Moore v. Cargill Limited, 2016 HRTO 764

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Sherry Moore Applicant

-and-

Cargill Limited Respondent

DECISION

Adjudicator: Jo-Anne Pickel Date: June 3, 2016 Citation: 2016 HRTO 764 Indexed as: Moore v. Cargill Limited

APPEARANCES

Sherry Moore, Applicant Mark Moore, Representative

Cargill Limited, Respondent Daniel Leone, Counsel

1This Decision addresses an issue on which I remained seized in my previous Decision, 2016 HRTO 209, in this matter. Specifically, it addresses whether the respondent breached a settlement entered into by the parties when it made child support deductions from the settlement monies it paid to the applicant. The factual back ground to this breach of settlement Application is set out in my previous decision and I will not repeat it here.

2In my Decision, I found that the respondent breached the settlement entered into with the applicant by making payroll deductions from the amount owing to the applicant. I found that it was unclear whether the respondent had also breached the settlement by making certain child support deductions and remitting them to the Family Responsibility Office ("FRO"). The FRO was not provided notice of the Tribunal's hearing into the applicant's breach of settlement Application nor did it have the opportunity to provide submissions at the hearing.

3I remained seized to determine any matters that had to be determined in relation to the child support deductions made by the respondent. I am now in receipt of a letter from counsel of the Ministry of the Attorney General providing the Ministry's position as to whether the child support deduction provisions in the Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31 ("FRSAEA") apply to the payment of general damages.

Ministry's Position

4By letter dated March 17, 2016, counsel of the Ministry of the Attorney General advised of the Ministry's position that the child support provisions in the FRSAEA do not apply to the payment of general damages. In the letter, counsel advised in part as follows:

Cargill Ltd. contacted FRO in March of 2015 to advise that they owed "severance" pay to Ms. Ellis. Funds owing on account of severance pay are subject to a SDN [Support Deduction Notice] (pursuant to s. 1(1) of the Act) and thus Cargill Ltd. was correctly advised that it was required to remit 50% of severance pay owed to Ms. Ellis.

The February 17, 2016 order of the Human Rights Tribunal... only identifies the payment made as "general damages". A review of the definition of an income source under s. 1(1) of the Act does not identify general damages as a type of payment that is owed by an income source to a support payor that would be the subject of a SDN.

Findings

5Section 45.9(8) of the Code sets out the Tribunal's power to remedy contraventions of settlements. It states that the Tribunal may make "any order that it considers appropriate to remedy the contravention." As noted in Matos v. Transplay, 2010 HRTO 2527 at para. 17, "the power to remedy a contravention of settlement is tied to the harm caused as a result of the contravention." See also, Xitimul v. Marriott Hotels of Canada, 2011 HRTO 1867 and Francis v. Toronto Police Services Board, 2011 HRTO 2018.

Was the respondent required to make the child support deduction?

6The FRSAEA imposes a duty on "income sources" to remit to the FRO in accordance with support deduction notices received from the FRO.

7An "income source" is defined as follows:

"income source" means an individual, corporation or other entity that owes or makes any payment, whether periodically or in a lump sum, to or on behalf of a payor of,

(a) wages, wage supplements or salary, or draws or advances on them,

(b) a commission, bonus, piece-work allowance or similar payment,

(c) a payment made under a contract for service,

(d) a benefit under an accident, disability or sickness plan,

(e) a disability, retirement or other pension,

(f) an annuity,

(g) vacation pay, termination pay and severance pay,

(h) an employee loan,

(i) a shareholder loan or dividends on shares, if the corporation that issued the shares is effectively controlled by the payor or the payor and the payor's parent, spouse, child or other relative or a body corporate which the payor and his or her parent, spouse, child or other relative effectively control, directly or indirectly,

(j) refunds under the Income Tax Act (Canada),

(k) lump sum payments under the Family Orders and Agreements Enforcement Assistance Act (Canada),

(l) income of a type described in the regulations.

