HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Amy Keating
Applicant
-and-
2229884 Ontario Inc. o/a Skirt, Walter Engel and Sarah Stunden
Respondents
DECISION
Adjudicator: Kathleen Martin
Indexed as: Keating v. 2229884 Ontario Inc.
WRITTEN SUBMISSIONS
Amy Keating, Applicant Kingsley Laurin, Counsel
2229884 Ontario Inc. o/a Skirt and Walter Engel, Respondents Walter Engel, self-represented
Sarah Stunden, Respondent John Annen, Counsel
1This is an Application alleging Contravention of Settlement (Form 18) filed on March 4, 2014, pursuant to section 45.9(3) of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the "Code"). The applicant previously filed an Application against the respondents under s. 34 of the Code. That Application was settled pursuant to written Minutes of Settlement ("the MOS") dated November 19, 2013. The applicant alleges that "the respondent" has not paid her what it was obliged to pay her pursuant to the MOS. As a remedy, the applicant seeks immediate payment of the monies owing to her pursuant to the MOS ($10,000), pre- and post-judgment interest, an order that the respondents comply with the other obligations in the MOS, and $8,000.00 as additional compensation for the contravention.
2Two Responses to the s. 45.9 Application were filed. A Response was filed on behalf of the corporate respondent and the personal respondent, Mr. Engel, who is the president and director of the corporate respondent. In the Response dated April 4, 2014, Mr. Engel did not dispute that there has been a contravention of the MOS, but stated that the company is insolvent and that his employment was scheduled to end on April 30, 2014.
3A Response was also filed by the personal respondent, Ms. Stunden, the applicant's former manager. Ms. Stunden states that, while a party to the MOS and present during the mediation, she understood that she was not responsible for paying the applicant any of the monetary compensation provided for in the MOS or for the remittance of the letter of recommendation. Ms. Stunden states that, based on her understanding from the mediator that she would not be responsible for these things, she signed the MOS.
4Based on the following, there appears to be no dispute that the MOS have been contravened. The issue in this case is which respondents are liable for the contraventions and what remedy should be ordered.
5For reasons outlined below, I have determined that the corporate respondent and Mr. Engel are liable for the contraventions and that the respondent Ms. Stunden is not liable.
Background
6The background facts and the procedural history of this Contravention Application are set out below.
7The applicant filed an Application against the respondents, alleging that they infringed her rights under the Code. The applicant was a sales associate at one of the corporate respondent's retail stores and the Application arose in the context of the applicant's employment with the corporate respondent. On November 19, 2013, the parties entered into the Minutes of Settlement during a mediation facilitated by a mediator of the Tribunal. At the mediation, the applicant was represented by counsel from the Human Rights Legal Support Centre (Mr. Laurin) and the corporate respondent and Mr. Engel were also represented by counsel ("Mr. Deley"). The respondent Ms. Stunden was self-represented.
8The MOS are between the applicant and Mr. Engel, Ms. Stunden and Skirt, who are collectively identified in the Minutes as the "Respondents".
9The applicant alleges that the following provisions in the MOS were contravened by the respondents:
The Respondents shall pay to the Applicant the sum of $10,000 as general damages with respect to the allegations of the breach of the Code for insult to dignity, self-worth and self-respect. The Respondents will issue one cheque in the amount of $5000 to be mailed to the Applicant's home address within 30 days of the signing of these Minutes of Settlement: [ ] The remainder will be paid monthly beginning January 19, 2014 at $500.00 and is to be paid on the 19th of every following month.
The Respondents undertake to develop a Human Rights Policy.
Respondents shall ensure that they post the Ontario Human Rights Code Card located at http://www.ohrc.on.ca/en/resources/code/codecard_en.pdf in a prominent location at all Skirt locations;
Within eight (8) months of the date of this settlement, the Respondents agree that each of its staff members, including management, will complete human rights training module offered by the Human Rights Commission on its website – http:www.ohrc.on.ca/en/learning/ohrc-elearning-your-elearning-source-human-rights. The Respondent Counsel agrees to provide the Applicant's Counsel with confirmation of the completion of the training.
The Respondents agrees to provide the Applicant with a Letter of Employment attached as Schedule A, on official letterhead. The Respondents agrees to a telephone protocol that is consistent with, and limited to the facts contained in the Letter of Employment. The Respondents convenants that they will not write, say, or communicate anything disparaging regarding the Applicant and will not respond to any employment inquiries in a manner consistent with the Letter of Employment. This Letter of Employment shall be mailed to the Applicant's home address within 30 days of the signing of these Minutes of Settlement.
(emphasis added)
10In addition to the above terms, the MOS contain several other terms including confidentiality, a release, an obligation to not make disparaging remarks and an indemnity provision. These other provisions also use the language "the respondents" in connection with the obligations but there is no allegation that any of these provisions have been contravened. All parties signed the MOS.
11The applicant did not receive the first payment provided for in the Minutes of Settlement. On January 13, 2014, the applicant's counsel emailed Mr. Deley about the missed payment of $5000.00 and asked that he advise of his client's intentions no later than January 17, 2014.
