SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: 10-403118

DATE: 20140703

RE: Karen Elizabeth O’Reilly and Patranee Shiwprashad, Plaintiffs

AND:

Purolator Courier Ltd., Defendant

BEFORE: Carole J. Brown J.

COUNSEL:
Chris Tonks , for the Plaintiff

Thomas J. Gorsky , for the Defendant

HEARD: March 14, 2014

ENDORSEMENT

[1] The defendant, Purolator, brings this motion for summary judgment, dismissing the plaintiffs’ action on the ground that the plaintiffs' claims for willful infliction of mental distress raise no genuine issues requiring a trial.

[2] The underlying basis of the claims is that the plaintiffs were both sexually harassed and assaulted at their place of employment, Purolator, by a fellow employee, Steven Brown, with Purolator's knowledge, over approximately a 2 1/2 year period.

[3] The plaintiffs, Karen O'Reilly ("Ms. O'Reilly") and Patranee Shiwprashad ("Ms. Shiwprashad") were terminated from their employment as security guards with Purolator on January 19, 2009, and April 27, 2009, respectively. The plaintiffs believe that it was due to the complaint they had made to Purolator about Steven Brown, which went unheeded. According to Purolator, the termination was due to its need to downsize in an economic downturn. Full and final releases were signed by both plaintiffs.

[4] It is the position of the defendant that, given the full and final releases, signed at the time of the plaintiffs' terminations, all of the plaintiffs' claims are encompassed therein. The defendant maintains that the plaintiffs cannot further pursue the defendant as regards Steven Brown and the sexual harassment and that there is, therefore, no genuine issue requiring a trial.

[5] It is the position of the plaintiffs that the claim against Purolator is in relation to Steven Brown's conduct and its vicarious liability therefore as his employer, and is not in relation to any dispute over severance entitlements. It is the position of the plaintiffs that said releases should be set aside due to unconscionability of the circumstances, including, but not limited to the fact that they did not understand that their release went beyond the scope of the termination itself at the time of the signing. It is further their position that there is conflicting evidence and material facts are in dispute, making summary judgment inappropriate.

The Facts

[6] There have been no examinations for discovery as yet in this action. The evidence before the court is based on cross-examinations on affidavits of the parties themselves submitted in this motion.

[7] Following the harassment and assaults by Steven Brown of the two plaintiffs, Ms. O'Reilly and Ms. Shiwprashad complained to Purolator in September of 2007. Purolator investigated and found insufficient evidence against Steven Brown. Subsequently, the plaintiffs filed criminal complaints against Steven Brown with the Toronto Police in September 2007. As a result, the Toronto police charged Steven Brown with two counts of criminal harassment pursuant to section 264 of the Criminal Code of Canada. The plaintiffs each took sick leave thereafter until September 2008. The plaintiffs allege that almost all of the harassment and assaults occurred at the workplace.

[8] On May 25, 2009, Steven Brown was convicted of one count of criminal harassment as regards the plaintiff, Karen O'Reilly, and was compelled to enter into a section 810 Recognizance as regards Patranee Shiwprashad.

[9] On January 19, 2009, Ms. O'Reilly was terminated without cause after eight years employment with the defendant. She was offered and received payment of salary continuance of up to eight months' pay, including benefits continuance and pension accrual, as well as career transition services and 14 days to accept the severance offer as set out in the termination letter. She received all of her pay. It is Ms. O'Reilly's evidence that she protested her dismissal and indicated to Purolator her belief that she had been terminated due to her complaints against Steven Brown. This is denied by the defendants.

[10] Her evidence as regards the release is that she signed a release on January 27, 2009, eight days after she first received it. She understood from the Purolator employee who met with her, Diane Brown, the Human Resources Representative of Purolator, that if she did not sign the release, she would not receive her severance pay. This is denied by the defendant, Purolator, which maintains that the cover letter enclosed with the release to be signed clearly indicated that if she did not sign, she would still receive the statutory entitlement notice, which counsel advised is much less than the severance package offered.

[11] Further, as stated in her affidavit, she did not understand that by signing the release, she would be barred from all claims against the defendant, including claims sounding in vicarious liability arising from the criminal conduct of Steven Brown and Purolator's failure to protect her in the workplace from said conduct, rather than simply all claims related to her termination.