8The relevant provisions regarding the duties of income sources are the following:

Duty of income source

22. (1) An income source that receives notice of a support deduction order, whether or not the income source is named in the order, shall, subject to section 23, deduct from the money the income source owes to the payor the amount of the support owed by the payor, or such other amount that is set out in the notice, and shall pay that amount to the Director.

Maximum deduction by income source

23. (1) The total amount deducted by an income source and paid to the Director under a support deduction order shall not exceed 50 per cent of the net amount owed by the income source to the payor.

9As the Ministry submitted, based on these provisions it is evident that an entity becomes an income source for purposes of the FRSAEA when it provides any of the types of income listed in the definition of "income source" set out above. Before the termination of the applicant's employment, the respondent was an income source under the FRSAEA due to its payment of wages to the applicant.

10As an income source, the respondent has a duty under s. 22(1) to "deduct from the money the income source owes to the payor the amount of the support owed by the payor, or such other amount that is set out in the notice". This section must be read in conjunction with the definition of "income source". When read in this context, it is evident that the deductions are to be made from the income provided by the income source.

11This interpretation is supported by the wording of the notices sent to the respondent by the FRO which state that the respondent must deduct family support payments from the applicant's "income". In the section that specifies how to calculate the required deductions, the first notice sent to the respondent sets out a process by which an employee's net income is calculated. The notice then states that the respondent must apply the deduction to the total of net income. Consistent with s. 23(1) of the FRSAEA, the notice states that the deductions being made should not exceed 50% of the payor's "net income".

12In light of the above, it is evident that child support deductions were to be made from "income". In the Minutes of Settlement, the parties characterized the monies that the respondent owed as "compensation in the nature of general damages", not as severance or lost income. In my view, the FRSAEA did not require that the respondent make child support deductions from the general damages payment they agreed to make under the Minutes of Settlement.

13I recognize, that an FRO Enforcement Services Officer advised the respondent that it was required to make a deduction from the payment to the applicant. However, she advised the respondent to do so when the respondent was under the mistaken impression that it was making the payment to the applicant as "severance". The letter from the Ministry makes clear that the Enforcement Services Officer would have provided a different answer if the respondent had properly identified the payment as general damages flowing from a human rights settlement.

14For all of the above reasons, I find that the respondent did not have a duty under the FRSAEA to make the child support deduction from the general damages it agreed to pay the applicant.

Did the respondent breach the Minutes of Settlement by making the child support deduction?

15The respondent submits that it has fulfilled the terms of the settlement by reducing her child support debt by $2500 and paying the applicant $2500 directly.

16This argument from the respondent may have some superficial appeal. However, I am not persuaded that, from the applicant's perspective, $5000 paid to her directly has the same value as $2500 paid to her directly plus a $2500 reduction in her child support debt. The terms of the Minutes of Settlement are clear and unambiguous. The respondent agreed to pay the applicant $5000 directly. Therefore, in my view, the respondent breached the Minutes of Settlement by failing to do so.

17The respondent also argued that, from the perspective of equity, the applicant would be placed in a better position than she should be if the Tribunal were to order the respondent to reimburse her for the $2500 it erroneously deducted as a child support deduction. I do not accept this argument. The only reason the applicant may be in a better position is because the respondent breached the settlement in this case. The respondent breached the settlement by characterizing the settlement monies as "severance" and then by erroneously making the child support deduction. If the applicant is put in a better position in this case, it is solely due to the respondent's breach of the settlement. I do not accept that this offends the principles of equity in the circumstances of this case.

Order

18The Application for Contravention of Settlement is granted. The respondent shall do the following:

a. It shall immediately pay the applicant by certified cheque or money order $2500 to reimburse her for the child support deduction it erroneously made in this case.

b. The respondent shall pay to the applicant pre-judgment interest at the rate of 1% in accordance with s. 128 of the Courts of Justice Act, R.S.O. 1990, c. C.43 from March 27, 2015 to the date of this Decision.

c. The respondent shall pay to the applicant post-judgment interest at the rate of 2% on the amounts owing as of the date of this Decision, calculated in accordance with s. 129 of the Courts of Justice Act.