Wong v. The Globe and Mail Inc. et al.

[Indexed as: Wong v. The Globe and Mail Inc.]

Ontario Reports

Ontario Superior Court of Justice,

Divisional Court,

Nordheimer, D.M. Brown and Mulligan JJ.

November 3, 2014

123 O.R. (3d) 28 | 2014 ONSC 6372

Case Summary

Contracts — Interpretation — Settlement of grievance arbitration resulting in agreement that employer would pay grievor lump sum representing two years' wages — Agreement containing confidentiality provision and providing that grievor would repay lump sum if she breached that provision — Arbitrator subsequently finding that grievor had breached confidentiality provision — Arbitrator reasonably finding that repayment provision was enforcement mechanism rather than penalty clause and that it was not unconscionable.

Employment — Labour relations — Grievance arbitration — Judicial review — Union and employer settling grievances filed on behalf of applicant — Memorandum of agreement containing confidentiality provision — Arbitrator subsequently determining that applicant had breached confidentiality provision — Applicant not having standing to bring application for judicial review of that award — Union's representation of applicant not so deficient that applicant should be given right to pursue judicial review — Union advancing all legitimate arguments that could be made on applicant's behalf and not a required to advance unmeritorious arguments simply because applicant wanted them made. [page29 ]

The union filed unpaid sick leave and wrongful termination grievances on the applicant's behalf after the employer terminated her employment. With the assistance of the arbitrator, a settlement was reached and the employer paid the applicant a lump sum representing two years' pay. The agreement contained a confidentiality and non-disparagement provision, and provided that the applicant would repay the lump sum if she breached that provision. The applicant published a book in which she made four references to the large sum of money she had received from the employer. The arbitrator found that the applicant had breached the confidentiality provision and ordered her to repay the lump sum. The applicant applied for judicial review of that award.

Held, the application should be dismissed.

The applicant did not have standing to bring the judicial review application. The union's representation of the applicant was not so deficient as to amount to a breach of the rules of natural justice, entitling her to pursue judicial review. On the contrary, the union advanced all of the legitimate arguments that could be made on the applicant's behalf. There were a number of other arguments that the applicant wished to have advanced, but the union, for good and sufficient reasons, chose not to advance those arguments. Counsel for the union was not obliged to advance unmeritorious arguments simply because the applicant wanted them made. Moreover, the applicant was unable to point to any true procedural unfairness in the manner in which the arbitrator conducted the proceeding.

The arbitrator reasonably concluded that the repayment provision was not a penalty clause and that it was not unconscionable. She reasonably found that the repayment provision was an enforcement mechanism designed to ensure that the applicant lived up to the confidentiality provision which was extremely important to the employer. There was no evidence of an inequality of bargaining power. The agreement was reached after much negotiation between the parties, and the applicant was represented throughout the negotiations not only by experienced counsel provided by the union, but also by counsel of her own choosing.

No fault could be found in the arbitrator's conclusion that the applicant breached the confidentiality provision. The provision was clear and unambiguous -- the "terms of the settlement" could not be disclosed. The lump sum payment was a term of the settlement.

There was no merit in the applicant's assertion that there was a reasonable apprehension of bias on the part of the arbitrator.

Cases referred to

Yee v. Trent University, [2010] O.J. No. 2697, 2010 ONSC 3307, 320 D.L.R. (4th) 746, 195 L.A.C. (4th) 97 (Div. Ct.), apld

Birch v. Union of Taxation Employees, Local 70030 (2008), 93 O.R. (3d) 1, [2008] O.J. No. 4856, 2008 ONCA 809, 243 O.A.C. 6, [2009] CLLC Â220-006, 305 D.L.R. (4th) 64, 171 A.C.W.S. (3d) 758; Peachtree II Associates -- Dallas, L.P. v. 857486 Ontario Ltd. (2005), 2005 23216 (ON CA), 76 O.R. (3d) 362, [2005] O.J. No. 2749, 256 D.L.R. (4th) 490, 200 O.A.C. 159, 10 B.L.R. (4th) 45, 140 A.C.W.S. (3d) 650 (C.A.), consd

Other cases referred to

142445 Ontario Ltd. (c.o.b. Utilities Kingston) v. International Brotherhood of Electrical Workers, Local 636, 2009 24643 (ON SCDC), [2009] O.J. No. 2011, 251 O.A.C. 62, 95 Admin. L.R. (4th) 273 (Div. Ct.); Dumbrell v. Regional Group of Companies Inc. (2007), 85 O.R. (3d) 616, [2007] O.J. No. 298, 2007 ONCA 59, 279 D.L.R. (4th) 201, 220 O.A.C. 64, 25 B.L.R. (4th) 171, 55 C.C.E.L. (3d) 155, 154 A.C.W.S. (3d) 1097; [page30 ]Keeprite Workers' Independent Union v. Keeprite Products Ltd. (1980), 1980 1877 (ON CA), 29 O.R. (2d) 513, [1980] O.J. No. 3691, 114 D.L.R. (3d) 162, 4 A.C.W.S. (2d) 397 (C.A.); Noël v. Société d'énergie de la Baie James, [2001] 2 S.C.R. 207, [2001] S.C.J. No. 41, 2001 SCC 39, 202 D.L.R. (4th) 1, 271 N.R. 304, J.E. 2001-1329, [2002] CLLC Â220-012, 106 A.C.W.S. (3d) 258; Nor-Man Regional Health Authority Inc. v. Manitoba Association of Health Care Professionals, [2011] 3 S.C.R. 616, [2011] S.C.J. No. 59, 2011 SCC 59, 275 Man. R. (2d) 16, 423 N.R. 95, 2011EXP-3790, 2011EXPT-2180, J.E. 2011-2079, D.T.E. 2011T-803, [2012] CLLC Â220-004, 340 D.L.R. (4th) 1, 29 Admin. L.R. (5th) 1, 212 L.A.C. (4th) 93, [2012] 2 W.W.R. 619, 96 C.C.E.L. (3d) 1, 208 A.C.W.S. (3d) 583; R. v. S. (R.D.), 1997 324 (SCC), [1997] 3 S.C.R. 484, [1997] S.C.J. No. 84, 151 D.L.R. (4th) 193, 218 N.R. 1, J.E. 97-1839, 161 N.S.R. (2d) 241, 1 Admin. L.R. (3d) 74, 118 C.C.C. (3d) 353, 10 C.R. (5th) 1, 35 W.C.B. (2d) 520; Stockloser v Johnson, [1954] 1 Q.B. 476, [1954] 1 All E.R. 630, [1954] 2 W.L.R. 439 (C.A.); Woldetsadik v. Yonge Street Hotels (c.o.b. Courtyard by Marriott Downtown Toronto), [2012] O.J. No. 1074, 2012 ONSC 1580 (Div. Ct.)