12On January 22, 2014, the applicant communicated with her counsel advising that the second payment had not been received.
13On January 31, 2014, Mr. Deley wrote to the Tribunal and Mr. Laurin, counsel for the applicant, advising that his firm was no longer acting for the corporate respondent and Mr. Engel and that all further correspondence should be sent directly to the corporation and Mr. Engel. Mr. Deley provided the last known address for Mr. Engel and the corporation. The address was the same for both respondents.
14On February 12, 2014, the applicant's legal representative wrote to Mr. Engel advising of "your breaches of the Minutes of Settlement" and seeking a response to his intentions to comply with the Minutes of Settlement no later than February 24, 2014. The letter warned that if he did not comply, the applicant would have no option other than to file a Contravention of Settlement application.
15None of the above correspondence was copied to the respondent Ms. Stunden.
16Thereafter, the Contravention of Settlement Application was filed, followed by the Responses of Mr. Engel and Ms. Stunden.
17Ms. Stunden and Mr. Engel then each filed a Request for Order During Proceedings seeking to be removed as parties on the basis that the obligations in the Minutes of Settlement were those of the corporation. The applicant opposed these Requests submitting that both individual respondents agreed to the terms of settlement and signed as respondents. The applicant took the position that all three respondents, and not just the corporate respondent, were liable for complying with each obligation in the MOS.
18Subsequently, the personal respondent Ms. Stunden advised that she was no longer seeking to be removed as a party and instead, wished to respond to the merits of the Application.
19On October 20, 2014, Ms. Stunden filed a Request for Order During Proceedings seeking disclosure of the name of the mediator and orders from the Tribunal granting leave to issue a summons for the mediator and Mr. Deley, the former counsel to the corporate respondent and Mr. Engel. On November 3, 2014, the applicant opposed the Request, arguing that neither the mediator nor Mr. Deley were necessary witnesses. The applicant also submitted that the mediator is not a compellable witness and in addition, even if the Tribunal found either witness to be compellable, their evidence was not "necessary" where the Minutes of Settlement are clear and unambiguous as the applicant submits they are in this case.
20On November 10, 2014, the Tribunal convened a conference call to address a number of issues including seeking clarification about whether a Form 19 provided by Mr. Engel constituted Mr. Engel's and the corporate respondent's Response to the Contravention of Settlement Application.
21In the conference call, Mr. Engel confirmed that it did constitute the Response on behalf of himself and the corporation.
22Following the conference call, the Tribunal issued a Case Assessment Direction on November 28, 2014, addressing a number of matters. Among other things, the Tribunal determined that it would schedule a one-day hearing and at the hearing, Ms. Stunden would be permitted to present evidence in respect of her understanding of the language "the respondents" contained in the Minutes of Settlement and the other parties would be permitted to present any evidence in reply. The Tribunal also issued directions regarding Ms. Stunden's request to summons Mr. Deley and the mediator. The Tribunal stated that if Ms. Stunden wished to summons Mr. Deley, Ms. Stunden was required to serve him in the normal course. The Tribunal also set up a process for addressing any objections from Mr. Deley. With respect to the mediator, the Tribunal stated that the issue of whether or not the mediator is compellable or otherwise relevant or necessary remained outstanding and would be addressed, if and when it was necessary to do so.
23The hearing was scheduled for April 30, 2015. On April 29, 2015, counsel for the respondent Ms. Stunden summonsed Mr. Deley to appear on April 30, 2015. Mr. Deley objected to the summons and raised a number of concerns, including that Ms. Stunden had not fully complied with the Tribunal's directions in the CAD. I directed through the Registrar that Mr. Deley was not required to attend the hearing on April 30, 2015, and that further directions would follow regarding the summons.
24At the hearing on April 30, 2015, the applicant, Ms. Stunden and Mr. Engel provided evidence on their understanding of the MOS and submissions on which respondents should be liable for the contraventions.
25Ms. Stunden did not pursue her request to have either Mr. Deley or the mediator attend the hearing to provide evidence and indicated that she was prepared to argue the case based on the evidence presented. In light of what was, in essence, a withdrawal of the Request to summons Mr. Deley and the mediator, it became unnecessary to issue further directions in respect of Mr. Deley or address whether or not the mediator was compellable.
The Parties' Evidence about the MOS
26The applicant testified that it was her "understanding" that all three respondents would be responsible to pay the compensation provided for in the MOS and that she based this belief on the reference to "the respondents" in paragraph 1 of the MOS. The applicant testified that because the MOS referred to only one cheque, it was something the respondents should work out as to which one of them would issue the payment. The applicant stated that she could not indicate which respondent would issue the payment and agreed with the suggestion of Ms. Stunden's counsel that it was ambiguous in this respect. The applicant acknowledged that given that Ms. Stunden was no longer employed with the corporate respondent at the time of the mediation, she would not be capable of fulfilling certain terms of the MOS that had been contravened, such as the issuance of the letter of employment and the development of the human rights policy, although she could take the online training.
