White v. CMLS Financial Ltd., 2015 HRTO 1735

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Angela White

Applicant

-and-

CMLS Financial Ltd., 1734927 Ontario Inc. o/a Verico KC Mortgage Services, Greenbrook Estates Inc., Tarion Warranty Corporation

Respondents

INTERIM DECISION

Adjudicator: Sheri Price

Date: December 24, 2015

Citation: 2015 HRTO 1735

Indexed as: White v. CMLS Financial Ltd.

APPEARANCES

Angela White, Applicant Self-represented

CMLS Financial Ltd., Respondent Lawrence Robinson, Counsel

1734927 Ontario Inc. o/a Verico KC Mortgage Services, Respondent Dan Conte, Representative

Greenbrook Estates Inc., Respondent Michael Cohen, Counsel

Tarion Warranty Corporation, Respondent Gena Argitis, Counsel

Introduction

1This is an Application under s. 34 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”) alleging that the respondents discriminated against the applicant because of her marital status and also because of her association with another person because of that person’s race and/or place of origin.

2The applicant, Angela White, entered into a contractual agreement to purchase a new home from the respondent builder, Greenbrook Estates Inc. (“Greenbrook”). The original closing date was in July 2013, but was ultimately moved to October 2013.

3The applicant was unable to close on the October 2013 date, because of problems that had arisen with her financing. However, Greenbrook was willing to allow the applicant to proceed with the house purchase, subject to her arranging financing.

4The applicant alleges that Greenbrook essentially required her to use a particular mortgage broker, the respondent 1734927 Ontario Inc. o/a Verico KC Mortgage Services (“Verico”), to arrange financing that would allow her to close on her new home purchase.

5Verico sought to arrange mortgage financing for the applicant from the lender CMLS Financial Ltd. (“CMLS”), another respondent in the case.

6The respondent Tarion Warranty Corporation (“Tarion”) is an entity created under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (“ONHWPA”) for the purposes of administering the Ontario New Home Warranties Plan.

7The applicant’s claim that she was discriminated against because of her marital status relates to her application for mortgage financing from CMLS. In particular, the applicant alleges that, because she was a married woman, she was required to either have her husband apply for a mortgage with her as a co-applicant or to provide a separation agreement, showing that she was separated from her husband. The applicant alleges that this constituted discrimination because of her marital status, contrary to the Code.

8The applicant also alleges that she was required to use a lawyer approved by the respondents instead of using her own lawyer from Brampton, who is of East Indian origin, to represent her in her house purchase. The applicant alleges that this constituted discrimination based on her association with another person because of that person’s race and/or place of origin, contrary to the Code (s.12).

9By Case Assessment Direction dated May 22, 2015, the Tribunal directed that a summary hearing be convened pursuant to Rule 19A of the Tribunal’s Rules of Procedure to determine whether the Application should be dismissed, in whole or in part, on the basis that there is no reasonable prospect that the Application or part of the Application will succeed. In its Case Assessment Direction, the Tribunal advised the parties that the Tribunal would dismiss the Application, in whole or in part, if it found, following the summary hearing, that the Application had no reasonable prospect of success.

10The summary hearing was held by teleconference on September 25, 2015. The applicant attended and represented herself at the summary hearing. The respondents also attended and were represented by counsel, except Verico which was represented by Mr. Conte, whom I understand to be the principal of Verico. During the summary hearing, the applicant was given an opportunity to explain how she could prove her claims that the respondents infringed her rights under the Code if the Application were to proceed.

11Although based on the Application she filed with the Tribunal, it initially appeared that the applicant was alleging that the respondents discriminated against her because of her race and/or place of origin, the applicant clarified during the summary hearing that that was not the case. The applicant clarified that the only race/place of origin claim being advanced is the above-noted claim that the respondents discriminated against the applicant because of her association with a Brampton lawyer of East Indian origin.

12For the reasons that follow, I find that the Application as against Greenbrook and Tarion has no reasonable prospect of success. It is dismissed accordingly.

13Likewise, the applicant’s claim that she was discriminated against because of her association with her lawyer has no reasonable prospect of success. It is also dismissed.

14However, I am not persuaded that the applicant’s claim that the lender, CMLS, discriminated against her because of her marital status by allegedly requiring her to apply for mortgage financing jointly with her husband has no reasonable prospect of success. The applicant’s marital status claim as against CMLS will continue in the Tribunal’s process.