Statutes referred to

Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A, ss. 74 [as am.], 96 [as am.]

Authorities referred to

Adams, George W., Canadian Labour Law, looseleaf, 2nd ed. (Toronto, Canada Law Book, 2013)

APPLICATION for judicial review of an arbitration award.

P. Thompson, Q.C., and D. Sheriff-Scott, for applicant.

S. Shamie and J. Healy, for respondent The Globe and Mail Inc.

T. Gleason and S. Dewart, for respondent Communications, Energy and Paperworkers Union of Canada, Local 87-M, Southern Ontario Newsmedia Guild.

The judgment of the court was delivered by

[1] NORDHEIMER J.: — This is an application for judicial review of an arbitration award dated July 3, 2013 in which the arbitrator, Louisa Davie, concluded that the applicant had breached a memorandum of agreement ("MOA") that had settled grievances that had been filed regarding the applicant's employment with The Globe and Mail. As a consequence of that breach, the arbitrator ordered the applicant to repay to The Globe and Mail a lump sum that it had paid to the applicant as part of the resolution set out in the MOA.

Background

[2] For many years, the applicant was employed as a journalist at The Globe and Mail. In September 2006, the applicant was directed by her employer to write an article on the assassination of a student at Dawson College in Montreal. The Globe and Mail [page31 ]published the article written by the applicant. Following its publication, the applicant was the subject of personal attacks in the media and elsewhere. The applicant says that these attacks prompted the onset of a severe depression which seriously undermined her mental health.

[3] As a consequence, the applicant was off work between October 2006 and the spring of 2007. She returned to work briefly in April 2007 but, shortly thereafter, she suffered a severe setback. The applicant was then off work again for a lengthy period due to her depression.

[4] The Globe and Mail refused to pay sick leave for the applicant between June and November of 2007. In May 2008, The Globe and Mail ordered the applicant back to work notwithstanding the applicant's contention that she was still medically disabled. The Globe and Mail is said to have contended that the applicant was neither sick nor unable to work. When the applicant did not return to work as directed, The Globe and Mail terminated her employment.

[5] As a consequence of the termination, the respondent union launched unpaid sick leave and wrongful termination grievances. These grievances proceeded to arbitration on July 9, 2008 before the arbitrator. Mediation sessions ensued over the next few months with the arbitrator acting as mediator. With the assistance of the arbitrator, a settlement was eventually reached. This settlement was reflected in the MOA which is dated September 24, 2008 and which was signed by The Globe and Mail, the union and the applicant.

[6] The settlement included The Globe and Mail's acknowledgement that the applicant was ill and unable to work from June 11, 2007 to November 13, 2007. As a consequence, The Globe and Mail agreed to pay the applicant a lump sum representing the amount she would have been entitled to for sick leave during this period. The Globe and Mail also agreed to pay the applicant a second lump sum representing two year's pay in the amount of $209,912. It should be noted, in this regard, that the applicant had been employed by The Globe and Mail for 21 years prior to her termination. It is this second, and larger, lump sum that the applicant was subsequently ordered to repay to The Globe and Mail by the arbitrator.

[7] There was a specific, and somewhat unusual, provision in the MOA that arose from the fact that the applicant intended to write a book about her experience suffering from depression in the workplace. The applicant was therefore concerned about her right to speak frankly about her experience. As a result, the MOA contained the following provision: [page32 ]

The Grievor agrees that until August 1, 2009, she will not disparage The Globe and Mail or any of its current or former employees relating to any issues surrounding her employment and termination from The Globe and Mail. The Globe and Mail agrees that until August 1, 2009, to not disparage the Grievor.

[8] The MOA also contained a provision regarding confidentiality. It provided that the parties agreed "not to disclose the terms of this settlement" with certain specific exceptions that are not relevant here. The MOA further contained a provision regarding the consequences of any breach by the applicant of the confidentiality provision and of the non-disparagement provision. Paragraph #8 of the MOA reads:

Should the Grievor breach the obligations set out in paragraphs 5 and 6 above, Arbitrator Davie shall remain seized to determine if there is a breach and, if she so finds, the Grievor will have an obligation to pay back to the Employer all payments paid to the Grievor under paragraph 3.

It is common ground that the paragraph references above should not have been to paras. 5 and 6 but, rather, ought to have been to paras. 6 (confidentiality) and 7 (non-disparagement). The obligation to pay back the payments paid under para. 3 refers to the second lump sum payment of two years' salary in the amount of $209,912.