27The applicant testified that when she initially sought to enforce the MOS her emails to her counsel about enforcement referred only to Mr. Engel (for example, in one email referring to "the minutes of settlement with Walter") and her efforts to seek enforcement were only directed at Mr. Engel. The applicant gave several explanations for this situation at different times in her evidence. The applicant stated that she did not feel it was "necessary" to refer to all the respondents; that the use of the name "Walter" was meant to be "all encompassing" and to refer to all respondents; and that she could not explain why her lawyer only wrote to Mr. Engel.
28The applicant gave contradictory evidence about her understanding of whether Mr. Deley acted for two or three respondents. In her evidence-in-chief, the applicant testified that she understood that Mr. Deley represented the numbered company and Mr. Engel. In cross-examination, the applicant initially stated that she understood that Mr. Deley acted for Ms. Stunden as well, but later testified that she had no reason to doubt the claim made by Ms. Stunden in her affidavit filed before the hearing that at all material times throughout the mediation process, the sole person "mediating" the terms of the settlement was Mr. Deley, the lawyer for Mr. Engel and the corporate respondent, with the mediator acting as an intermediary on behalf of the applicant. I note that the parties (the applicant through her counsel) agreed that based on the material filed in connection with the original Application, Ms. Stunden was self-represented and Mr. Deley acted for the other two respondents.
29In her evidence, Ms. Stunden confirmed that Mr. Deley did not act for her. Ms. Stunden provided evidence about the mediation process. Ms. Stunden stated that she arrived at the mediation and was sent to a particular room and that later, Mr. Deley and Mr. Engel came into the same room. Ms. Stunden testified that the mediator went to meet with the applicant and came back and then there was a "back and forth" on deciding how much money would be appropriate and when it would be paid. Ms. Stunden stated that this discussion happened in front of her, but she was not part of the discussion.
30Ms. Stunden testified that she understood that she was not responsible for making any payment. Ms. Stunden stated that before signing she was told explicitly by the mediator that she would not be held responsible for any payment. She was told this after her mother, who attended the mediation with her, asked a direct question about who was responsible and the mediator responded that it would be "the company". In addition, Ms. Stunden stated that she based this understanding on the fact she was excluded from the discussions on the payment.
31In contrast to the issue of the payment, Ms. Stunden testified that she understood that certain other provisions in the MOS applied to her. Ms. Stunden stated that the mediator told her at a different time from the discussion about payment that the obligation to not make disparaging remarks, the release language and confidentiality applied to her.
32Mr. Engel also testified and largely confirmed the evidence of Ms. Stunden at least in respect of her role in the mediation and the understanding of which party was responsible for the payments. Mr. Engel described himself as a director of the company since October 12, 2012, and testified that the current status of the corporation is that it is insolvent and dormant. Mr. Engel testified that while not formally in "bankruptcy or CCAA", the corporation's obligations exceed its assets. Mr. Engel stated that the corporation no longer has any active stores and the Peterborough location where the applicant was employed closed in June 2014. Mr. Engel stated that his employment ended May 15 or 25, 2015 (which I presume was an inadvertent error as he previously had indicated his employment ended in 2014 and the hearing occurred before the date given in evidence).
33Mr. Engel confirmed that Ms. Stunden had no input into the settlement items and that the understanding was that the corporate respondent would pay the monetary amounts set out in the MOS. Mr. Engel stated that there was back and forth on the terms of settlement between his counsel, Mr. Deley, the mediator, and the applicant's counsel, and that his role as president was to give instructions to Mr. Deley. Mr. Engel testified that he understood that certain terms applied to him, such as the completion of the human rights training module.
34Mr. Engel testified that he can see now how there is a "problem" with the MOS and the language is a "misunderstanding" given that the "respondents" is always in the plural. Mr. Engel stated that his counsel reviewed the draft and advised of implications of sections in the MOS.
35Both Mr. Engel and Ms. Stunden testified that they each understood that the applicant had drafted the Minutes of Settlement. This evidence was unchallenged by the applicant's counsel.
The Parties' Submissions
36The applicant made brief oral submissions. The applicant submits that the Tribunal should not have regard to extrinsic evidence in interpreting the MOS. In support of her position, the applicant relies on the language in 45.9(1) of the Code (i.e. that if a settlement of an application is "agreed to in writing and signed by the parties, the settlement is binding") and the Tribunal's decision in Thornton v. Toronto Police Services Board, 2012 HRTO 2412 (where the Tribunal refused to hear evidence of statements made at mediation where it found the language clear and unambiguous). The applicant submits that because the respondent Ms. Stunden is no longer an employee, she would not be able to comply with the obligation to post Code cards, provide a letter of employment, and develop a policy, but should comply with the obligation to make the payment and complete the training. The applicant submits that if extrinsic evidence is introduced, some provisions would not apply because of practicality and that for Mr. Engel, the case is "clearer" given that he had counsel, that he was there to provide advice and that his responsibility was to make sure his client's interests were protected.