[12] It is the position of Ms. O'Reilly that she was an unsophisticated party. It was her evidence that she had not previously signed a release. She testified that she did not understand the term "independent legal advice" ("ILA"), which appeared in the release. This is denied by the defendant. She further testified that she was confused about what statutory notice requirements were as distinguished from severance payments. The evidence of Diane Brown, who met with her as indicated at para. 10, above, was that she told Ms. O'Reilly to consult someone she trusted. She did not tell Ms. O'Reilly to consult a lawyer. Ms. O'Reilly did not consult a lawyer regarding the release, but only spoke with her husband, who was not a lawyer, about it.

[13] The defendant maintains that Ms. O'Reilly changed her evidence given in her affidavit on cross-examination, was confused about what occurred at the meeting she had with Ms. Brown at the time of termination on January 19 and at the time of the signing of the release, January 27. The defendant argues that such confusion renders the evidence unreliable such that it should be discounted.

[14] Relevant portions of the termination letter state as follows:

Release

The severance arrangements provided for in this letter are conditional on the signing and returning of the enclosed release. Failure to return a signed release will result in the suspension of salary continuance, after statutory notice requirements have been satisfied. In addition no lump sum will be paid until a signed release is received.

[15] The Release contains the following provisions:

In consideration of the payment or promise of payment or other agreements as detailed in correspondence to Karen O'Reilly from Purolator Courier Limited, dated January 19, 2009, the sufficiency and receipt whereof by me is hereby expressly acknowledged, I, Karen O'Reilly do hereby remise, release and forever discharge Purolator Courier Ltd./Courrier Purolator Ltee. and all of its affiliated and related companies and subsidiaries and their officers, directors, servants and agents (hereinafter collectively referred to as the "Releasees") of and from all actions, causes of actions, demands, covenants, contracts and claims whatsoever which I ever had, now have or which I can, shall or may hereafter have existing up to the date hereof for or by reason of any cause, matter or thing whatsoever, including without limiting the generality of the foregoing, any actions, causes of action, suits, demands or claims relating to my employment with any of the Releasees, and I hereby specifically covenant, represent and warrant to the Releasees that I have no further claim against the Releasees for or arising out of my employment or cessation of employment which specifically includes but is not limited to any claims for notice, pay in lieu of notice, wrongful dismissal, severance pay, bonuses, overtime, and interest, vacation pay or any claims under the Canada Labour Code and the Canadian Human Rights Act.

And for the same consideration, I further covenant and agree to save harmless and indemnify the Releasees from and against all claims, charges, taxes, penalties or demands which may be made by the Minister of National Revenue requiring the Releasees to pay income tax, charges, taxes or penalties under the Income Tax Act (Canada) in respect of income tax payable by me in excess of income tax previously withheld; and in respect of any and all claims, charges, taxes or penalties and demands which may be made on behalf of or related to the Employment Insurance Commission and the Canada Pension Commission under the applicable statutes and regulations with respect to any amounts which may in the future be found to be payable by the Releasees in respect of myself.…

I hereby confirm that I have been afforded an opportunity to obtain independent legal advice with respect to the details of the settlement evidenced by this Release and confirm that I am executing this release freely, voluntarily and without duress.

[16] As regards Ms. Shiwprashad, she was terminated without cause on April 27, 2009, after 6.75 years of service. She was offered payment of salary continuance of up to 6.75 months' pay, including benefits continuance and pension accrual, as well as career transition services and 14 days to accept the severance offer as set out in the termination letter. She received most of her pay. It is the evidence of both plaintiffs that they believed they were terminated due to their complaints against Steven Brown.

[17] Ms. Shiwprashad was terminated by David Murray, Purolator's Director of Security, and allegedly a friend of Steven Brown, and by Diane Brown, the Purolator Human Resources Representative. Her termination occurred two days after she had testified at the criminal trial of Steven Brown on April 25, 2009. The evidence indicates that she returned the signed release two days later on April 29, 2009. She did not speak with anyone prior to signing the release.