[9] The applicant did, indeed, write a book entitled Out of the Blue. She contracted for the book's publication with Doubleday, with whom she had a long-standing business relationship. In October 2010, Doubleday began advertising on its website the pending publication of the book for availability in May 2011. Concurrently, Chatelaine magazine, in advance publicity, published an article in which the applicant commented on The Globe and Mail's reasons for firing her. The Globe and Mail objected to the applicant's characterization of the reasons why it had fired her and contacted Doubleday to express its concerns.

[10] As a result of the issues raised by The Globe and Mail, Doubleday chose not to publish the book. In fact, it terminated its publication contract with the applicant. As a result, the applicant elected to self-publish the book, which she did in May 2012.

[11] Following the book's publication in May 2012, The Globe and Mail immediately applied to the arbitrator for a determination that 23 phrases in the book breached the MOA's confidentiality provision. The Globe and Mail sought an order that the applicant forfeit and repay to it the second lump sum, representing two years' salary, paid to her under the MOA. [page33 ]

[12] The arbitrator held a hearing on The Globe and Mail's application on May 30, 2013. The arbitrator released her decision on July 3, 2013. In her decision, the arbitrator concluded that at least four of the 23 impugned phrases in the book did breach the MOA because they disclosed the fact that a payment had been made by The Globe and Mail to the applicant. Those four phrases were:

-- . . . I can't disclose the amount of money I received

-- I'd just been paid a pile of money to go away . . .

-- Two weeks later a big fat check landed in my account.

-- Even with a vastly swollen bank account . . .

As a result, the arbitrator concluded that the applicant had disclosed a term of the settlement and thus had breached the confidentiality provision.

The Issues

[13] It is against that background that I turn to address the many issues raised by the applicant in her written submissions. As will be seen, not all of these issues were the subject of submissions at the hearing of this application but, nonetheless, I will address each of them. The issues are

(i) the applicable standard of review;

(ii) standing and procedural unfairness;

(iii) the remedy of equitable relief;

(iv) the issue of a breach of the MOA;

(v) reasonable apprehension of bias;

(vi) the availability of affidavit evidence;

(vii) the appropriate remedy; and

(viii) costs.

I intend to deal with each of the issues in the same order that they were set out in the applicant's factum. I will say though that, as the argument of the matter unfolded, it became apparent that there were really two main issues to decide. One was the issue of standing and the other was the issue of whether equitable relief ought to have been granted. [page34 ]

(i) Standard of review

[14] While little time was spent on this issue in oral argument, in her factum, the applicant submitted that there is no standard of review applicable in this case because the issues raised involve breaches of the rules of natural justice and the duty of procedural fairness. The applicant also submitted that, on the issue of whether there was a breach of the MOA, the standard of review is correctness because the finding of a breach is a question of law. The applicant further submitted that the issue of the appropriate remedy, if a breach is established, should be reviewed on a standard of correctness because the granting of equitable relief is not a matter within the expertise of arbitrators.

[15] The respondents submitted that, on the substantive issues, the applicable standard of review is reasonableness. The respondents also submitted that no procedural unfairness or breach of natural justice occurred so the applicable standard of review, if any, for those matters does not arise on the facts of this case.

[16] I agree with the respondents that the applicable standard of review on the issue of whether there as a breach of the MOA is reasonableness. At its core, the issue here is the interpretation of a settlement agreement arising out of a labour grievance. It is precisely the type of task in which labour arbitrators engage with great frequency. Labour arbitrators therefore have significant experience in deciding such issues. While I agree that no standard of review is applicable where there is a breach of the rules of natural justice or procedural fairness, as I will explain below, I do not accept that any such breaches arise in this case. Further, as I shall also explain below, the fact that the arbitrator was asked to award equitable relief does not take her decision in that regard outside of the reasonableness standard. Arbitrators are often required to decide such issues, where they arise in conjunction with a labour award, and thus they are matters that are closely connected to the core function of labour arbitrators.

[17] I approach this application, therefore, on the basis that, ultimately, the applicant will have to demonstrate that the decision of the arbitrator is not a reasonable one in order for her to be successful.

(ii) Standing and procedural unfairness

[18] A preliminary issue arises because both respondents contend that the applicant has no standing to bring this application [page35 ]for judicial review. The respondents say that the MOA is a labour arbitration matter to which only The Globe and Mail and the union are parties and only those two parties have standing to seek review of the arbitrator's decision. The respondents therefore submit that the judicial review application should be summarily dismissed.

[19] In that regard, the respondents refer to various cases where the principle of exclusive representation has been enunciated, including Noël v. Société d'énergie de la Baie James, 2001 SCC 39, [2001] 2 S.C.R. 207, [2001] S.C.J. No. 41, where LeBel J. said, at para. 69:

Ultimately, however, where the subject matter of the challenge that it is proposed to bring in the courts is the very essence of the primary function of union representation -- the interpretation or application of the collective agreement -- the decision is for the union to make and it cannot be challenged, regardless of the procedural method adopted, except by way of a complaint made under s. 47.3 L.C. or by a proceeding based on the general principle of civil liability, as discussed earlier.

[20] While I accept that Noël establishes a general principle that ordinarily only the employer and the union are parties to the proceedings in a labour arbitration, that general principle is not absolute. As the decision in Noël itself observes, there are exceptions to this general principle. Those exceptions were later summarized in Yee v. Trent University, [2010] O.J. No. 2697, 2010 ONSC 3307 (Div. Ct.), where Swinton J. said, at para. 8:

However, the case law has identified three exceptional situations in which an individual may have standing to pursue arbitration or judicial review: where the collective agreement confers a right on the individual to pursue a matter to arbitration, where the union takes a position adverse in interest to the employee, and where the union's representation of the employee has been so deficient that the employee should be given a right to pursue judicial review.

