Pauline Lac Seul v. Shibogama First Nations Council and Cathy Kiepek, 2016 HRTO 946

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Pauline Lac Seul

Applicant

-and-

Shibogama First Nations Council and Cathy Kiepek

Respondents

DECISION

Adjudicator: Jo-Anne Pickel

Date: July 19, 2016

Citation: 2016 HRTO 946

Indexed as: Lac Seul v. Shibogama First Nations Council

APPEARANCES

Pauline Lac Seul, Applicant

Self-represented

Shibogama First Nations Council and Cathy Kiepek, Respondents

Robert Edwards, Counsel

1The applicant filed an Application alleging that the respondents discriminated against her contrary to the Human Rights Code, R.S.O. c. H. 19, as amended (the “Code”). In particular, the applicant alleged that the personal respondent harassed her. She also claimed that she was subjected to a poisoned work environment. In their Response, the respondents requested that the Tribunal dismiss the Application due to a full and final release signed by the applicant that covers the allegations contained in the Application.

2The Tribunal held a preliminary hearing to address this issue. Based on the parties’ submissions at the preliminary hearing and the written materials, I find that the Application must be dismissed. By signing the release, the applicant undertook not to advance any claims against the respondent with respect to any claims arising out of her employment and/or her termination. The applicant has not provided any legally valid reason why she should not be bound by the release she signed. As a result, it would be an abuse of process for this Tribunal to proceed with the Application in light of the full and final release signed by the applicant.

Factual Background

3The applicant was employed by the organizational respondent from November 2001 to the date on which she resigned on February 27, 2015. After her resignation, the applicant retained an experienced employment lawyer who negotiated a settlement with the organizational respondent. The applicant signed the settlement and release on March 26, 2015, approximately one month after she resigned. Under the settlement, the organizational respondent agreed to convert the applicant’s resignation to a non-disciplinary termination and provided her with an additional sum which exceeded the statutory termination pay to which she would have been entitled.

4In return for this payment, the applicant signed a full and final release. Among other things, in the release, the applicant agreed to release the organizational respondent and its employees with respect to any claims arising out of her employment and/or the termination of that employment. The release specifically released the respondents from any claims under the Code.

applicable law

5The Code does not explicitly bar applications where a release has been signed by an applicant. However, in several cases, the Tribunal has found that filing a human rights application after signing a full and final release in respect of the subject-matter of the application may constitute an abuse of the Tribunal’s process and, where that is the case, such applications should be dismissed.

6The reason why the Tribunal may determine that it is an abuse of process to permit an applicant to proceed with an application where he or she has signed a full and final release relates not only to the principle of finality but also to the sound enforcement of the Code’s protections and fairness to all parties. When two parties agree to settle a legal dispute, the principle of finality demands that the settlement be given effect. The principle of finality requires that parties not be permitted to litigate settled matters, unless there are compelling reasons to disregard a prior settlement and release.

7Most litigation ends in settlements and almost all settlements include a provision by which a claimant fully releases the respondent from future claims relating to the subject matter of the settlement. To be effective, settlements must be final. Otherwise, parties would have no incentive to enter into settlements to end litigation. If the Tribunal were to routinely permit applicants to litigate discrimination claims despite the existence of a full and final release, respondents would have no incentive to settle Code-related disputes. As a result, many more cases would proceed to litigation, thus imposing a heavy burden on applicants, respondents, and the publicly funded human rights system.

8It is for these reasons that the Tribunal has held that it would be an abuse of process to proceed with an application when its subject matter is covered by a full and final release, unless there are compelling reasons to disregard the release.

9In Pritchard v. Ontario (1999), 1999 CanLII 15058 (ON SCDC), 45 O.R. (3d) 97 (Div. Ct.) at para. 17, the Divisional Court set out some of the relevant factors to consider under the pre-2008 version of the Code when deciding whether a human rights claim is barred by the signing of a full and final release:

Undoubtedly, in some cases, an employee who has accepted a sum of money in exchange for a release of claims against a former employer, including human right claims, would be acting in bad faith in subsequently turning around and filing a human rights complaint. However, in other cases, the facts may show that the employee misunderstood the significance of the release, or received little or no consideration for it beyond statutory entitlements under employment standards legislation, or was in such serious financial need that she or he felt there was no choice but to accept the package offered.