[18] Mr. Murray, the Purolator employee who terminated her, had been given a CD-ROM security tape on November 11, 2006, which had captured an incident of harassment by Steven Brown as against Ms. Shiwprashad. It appears from the evidence that the investigation by Purolator, which resulted in the finding that there was insufficient evidence of any sexual assault or harassment, was conducted after the video had been provided to Mr. Murray. Ms. Shiwprashad alleges that Steven Brown and David Murray are friends.

[19] As regards the ILA, Diane Brown, who met with Ms. Shiwprashad to sign the release, admits that she told Ms. Shiwprashad to consult someone she trusted regarding the release. She admitted that she did not advise Ms. Shiwprashad to obtain ILA or consult a lawyer as regards the release. It was the submission of counsel for Purolator that it was not a legal requirement for an employer to suggest that an employee consult a lawyer or obtain ILA. It was the submission of counsel for the plaintiffs that, in the circumstances, with the unequal bargaining power, and given Purolator's interpretation that the signed release served to release Purolator from all claims, including not only issues regarding the termination and severance package, but also any and all claims arising from Steven Brown's conduct in the workplace, the employer should have given a full explanation of the scope of the release and a suggestion to obtain ILA.

[20] It was Ms. Shiwprashad's evidence that she did not understand that she was precluded from pursuing any claims against Purolator regarding her alleged failure to protect her from Steven Brown's conduct. It is her position that she is an unsophisticated party. It was her evidence that she had never previously signed a release. She stated that she did not understand the technical language of the release, and did not understand the meaning of independent legal advice. This is all denied by the defendant. It is further her evidence that she did not speak with anyone before signing the release.

The Positions of the Parties

Position of the Defendant, Moving Party

[21] It is the position of the defendant that the only issue is whether the plaintiffs signed the settlement documents, and that a trial is not warranted in the circumstances. Counsel for the defendant emphasizes the public importance of and sanctity of settlement agreements and states that settlement agreements should not be set aside except in the most limited circumstances, which do not apply here. He states that as regards mental distress, no medical records were produced for Ms. O'Reilly and those produced for Ms. Shiwprashad record prior issues in 2007 and before and, therefore, there is no evidence to support any mental distress. I note, regarding Ms. Shiwprashad's medical records and the prior medical complaints, which the defendant maintains are not related to the harassment, that there was indication in the evidence that some of the harassment issues dated from at least September of 2006 and that the defendant knew as early as November 11, 2006 of the issues of sexual harassment, when the videotape of Mr. Brown harassing Ms. Shiwprashad was given to the Purolator security manager.

[22] It is the position of the defendant that the plaintiffs did not, at any time, protest the severance package offered or the amount paid for their severance, but have only complained regarding their termination, as they believe it was due to their complaints regarding Steven Brown. Counsel for the plaintiffs submit that the plaintiffs' failure to complain regarding the amount of severance offered is consistent with their not understanding that they were giving up not only claims as regards their termination, but also claims regarding their future rights against the defendants arising from vicarious liability for Steven Brown's criminal conduct in the workplace. It is the plaintiffs' position that they did not connect the release regarding their termination with a release from claims arising from the said criminal conduct of Steven Brown, which would likely result in larger damages amounts.

[23] As regards the issue of duress, the defendant maintains that Ms. Diane Brown, who met with the plaintiffs, stated that she read portions of the termination letter and release to them to make it clear that they would receive their termination pay (statutory) if they did not sign, while the plaintiffs maintain that they understood they would not receive payment if they did not sign the release. They did not understand the language of the release as regards "statutory notice requirements" being satisfied and the severance payments offered to them.

Position of the Plaintiffs, Responding Parties

[24] Counsel for the plaintiffs submit that the issues as regards the releases are unconscionability and duress. It is the position of the plaintiffs' counsel that the releases should be set aside on the grounds that the signing of the release was a grossly unfair and improvident transaction. They argue that they unknowingly contracted out of the right to bring an action for damages against the defendant for the criminal conduct of the defendant's employee, Steven Brown, and the defendant's failure to take any action to protect the plaintiffs, as employees, in the workplace, and executed the releases believing that if they did not do so, they would receive no severance pay. They argue that damages for such a claim could have significantly exceeded the severance and statutory payments made to the plaintiffs pursuant to the Canada Labour Code or at common law.