(Citations omitted)

[21] The existence of exceptions to the general principle is also recognized by George Adams in his text, Canadian Labour Law, looseleaf, 2nd ed. (Toronto, Canada Law Book, 2013), where he says, at Â4.1660:

In general, and subject to exceptions, unless the collective agreement itself expressly grants individual employees the right to pursue a matter to arbitration, only the union or the employer may do so and only the union or employer have the standing as of right to make an application for judicial review of any decision resulting from the arbitration proceedings.

(Citations omitted; emphasis added)

[22] The issue is complicated in this case by three salient facts. First, in this case, it was not the union who had to pay [page36 ]back the second lump sum, if there was a breach of the MOA. It is the applicant that must do so. Second, all of the significant terms of the MOA are expressly directed at limiting the applicant's rights. Nothing in the MOA restricts anything that the union might do with the sole exception that it agreed, as part of the settlement, to withdraw the grievances. Third, the applicant signed the MOA. Presumably the purpose in having the applicant sign the MOA was to ensure that there could be no subsequent argument that the applicant was not a party to the MOA and therefore bound by its terms. While the respondents say that it is not unusual in the settlement of labour grievances to have the grievor sign the settlement, that reality does not detract from the likely reason for that practice.

[23] In Noël, LeBel J. made the critical point that an employee "cannot be left without a remedy" (para. 69). Yet, if the respondents are correct in their submissions on standing, there is an argument that, for all practical purposes, the applicant would be left precisely in that predicament once the Union decided that no judicial review application would be brought from the arbitrator's award.

[24] The respondents counter this concern by making two points. One is that, while the applicant may technically be a party to the MOA, that does not make her a party to any proceeding by way of judicial review. The other point made by the respondents is that excluding the applicant from standing to bring a judicial review application from the award does not leave the applicant without a remedy. If the applicant is of the view that the union failed to represent her fairly in the proceedings before the arbitrator, and this failure of fair representation led to the adverse result, the applicant still has a remedy. The applicant could have brought an application before the Ontario Labour Relations Board for a breach of the union's obligation of fair representation. The obligation of fair representation is imposed on the union by s. 74 of the Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A, which reads:

74. A trade union or council of trade unions, so long as it continues to be entitled to represent employees in a bargaining unit, shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit, whether or not members of the trade union or of any constituent union of the council of trade unions, as the case may be.

[25] The respondents assert that, if the applicant was of the view that the union had failed to properly and adequately put her case before the arbitrator, her sole remedy was to seek the assistance of the OLRB. The applicant does not have standing to [page37 ]bring a judicial review application. The respondents say that the remedy that they say the applicant is restricted to is not a toothless one. They point to the fact that under s. 96 of the Labour Relations Act, 1995, the OLRB has broad jurisdiction to "determine what, if anything", the union should be ordered to do if the conclusion is reached that the union failed to fairly represent the applicant. All of that said, however, the respondents do acknowledge that one thing that the OLRB could not do is set aside the arbitrator's award. Only this court could grant that relief.

[26] I return then to the central issue and that is whether the applicant can bring herself within any of the three exceptions set out in Yee so as to give her standing to bring this judicial review application. The first exception does not apply because the collective agreement did not confer a right on an individual to pursue a matter to arbitration. In terms of the second exception, the applicant [did] not rely on this exception in her factum and she expressly placed no reliance on it during the course of the hearing. This then leaves only the third exception, that is, where the union's representation of the employee was so deficient that the employee should be given a right to pursue judicial review. The possible application of this third exception leads into the companion issue raised under this heading and, that is, the applicant's contention that the union's representation of the applicant was "so deficient" as to amount to a breach of the rules of natural justice.

[27] A great deal of effort and argument was directed towards this issue during the course of the hearing but, notwithstanding all of that effort, I conclude that the basic premise does not find any traction in the evidence. The record demonstrates that the union advanced all of the legitimate arguments that could be made on the applicant's behalf. There were a number of other arguments that the applicant wished to have advanced but counsel for the union, for good and sufficient reasons, chose not to advance those arguments. Counsel for the union told the applicant, on a number of occasions, that the union would not advance some of the arguments that the applicant wished to have made, and the reasons why those arguments would not be advanced. In some instances, counsel for the union concluded that there was no merit to the argument. In other instances, counsel for the union concluded that the arguments could not find any foundation in the evidence, properly understood and correctly recited. All of these issues were matters for the union's counsel to consider and decide upon. [page38 ]

[28] It is counsel's role, generally, in any piece of litigation to decide what should be argued and what should not. Counsel is not obliged to advance an unmeritorious argument just because the client wants the argument made. Indeed, it is counsel's responsibility not to advance unmeritorious arguments. That responsibility recognizes the dual obligations that counsel has -- the obligation is to his/her client and the companion obligation to the court in counsel's capacity as an officer of the court.

[29] This bifurcated role is even more evident in the labour relations context because, in that context, counsel's client is not the grievor, it is the union. Consequently, it falls to the union to decide how the proceeding should be advanced in terms of its overall responsibility, not just to the grievor, but to the other members of the union. This point has been made in a number of cases but it is succinctly stated in Woldetsadik v. Yonge Street Hotels (c.o.b. Courtyard by Marriott Downtown Toronto), [2012] O.J. No. 1074, 2012 ONSC 1580 (Div. Ct.), where Pepall J. said, at para. 8:

. . . it is well established that a union, let alone its counsel, is not required to take instructions from the grievor with respect to how to present a grievance at arbitration[.]

[30] There is a lot of material in the record regarding the communications between counsel for the union and the applicant and her various counsel. Many of these communications have to do with differences of opinion between counsel for the union and the applicant's counsel over what arguments ought, or ought not, to be made before the arbitrator. To say that these communications show a strained relationship between counsel for the union and the applicant would be an understatement.