15As for Verico, although it was involved, as the mortgage broker, in conveying CMLS’s alleged requirements to the applicant, I am not persuaded that the applicant has any reasonable prospect of proving that Verico itself treated the applicant in a disadvantageous manner because of her marital status. The Application as against Verico is dismissed accordingly.

Background

16In or around September 2012, the applicant bought a new house in Shelburne, Ontario from the respondent builder, Greenbrook. Pursuant to the Agreement of Purchase and Sale with Greenbrook, the applicant was the sole owner of the house.

17The applicant alleges that, originally, there was to be a July 2013 closing date and that she listed and sold the house that she was living in in anticipation of that date. However, in or around March 2013, Greenbrook allegedly informed the applicant that the house would not be ready for a July 2013 closing, and the closing date was ultimately moved to October 2013.

18The applicant alleges that, although she had financing in place for the July 2013 closing date, she was unable to close in October 2013 because she did not have financing in place at that time.

19Despite the fact that the applicant was unable to close in October 2013, Greenbrook was willing to proceed with the sale of the house to the applicant, provided that she could arrange financing.

20The applicant alleges that she was attempting to arrange her own financing in November 2013 when she received a telephone call from a Greenbrook representative about putting her in touch with the respondent Verico, a mortgage broker. However, whereas Greenbrook submits that it merely recommended Verico to the applicant, because of Verico’s past successes in assisting people in the applicant’s situation, the applicant contends that Greenbrook effectively required her to use Verico. According to the applicant, she believed that Greenbrook would only proceed with the sale of the house to her if she used Verico to arrange her financing.

21In any event, the applicant engaged the services of Verico in or around late November 2013. Verico subsequently submitted an application for mortgage financing to the lender CMLS on behalf of the applicant. Although the applicant’s mortgage application indicated that the applicant was married, the applicant applied for the mortgage as a sole applicant. Again, as noted above, the applicant was to be the sole owner of the house she was purchasing from Greenbrook. The mortgage application also identified the applicant’s lawyer as a Mr. Bhardwaj, who had apparently represented the applicant in a number of previous real estate transactions.

22Following receipt of the applicant’s mortgage application, the lender CMLS conveyed to Verico that the applicant had to use one of the lawyers on its approved list to represent her and the lawyer she had identified, Mr. Bhardwaj, was not on the list. During the summary hearing, the applicant stated that CMLS provided the names of three lawyers from the approved list from whom she could choose: Ricky Rye (later identified as “Amanpreet Ricky Rye”) in Brampton, Kania Lawyers in Brampton, and Bukhari law firm in Mississauga.

23The applicant alleges that when she questioned why she had to use one of CMLS’s approved lawyers, Dan Conte, the principal of Verico with whom the applicant was dealing, told her that Brampton was “a zoo” and that there was not a lot of trust in terms of how business was conducted there. The applicant submits that she took this to mean that the respondents did not want her to use a lawyer of East Indian origin, because there are a lot of people of East Indian origin in Brampton.

24The applicant alleges that she asked Mr. Conte which lawyer on CMLS’s approved list she should use because she did not know any of them and Mr. Conte said he would pick one for her. The applicant alleges that Mr. Rye was retained for her on that basis. Although she did not dispute during the summary hearing CMLS’s contention that Mr. Rye is himself an Indo-Canadian lawyer, the applicant submits that she did not know that at the time as she never met Mr. Rye in person.

25Verico denies that it had any part in deciding that the applicant could not use Mr. Bhardwaj to represent her in her real estate transaction. Mr. Conte points out that the mortgage application he submitted to CMLS on behalf of the applicant listed Mr. Bhardwaj as the applicant’s legal counsel. He submits that it was the lender, CMLS, that replied that the applicant had to use one of the lawyers on its approved list in order to proceed. It was also CMLS, and not Verico, that provided the list of approved lawyers in the area, which Mr. Conte passed along to the applicant. Mr. Conte denies that he selected a lawyer for the applicant from CMLS’s approved list.

26Mr. Conte also denies that he made the alleged “zoo” comment attributed to him by the applicant. He submits that he may have told the applicant that there has been an issue with mortgage fraud in Brampton, and that lenders are cautious, but denies that such comments were discriminatory.

