PEHT Case No: 0062-20-PE
Joan Mills, Applicant v City of Hamilton, and The Hamilton Entertainment and Convention Facilities Inc., Respondents
BEFORE: M. David Ross, Chair, and Members Patricia Greenside and Stephen Roth
DECISION OF THE TRIBUNAL: August 21, 2020
[1]. This is an application under the Pay Equity Act, R.S.O. 1990, c.P.7, as amended (“the Act”). The application filing date is April 14, 2020. This application arises from a Notice of Decision dated September 27, 2016.
[2]. The respondent, the City of Hamilton (“the City”) has filed a response. The respondent, The Hamilton Entertainment and Convention Facilities Inc. (“HECFI”) has not filed a response and it is understood and agreed by the parties that this entity has not been operational for several years. For this reason, the Tribunal is proceeding with this application in the absence of receiving any response from HECFI.
[3]. The City has requested the Tribunal to dismiss this application on a preliminary basis because it is untimely and amounts to an abuse of process, and because a full and final release signed by the applicant bars this application. By decision dated July 9, 2020, the Tribunal directed the applicant to file submissions in response to the City’s requests to dismiss. The applicant filed its response submissions as directed.
[4]. For the reasons below, this application is dismissed because the applicant executed a full and final release with HEFCI and the City on May 31, 2013 which acts as a bar to this application.
Undisputed Facts
[5]. The facts pertaining to the 2013 Settlement pled by the applicant and the City are generally not in dispute. Rather, the parties disagree over the legal conclusion of whether the release signed by the applicant in the 2013 Settlement continues to act as a bar to this application.
[6]. The applicant was hired by the respondent, the City in 1985. The applicant was hired by HEFCI in 1999.
[7]. The applicant’s employment continued with HEFCI until she was terminated on February 19, 2013. The termination was a byproduct of HEFCI having its service agreement not renewed by the City. The applicant negotiated a settlement that resolved all matters relating to her employment which was executed on May 31, 2013. The applicant pled “on or about May 31, 2013, Mills signed settlement documents with HECFI and the City.” The release contained in that document states:
“And whereas the parties are desirous of fully and finally settling all matters in dispute between them related to Mills’ employment with and the termination of employment from HECFI for the settlement of all matters in dispute between the parties.”
[8]. The settlement required the applicant to be paid a salary continuance from February 19, 2013 until October 15, 2014 (19 months and 20 days). It also contemplated that any cost of living adjustment (“COLA”) provided to non-union employees during this period would be provided to her as well.
[9]. The applicant became aware that she did not receive a 1.9% COLA that was provided to other non-union City employees. She filed a Statement of Claim in Hamilton in the Small Claims branch of the Superior Court (Court File No. 14-19905). The applicant has pled that this court action remains outstanding.
[10]. The applicant filed a complaint with Review Services on January 12, 2016. In this complaint, the applicant alleged that pay equity was not done by the employer in that her job class was not evaluated. The complaint is appropriately characterized that her position should have been included in the City’s pay equity plan, rather than HEFCI’s pay equity plan which she helped establish.
[11]. The Review Officer issued the Notice of Decision dated September 27, 2016. In that decision, the Review Officer determined that the HEFCI, not the City was her employer, and that the complaint was barred because of the full and final release executed by the parties on May 31, 2013.
Submissions of the Parties
[12]. The applicant submits that the respondents repudiated the 2013 Settlement when she was not provided the 1.9% COLA, and therefore she is relieved of her obligations under the 2013 Settlement. The applicant has not asserted that she has an independent right to pursue this claim against the respondents if the 2013 Settlement is not found to have been repudiated. The applicant relies on Place Concorde East Limited Partnership v. Shelter Corporation of Canada, 2006 CanLII 16346 (ON CA) (“Place Concorde”) in support of her position.
[13]. The City submits that while there remains an outstanding dispute about whether the applicant is entitled to the 1.9% cost of living increase, the dispute does not “resurrect potential pay equity claims”, and the settlement remains binding on the parties, which includes the release.
Decision and Analysis
[14]. The Tribunal can determine this issue pursuant to the written submissions pursuant to Rule 68 of its Rules of Practice.