[31] The applicant makes a number of allegations regarding counsel for the union all centred around her core position that the union failed to adequately represent her. The allegations include a failure to meet with the applicant to properly prepare her for the arbitration hearing, the failure to adduce evidence, the failure to properly investigate certain allegations, especially regarding the conduct of The Globe and Mail (about which I will say more below), and other matters.

[32] I do not intend to review all of the communications that are before us because, in my view, it is unnecessary to do so in order to deal properly with the applicant's arguments. In terms of a foundational context to evaluate the applicant's arguments in this regard, I will begin by saying that I agree with the characterization given to this matter by counsel for The Globe and Mail: this is basically a simple case. The MOA bound the applicant and The Globe and Mail to a settlement under which they [page39 ]were each required to do certain things. The central issue for the arbitrator to determine was whether the contents of the applicant's book breached the confidentiality provision of the MOA.

[33] Arguably, all that the arbitrator required in order to determine this matter was a copy of the MOA and a copy of the applicant's book. However, the arbitrator, for reasons that she gave at the time, permitted the applicant to put a "will say" statement into evidence along with a brief of documents. The arbitrator did so in fairness to the applicant but with the express caveat that the arbitrator would subsequently determine what weight, if any, to give to this evidence.

[34] The applicant sought to greatly complicate this matter by attempting to expand the application that was before the arbitrator into an examination of the actions of The Globe and Mail that lead Doubleday to cancel its publishing agreement with the applicant. That approach was fundamentally flawed for a number of reasons. First, the impugned actions of The Globe and Mail occurred two years prior to the alleged breach of the MOA by the applicant, by the publication of her book, which led to the issue being raised before the arbitrator by The Globe and Mail. At no point in that two-year period did the applicant bring this issue before the arbitrator or otherwise advance any claim regarding what she now contends was a breach of the MOA by The Globe and Mail. Notably, on this point, the applicant did not approach the union at any time to suggest that there had been a breach of the MOA by The Globe and Mail.

[35] Second, there is a complete absence of evidence in all of the material filed before the arbitrator, or to which the applicant can otherwise now point, that would even begin to substantiate an allegation that The Globe and Mail had breached the MOA as a consequence of its contact with Doubleday.

[36] Third, there is no paragraph in the MOA that precluded The Globe and Mail from taking steps to prevent the applicant from disparaging it. The argument that, because the MOA permitted the applicant to disparage The Globe and Mail after a certain date, The Globe and Mail was thereby prohibited from taking any steps to protect itself from such disparagement is an untenable one.

[37] Simply put, the applicant cannot point to any true procedural unfairness in the manner in which the arbitrator conducted the proceeding. The arbitrator provided the applicant with a reasonable opportunity to put her various complaints before the arbitrator. In extending that opportunity to the applicant, the arbitrator was not required to permit the applicant to lead whatever evidence she wanted to or to raise every issue [page40 ]that she might conceive of. The arbitrator had the right, as any adjudicator does, to place reasonable limits on the proceeding.

[38] Consequently, I cannot find any basis for a conclusion that the union's representation of applicant was so deficient that the applicant should be given a right to pursue judicial review. Indeed, I would go further and say that I see little basis upon which the union's representation of the applicant could be fairly and rationally criticized. In my view, counsel for the union did his best to protect the applicant's interests, including in situations where it appears that the applicant was not of a mind to protect her own interests.

[39] Finally on this issue, I acknowledge the applicant's point, to which I made reference earlier, that it is she who is liable for the repayment of the second lump sum, not the union. I accept that the consequences of the arbitrator's decision greatly affects the applicant and minimally, if at all, affects the union. However, I am unaware of any authority, and none was cited to us, that makes the impact of the decision the deciding factor in terms of the standing issue. As the union pointed out, there are many cases where the court has held that the grievor does not have standing to bring a judicial review in situations where the consequences of the underlying decisions were equally important to the grievors. For example, in some cases the grievor had had his employment terminated. In another, a faculty member had been denied tenure. These decisions had very serious financial consequences for the individuals involved, just as the decision here has for the applicant, but that did not change the proper analysis, or the result, on the issue of standing.

[40] I conclude, therefore, that the applicant does not have standing to bring this application. Notwithstanding that conclusion, however, I consider it prudent to deal with the other issues raised by the applicant.

(iii) Equitable relief

[41] This is the other major issue raised in this application. The applicant contends that the arbitrator applied the wrong legal framework in considering whether, if there was a breach of the MOA, the applicant should be relieved from the provision in the MOA that required her to repay the lump sum. The applicant contends that the repayment provision constitutes an "oppressively punitive forfeiture provision" in an otherwise valid agreement. However, the applicant says that the union presented the issue to the arbitrator on the basis that the repayment provision was a penalty clause. The applicant says that the arbitrator's rejection of the penalty analysis led her to [page41 ]address the wrong issue. Consequently, the applicant says that the analysis engaged in by the arbitrator, and the conclusions that she reached, are fundamentally flawed. As such, the applicant says that it renders the arbitrator's decision incorrect in law or, at the very least, an unreasonable one.

[42] I do not agree that the arbitrator failed to conduct the proper analysis of the issue that was before her. I acknowledge that the arbitrator did spend some time in her reasons dealing with the penalty argument. This obviously resulted from the fact that the union led with that argument -- something that counsel for the union had made clear to the applicant that he intended to do. However, notwithstanding that that is how the argument began, I am satisfied that the arbitrator also considered the alternative analysis, that is, that the repayment provision was a forfeiture provision. I am aware that the arbitrator did not mention the decision in Peachtree II Associates -- Dallas, L.P. v. 857486 Ontario Ltd. (2005), 2005 23216 (ON CA), 76 O.R. (3d) 362, [2005] O.J. No. 2749 (C.A.), which is particularly instructive on this question. Nevertheless, the arbitrator did consider the matters that the decision in Peachtree requires when considering the forfeiture argument.