[25] The plaintiffs submit that there was an overwhelming imbalance in bargaining power in favour of the defendant as regards both plaintiffs; as regards Ms. O'Reilly, with respect to her knowledge and understanding concerning the release and the defendant’s better understanding of its potential liability for Steven Brown's criminal conduct; as regards Ms. Shiwprashad, with respect to her understanding of the releases, and the proximity of her termination and the signing of the release to her testifying in the criminal trial against Steven Brown. The plaintiffs further argue that they signed the releases under duress.

[26] The plaintiffs submit that there are numerous triable issues raised in their claim, including but not limited to the circumstances in which the decision to terminate the plaintiff's employment was made, who from Purolator made the decision to terminate the plaintiffs, and whether those from Purolator who made the decisions to terminate the plaintiffs had any relationship and/or connection to Steven Brown. Ms. Shiwprashad, in her statement of claim, has pleaded that Mr. Murray, who terminated her, was a friend of Steven Brown and that it was Mr. Murray who was given the CD-ROM security tape of Steven Brown assaulting Ms. Shiwprashad, which he subsequently failed to act on, thus allowing the sexual harassment and assaults to continue. According to Diane Brown, who was also at the termination meeting, it is also likely that Mr. Murray had a direct role in the decision to terminate Ms. Shiwprashad, which was carried out only two days after Ms. Shiwprashad testified in Steven Brown's criminal trial. The plaintiffs submit that these issues cannot be resolved on a summary judgment motion, even with enhanced powers provided to the judge pursuant to Rule 20.

The Issues

[27] The issue for determination by this Court is whether there are genuine issues requiring a trial, taking into consideration the principles set forth in Hyrniak v Mauldin, 2014 SCC 7 and Bruno Appliances and Furniture Inc. v Hyrniak, 2014 SCC 8.

The Law

Rule 20 and Summary Judgment

[28] Rule 20 provides for summary judgment where there is no genuine issue requiring a trial with respect to a claim or defence.

[29] The Supreme Court of Canada, in Hyrniak v Mauldin, supra and Bruno Appliances and Furniture Inc. v Hyrniak, supra, has recently reinterpreted Rule 20, taking into account the recognized need for access to justice for the majority of Canadians. The Supreme Court held that summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims. It found that the Court of Appeal, in Combined Air Mechanical Services Inc. et al v. Flesch et al, 2011 ONCA 764, placed too high a premium on the "full appreciation " of evidence that can be gained in a conventional trial, given that such a trial is not a realistic alternative for most litigants. It held that a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial.

[30] On a motion for summary judgment, the judge must first determine if there is a genuine issue requiring trial based only on the evidence before the judge without using the judge's new fact-finding powers.

[31] There will be no genuine issue requiring a trial if the summary judgment process provides the motion judge with the evidence required to fairly and justly adjudicate the dispute on the merits within the meaning of Rule 20.04(2)(a) and is a proportionate, more expeditious and less expensive means to achieve a just result. Where a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceedings at trial would generally not be proportionate, timely or cost-effective. However, a process that does not give the judge confidence in conclusions to be drawn can never be the proportionate way to resolve the dispute.

[32] Madam Justice Karakatsansis, writing for the Court, observed as follows in the companion case, Bruno Appliances, supra, at paragraph 22:

The motion judge should ask whether the matter can be resolved in a fair and just manner on a summary judgment motion. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is the proportionate, more expeditious and less expensive means to achieve a just result. If there appears to be a genuine issue requiring a trial, based only on the record before her, the judge should then ask if the need for a trial can be avoided by using the new powers provided under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice.

[33] To grant summary judgment, on a review of the record, the motions judge must be "of the view that sufficient evidence has been presented on all relevant points to allow him/her to draw the inferences necessary to make dispositive findings under Rule 20.

[34] The Supreme Court recognized that concerns about credibility or clarification of evidence can often be addressed by calling oral evidence on the motion itself, using the powers given to the court pursuant to Rule 20.04(2.1). However, it also recognized that there may be cases where, given the nature of the issues and the evidence required, the judge cannot make the necessary findings of fact, or apply the legal principles to reach a just and fair determination.