37In her oral submissions, the applicant stated that she also relies on her Response to the Request to Remove Ms. Stunden as a party dated April 5, 2014, and the Response to the Request to Summons the mediator and Mr. Deley dated November 3, 2014, in connection with how to interpret the MOS. In the latter response, the applicant had submitted that the language is clear and unambiguous, that it is unnecessary to consider extrinsic evidence and that if there was an agreement as to who was going to pay, it was incumbent on the parties to have written this into the MOS. The applicant further submitted that absent such language, all of the respondents are jointly and severally liable for the payment.
38The respondent Ms. Stunden submits that she is not responsible in law to make any payment to the applicant. Ms. Stunden submits that the language in the MOS is ambiguous and that all witnesses in their testimony agreed it was ambiguous as to who should issue payment. Ms. Stunden submits that the Tribunal should apply the contra proferentem rule and interpret any ambiguity against the drafter – in this case, the applicant. The respondent Ms. Stunden argues that both individual respondents gave similar credible evidence that the intent was that the corporate respondent would make the payment. The respondent Ms. Stunden submits that if there is an ability to pierce the corporate veil, Mr. Engel is the individual behind the corporation.
39In support of her submissions, the respondent Ms. Stunden referred to the Tribunal's decision in Thornton, as well as Sun Life Trust Co. v. Dewshi, [1993] O.J. No. 57, and Legal Aid Ontario v. Gertler, [2010] O.J. No. 5132, 2010 ONSC 6556.
40Mr. Engel submits that the provisions in the MOS dealing with payment and "all corresponding points" (which I presume are paragraphs 2 through 5 of the MOS cited above) did not involve Ms. Stunden, stating in his submissions that at the time, the "entire document was done without [her] input" and she "deferred to the fact that the company was taking responsibility". Mr. Engel submits that he should not be responsible for payment either, and paragraphs 2, 3 and 5 should not apply to him "if [he] no longer works for the company". Mr. Engel separately submits that the responsibility for the body of the MOS was with the "company" and as the "operating mind of the company" he was "responsible in the amount payable". Mr. Engel states that at the time the MOS were negotiated he was confident that the company could fulfill the obligations. Mr. Engel submitted that he himself would not be able to "afford to pay this amount".
Analysis and Decision
41The issue before me is what interpretation should be given to "the respondents" in paragraphs 1 to 5 of the MOS. In particular, the issue is whether the parties intended that all respondents be responsible for obligations set out in paragraphs 1 to 5 of the MOS.
42In Reyes v. Centric Health Corporation, 2014 HRTO 931, the Tribunal addressed its approach to interpreting minutes of settlement. The Tribunal stated in part at paras. 10-13:
Minutes of Settlement are contracts, and, as such, the same principles of contract interpretation apply. See Precision Remodeling Ltd. v. Soskin, 2008 CanLII 31411 (ON SC) at para. 27. The primary goal of contractual interpretation is to give effect to the intentions of the parties. See Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., 1979 CanLII 10 (SCC), [1980] 1 S.C.R. 888 at p. 901.
The contractual intent of the parties is to be determined by reference to the words they used in drafting the document, and it is unnecessary to consider any extrinsic evidence at all when the document is clear and unambiguous on its face. Unless there is ambiguity in the wording of the document, extrinsic evidence regarding the subjective intentions of the parties is inadmissible pursuant to the parol evidence rule. See Eli Lilly & Co. v. Novopharm Ltd., 1998 CanLII 791 (SCC), [1998] 2 S.C.R. 129 at paras. 54, 55 and 58.
Regardless of ambiguity, however, courts may have regard to the context or the factual matrix in order to determine the intent of the parties and the scope of their understanding (i.e. contracts are to be interpreted with regard to objective evidence of the context or factual matrix underlying the negotiation of the contract, but without reference to the subjective intention of the parties). See Dunn v. Chubb Insurance Company of Canada, 2009 ONCA 538 at paras. 33-34.
See also Thornton at paras.13-14.
43Where contractual language is ambiguous, however, the Tribunal may consider extrinsic evidence as an aid to interpretation. An ambiguity may be patent (where more than one meaning is obvious on the face of the document) or can be latent (where interpretative problems arise when seeking to interpret the contract for a particular circumstance) (See Simpson v. Canada (Attorney General), 2011 ONSC 5637 at para. 69-70 and the cases cited therein).
44Extrinsic evidence may be admitted to disclose a latent ambiguity in the contract and to assist in resolving the ambiguity. Evidence regarding the negotiations leading up to the agreement is one type of extrinsic evidence that may be admitted where a contract is ambiguous. (See Dunn v. Chubb Insurance Company of Canada, 2009 ONCA 538 (OCA) at para. 34.) Further, where an agreement is ambiguous, evidence of subsequent conduct may be admitted to determine the intent of the parties (see Simpson v. Canada (Attorney General), above, at para. 68).
45Lastly, in interpreting contracts, if all other rules of construction are inadequate, the doctrine of contra proferentem may be applicable to resolve an ambiguity against the party who drafted the contract. See Dunn at para. 36.