[43] There are a number of salient points that arise from the decision in Peachtree that are of relevance to this case. That said, there is no need to engage in an exhaustive analysis of those points for the purpose of properly deciding this case. I will therefore limit my reasons to the basic points.

[44] The first point from Peachtree is the distinction between a penalty provision and a forfeiture provision. As Sharpe J.A. notes [at para. 22], a penalty provision involves a payment of money "stipulated as in terrorem of the offending party". A forfeiture provision, on the other hand, involves the loss of something, often money, held as security for the enforcement of an obligation. As Sharpe J.A. further notes, at para. 22:

Like promises to pay a penalty, forfeitures often have penal consequences as the right or property forfeited by the defaulting party may bear no relation to the loss suffered by the innocent party.

[45] The decision in Peachtree cautions that courts should avoid classifying contractual clauses as penalties. Where a choice arises between classifying a clause as a penalty or as a forfeiture, the latter should be favoured. I have no hesitation in concluding that the provision in the MOA is properly classified as a forfeiture provision and not as a penalty. This is the same conclusion that the arbitrator reached where she said (award, at p. 27): [page42 ]

In my view the provisions of paragraph 8 should not be viewed as a "penalty" which requires proof of damages. Rather, it is an enforcement mechanism which seeks to ensure that the grievor lived up to a component of the deal the parties made which was key to the Employer.

[46] In Peachtree, Sharpe J.A. goes on to deal with the situations where a court will not enforce a penal forfeiture provision. He notes that courts will consider the enforceability of such provisions at the time of the breach and not at the time that the agreement was made. He then quotes with approval from the decision of Denning L.J. in Stockloser v. Johnson, [1954] 1 All E.R. 630, [1954] 1 Q.B. 476 (C.A.), where the Lord Justice said, at p. 638 All E.R.:

Two things are necessary: first, the forfeiture clause must be of a penal nature, in the sense that the sum forfeited must be out of all proportion to the damage; and, secondly, it must be unconscionable for the seller to retain the money.

[47] There was no evidence placed before the arbitrator regarding any damage that may have been suffered by The Globe and Mail arising from the applicant's breach of the MOA. That said, the arbitrator did remark on the difficulty inherent in quantifying any damage that arises from the disclosure of information that was supposed to be kept confidential in a situation such as this. The arbitrator noted "the harm here is intangible and not easily or readily quantifiable" (award, at p. 27).

[48] I am prepared to accept, for the purposes of this judicial review application, that the provision that required the applicant to repay the second lump sum arising from a breach of the confidentiality or non-disparagement provisions would likely bear no relationship to any actual loss suffered by The Globe and Mail from such a breach. In other words, I am prepared to put the applicant's case at its highest in considering the enforceability of the repayment provision. The issue then was whether it was unconscionable for The Globe and Mail to recover the money.

[49] On the point of whether the repayment provision was unconscionable, the arbitrator referred to the decision in Birch v. Union of Taxation Employees, Local 70030 (2008), 2008 ONCA 809, 93 O.R. (3d) 1, [2008] O.J. No. 4856 (C.A.). This is of importance for two reasons. First, it shows that the arbitrator considered the correct legal test for deciding whether a forfeiture provision is unconscionable. Second, the decision in Birch makes extensive reference to the decision in Peachtree so while the arbitrator did not make specific reference to Peachtree, it makes it more difficult to argue that she was unaware of the decision and consequently erred in not applying it. Yet this is the essence of the applicant's [page43 ]argument when she says that the arbitrator applied the wrong legal framework in reaching her decision.

[50] In Birch, the test for establishing that a forfeiture provision is unconscionable is expressed by Armstrong J.A., at para. 45:

However one articulates the test for unconscionability, I am satisfied that it involves more than a finding of inequality of bargaining power between the parties to a contract. Both the test adopted by the application judge in Eckstein and the test in Harry of the British Columbia Court of Appeal recognize that a determination of unconscionability involves a two-part analysis -- a finding of inequality of bargaining power and a finding that the terms of an agreement have a high degree of unfairness.

[51] Applying that test to the situation here, there is no evidence that there was an inequality of bargaining power. The MOA was reached after much back and forth between the parties. Numerous changes were made to the proposed terms. Of considerable importance is that the applicant insisted, and eventually obtained, a term that permitted her to disparage The Globe and Mail after a certain point in time. This was something that the evidence establishes was important to her and she achieved that result. In addition, the applicant was represented by counsel throughout the negotiations of the MOA -- not only experienced counsel provided by the union but also by counsel of her own choosing. All of these facts were mentioned and relied upon by the arbitrator in reaching her conclusion.

[52] There is also no evidence in this case of a "high degree of unfairness" inherent in the repayment provision. As the arbitrator found, confidentiality was the one thing that The Globe and Mail wanted out of the MOA. Repayment of the second lump sum was the mechanism to be used to enforce that requirement. As the arbitrator said, in characterizing the repayment provision (award, at p. 27):

Rather, it is an enforcement mechanism which seeks to ensure that the grievor lived up to a component of the deal the parties made which was key to the Employer.

[53] I cannot find any fault in the arbitrator's analysis on this issue. Certainly it cannot be said that her conclusion in this regard was unreasonable. I note, on this point, that the MOA also required The Globe and Mail to pay to the applicant a separate lump sum of $43,731.67 for five months of sick leave that she had not received. The forfeiture provision did not require the applicant to repay this amount nor did the forfeiture provision require her to repay any additional amount over and above the second lump sum. The deal under the MOA was clear. The Globe and Mail was to pay the applicant a large lump sum and the [page44 ]applicant was to stay quiet about the payment. It was an entirely reasonable enforcement mechanism, if the applicant failed to meet her main obligation under the MOA -- confidentiality -- that The Globe and Mail would be relieved of its main obligation under the MOA -- the second lump sum payment.

