Valerio Torcato and Myrtle Torcato v. Fulton Engineered Specialties Inc. and Walter Widla, 2015 HRTO 687

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Valerio Torcato

Applicant

-and-

Fulton Engineered Specialties Inc. and Walter Widla

Respondents

AND B E T W E E N:

Myrtle Torcato

Applicant

-and-

Fulton Engineered Specialties Inc. and Walter Widla

Respondents

DECISION

Adjudicator: Mark Hart Date: May 26, 2015 Citation: 2015 HRTO 687 Indexed as: Torcato v. Fulton Engineered Specialties Inc.

APPEARANCES

Valerio Torcato and Myrtle Torcato, Applicants

Brenda Culbert, Counsel

Fulton Engineered Specialties Inc. and Walter Widla, Respondent

Self-represented

1These are two Contravention of Settlement Applications both dated December 29, 2014 pursuant to s. 45.9 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), alleging that the respondents breached the terms of Minutes of Settlement between the parties dated July 22, 2014.

2A teleconference hearing was held on April 29, 2015, and I heard evidence and oral submissions from all parties and have reviewed and considered the material filed for the purpose of the hearing.

3The Minutes of Settlement dated July 22, 2014 provide that the respondents, jointly and severally, shall pay to the applicant $14,000 as general damages under the Code. This amount was to be paid in instalments of $750 per week, starting on August 8, 2014 with a final payment of $500 to be made on December 12, 2014. The instalments were to be paid by money order and mailed to the applicants’ home address on each of these days.

4The respondents provided cheques to the applicants in the amount of $750 on August 8 and 15, 2014, but then stopped making the instalment payments. After notice from applicant counsel that they were in breach of the settlement agreement, the respondents provided four more cheques in the amount of $750 dated November 14, 21 and 28 and December 5, 2014. After the Contravention of Settlement Applications were filed and shortly before the hearing, the respondents made two further payments in the amount of $750. As of the date of the hearing, the principal amount still owing under the settlement agreement was $8,000.

5The respondents do not contest that not all of the payments required under the Minutes of Settlement have been made. The respondents state that they have made the instalment payments when they were able to do so, but were experiencing cash flow problems that rendered them unable to make all of the payments as promised. Mr. Widla testified that the corporate respondent no longer does any business, and that he has been using his personal funds to make the payments. The respondents noted that the applicants also made claims with the Employment Standards Branch (“ESB”) for unpaid wages, which with interest and penalties required him to pay them in excess of $45,000. He states that he had to maximize the mortgage on his house in order to comply with the ESB order, and as a result has had limited funds available to make the remaining instalment payments under the Minutes of Settlement.

6While I may sympathize with the financial difficulties being experienced by the respondents, at the same time the respondents entered into a binding agreement with the applicant requiring that certain payments be made in settlement of an outstanding human rights application. It is not open to the respondents to resile from their agreement to pay these amounts on the basis of any financial difficulties they may be experiencing.

7Accordingly, the applicant is entitled to an order requiring the respondents jointly and severally to pay the outstanding principal amount of $8,000 owing under the Minutes of Settlement, together with pre-judgment interest. Pre-judgment interest is calculated on $9,000 from the mid-point of the period when the payments were not made (or from September 23, 2014) to the date when the final instalment was due (on December 5, 2014) and then on $9,500 from that point to the date of the hearing, all at a pre-judgment interest rate of 1.3% per annum. As the further $1,500 was paid only a short time in advance of the hearing, I will not take that payment into account in the interest calculation. The applicants also are entitled to pre-judgment interest on the remaining balance of $8,000 from the date of the hearing to the date of this Decision. The applicants further are entitled to post-judgment interest at the rate of 3% per annum on any amount that remains unpaid 30 days from the date of this Decision, to be calculated from the date of this Decision.

8The applicants also are entitled to compensation for the emotional impact on them of the respondents’ failure to abide by the terms of the settlement agreement, as part of this Tribunal’s authority “to make any order that it considers appropriate to remedy the contravention”: see s. 45.9(8). An applicant is entitled to rely upon a respondent’s agreement to settle a human rights application and comply with the agreed-upon terms of settlement. Cases before this Tribunal typically raise issues that go to the core of an applicant’s self-identity and feelings of self-worth, and the resolution of these issues is supposed to provide an applicant some relief and an ability to move forward with her or his life. However, the failure of a respondent to abide by the terms of settlement can serve to re-open wounds that the applicant had hoped to start healing by agreeing to the settlement.

9That is what has happened in this case. The applicants’ evidence is that the respondents’ breach of the settlement has had significant adverse financial and emotional consequences for them. They had no source of income at the time the settlement agreement was entered into, and they were counting on the instalment payments to meet their financial needs. As a result of the failure to receive the instalment payments, the applicant were forced to borrow against their credit cards and from a private mortgage lender at high interest rates in order to make ends meet. The applicants testified that they experienced sleepless nights as a result of not receiving the instalment payments, and that this took a toll on their marriage.

10The applicants each request an award of $5,000 as compensation for the emotional suffering they experienced as a consequence of the respondents’ failure to live up to their obligations under the settlement agreement. Awards of compensation for the emotional impact of a contravention of settlement typically have been in the range of $500 to $1,500: see Archer v. Dobson, 2014 HRTO 1810. In my view, in the circumstances of this case, it is appropriate amount to award each applicant an amount at the high end of this scale, in light of the impact on them not only of the respondents’ failure to pay the amount owing but their failure to communicate with applicants to explain or give notice of their default.

ORDER

11For the foregoing reasons, I hereby make the following order:

a. The respondents are jointly and severally liable to pay to the applicants the sum of $8,000.00 together with pre-judgment interest in the amount of $79.01;

b. The respondents are jointly and severally liable to pay to each of the applicants the further sum of $1,500.00;

c. The respondents also are jointly and severally liable to pay to the applicants post-judgment interest at the rate of 3% per annum on any amount that remains unpaid 30 days from the date of this Decision, to be calculated from the date of this Decision.