46In light of the issues in this case, the first issue to be determined is whether the term "the respondents" in the Minutes of Settlement is ambiguous. In my view, it is. While the term is not patently ambiguous, it is latently ambiguous. My reasons for this are as follows.
47First, I find that there is a latent ambiguity in the reference to the "respondents" in paragraphs 2 through 5 of the MOS with respect to the inclusion of the respondent Ms. Stunden. While the description of the parties to the MOS defines the respondents as including all three named respondents to the original Application, an examination of the obligations in paras. 2 to 5 (i.e. the obligation to develop a policy, post Code cards, complete staff training and provide a letter of reference), coupled with the surrounding factual circumstances, reveals interpretative problems in applying these obligations to Ms. Stunden.
48In particular, I fail to see how the obligations in paragraphs 2 through 5 could apply to Ms. Stunden, given that she was no longer employed with the corporate respondent at the time the MOS was negotiated and signed. This means that it was not possible for Ms. Stunden to develop a human rights policy with the other respondents, ensure that the Ontario Human Rights Code Card was posted in a prominent location at all Skirt locations, ensure that staff members take human rights training, and provide the applicant with a letter of reference on "official letterhead". While the latter is not defined, the reasonable interpretation is that the letterhead would be that of the corporate respondent, something to which Ms. Stunden, as an ex-employee, no longer had access.
49In her final submissions, the applicant submitted that since Ms. Stunden was no longer at the workplace, paragraphs 2, 3 and 5 would not apply to her but argued that Ms. Stunden could live up to the obligation in paragraph 4 regarding training. However, I find the language in para. 4 to be ambiguous as well. Paragraph 4 provides, "the Respondents agree that each of its staff members, including management, will complete human rights training module…" It makes no sense that "the Respondents" in para. 4 was meant to include Ms. Stunden, since at the time she signed the MOS, she had no power to ensure that staff members at a location where she no longer worked complete training. Further, given that Ms. Stunden was no longer employed by the corporate respondent at the time of the MOS were signed, she is not obliged to do the training in the capacity of "staff member" either.
50In addition, the reference to "the Respondent Counsel" providing confirmation of the completion of training reflects that this provision only applies to the corporate respondent and Mr. Engel, given that the only counsel was Mr. Deley, who acted for only the corporate respondent and Mr. Engel.
51Finally, the reference in para. 1 to the issuance of "one cheque" implies that only one respondent is making the payment or at least respondents who could act in a coordinated manner by issuing one cheque. Although it is possible that an ex-employee could coordinate with a former employer in this way, in my view, the reference to "the respondents" issuing "one cheque" casts further doubt on the proposition that Ms. Stunden was liable for the payment to the applicant. Indeed, the applicant herself conceded in evidence that the language is ambiguous with respect to which respondent was obliged under the Minutes of Settlement to issue the payment to her.
52I do not find similar ambiguities with regard to the implementation of the core obligations in paragraphs 1 through 5 by Mr. Engel. Given Mr. Engel's role as president and director of the corporation, he could ensure that payment is issued by the corporation or otherwise (meaning he could coordinate whether he or the corporation make the payment). As for the other obligations, while I appreciate Mr. Engel testified that he has now left the workplace, at the time of the mediation and as of the date of the Contravention Application, Mr. Engel was able to implement these obligations under the MOS. Further, in the corporate search documents produced on the day of hearing, Mr. Engel continued to be listed as the president and director of the corporation and accordingly would appear to still be able to implement the obligations (to the extent the corporate respondent can implement the obligations) under the MOS.
53Having found the language of the MOS ambiguous at least with respect to the application to Ms. Stunden, it is appropriate to consider extrinsic evidence to clarify the ambiguity. In my view, the relevant extrinsic evidence, particularly evidence of the negotiating history and the applicant's conduct following the signing of the MOS, supports the interpretation that the meaning of "the respondents" includes the corporate respondent and Mr. Engel, but does not include Ms. Stunden.
54As a starting proposition, I accept that the plain and literal meaning of the term, "the respondents", would mean more than one respondent. Absent compelling evidence, it would not seem logical that the parties had used the plural throughout the MOS when in fact the intention was to hold only a single respondent responsible for the core obligations in the MOS. The more contentious issue is whether the term was meant to refer to two respondents or three respondents, and if the former, which respondent was intended to be included. In my view, this issue is clarified by the extrinsic evidence presented at the hearing.
55Specifically, the respondents Ms. Stunden and Mr. Engel gave consistent evidence about what was going on in their mediation room and in particular, that Ms. Stunden did not participate in negotiating the monetary compensation. In fact, in his final submissions, Mr. Engel stated that the entire MOS was done without Ms. Stunden's input and that Ms. Stunden had deferred to the company taking responsibility. This suggests that the common intention, at least among the respondents, was that Ms. Stunden was not responsible for the obligations in question and that it would be the corporate respondent taking responsibility. This is consistent with the interpretation of the MOS set out in paragraphs 48 to 51 above.
