 1655, at para. 69:
[I]f, as the applicant contends, she chose to sign the Release without ensuring that she understood it, then she is responsible for that choice.... A party to a legal agreement cannot enter into it without taking the time and effort to understand it and then rely on her own actions as the basis upon which to resile from the agreement.
Fraudulent misrepresentation
22The applicant argues that the release should be set aside and he should be permitted to proceed with his Application because he was misled as to the circumstances surrounding his termination at the time he entered the settlement agreement with the respondent. Specifically, the applicant submits that he signed the Release because the respondent represented to him that all the members of his department were going to be laid off whereas he subsequently learned that only three members of the department were laid off including himself.
23Where one party to an agreement deliberately misleads another party and thereby induces him or her into entering an agreement, the agreement may be set aside on the basis of the fraudulent misrepresentation. In Wedderburn v. Air Liquide Canada 2010 HRTO 691, the Tribunal relied on Professor Fridman's description of fraudulent misrepresentation in The Law of Contract, 3^rd^ ed.(1994) at p. 294:
A fraudulent misrepresentation is one which is made with knowledge that it is untrue and with the intent to deceive. It may even constitute a term of the contract. Whether it does or not is immaterial, since fraud gives rise to effects in the law of contract and the law of tort. A contract resulting from a fraudulent misrepresentation may be avoided by the victim of the fraud. In such instances the apparent consent by the innocent party to the contract and its terms, is not a real consent. Whether or not the effect of such fraud is to induce a mistake (which might render the contract void), the consent of the innocent party may be revoked at his option.
24In essence, the applicant argues that he was induced into the settlement agreement with the respondent because of the respondent's fraudulent misrepresentation that it was terminating all the employees in the applicant's department.
25The respondent submits that it did not intentionally deceive the applicant into signing the Release. Contrary to the applicant's submissions, the respondent submits that it did not advise the applicant that all members of the department were going to be terminated. It advised the applicant that some members would be re-deployed while other members would receive severance packages. Allegedly a business decision was made to offshore a specific business function which impacted the applicant's department. Some of the applicant's team members were redeployed while others were provided with severance packages, including the applicant.
26In my view, the respondent's evidence sets out a reasonable account of the circumstances surrounding the dismantling of the applicant's department. The applicant failed to identify the person or persons who allegedly told him that everyone in the department would be terminated. He testified that it was his "understanding" that his whole team would be "eliminated". It is plausible that he came to that understanding by inference from the fact that his department was being dismantled.
27In any event, in my view, the applicant has failed to establish on a balance of probabilities that the respondent represented to him that everyone in his department was going to be terminated. Consequently, there is nothing before me to suggest that the respondent knowingly misled the applicant into signing the Release.
28In summary, the applicant was capable of understanding the terms of the release, he was not under economic duress at the time he executed that document and he failed to establish that the respondent made representations to the applicant that were intended to deceive the applicant into signing the release.
29I find that the Application is an abuse of the Tribunal's process.
30The Application is dismissed.
Dated at Toronto, this 21^st^ day of September, 2015.
"Signed By"
__________________________________
Keith Brennenstuhl
Vice-chair