[54] As part of her argument that the arbitrator failed to apply the correct legal framework, the applicant says that the arbitrator only considered the circumstances that existed at the time that the MOA was agreed to, and not the circumstances as they existed at the time of the alleged breach, as required by the Peachtree analysis. That argument is directly contradicted by the contents of the arbitrator's award. The arbitrator referred extensively to the events that occurred after the MOA was agreed to. In particular, the arbitrator referred to the fact that the applicant self-published her book and that she had consulted counsel before doing so for libel issues. The arbitrator also referred to the contents of the applicant's book that were alleged to constitute a breach of the MOA. I note in that regard that the arbitrator only found four breaches of the 23 that were asserted by The Globe and Mail.

[55] Finally on this issue, I would add that an arbitrator is not required to use the same language, or engage in the same detailed analysis, that might be expected from a judge deciding the same issue. An arbitrator is entitled to some considerable latitude in how s/he addresses the application of the law to the context with which s/he is faced. This point was made in Nor-Man Regional Health Authority Inc. v. Manitoba Association of Health Care Professionals, 2011 SCC 59, [2011] 3 S.C.R. 616, [2011] S.C.J. No. 59, where Fish J. said, at para. 45:

On the contrary, labour arbitrators are authorized by their broad statutory and contractual mandates -- and well equipped by their expertise -- to adapt the legal and equitable doctrines they find relevant within the contained sphere of arbitral creativity. To this end, they may properly develop doctrines and fashion remedies appropriate in their field, drawing inspiration from general legal principles, the objectives and purposes of the statutory scheme, the principles of labour relations, the nature of the collective bargaining process, and the factual matrix of the grievances of which they are seized.

[56] It is clear that the one thing that The Globe and Mail wanted from this settlement was confidentiality. The Globe and Mail was prepared to pay for that confidentiality. The only other aspect of the MOA that benefitted The Globe and Mail was the brief period of non-disparagement. And yet, in the end result, The Globe and Mail did not get the one thing that it was paying for -- confidentiality. In those circumstances, there is no inherent unfairness in a conclusion that the applicant should have to [page45 ]repay the moneys that she received, and that she agreed to repay, if she breached the MOA.

(iv) The breach of the MOA

[57] The applicant says that she did not breach the MOA because she understood that she could speak about the terms of the settlement as long as she did not reveal the actual amounts paid. The first point that I would make on this issue is that it is far from clear that the applicant's understanding of what she could, or could not, do under the MOA is properly considered on the issue of whether there was a breach of the MOA. Generally speaking, evidence of the subjective understanding of the parties as to the meaning of a contract is not admissible for purposes of interpreting the document. This point was made in Dumbrell v. Regional Group of Companies Inc. (2007), 2007 ONCA 59, 85 O.R. (3d) 616, [2007] O.J. No. 298 (C.A.), where Doherty J.A. said, at para. 51:

Eli Lilly, supra, instructs that the words of the contract drawn between the parties must be the focal point of the interpretative exercise. The inquiry must be into the meaning of the words and not the subjective intentions of the parties.

[58] Therefore, to the degree that the arbitrator considered the applicant's subjective understanding of the MOA, the arbitrator gave the applicant much greater leeway on the issue of any possible breach than the law would normally permit.

[59] In any event, the arbitrator did not accept that it was reasonable to interpret the MOA on the basis of the applicant's subjective understanding of what it meant. As the arbitrator said, the applicant was not content, in her book, to just mention that a payment had been made, although that alone would have constituted a breach. Rather, the applicant expressly referred to the size of the payment through characterizations such as "a big fat check [sic]"; "paid a pile of money"; and "a vastly swollen bank account". The applicant's contention that she could, essentially, mention this central aspect of the settlement as long as she did not mention the exact amount is, frankly, an indefensible one.

[60] The arbitrator, both correctly and reasonably, concluded that the applicant had breached the MOA. In so concluding, the arbitrator said (award, at p. 23):

In the circumstances of this case it would be inappropriate to set aside a comprehensive settlement, negotiated over a lengthy period of time, which in clear, unambiguous and objective language sets out what the nondisclosure obligation entails merely because of the grievor's subjective opinion and what she "thought" her nondisclosure obligations to be. [page46 ]

[61] I cannot find any fault in the arbitrator's conclusion in that regard or in her conclusion that the applicant breached the confidentiality provision of the MOA. In fact, it is hard to see how the arbitrator could have concluded otherwise. The confidentiality provision was clear and unambiguous -- the "terms of the settlement" could not be disclosed. The second lump sum payment was a term of the settlement. Once again, it cannot be said that the arbitrator's conclusion, that there had been a breach, was unreasonable.

(v) Reasonable apprehension of bias

[62] The applicant asserts that the arbitrator was not in a position to impartially adjudicate the issue regarding the proper interpretation of the MOA. This assertion is based on the proposition that, because the arbitrator was intensely involved in the mediation efforts that led to the MOA, her interpretation of any terms of the MOA could be a biased one. In other words, the arbitrator might have a vested interest in a particular view of the meaning of the MOA. The applicant adds to the assertion that there was a reasonable apprehension of bias on the part of the arbitrator, other facts that she says confirms that view including the arbitrator's refusal to allow the applicant to give oral evidence at the hearing. Further, the applicant says that the result pronounced by the arbitrator demonstrates that she was not impartial.

