HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Mitchell Allen
Applicant
-and-
2297970 Ontario Inc. operating as LTP Financial
Respondent
DECISION
Adjudicator: Laurie Letheren
Indexed as: Allen v. 2297970 Ontario Inc.
APPEARANCES
Mitchell Wayne Allen, Applicant
Self-represented
Introduction
1This is a Contravention of Settlement Application filed under s.45.9(3) of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”). The applicant alleges that the respondent has failed to pay the money agreed to in Minutes of Settlement (“MOS”) signed by the parties on December 15, 2015 in settlement of an Application. The applicant seeks an order directing the respondent to pay the money plus additional monetary compensation for the alleged contravention.
BACKGROUND
2On March 14, 2016, the Tribunal issued a Confirmation of Receipt of Application Alleging Contravention of Settlement letter to the respondent in which it confirmed that a Response to the Application must be filed with the Tribunal no later than March 23, 2016.
3The respondent did not file a Response.
4On March 29, 2016, the Tribunal again wrote to the respondent and directed that the respondent file a Response to the Application by April 6, 2016 together with an explanation for the failure to file a Response to date.
5The respondent did not comply with these directions and has not filed a Response or otherwise communicated with the Tribunal. The Tribunal sent its correspondence by regular mail, courier, email and fax to the mailing address, email address and fax number that were identified by the applicant in the Contravention of Settlement Application. As well these were the same address, email and fax identified as the contact information for the respondent in the underlying Application. The correspondence was not returned as being undeliverable.
6In Interim Decision 2016 HRTO 548, the Tribunal ordered that the respondent is deemed to have accepted all of the allegations set out in the Application and to have waived all rights to notice or participation in these proceedings.
7The Tribunal held a teleconference hearing with the applicant in which it heard his evidence with respect to the Contravention of the Settlement Agreement that had been signed on December 15, 2015 and the impact of the Contravention.
8The applicant testified that he signed Minutes of Settlement on December 15, 2015. Gene Mina signed on behalf of the respondent.
9One of the terms of settlement was that the respondent was to pay the applicant $4500.00 within 30 days of the date of signing the Minutes.
10The applicant received a cheque for $4500.00 dated January 15, 2016. The cheque was issued by 1940587 Ontario Inc. and not the respondent. The cheque issued by 1940587 Ontario Inc. was signed by Gene Mina.
11The applicant cashed the cheque and after a hold on the cheque, the funds were released into his bank account on January 22, 2016. The applicant used the funds to pay off his debts and to begin to secure a new place to live as he was required to move.
12On February 1, 2016 he was advised that the $4500.00 was withdrawn from his account by his bank as a “stop payment” had been ordered on the cheque. As the applicant had already used the funds, they were no longer in his account to be returned. As a result, he was overdrawn and needed to rely on loans to pay his monthly costs and his bills for several months after.
13The applicant stated this breach by the respondent, negatively affected his credit rating and affected his dignity as he had to borrow money from others. He states the actions of the respondent to intentionally disregard its obligations under the terms of settlement has caused him emotional stress and frustration. He stated that the he was anxious about the impact on his credit rating and embarrassed that he had to ask others to loan him money.
14The applicant is asking for an order from the Tribunal that the respondent pay the outstanding $4500.00 and pay $1500.00 as compensation for the injury to his dignity and self-worth.
Decision
15There is no doubt that the applicant is entitled to an order that the respondent pay the applicant the $4500.00.The respondent had agreed to pay this amount under the terms of settlement and it is bound by that agreement.
16As noted earlier, under section 45.9(8) of the Code, if the Tribunal determines that a party who signed an agreement contravened the settlement, “the Tribunal may make any order that it considers appropriate to remedy the contravention.”
17The applicant directed the Tribunal to Saunders v. Toronto Standard Condominium Corp. No. 1571, 2010 HRTO 2516 in which the Tribunal concluded that the following questions were relevant to the determination of remedy once it has been determined that a contravention occurred:
What is the nature of the breach – does it go to the heart of the MOS?
Does anything need to be done to fulfil the terms of the MOS? If so, what?
Were the applicant’s contractual expectations adversely affected?
Did the applicant suffer any quantifiable harm or material loss as a result of the breach?
Did the applicant suffer any harm to dignity, feelings or self-respect as a result of the breach?
18Within the Tribunal’s case law, there are differing views on whether s. 45.9(8) gives the Tribunal the authority to award compensation in breach of settlement Applications given that this section does not include the reference to compensation for injury to dignity, feelings and self-respect that is found in s. 45.2(1). Some adjudicators have awarded the applicant compensation for pain and suffering arising from the breach: see for example Salimi v. Toronto Community Housing Corporation, 2013 HRTO 66; or to emphasize the importance of complying with settlement terms as was stated in Saunders, above. Other cases have found that the damages that can be awarded for a breach of settlement Applications are restricted to those which might be awarded for breach of contract.