27For its part, CMLS agrees that it has an approved list of lawyers and that it will only enter into transactions where an approved lawyer is acting. However, CMLS denies that the lawyers’ race or place of origin or even their office location is a factor in determining whether a lawyer is on the approved list. Rather, CMLS submits that the factors it considers are the lawyer’s expertise in the area, his or her familiarity with CMLS, and, in light of concerns about mortgage fraud, the lawyer’s disciplinary record with the Law Society of Upper Canada. (In this regard, CMLS notes that the applicant’s chosen lawyer had been disciplined by the Law Society, although it is not clear whether the respondents were aware of that at the time.) CMLS submits that it has a legitimate interest in ensuring that the applicant’s lawyer is on the approved list because the lawyer has obligations to it, the lender, as well as to the buyer. For example, CMLS explained that the lawyer representing the home buyer is generally required to provide an undertaking to forward monies received by him or her to the seller and also to register the mortgage on title. CMLS submits that using lawyers from an approved list helps to ensure that these things are done properly and that nothing fraudulent is done with the funds.

28In addition to the issue with her lawyer, the applicant contends that Verico conveyed to her that, in order to get a mortgage through CMLS, she would either have to apply for a mortgage jointly with her husband as a co-applicant (in which case credit checks and income verification for her husband would be required) or else she would have to provide a separation agreement showing that she was separated from her husband.

29In particular, the applicant alleges that Mr. Conte told her that the lender had raised an issue about the fact that the applicant’s husband was not co-applying for the mortgage with the applicant. The applicant submits that she explained to Mr. Conte that her husband was self-employed and had been in a car accident, and she did not want him to apply for the mortgage with her. The applicant alleges that Mr. Conte suggested that getting a separation agreement would be an “easy solution” to the problem, even though the applicant was not separated from her husband and allegedly never suggested that there was any marital discord between her and her husband.

30The applicant contacted her lawyer and had him draft a separation agreement reflecting that she had separated from her husband some months earlier, in January 2013. However, the applicant never signed the separation agreement or provided it to Verico or CMLS. In the end, the applicant submits that she was uncomfortable with not being able to use her own lawyer and with having to provide a separation agreement in order to get financing and so she decided not to go ahead with the financing from CMLS or the house purchase from Greenbrook.

31Verico denies that things unfolded in the manner alleged by the applicant. Mr. Conte acknowledges that after he submitted the applicant’s mortgage application to CMLS indicating that the applicant was married, CMLS indicated that it was not satisfied with the applicant applying for the mortgage without her husband and that it wanted the applicant’s husband to be a co-applicant for the mortgage, and that he subsequently conveyed this to the applicant. Mr. Conte alleges that when he told the applicant this, she replied that her relationship with her husband was not good. Mr. Conte submits that he then asked if there was a possibility that the applicant and her husband were splitting up, to which the applicant replied that they probably would in the not-too-distant future. Mr. Conte acknowledges that, at that point, he raised the possibility of a separation agreement, in response to what the applicant told him about her marital situation. He denies that he suggested the applicant obtain a separation agreement “out of the blue,” as the applicant contends.

32Mr. Conte also denies that the applicant had to get a separation agreement in order to get a mortgage from CMLS. Mr. Conte submits that what he conveyed to the applicant, in his role as a conduit between the applicant and CMLS, was that it was an “either/or” situation: either the applicant had to have her husband apply with her for the mortgage or, if she was separating from him, then she had to obtain a separation agreement specifying what, if any, financial obligations the applicant had to her husband.

33For its part, CMLS acknowledges that it saw it as “odd” that the applicant was applying for a mortgage without her husband. It submits that since the applicant’s husband was not a co-applicant for the mortgage they had no information about his credit, and no information about the applicant’s and her husband’s shared ability to handle their debt. CMLS submits that it was merely employing prudent business practices by seeking to ensure that a married couple could handle their shared obligations. CMLS submitted that there was also some uncertainty about the applicant’s income that came into play. CMLS submits that it understood that, when Mr. Conte conveyed CMLS’s concerns about the applicant applying for a mortgage without her husband, the applicant responded that, although she and her husband were “technically” married, they were not really together. That prompted the discussion about the separation agreement. CMLS submits that it was the applicant who went to a lawyer and had him draw up what was essentially a fraudulent separation agreement (unbeknownst to the lawyer) because the applicant understood that, if she applied for a mortgage with her husband, based on their shared finances, they might be disqualified from the loan. Ultimately, CMLS submits that it was the applicant who decided to “walk away” from the financing arrangement; CMLS was prepared to fund the applicant’s house purchase.

Analysis and decision

Claim as against Greenbrook and Tarion

34In order to establish that any or all of the respondents discriminated against her contrary to the Code, the applicant would have to establish that they treated in a disadvantageous manner because of a prohibited ground of discrimination under the Code.