[63] I do not find any merit in the assertion that there was a reasonable apprehension of bias on the part of the arbitrator. First, it was entirely up to the arbitrator to decide how the hearing before her should be conducted. This was, in essence, a contractual interpretation issue as the applicant expressly acknowledges. As I have already mentioned, there was no need for oral evidence to properly determine the contractual interpretation issues that were before the arbitrator. To the extent that some evidence was necessary or advisable on the relief from forfeiture issue, the arbitrator had already agreed to allow the applicant to place her "will say" statement into evidence along with various supporting documents. It was open to the arbitrator to decide that that was sufficient for the limited purpose for which evidence was necessary in an effort to place some controls on the amount of evidence that she would hear.

[64] The mere fact that the arbitrator was involved in the mediation does not properly give rise to a reasonable apprehension of bias. The test for the appearance of a reasonable apprehension of bias is well known. It is set out in [page47 ]R. v. S. (R.D.), 1997 324 (SCC), [1997] 3 S.C.R. 484, [1997] S.C.J. No. 84, where Cory J. said, at para. 111:

The manner in which the test for bias should be applied was set out with great clarity by de Grandpré J. in his dissenting reasons in Committee for Justice and Liberty v. National Energy Board, 1976 2 (SCC), [1978] 1 S.C.R. 369, at p. 394:

[T]he apprehension of bias must be a reasonable one, held by reasonable and right-minded persons, applying themselves to the question and obtaining thereon the required information. . . . [The] test is "what would an informed person, viewing the matter realistically and practically -- and having thought the matter through -- conclude. . . ."

[65] I do not believe that any person, reasonably informed as to the background of this matter and the way in which the MOA came into being, having thought the matter through, would perceive any bias on the part of the arbitrator. I am reinforced in that view by the fact that there is nothing in the reasons of the arbitrator that suggests even a whiff of bias. To the contrary, the arbitrator considered all of the issues fairly and objectively and gave comprehensive reasons for her conclusions.

[66] I need say little about the submission that the result demonstrates bias. If that were the test for the reasonable apprehension of bias, then every losing party would, perforce, be able to establish it.

(vi) Affidavit evidence

[67] The respondents objected to the applicant filing affidavit evidence on this judicial review. Again, this is an issue that, while raised in the written submissions of the parties, did not receive any attention in their oral submissions. I will therefore deal with it briefly. Normally, affidavit evidence is not admissible on an application for judicial review. The application is to be based on the record as it was before the tribunal whose decision is being reviewed. However, that normal rule is not without exceptions.

[68] In 142445 Ontario Ltd. (c.o.b. Utilities Kingston) v. International Brotherhood of Electrical Workers, Local 636, 2009 24643 (ON SCDC), [2009] O.J. No. 2011, 251 O.A.C. 62 (Div. Ct.), Swinton J. referred to the law on the use of affidavits in a judicial review application as reflected in Keeprite Workers' Independent Union v. Keeprite Products Ltd. (1980), 1980 1877 (ON CA), 29 O.R. (2d) 513, [1980] O.J. No. 3691 (C.A.), and then summarized the matter in the following way, at para. 18:

The Keeprite standard for the admission of affidavit evidence on judicial review has been applied in numerous decisions involving labour boards and labour arbitrators. These cases have held that affidavit evidence can be [page48 ]admitted either to show an absence of evidence on an essential point or to disclose a breach of natural justice that cannot be proven by a mere reference to the record.

[69] In this case, the applicant asserted a breach of natural justice. The affidavits from the applicant are admissible before us for that limited purpose.

(vii) The appropriate remedy

[70] The applicant asserts that, if she is successful in her application, it would not be appropriate to remit the matter back for a rehearing. Rather, the applicant says that this court should simply decide the issue in her favour and dismiss the application of The Globe and Mail regarding the alleged breaches of the MOA.

[71] It is unnecessary for me to address this issue since I have concluded that the applicant has failed to establish any error in the arbitrator's award.

(viii) Costs of the hearing

[72] The applicant says that the reprehensible conduct of the union in not adequately representing her interests before the arbitrator warrants an order that the union pay the applicant's solicitor and client costs of the proceeding.

[73] As I indicated earlier when I was dealing with the issue of standing and procedural unfairness, the applicant has failed to establish reprehensible conduct on the part of the union. At the risk of being repetitive, the union put forward all reasonable arguments on behalf of the applicant at the hearing before the arbitrator. Admittedly, there were disagreements between what the applicant thought should be argued before the arbitrator and what the union chose to argue. It was entirely within the scope of the union's representation of the applicant for it to make those decisions.

[74] In my view, the union did its best to accommodate the interests of the applicant. It carefully considered her, and her lawyer's, suggestions as to matters that should be argued. The necessary arguments were subsequently made by the union and were made fully and properly. Where the union disagreed with the applicant's suggestions, it explained to her or her lawyer why it took that view. While the applicant was dissatisfied with the union's carriage of this matter, dissatisfaction does not equate to reprehensible conduct or inadequate representation. [page49 ]

[75] The applicant has been unsuccessful in this application. Costs normally follow the event. Given my conclusions regarding the failure of the applicant to demonstrate inadequate representation of her by the union, there is no basis to make any order that the union pay the applicant's costs.

Conclusion

[76] The application is dismissed. We have considered the parties' submissions on costs. We accept the applicant's point that there was overlap between the positions of the two respondents. However, while The Globe and Mail took the lead on the main issue of the interpretation of the MOA, the union was required to respond to the allegations of inadequate representation. We note that the nature of some of those allegations could, on its own, warrant an increase in the quantum of costs awarded. In the end result, therefore, we would award costs fixed in the amount of $15,000, inclusive of disbursements and HST to each of the respondents, payable within 30 days.

Application dismissed.

End of Document