10In several cases, the Tribunal has found that the Pritchard factors can be useful in determining whether it would be an abuse of process to proceed with a hearing on the merits. In addition to the factors set out in the paragraph above from Pritchard, it is well accepted that a release may also be set aside if there is evidence of psychological or emotional pressure amounting to duress or if there is evidence of fraudulent misrepresentation.

11In assessing claims of economic duress, the Tribunal has relied on the description of economic duress provided by the Court of Appeal for Ontario in Taber v. Paris Boutique & Bridal Inc. (Paris Boutique), 2010 ONCA 157 at paras. 8-9:

There is no doubt that economic duress can serve to make an agreement unenforceable against a party who was compelled by the duress to enter into it. Nor is there any doubt that the party can have the agreement declared void on this basis.

However, not all pressure, economic or otherwise, can constitute duress sufficient to carry these legal consequences. It must have two elements: it must be pressure that the law regards as illegitimate; and it must be applied to such a degree as to amount to “a coercion of the will” of the party relying on the concept.

12In Dai v Zuo, 2015 ONSC 3008, the Ontario Superior Court held that the following considerations apply in determining whether pressure amounts to a “coercion of the will”: (1) whether the party relying on this defence protested; (2) whether there was an alternative course open to him or her; (3) whether he or she were independently advised; (4) whether he or she took steps to avoid the agreement after entering into it.

Findings

13In my view, it would be an abuse of process for this Tribunal to proceed with the Application in light of the release signed by the applicant.

14The release covered the allegations of discrimination contained in the Application. The applicant provided a number of reasons why she should not be bound by the release. First, she stated that her health was compromised and she was in counselling at the time. She stated that she had three heart attacks between 2014 and 2015. She also submitted medical information showing that she was receiving counselling from 2014 to April 2015. There is nothing in the medical documentation submitted by the applicant to demonstrate that her medical condition made her incapable of understanding what she was signing and the consequences of signing it. As a result, the applicant’s medical or health condition at the time is not a valid reason for setting aside the release.

15Second, the applicant stated that she felt coerced into signing the release because her lawyer told her she had to sign it in order to receive the amounts contained in the settlement agreement. I can understand that the applicant may have felt pressured to sign the release in order to receive the payments provided for under the settlement agreement. However, if such pressure were a valid reason to set aside a release, no release would ever been given effect. In every case where a settlement includes a release, the payment of the amount referred to in the settlement is conditional upon the signing of the release. Therefore, I do not accept that the kind of pressure referred to by the applicant is a valid reason to disregard the release that she signed. Such pressure does not amount to the kind of pressure that courts have accepted as amounting to duress of such a degree that is sufficient to set aside a settlement.

16The third reason that the applicant gave for why she should not be bound by the release is her belief that she was legally entitled to the amounts she received under the settlement agreement. As someone who resigned her employment, the applicant would not have been entitled to the payments referred to in the settlement. From what the applicant said in the preliminary hearing, it appears that she was unhappy with the settlement, as she believed that she should have received more under the settlement. If the applicant felt this way, she had the option of not signing the settlement and release and instead proceeding with an Application before this Tribunal. However, it was not open to her to do both in the absence of valid reasons to set aside the release.

17Finally, the applicant claimed she did not understand what she was signing. It is very common in cases such as this one for applicants to claim that they should not be bound by a release because they allegedly did not understand what they were signing. In this case, the applicant had the benefit of legal advice from an experienced employment lawyer. She has not claimed that she lacked the mental capacity to understand what she was signing and there is no evidence before me to support such a claim if one had been made. Therefore, I do not accept that the applicant was incapable of understanding what she was signing and the consequences of signing it.

In my view, none of the reasons provided by the applicant are valid reasons for disregarding the release she signed.

intervention

18The applicant’s lawyer who negotiated the settlement with the organizational respondent was granted a right to intervene in this case. However, she ultimately did not intervene as any relevant information she could have provided was subject to solicitor-client privilege.

Order

19For the reasons set out above, the Application is dismissed. I find that it would be an abuse of process to proceed with this Application due to the full and final release signed by the applicant.