56I note that the conduct of Ms. Stunden is sharply contrasted with that of Mr. Engel, who was actively involved in the MOS and in fact was the instructing client to his counsel who acted for both him and the corporate respondent. It is clear from Mr. Engel's submissions that he viewed himself to be responsible for the obligations as long as he worked for the corporate respondent. In fact, Mr. Engel referred to himself as the "operating mind" of the corporate respondent in his closing submissions.
57Ms. Stunden did sign the MOS and testified that she understood that she was bound to comply with certain provisions (confidentiality and no disparaging remarks) and had the benefit of the release provision. No party suggested that there were any interpretative problems in applying these provisions to Ms. Stunden.
58While the applicant also gave some evidence about her understanding of the MOS, the applicant's evidence was based on her interpretation of the MOS as opposed to extrinsic evidence about the negotiating history. She provided no evidence of comments made to her by her counsel, the other parties, or the mediator that would support her interpretation of the MOS.
59While at one point the applicant stated that she believed all respondents were represented by Mr. Deley and referred to evidence in this regard (i.e. Mr. Deley was the only lawyer in the room with the respondents), as indicated above, the applicant appeared to change her evidence later in her cross-examination when she acknowledged that she had no reason to doubt the claim made by Ms. Stunden in her affidavit filed before the hearing that at all material times throughout the mediation process, the sole person mediating the terms of the settlement was Mr. Deley, the lawyer for Mr. Engel and the corporate respondent. In fact, Mr. Deley's conduct in respect of the contraventions confirms that he continued to act only on behalf of the corporation and Mr. Engel given his communication to applicant counsel when the applicant first complained about the contravention.
60Further, while a common intention on the part of the respondents alone is arguably not sufficient to support a finding as to the intention of all of the parties, in my view the applicant's conduct after the MOS were signed reinforces that she also intended that the obligations of "the respondents" in the relevant paragraphs did not apply to Ms. Stunden. As particularized in paragraphs 11 to 14 above, the applicant took no steps to notify Ms. Stunden of the contraventions and directed her complaints to Mr. Engel, the president of the corporate respondent. In fact, the applicant did not even copy Ms. Stunden. This is indicative of the applicant herself viewing the corporate respondent and Mr. Engel as responsible for the obligations in question. Indeed, even in the Application, the applicant continued to focus on Mr. Engel (and not Ms. Stunden). For example, after detailing her unsuccessful efforts to contact Mr. Engel, the applicant concluded:
In light of the fundamental breach of the Respondent and the ability to contact him, we are seeking the enforcement of the remedies achieved in the Minutes of Settlement entered into by the parties" (emphasis added)
61As for the applicant's evidence that when she addressed her concerns to "Walter" she meant all three respondents, I do not find this credible. Given the fact that the respondent Ms. Stunden was not employed with the corporate respondent since July 2013, it is not credible that the applicant could reasonably assume that correspondence sent to Mr. Engel was notice to Ms. Stunden of the applicant's complaint. In my view, the more reliable indicator of the applicant's understanding and intention of the MOS were her actions in looking only to the president of the corporate respondent to make good on the obligations in the settlement.
62In comparison to Ms. Stunden, although I did not find the language ambiguous with respect to Mr. Engel, if I am incorrect in this respect, I do not find that there is credible extrinsic evidence supporting an interpretation that he is not liable for the monetary amount and other obligations under the MOS. While Mr. Engel testified that he understood the monetary obligation and most of the other obligations did not apply to him, he did not present any extrinsic evidence in support of his position. Indeed, as stated above, he negotiated the monetary amount and testified that he provided instructions to Mr. Deley on the MOS. Further, while Mr. Engel stated in final submissions that paragraphs 2, 3 and 5 did not apply to him if he no longer works for the company, he gave no evidence in support of this claim. Moreover, the evidence that was presented was the corporate search document which reflected that Mr. Engel continued to be president, director and secretary as of the day of hearing, which in my view supports a conclusion that he could implement the terms of the MOS to the extent the corporation continues to be operational. I address the implications of the current state of the corporation below.
63In summary, in my view, the extrinsic evidence (the negotiating history and the applicant's subsequent actions) are consistent with an intention that the obligations that were contravened were those of the corporate respondent and Mr. Engel. Accordingly, the corporate respondent and Mr. Engel are jointly and severally liable for remedies detailed below.
Remedy
64Section 45.9(8) of the Code sets out the Tribunal's remedial jurisdiction in the case of a contravention of settlement:
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.
65The Tribunal has found that a contravention of settlement is, in essence, a breach of contract (See Saunders v. Toronto Standard Condominium Corp. No. 1571, 2010 HRTO 2516 at para. 37 to 39, and Glover v. 571566 Ontario Inc., 2011 HRTO 1563 at para. 20.) The remedy for a breach of contract is to put the applicant in the position that she would have been in had the contravention not occurred.
66In the Contravention Application, the applicant requested that the respondents provide her with the full immediate payment of the $10,000.00, including pre- and post-judgment interest; compliance with all remedial terms of the MOS outlined in paragraphs 2-5 of the MOS; and $8,000.00 in additional compensation.