19I agree that a settlement agreement is a contract. As a result, remedies ordered in breach of settlement Applications must be confined to those that address the damages that arose from the breach of the contract and are not to address a Code violation. In Glover v. 571566 Ontario Inc., 2011 HRTO 1563 at paragraphs 36-37 the Tribunal reviewed the proper framework for assessing damages that can arrive from a breach of contract:
In Fidler v. Sun Life Assurance Co. of Canada, [2006] 2. S.C.R. 3, at paragraph 55, the Supreme Court of Canada re-affirmed that Hadley v. Baxendale (1854), 9 Ex. 341, 156 E.R. 145 establishes “the single and controlling test for compensatory damages in cases of breach of contract”. That test 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”.
The damages which can be said to be within the reasonable contemplation of the parties fall into two categories: those which it would be objectively reasonable to have expected, regardless of actual knowledge; and such additional damages as it would be objectively reasonable to expect would arise from special circumstances of which there is actual knowledge
20As stated in Saunders at paragraph 44, a contravention per se should not give rise to an award of monetary compensation.
21When an applicant is found to have experienced a breach of Code rights, an award of compensation for injury to dignity, feelings and self-respect is most often ordered as one of the remedies. Recognition of the dignity and self-worth of all persons is set out in the Code’s Preamble. In Keating v. 2229884 Ontario Inc., 2015 HRTO 1677 at paragraph 83 the Tribunal commented that, “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.” I agree that awards in Contravention of Settlement Applications cannot be awards for injury to dignity, feelings and self-respect to compensate for Code breaches. However, in some circumstances a breach of a contract term could result in injury to dignity within a broader meaning of that term, being a loss of pride and self-esteem, and compensation might be appropriate (see, Glover at para. 38). I find that such an award is appropriate in this Application.
22The applicant provided evidence about the impact that the breaches have had on him. He stated that he acted on the receipt of the $4500.00 by paying of debts and using funds he needed to plan for a move to a new home. After spending the money when it was cleared by his bank, he then was overdrawn on his account when the payor put a stop payment. He testified that this caused him great stress and anxiety. In addition, he testified that because he was then overdrawn on his bank account, he had to resort to borrowing money from others. He testified that having to ask others for money impacted his dignity and his sense of pride.
23I find that the applicant’s evidence demonstrates that he experienced both mental anxiety and stress and his dignity and feeling of self-worth were impacted as a result of the respondent’s breach of the settlement agreement. I also find that it would be expected that such damage would be an objectively reasonable result of such a breach. This is particularly so when the applicant accepted the cheque in good faith, relied on it and then, contrary to his reasonable expectation that the cheque would clear and be honoured, the respondent took steps to put a stop payment on the cheque. Understandably this resulted in stress and anxiety for the applicant.
24The Tribunal has awarded between $500 and $1,500 in comparable situations, for example in Kim v. 1743766 Ontario Inc., 2015 HRTO 685, Archer v. Dobson, 2014 HRTO 1810 and Weitzmann v. Burns, 2011 HRTO 818.
25In this case, I conclude that compensation in the amount of $750 is appropriate.
Interest
26Ordering the respondent to pay interest is another manner by which the applicant could be put in the position that he would have been if he had received the money as agreed in the MOS. The Tribunal has typically ordered the payment of pre-judgement interest in cases where a respondent has failed to pay amounts agreed to in a settlement. In those cases, the Tribunal has generally awarded interest based on the pre-judgment interest rate referred to in section 128 of the Courts of Justice Act, RSO 1990, c C.43.
27The Tribunal’s authority to award interest comes from section 17(2) of the Statutory Powers Procedure Act R.S.O. 1990, Chapter S.22:
17.(2) A tribunal that makes an order for the payment of money shall set out in the order the principal sum, and if interest is payable, the rate of interest and the date from which it is to be calculated.
28The applicant is entitled to pre-judgment interest calculated in accordance with s. 128 of the Courts of Justice Act, R.S.O. 1990 on the $4500.00 owing from the time the payment was due on January 14, 2016 until the date of this Decision, and post-judgment interest calculated in accordance with s. 129 of the Courts of Justice Act, R.S.O. 1990 on the total $5250.00 (plus the amount of prejudgment interest set out above) effective from 30 days after the date of this decision.
Orders
29The Tribunal orders as follows:
a. Within 30 days of the date of this Decision, the respondent shall pay the applicant $5250.00 along with pre-judgment interest on the $4500.00 outstanding under the Minutes of Settlement calculated from January 14, 2016 accordance with s. 128 of the Courts of Justice Act, R.S.O. 1990; and
b. Post-judgment interest calculated in accordance with s. 129 of the Courts of Justice Act, R.S.O. 1990 on the total $5250.00 (plus the amount of prejudgment interest set out above) effective from 30 days after the date of this decision.
Dated at Toronto, this 15th day of December, 2016.
“Signed By”
Laurie Letheren
Vice-chair
CORRECTION NOTICE
The decision released on December 15, 2016 contained the following errors which have been corrected:
at paragraph 10 “1904057” was incorrectly substituted for “1940587”;
at paragraph 29 a. the figure of “5200.00” was incorrectly substituted for the figure of “5250.00”; and
at paragraphs 28 and 29 b. an error of calculation omitted from the calculation of post-judgment interest the amount of prejudgment interest awarded on the sum of $4500.00 – in both paragraphs the error of calculation is corrected by the inclusion of the words “(plus the amount of prejudgment interest set out above)”.
Dated at Toronto, this 25th day of April, 2017.
“Signed By”
Laurie Letheren
Vice-chair