[15]. The applicant’s position is that the respondent(s) have repudiated the 2013 Settlement by not providing 1.9% COLA that was provided to the City’s other non-union employees. The applicant cited the Court of Appeal’s decision of Place Concorde, supra. However, this decision does not support her position, rather the opposite. Paragraphs 49 to 52 of that decision state:
[49] In contrast, repudiation occurs by words or conduct that show an intention not to be bound by the contract. Contrary to rescission, which allows the innocent party to treat the contract as void ab initio, the consequences of repudiation depend on the election made by the non-repudiating or innocent party: Gordon Capital, supra, at para. 440. The non-repudiating party can elect to treat the contract as still being in full force and effect, and the contract remains for the future. In this instance, each party would have a right to sue for damages for past or future breaches. Alternatively, the innocent party can elect to accept the repudiation and the contract is terminated. Each party is then discharged from future obligations: Gordon Capital at para. 40.
50Thus, a repudiatory breach does not automatically bring an end to a contract. Rather, it confers a right upon the innocent party to elect to treat the contract at an end thereby relieving the parties from further performance. As a general rule, the innocent party must make an election and communicate it to the repudiating party within a reasonable time: see Chapman v. Ginter 1968 CanLII 72 (SCC), [1968] S.C.R. 560 at 568. However, in some cases the election to treat the contract at an end will be found to have been sufficiently communicated by the innocent party’s conduct: John D. McCamus, The Law of Contracts, (Toronto: Irwin Law Inc., 2005) at pp. 641-42.
51Repudiation occurs in circumstances where the breach deprives the innocent party of substantially the whole benefit that it was intended he or she should have obtained from the contract: Hunter Engineering Co. v. Syncrude Canada Ltd., 1989 CanLII 129 (SCC), [1989] 1 S.C.R. 426 at 499-500. A breach that allows the non-repudiating party to elect to put an end to all unperformed obligations of the parties is an exceptional remedy that is available only in circumstances where the entire foundation of the contract has been undermined, that is, where the very thing bargained for has not been provided: see Hunter Engineering, supra; see also Gordon Capital, supra, at para. 50.
52Various expressions have been used to define the sort of term that, if broken by one party, will excuse the other from future performance. Behind all of these expressions lies the notion of “substantial failure of performance”: see S.M. Waddams, The Law of Contracts, 5th ed. (Toronto: Canada Law Book Inc., 2005), at para. 587. Thus, a breach of contract that rises to the level of a substantial failure of performance can operate as a repudiation of the contract.
[emphasis added]
[16]. There are two significant flaws with the applicant’s argument that the 2013 Settlement has been repudiated.
[17]. The first is that the Court of Appeal was clear that an applicant must make an election when faced with an alleged repudiation of a contract. Those options are set out at paragraph 49 of Place Concorde, supra, and the options are to either sue for damages or to treat the contract as repudiated and be relieved of future obligations. In this case, the applicant elected to sue for damages and filed Court File No. 14-19905 to enforce the terms of the 2013 Settlement. That action remains outstanding. Her election was not the alternative and to treat the contract as repudiated. The applicant is not entitled to elect both options and both sue for damages and treat the 2013 Settlement as repudiated such that she can pursue an additional claim before this Tribunal.
[18]. Secondly, on the face of the pleadings, the applicant has not pled a prima facie case that the contract has been repudiated such that she is relieved of her obligations under the 2013 Settlement. Assuming for the purpose of this preliminary motion that the applicant is correct that the 2013 Settlement required the respondent(s) to provide the applicant the 1.9% COLA during the period of her salary continuance, the applicant’s best case is that she still received 98.1% of the compensation guaranteed by the 2013 Settlement. The only reasonable conclusion on these facts is that the contract was substantially performed. The applicant received a salary continuance for over 19 months after the date her job ended pursuant to the 2013 Settlement. To find on these pleadings that a contract that was 98.1% performed constitutes a “substantial failure of performance”, that the applicant was deprived “substantially the whole benefit”, or that it warrants the “exceptional remedy that is available only in circumstances where the entire foundation of the contract has been undermined” would cause offense to the phrases used by the Court of Appeal to describe the exceptional circumstances when a contract should be found to have been repudiated.
[19]. Accordingly, the Tribunal finds that the applicant elected to sue for damages, and that on her best case, the alleged breach does not amount to a repudiation of the 2013 Settlement such that she is relieved of her signed full and final release. This application is dismissed against both respondents.
[20]. Given that this application has been dismissed in its entirety for the reasons above, it is unnecessary for the Tribunal to determine the City’s other preliminary motion about whether this application should be dismissed for delay as an abuse of process.
For the Tribunal,
"M. David Ross" Chair "Patricia Greenside" Member "Stephen Roth" Member