67I grant the remedies in part. In light of my findings as to the meaning of "the respondents" in paragraphs 1 through 5 of the MOS, the respondents Mr. Engel and the corporate respondent are jointly and severally liable for the monetary remedies set out below.
Remedy for the Failure to Pay Compensation in the MOS
68The MOS required that the applicant be paid $10,000.00 (an initial payment of $5,000.00 on December 19, 2013, and monthly instalments of $500.00 thereafter to be paid on the 19th of each month). The full amount should have been paid as of October 19, 2014. There is no dispute that no compensation has been paid.
69The remedy for this contravention is to order that the corporate respondent and Mr. Engel are jointly and severally liable for the payment of $10,000.00 to the applicant.
70The Tribunal has significant discretion to remedy the contravention of settlement, including by requiring the respondent to pay the applicant interest on the monies that it did not pay her in accordance with the MOS. In addition to ordering that the full amount be paid along with post-judgment interest, I find it appropriate to order pre-judgment interest to remedy the financial consequences of the delay in paying the applicant the agreed to compensation. Given that the compensation in the MOS was framed as general damages with respect to the allegations of the breach of the Code for insult to dignity, self-worth and self-respect, I think it is appropriate to exercise my discretion to award pre-judgment interest at the rate applicable for damages for non-pecuniary loss, i.e. 5%. (see s. 128 (2) of the Courts of Justice Act, R.S.O. 1990, c. C.43, and Rule 53.10 of the Rules of Civil Procedure). In order to take account of the instalment schedule, pre-judgment interest at the rate of 5% is to be paid on $5,000.00 from December 20, 2013 (the day after the first payment was owing) to the date of this Decision; and on the additional $5,000.00 from May 4, 2014 (the estimated midpoint of the remaining 10 instalment dates) to the date of this Decision.
Remedy for Paragraphs 2-5 of the MOS
71In the Application, the applicant also sought an order from the Tribunal that the respondents comply with "all remedial terms of the settlement, outlined in sections 2-5 of the Minutes of Settlement". The applicant submitted that these "public interest remedies" were essential elements to the settlement and were entered into under the premise that the respondents would take significant steps to promote essential Code values in "their workplace".
72The respondent corporation and Mr. Engel did not respond to this request either in their Response or at the hearing. However, Mr. Engel, a director of the corporate respondent, testified that the corporate respondent is insolvent and dormant. Mr. Engel stated that while the corporate respondent is not formally in bankruptcy or CCAA, proceedings it has no active stores and staff have been given notice and the premises turned over to the landlord.
73The applicant did not challenge any of the evidence provided by Mr. Engel and did not address the implications, if any, of this evidence on the remedy being sought. Moreover, the applicant's efforts to enforce the MOS prior to filing the Application appeared to be focussed on the failure to provide the payment to her as opposed to the respondents' contravention of paragraphs 2-5 of the MOS.
74In the normal course, the remedy for non-compliance with these types of provisions in a settlement would be to make an order that the remedies be complied with. While I have some concerns about the ability of the respondents to comply with the substance of all of these terms given the state of the corporate respondent and the absence of any submissions in this regard, I have determined that it is appropriate to make the following orders to give effect to the MOS terms that have been contravened. Given the status of the corporate respondent (dormant with no open retail locations), it would appear that the corporate respondent and Mr. Engel would not be able to comply with the obligations under paragraphs 2-4, or it would not serve any purpose to comply with the obligations unless the business begins to operate again. Although this may be unlikely given the financial state of the respondent, I cannot assume that there is no possibility that Mr. Engel or a new buyer may not open new locations at some point. As long as it exists, the corporate respondent is still under an obligation to comply with the terms of the MOS dealing with the development of a policy, the Code cards, and training should the corporate respondent begin operating again.
75As for the letter of employment, I find it appropriate to order Mr. Engel to issue a letter to the applicant within 30 days of this decision in the form set out in the MOS.
76I do not find it necessary to issue any further order in respect of the contravention of paragraph 5 of the MOS as the applicant did not claim that there had been any contravention of the paragraph as it relates to the agreement to a telephone protocol.
Additional Compensation
77The applicant also requests an additional $8,000.00 in compensation for the contravention. In the Application, the applicant submitted that the respondents have shown complete disregard for the terms of the settlement and they have had ample time to comply with the terms. In support of her request for additional compensation, the applicant relies on the Tribunal's decision in Saunders at paragraph 51. The applicant also relies on Ye v. Pestell Pet Products Inc., 2014 HRTO 156, and Schenk v. Nixon, 2011 HRTO 1312 at paragraphs 28-29.
78The applicant made no submissions on the request for additional compensation at the hearing including why the amount requested was warranted or what evidence, if any, was relevant to the request.