35In this case, the applicant alleges that she experienced disadvantageous treatment because of her marital status when she was allegedly required her to apply for a mortgage jointly with her husband or else to establish that she was legally separated from him. She further alleges that she was treated disadvantageously because of her association with a person of East Indian origin when she was required to use one of CMLS’s approved lawyers, and not her chosen lawyer, Mr. Bhardwaj, to represent her in her house purchase.

36During the summary hearing, the applicant stated that she named Greenbrook as a respondent because it required the applicant use Verico to arrange mortgage financing for her house purchase On this basis, the applicant alleges that Greenbrook is liable for Verico’s and CMLS’s alleged discriminatory actions.

37The applicant contends that Tarion is liable for the alleged discrimination as well because it works closely with builders and “someone has to be held accountable”.

38In my view, it is readily apparent that the applicant has no reasonable prospect of success in her claims against these Greenbrook or Tarion. This is because none of the alleged disadvantageous treatment of the applicant was treatment by Greenbrook or Tarion.

39The alleged requirement that the applicant apply for a mortgage jointly with her husband or else provide a separation agreement showing that she was separated from him and had no financial obligations to him was the lender’s requirement, not Greenbrook’s or Tarion’s. Likewise, it was not Greenbrook’s or Tarion’s requirement that the applicant use a lawyer other than Mr. Bhardwaj in her real estate transaction. Indeed, there is no dispute that Greenbrook did deal with Mr. Bhardwaj, as the applicant’s lawyer, up until the applicant failed to close with Greenbrook in October 2013.

40As noted above, the applicant claims that Greenbrook is liable for the allegedly discriminatory actions of Verico and/or CMLS because Greenbrook essentially compelled her to arrange her mortgage financing through Verico. However, assuming without finding that Greenbrook did require the applicant to go through Verico to obtain mortgage financing (which Greenbrook denies), Greenbrook submits, and I agree, that this does not make Greenbrook liable for subsequent discriminatory conduct by Verico, much less the lender, CMLS.

41Contrary to the position taken by the applicant, Greenbrook cannot be held liable under the Code for another party’s allegedly discriminatory requirements. There are no allegations that Greenbrook treated the applicant in a disadvantageous manner because of her marital status or her association with Mr. Bhardwaj. Nor are there any facts alleged in this case that if proved could establish that Greenbrook knew or ought to have known that the applicant would be subjected to the alleged discriminatory treatment if she engaged the services of Verico and/or CMLS. Accordingly, the Application as against Greenbrook has no reasonable prospect of success.

42As for Tarion, the applicant alleges that it is liable to her under the Code solely because it has a lot of dealings with home builders such as Greenbrook. Again, however, liability under the Code does not flow merely because a party has dealings with another party that has engaged in discriminatory conduct. In the absence of any allegation that Tarion itself treated the applicant in a disadvantageous manner because of her marital status or her association with Mr. Bhardwaj, the Application as against Tarion has no reasonable prospect of success.

43For the above reasons, the Application as against Greenbrook and Tarion is dismissed as having no reasonable prospect of success.

Discrimination based on association with a lawyer of East Indian origin

44I now turn to whether the applicant has any reasonable prospect of proving that the mortgage broker, Verico, or the lender, CMLS, discriminated against her because of her association with another person, because of that person’s race or place of origin.

45As noted above, the applicant contends that she was discriminated against because of her association with a lawyer of East Indian origin when the lender CMLS refused to allow her to have the Indo-Canadian lawyer from Brampton who had previously acted for her represent the applicant in their dealings with CMLS.

46In my view, the applicant has no reasonable prospect of proving that she was not permitted to use her chosen lawyer because he was East Indian origin and/or from Brampton, which the applicant submits has a large number of individuals of East Indian origin. This is evident from the undisputed fact that two of the three approved lawyers whom CMLS indicated the applicant could use were from Brampton and one of them – the lawyer who ended up being retained to represent the applicant – was himself Indo-Canadian. In my view, the applicant has no reasonable prospect of proving that the respondents did not want her to use an East Indian lawyer from Brampton given that one of the lawyers they referred her to was also of East Indian origin from Brampton.

47Although, during the summary hearing, the applicant acknowledged that it was CMLS and not Verico that prevented her from using her chosen lawyer, the applicant submits that Mr. Conte made discriminatory comments to her when he allegedly referred to Brampton as a “zoo” and when he stated that there was not a lot of trust in how business was conducted in Brampton. She submits that Verico is liable to her under the Code for such discriminatory comments, even if it is not liable for preventing her from using her lawyer. I disagree.