[35] The enhanced fact-finding powers granted to motion judges in Rule 20.04(2.1) may be employed on a motion for summary judgment unless it is in the "interest of justice" for them to be exercised only at trial. The Supreme Court observed that inquiry into the interest of justice to be served by summary judgment must be assessed in relation to the full trial and the relative efficiencies of proceeding by way of summary judgment as opposed to trial, including the cost and speed of both procedures, the evidence available at trial versus that on the motion, as well as the opportunity to fairly evaluate such evidence.

[36] The Supreme Court further commented that the interest of justice inquiry goes further and also considers the consequences of the motion in the context of the litigation as a whole. In cases where some claims against the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice.

[37] The parties must each "put their best foot forward". A party is not entitled to sit back and rely on the possibility that more favourable facts may develop at trial. The court is entitled to assume that all of the evidence the parties intend to rely on at trial is before the court.

[38] I am fully cognizant of and have taken into consideration the principles set forth in the guidance provided by the Supreme Court of Canada in the recent cases of Hryniak and Bruno Appliances, as set forth above.

[39] As stated by the Supreme Court of Canada, there will be no genuine issue requiring a trial if the summary judgment process provides the motion judge with the evidence required to fairly and justly adjudicate the dispute on the merits within the meaning of Rule 20.04(2)(a) and is a proportionate, more expeditious and less expensive means to achieve a just result. While there is no question that summary judgment would, in this case, as in most cases, be more expeditious and less expensive than a trial, I am of the view that, in this case, the summary judgment process does not provide me with the evidence required to fairly and justly adjudicate the dispute on the merits, nor will it allow me to find the necessary facts and resolve the dispute.

[40] There are genuine issues requiring a trial as regards the release, its scope, and the circumstances of signing, which may give rise to unconscionability and duress. I am of the view that even with the enhanced powers granted to the judge under Rule 20, a just and fair adjudication cannot be had on this summary judgment motion.

[41] There is disagreement between the parties as regards material facts and evidence, which will be of importance in this action. As regards the releases, there is disagreement as to what was discussed at the termination meetings of the parties including the plaintiffs' testimony that they protested that their terminations were due to their complaints and criminal charges against Steven Brown. In this regard, the representative of Purolator, Diane Brown, said that both were very quiet or said nothing in the meetings. As regards the information provided at the termination meetings, the plaintiffs' evidence was that they were told that if they did not sign, they would not receive their severance pay, while the representative of Purolator, Diane Brown denies this. There are significant issues as to the plaintiffs' understanding of the scope of the release, and what they were contracting out of, with the evidence of the plaintiffs being that they did not understand, nor were they advised that the release would cover not only issues arising from their termination, but also any actions regarding the harassment and sexual assault complaints arising from the conduct of Steven Brown, Purolator's employer.

[42] Accordingly, there are significant factual and legal issues to be determined in this action. Despite the enhanced powers given to the motions judge in a Rule 20 summary judgment motion, I am of the view that the issues cannot be properly and fairly determined without the full machinery of a trial. The evidence adduced on this motion includes affidavits and transcripts of cross-examinations thereon of the plaintiffs, Karen O'Reilly and Patranee Shiwprashad, and for the defendant, Diane Brown. I am of the view that viva voce evidence, not only of the affiants in this motion, but of other witnesses, including a number of representatives of the defendant, will be of significant importance in determining the facts and issues in this action and that, as regards this viva voce testimony, there will be issues of credibility to be determined as regards testimony of the plaintiffs and the defendant, where there is contradiction on material facts. I am not of the view that the enhanced powers provided pursuant to Rule 20.04 are sufficient to provide me with the opportunity to fully evaluate the issues in this action in a fair and expeditious manner. In fairness to the parties and in the interest of justice, this is a case that will require a full hearing at trial.

[43] Accordingly, this motion for summary judgment is dismissed. The parties are to move expeditiously to complete the next steps in order to proceed to trial.

Costs

[44] I would urge the parties to agree upon costs, failing which I would invite the parties to provide any costs submissions in writing, to be limited to three pages, including the costs outline. The submissions may be forwarded to my attention, through Judges’ Administration at 361 University Avenue, within thirty days of the release of this Endorsement.

Carole J. Brown J.

Date: July 3, 2014