79I acknowledge that in some contravention of settlement cases, the Tribunal has ordered that an applicant be paid additional compensation beyond that provided for in the MOS, as a remedy to the contravention of the settlement. In Saunders, the Tribunal ordered that an applicant be paid an additional $1000.00 to remedy the contravention of settlement. The Tribunal's justification for the order in that case appeared to be based, at least in part, on its view that an award of monetary compensation can help reflect the private and public importance of complying with settlement terms. The Tribunal referred to the Ontario Superior Court's decision in ADGA Group Consultants Inc. v. Lane (2008), 295 D.L.R. (4th) 425, 2008 CanLII 39605 (Ont. S.C.D.C.), which provided that damages should not so low as to constitute a licence fee for discriminatory conduct or trivialize the social importance of the Code thus leaving the impression that the principles cited in ADGA were applicable to the Tribunal's decision to order additional compensation. See Saunders at paras. 50 and 51.
80Although there have been several other cases in which the Tribunal has applied the reasoning in Saunders, the approach taken in Saunders has not been universally followed by the Tribunal. For example, in Glover, above, the Tribunal expressed disagreement with this part of the Saunders analysis. The Tribunal stated that the reference to ADGA Group Consultants Inc. is not helpful as this case was concerned about the power of the Tribunal to award general damages to compensate for the loss of the right to be free from discrimination and the experience of victimization as a result and not a breach of settlement. Moreover, the Tribunal disagreed with what appeared to be the view in Saunders that a contravention per se should give rise to an award of monetary compensation (see para. 44). See also Lambert v. Silver Dental Centre, 2015 HRTO 979 at para. 14.
81In Glover, the Tribunal emphasized that contractual principles provide an appropriate framework for analyzing contraventions. In the case of compensatory damages, the Tribunal cited the test applied by the courts in cases of breach of contract; namely, the test for compensatory damages is that damages must be "such as may fairly and reasonably be considered either arising naturally… from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties." (see Glover at para. 36 and the cases referenced in that paragraph). The Tribunal stated that in an appropriate case, this could include damages for mental distress and/or punitive damages.
82I prefer the approach in Glover. While I appreciate the sentiments expressed in Saunders and other cases about the importance of complying with settlement terms, any award for additional compensation needs to be based on the application of contractual principles. The Tribunal's remedial jurisdiction under s.45.9 is undeniably broad but the jurisdiction is to make any order that the Tribunal considers appropriate to "remedy the contravention". In this case, I do not find that there is any specific language in the settlement that contemplates the payment of additional compensation for a breach nor has the applicant advanced any legal theory as to why an award for $8,000.00 or some other amount is justified to remedy the contravention in this case. I do not find the reference in the Application to an award reflecting the private and public importance of complying with settlement terms as stated in Saunders to be a sufficient justification.
83Though not pursued in argument, I have also considered whether the applicant's evidence about how the breach of settlement affected her justifies an order that the respondents provide her additional compensation (i.e. beyond the monies provided for in the MOS and interest on such amount). The thrust of the applicant's very brief evidence was that the failure to comply with the MOS exacerbated the injury to her dignity that had occurred, i.e. the applicant referenced going through something emotional, that it hurt her dignity and that she has not been able to start the healing process and that the "waiting, relying and expecting" made the "whole experience worse". This evidence on impact appears to relate to the original alleged discrimination as opposed to the impact of the contravention itself (albeit the applicant suggests that the contravention exacerbated the hurt she felt). The original Application into the alleged discrimination was never determined and was settled and as a result, cannot provide a justification for additional compensation arising from the contravention. At this stage, as previously stated, the Tribunal's jurisdiction is limited to what order is appropriate to remedy the contravention. I do not find the evidence on impact justifies an order for additional compensation for the contravention.
84For all these reasons, I decline to make an order for additional compensation beyond that already ordered.
Orders
85The Tribunal orders as follows:
a. The respondents 2229884 Ontario Inc. o/a Skirt and Walter Engel have contravened the Minutes of Settlement;
b. The respondents 2229884 Ontario Inc. o/a Skirt and Walter Engel are jointly and severally liable to pay to the applicant the sum of $10,000.00;
c. The respondents 2229884 Ontario Inc. o/a Skirt and Walter Engel are jointly and severally liable to pay to the applicant pre-judgment interest at the rate of 5.0% on $5,000.00 from December 20, 2013 to the date of this Decision and on an additional $5,000.00 from May 4, 2014 to the date of this Decision;
d. The respondents 2229884 Ontario Inc. o/a Skirt and Walter Engel are jointly and severally liable to pay to the applicant post-judgement interest at the rate of 2.0% on any accumulated principal and interest from the date of this Decision in accordance with the Courts of Justice Act.
e. Should the respondent 2229884 Ontario Inc. o/a Skirt begin operating again at any point in the future it shall immediately implement the terms of paragraphs 2 through 4 of the Minutes of Settlement set out in paragraph 9 above;
f. The respondent Walter Engel shall provide a letter of reference to the applicant within 30 days of the date of this decision in accordance with paragraph 5 of the Minutes of Settlement.
Dated at Toronto, this 11th day of December, 2015.
"Signed by"
Kathleen Martin Vice-chair