48Assuming without finding that Mr. Conte made the alleged comments, I am not persuaded that they could constitute a basis upon which the Tribunal might find that Verico discriminated against the applicant because of her association with a lawyer of East Indian origin. In my view, there is nothing inherent in the alleged comments that could lead the Tribunal to conclude that they were related to persons of East Indian origin and/or their presence in Brampton. Nor are there any facts alleged about the circumstances in which such comments were allegedly made that could lead the Tribunal to link Mr. Conte’s alleged comments to the applicant’s lawyer’s race or place of origin.

49For the above reasons, I find that the applicant has no reasonable prospect of establishing that she was discriminated against because of her association with a Brampton lawyer of East Indian origin. This claim is dismissed accordingly.

Discrimination based on marital status

50I now come to the applicant’s claim that CMLS and/or Verico discriminated against her because of her marital status.

51As noted above, the applicant alleges that she could not get a mortgage from CMLS on her own, because she was a married woman, even though she qualified for the mortgage on her own, and had had other mortgages by herself in the past. The applicant submits that, given her husband’s credit, CMLS’s requirement that she apply for a mortgage with her husband effectively meant that she could not get a mortgage as a married woman. She submits that she had to get a separation agreement – to be “not married” – to obtain mortgage financing from CMLS.

52For its part, CMLS denies that it was discriminatory to require the applicant to have her husband as a co-applicant on her mortgage application. It maintains that it was entitled to be prudent and to obtain information about the applicant’s husband’s income and credit so that it could assess its risk in lending to the applicant. Moreover, at the point at which it was advised that the applicant was estranged from her husband, CMLS submits that it was completely justified in requiring a separation agreement that showed any financial liabilities the applicant may have had to her husband, insofar as this could affect her ability to meet her financial obligations to CMLS.

53At this stage, it is not appropriate to make any factual or legal findings with respect to the applicant’s allegations. Suffice it to say that, having heard and considered the applicant’s allegations, I am unable to conclude that the applicant has no reasonable prospect of success in establishing that CMLS treated her in a disadvantageous manner in whole or in part because of her marital status. In my view, it is appropriate for the applicant’s marital status claim as against CMLS to be decided based on an evidentiary record. The applicant’s marital status claim as against CMLS will therefore continue in the Tribunal’s process.

54However, I find that the applicant’s marital status claim against Verico has no reasonable prospect of success. It is dismissed accordingly.

55There was no dispute during the summary hearing that any requirement about the applicant applying for a mortgage jointly with her husband came from CMLS, not Verico. Accordingly, any disadvantage the applicant might have experienced as a married woman applying for a mortgage by herself was not as a result of treatment by Verico. Indeed, there does not appear to be any dispute that when the applicant told Verico that she wanted to apply for a mortgage on her own, it submitted the mortgage application to CMLS with the applicant as the sole applicant. In the circumstances, I find that there is no reasonable prospect that the applicant will succeed in establishing that Verico discriminated against her because of her marital status. Taken at its highest, Verico merely told the applicant about CMLS’s allegedly discriminatory requirement. Verico cannot be held liable for discriminating against the applicant just because it informed the applicant what the lender’s requirements were.

56The applicant’s claim that Verico discriminated against her because of her marital status seems to be based on the allegation that Mr. Conte suggested that the applicant claim that she was separated as a way of getting around CMLS’s request for information relating to her husband’s credit and/or income. If this were true, which Mr. Conte strenuously denies, then it certainly might have been improper. Indeed, CMLS submits that such actions would have been fraudulent. However, I fail to see how such alleged actions could constitute disadvantageous treatment of the applicant because of her marital status by Verico. In my view, the applicant has no reasonable prospect of establishing that Verico discriminated against her because she was married. The Application as against Verico is dismissed accordingly.

57That said, I would note that Mr. Conte will likely have relevant evidence to give at this proceeding insofar as he was the conduit between the applicant and CMLS. Either or both of the parties may wish to consider summonsing Mr. Conte to give evidence at the hearing of the Application.

Orders/directions

58In sum, the Tribunal makes the following orders and/or directions:

1. The Application as against Greenbrook, Tarion and Verico is dismissed as having no reasonable prospect of success, as is the claim that CMLS discriminated against the applicant because of her association with another person because of that person’s race and/or place of origin.

2. The applicant’s claim that CMLS discriminated against her because of her marital status will continue in the Tribunal’s process.